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OCR for page 68
How Poverty Neighborhoods
Are Changing
JOHN C. WEIGHER
Public concern about urban problems has tended to focus on the notion
of an "underclass" during the 1980s. The concept has not been precisely
defined, at least to the point where analysts have general agreement on its
meaning and composition, but it is perhaps fair to say that the underclass
includes people who are persistently poor, especially those who also grew
up in poor families, and who live in neighborhoods where much of the
population is persistently poor. These neighborhoods might be termed
"persistent slums."
This chapter provides a microanalytic perspective on the phenomenon
of persistent slums as a contribution to better understanding of the problem.
It describes the changes that have occurred in selected urban poverty
neighborhoods during the 1970s. The focus of the analysis is on the private
characteristics of the slums: the people and the housing~what they are
like, and how they are changing.
The chapter also looks at how federal policies have affected poverty
neighborhoods. The nature of the available information precludes a sys-
tematic evaluation of the impact of particular federal antipoverty policies
in particular neighborhoods, but some inferences can be drawn about the
ways in which the most important federal policies have affected poverty
neighborhoods in general, and some guesses can be made about the likely
effectiveness of recent proposals.
The basic methodology of the chapter is a statistical analysis of the
neighborhoods. Changes in individual neighborhoods are discussed, but
detailed case studies are not presented. The primary sources of information
about these neighborhoods are the decennial censuses of population and
housing for 1970 and 1980. (Specifically, data have been taken from the
Fourth Count Summary Tape for the 1970 census, and from Summary
68
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HOW POVERTY NEIGHBORHOODS ARE C~4NGING
69
Tape File 4 for the 1980 census.) The data for census tracts in slum
neighborhoods have been aggregated to provide information on persistent
slum areas in big cities. The data were produced as a special tabulation for
this study by the Princeton University Computer Center, under a contract
with the American Enterprise Institute. Changes in the 1960s are also
analyzed, using data for a smaller set of poverty neighborhoods that had
been compiled from the decennial censuses of 1960 and 1970, as part of a
previous study.) That data set is used to supplement the basic analysis of the
1970s. It permits a somewhat longer perspective on slum neighborhoods,
but the information for the 1960s is more limited, in several ways, and it
was originally compiled for a different purpose.
THE CONCEPT OF A "POVERTY NEIGHBORHOOD"
The poverty neighborhoods induded in this study consist of contiguous
census tracts, each having 20 percent of its population below the poverty line
in both 1970 and 1980. The neighborhoods are delineated with consistent
boundaries in both censuses. The 20 percent figure was established after
the 1970 census as the cutoff for categorizing a census tract as a low-income
area. The same criterion was used in 1980, but the term was changed to
poverty area. A different and more complicated concept was used in the
1960s. As part of the War on Poverty, the Census Bureau and the Office
of Economic Opportunity developed an index of poverty, which gave equal
weight to five factors: family income (unadjusted for family size), children
not living with both parents, adults with less than an eighth-grade education,
unskilled male workers, and substandard housing. The lowest ranking 25
percent of all census tracts were then classified as poor (Bureau of the
Census, 1966~. The 20 percent figure was chosen after the 1970 census as
the best approximation to the 1960 method, in terms of classifying tracts as
poverty areas (see Bureau of the Census, 1973; Putnam, 1973~.
There is a distinction between being poor and living in a poverty
neighborhood. Poverty status for individuals depends only on their own
income (adjusted for age and family size); poverty status for neighborhoods
depends on the incidence of poor individuals within a geographic area. In
1980, for example, 47.5 million people were living in the 100 largest central
cities, of whom 8.1 million were poor, 15.5 million lived in poverty areas,
and 5.2 million were poor and lived in poverty areas. These figures imply
that 2.9 million poor people did not live in poverty areas and that 10.3
iThe data set was assembled for the National Housing Polipy Review in 1973. The changes in
housing conditions during the 1960s are summarized in the report of the National Housing Polipy
Review (1974), Ch. 6.
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70
INNER-CITY POVERTY IN THE UNITED STATES
million living in poverty areas were not poor. Most poor people lived in
poverty areas, but most people in poverty areas were not poor.
Poverty neighborhoods were delineated by the Office of Economic
Opportunity after 1970 as groups of contiguous low-income census tracts
with 20,000 or more residents in the aggregate. The smallest of these
neighborhoods contained at least three census tracts. The 1970 neighbor-
hoods are the basis for the poverty neighborhoods in this study, with some
adjustments and qualifications.
Poverty Neighborhoods as Neighborhoods
Local planners and other experts were consulted in establishing the
boundaries of the poverty neighborhoods so that they conformed as closely
as possible to the local sense of neighborhood. A large group of contiguous
poor tracts was often broken into several neighborhoods on the basis of
racial, ethnic, or other differences between the smaller areas. Nonetheless,
poverty areas often overlap neighborhoods defined on other criteria, and
they sometimes include only part of a single neighborhood. Only 1 of the
12 poverty neighborhoods in Chicago, and 1 of the 8 in Los Angeles, are
coterminous with neighborhoods as formally defined by local planners and
analysts (e.g., the Chicago Community Inventory).
Consistent Neighborhood Boundaries
Individual census tracts can be classified as poor in one decennial
census and nonpoor in the next, or vice versa. In fact, the actual number
of poverty census tracts has increased, and the territorial extent of poverty
areas in cities has grown substantially between 1960 and 1980, especially in
the 1970s.
The geographic spread of poverty between 1970 and 1980 occurred
partly because of a measurement problem. The Consumer Price Index
(CPI), which is used to adjust the poverty line from year to year, overstated
the increase in the cost of homeownership during the inflation of the
1970s.2 Even if the error is corrected, however, it seems clear that both the
size and the population of poverty neighborhoods in large cities increased
markedly. In Chicago, for example, some 227 census tracts, with a total
2 Compared with either the Gross National Product Deflator or the current CPI, the CPI used
during the 1970s overstated change in the price level (and therefore the poverty line) By about
6.5 percent, and also overstated the poverty rate in the United States lay about 11.5 percent, or
1.5 percent of the total population, in 1980. The error was corrected, beginning in 1983, but not
retroactively. See Weicher (1987) for a fuller discussion of the measurement problem. Corrected
data have been published By the Bureau of the Census (1989, Table C and Appendix Err) for yeam
beginning in 1974.
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HOW POVERTY NEIGHBORHOODS ARE CHANGING
71
population of 818,000, were considered to be poverty areas in 1970. By
1980, the number of tracts increased to 306, with a total population of
1,171,000. The published census reports do not permit the error in the
poverty threshold incomes to be corrected on any geographic basis, but it
is possible to make a crude adjustment. I estimate that 28 tracts, with a
total population of 106,000, would not have been classified as poverty areas
in 1980 had the current version of the CPI been in use through the 1970s.
(This assumes a rectangular distribution of the population between 75 and
100 percent of the poverty line and uses 92 percent of the official poverty
line as the true one.) Even with the correction, there are still 278 tracts
and 1,065,000 people in poverty areas in 1980, a larger area and population
than in 1970.
Some tracts, and even some neighborhoods, have moved out of poverty
status. In Washington, D.C., for example, the southern part of the Capitol
Hill neighborhood, between the Capitol and Anacostia, was a sizable
poverty area (comprising eight tracts) in 1960. It has since largely been
gentrified. By 1970, one tract was no longer counted as part of the poverty
area; by 1980, four more tracts had been upgraded, and the remaining
poverty area consisted of the three southernmost tracts. It seems likely that
by 1990 the entire area will disappear from maps of poverty.
The neighborhood focus of this study and the growth in the size
of poverty areas, taken together, mean that it is not particularly useful to
describe changes in poverty areas in the aggregate within a city. Instead, the
study focuses on changes in individual poverty areas, keeping the boundaries
unchanged. All tracts in each neighborhood were defined as being poor in
each of the past three censuses the maximum criterion for "persistence,"
because the available data only go back to 1960. This maximum criterion
was established in order to focus on identifiable neighborhoods that have
indeed been persistently poor, persistently slums Watts in Los Angeles,
Washington Park in Chicago, the South Bronx in New York.
Study Neighborhoods
For this study, 79 persistently poor neighborhoods were identified in
12 central cities of standard metropolitan statistical areas (SMSAs). The
project has a midwestern and northeastern focus, because these regions
have the metropolitan areas with the most persistent slums. There are
more midwestern metropolitan areas, but more northeastern neighbor-
hoods in the study. This is because New York City is included. Of the 40
Northeastern poverty neighborhoods, 29 are in New York City; in addition,
5 are in Philadelphia, 4 in Washington, D.C., and 2 in Pittsburgh. Six
midwestern metropolitan areas are included, with a total of 29 poverty
neighborhoods: 12 in Chicago, 5 in Cleveland, 4 in St. Louis, 4 in Kansas
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INNER-CTTY POVERTY IN THE UNITED STATES
City, 3 in Milwaukee, and 1 in Gary. The remaining 10 poverty neigh-
borhoods are in the Los Angeles SMSA, 8 from the city of Los Angeles
and 2 from Long Beach. The California neighborhoods provide a limited
basis for an overview of some regional differences. The sample is obvi-
ously dominated by the three supercities of New York, Los Angeles, and
Chicago. The differences among these cities constitute an important part
of the analysis.
Because of the change in the definition of poverty area from 1960
to 1970, and because of occasional redrawing of census tract boundaries,
poverty neighborhoods as defined for this analysis need not correspond to
the boundaries of poverty neighborhoods as defined in any of the decennial
censuses. Few tracts, however, have moved out of poverty between one
census and the next. As it happens, 27 of the 79 neighborhoods have the
same boundaries in this study as they officially had in 1970. The other
52 have the same boundaries as they officially had in 1960. Their official
boundaries in 1980 were larger (often by only one or two tracts) than
in 1970; they are examples of the general pattern, previously noted, of
increases in the size and population of poverty areas during the decade.
The poverty areas defined in this study can be considered the cores of
poverty areas as measured by the 1980 census.
Redrawing of census tract boundaries limited the number of neighbor-
hoods and even eliminated a few large central cities. Boundaries were com-
pletely redrawn for the city of Detroit between 1970 and 1980, which makes
it impossible to define any poverty neighborhoods consistently. Cincinnati
had five poverty neighborhoods in 1960, but only one could have been used
in this analysis. The boundaries for so many low-income tracts in Cincinnati
were changed that there were only one or two tracts in each of the other
neighborhoods that were poor and had consistent boundaries across the
three censuses. The loin Cities had only three poverty neighborhoods in
1960, and only two were consistently comparable. Boston had only two
poverty neighborhoods in 1960; re-tracting left only one with consistent
boundaries by 1980. Buffalo had no neighborhoods with more than To
census tracts.
The only eastern cities that met the study criteria but were excluded
were Baltimore (four poverty neighborhoods), and Newark (three). If the
study had been given a national scope, a number of southern and western
cities could have been included, but only the San Francisco-Oakland area
has as many as five eligible neighborhoods. Houston might also have five or
more, but it was completely re-tracted between 1960 and 1970. Most of the
larger SMSAs in these regions did not have many poverty neighborhoods
in 1960; they developed sizable identifiable concentrations of the poor only
as they subsequently grew rapidly. But even with a full set of poverty
neighborhoods for all large central cities the 100 largest, for example
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HOW POVERTY NEIGHBORHOODS ARE CHANGING
TABLE 3-1 Poverty Neighborhoods in Study and City
73
Number of Population in Poverty Population in Poverty
Neighborhoods, Neighborhoods (000), Neighborhoods (000),
1970 1970 1980
City StudyCityStudyCity % Study City %
Chicago 12 15 547 818 673941,171 34
Cleveland 5 6 166 207 80103273 38
Gary 1 1 27 33 811564 23
Kansas City 4 4 94 107 8863123 51
Long Beach 2 2 28 57 493385 39
Los Angeles 8 10 367 561 65408964 42
Milwaukee 3 4 76 132 5856161 35
New York 29 35 1,440 2,089 699382,742 34
Philadelphia 5 9 276 494 56197712 28
Pittsburgh 2 3 55 113 4941121 34
St. Louis 4 7 143 284 5088233 38
Washington, D.C. 4 5 106 239 4482251 33
Total 79 101 3,325 5,134 652,4186,900 35
the universe would still be dominated by the largest cities, particularly New
York. Limiting the number of metropolitan areas did not greatly reduce
the number of neighborhoods.
Bible 3-1 presents some basic information about the poverty neighbor-
hoods in this study. Most of the neighborhoods officially delineated in 1970
in the cities involved are included, though not all with the same boundaries.
The neighborhoods contained well over half of all people living in poverty
neighborhoods in these cities in 1970, except for Long Beach, Pittsburgh
(both at 49 percent), and Washington, D.C. By 1980, the neighborhoods'
total share was down substantially; they had nearly all lost population, and
more tracts in the cities were classified as poverty areas. But they still ac-
counted for over 30 percent of the people living in poverty areas, except in
Gary and Philadelphia. (A list of the tracts contained within each poverty
neighborhood, for each of the three decennial censuses, is available from
the author.)
NEIGHBORHOOD CHAD GES IN THE 1970s
Poverty neighborhoods differ from city to city, but the neighborhoods
in eastern and midwestern cities changed in similar ways in the course of the
1970s. These changes are more important in understanding the problems of
persistent slums than are the surface differences. It is possible, therefore,
to summarize the changes in eastern and midwestern neighborhoods in
terms of averages for all 69 neighborhoods from the two regions in the
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74
INNER-CI~IY POVERTY IN THE UNITED STATES
sample (liable 3-2~. This is not to say that all of these neighborhoods fit the
pattern shown in the table. There were some differences, by region and by
size of city, particularly in housing conditions. But the table is a reasonable
representation of what happened in most neighborhoods. The few major
differences between cities are discussed in a subsequent section.
Eastern and Midwestern Poverty Neighborhoods: A Study in Decline
The most important similarity among the neighborhoods in the East
and Midwest is also the most important and most obvious regional differ-
ence between them and the neighborhoods in Los Angeles. In the East
and Midwest, nearly all poverty neighborhoods lost population during the
1970s. In Los Angeles, nearly all of them gained population. Moreover,
they gained a very different population; typically, Hispanics replaced blacks.
The only eastern neighborhoods with population increases were two in New
York City, one in Manhattan and one in Brooklyn. Both also experienced
the same raciaVethnic turnover.
The typical neighborhood lost about one-third of its total population
in the decade, over half its white population, almost one-third of its black
population, and almost one-fifth of its Hispanic population. It gained
a small number of persons of other races. The averages in 1970 and
1980 mask substantial differences between cities; the white population was
concentrated in the smaller midwestern cities, and the Hispanic population
in New YorL Most of the trends are nonetheless universal. Not many
neighborhoods had a large white population in 1970, but nearly all lost
most of whatever they had by 1980. There were small numerical gains
from a small base in the number of persons of other races, in most
neighborhoods. There was substantial growth in the Hispanic population,
however, in a number of New York neighborhoods; in the Midwest, no
neighborhoods were predominantly Hispanic in either year, and about half
lost Hispanic residents over the decade.
The number of households also declined, but by less than the pop-
ulation. The size of the typical household therefore also declined, from
about 3.1 to 2.8 persons. The "feminization of poverty" is apparent in these
poverty neighborhoods. The number of married couples declined by half,
but the number of female-headed households remained about the same.
About half the households in the typical neighborhood in 1970 consisted
of married couples; about half in 1980 were headed by a single woman. At
the same time, the population became older, on average; the number and
incidence of children under 18 declined, and the incidence of the elderly
increased slightly.
Economic changes were similarly pronounced. Real median household
income (in 1980 dollars) fell by about $1,700. In 1970, dose to half the
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HOW POPERlY NEIGHBORHOODS ARE CHANGING
TABLE 3-2 Neighborhood Changes in Midwestem and Eastern Cities
1970
Mean
1980 1970 1980 %
Mean % % Change
People
Population43,30029,200 -30.7
White.7,1003,100 19.9 12.2
Blacks28,60019,500 64.1 66.1
Hispanic6,9005,700 14.6 19.4
Other recess800900 1.7 2.4
Over 65 years3,7003,200 9.1 11.1
Under 18 years16,9009,600 38.5 33.0
Households13,80010,400 -23.8
Married couples6,5003,200 47.2 31.1
Female head5,4005,200 38.6 50.6
Male head, no spouse2,0002,000 14.2 18.3
Income and Economy
Median household incomeb$9,100$7,400 -18.2
Labor force (16+ years)
Percent unemployed3.77.2
Percent not in labor force49.453.9
Percent employed46.738.9
Percent with earningsC81.158.8
Percent with income transfersC46.461.5
Median years of schooling9.210.3
Housing
Housing units14,90012,000 -18.8
Occupied housing units13,70010,400 -23.1
Vacancy rate (%)8.413.3
Percent renter-occupied83.982.4
Space
Persons per unit3.152.85
Median rooms per unit4.064.15
Percent crowded17.212.1
Quality
Percent without complete
plumbing5.26.5
Percent without central heat13.614.1
Percent without heat0.20.5
Age
Percent 30+ years old73.071.0
Percent built pre-194073.055.4
Percent <10 years old7.57.9
Percent in 1-unit structures14.616.2
Percent in 5+ unit structures59.059.8
Median home valueb$34,000$24,200 -29.6
Median rentb$131$134 +2.5
Non-Hispanic population.
~ 1980 dollars.
CFor families and unrelated individuals in 1970, households in 1980.
75
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INNER-CITY POVERTY IN THE UNITED STATES
individuals over 16 were employed; in 1980, only about 40 percent were.
The unemployment rate nearly doubled. Transfer payments apparently
became a more important source of income, and earnings from work less
important. This inference, however, must be tempered by the fact that
the information is reported on a different basis in the two years. In 1970,
the Census Bureau published data for "families and unrelated individuals,"
in 1980 for "households," which can consist of two or more unrelated
individuals. Despite the problems with comparability, there probably was
a real change in the relative importance of transfer payments and earnings
from wore
The one positive feature in this picture is the increase in years of
schooling among the adult population. The improvement was only from
the ninth-grade to the tenth-grade level, however, which means the typical
adult in these neighborhoods was well behind the rest of the population.
Schooling seems to run counter to the other trends; the improvement does
not translate into better economic circumstances.
The general impression from these changes is that the black middle
class, or perhaps more precisely the lower middle class, was moving out
of these neighborhoods. People who could afford to leave were doing so.
The number of housing units declined, but less rapidly than the number of
people or households. This implies that the vacancy rate increased. Vacant
units, however, fall into several categories, and the meaning of "vacancy
rate" varies among these neighborhoods. Some vacant units are "available
for sale or for rent." Others fall into an "other vacant" category, of which
the most prominent subcategory is "in boarded-up buildings." These units
may be about to drop out of the housing stock altogether. They may be
almost indistinguishable from structures that are no longer counted as part
of the housing inventory. Boarded-up buildings account for most of the
vacant stock in New York and Philadelphia, but a minor fraction of it in
the other cities.
The age distribution of the housing stock did not change much, but this
fact can be misleading. A substantial share of the prewar housing stock-
over 4,000 units in the average neighborhood-was razed or otherwise
removed from the inventory. The remaining housing aged 10 years, and
a small number of new units were built. It is reasonable to conjecture
that some if not all of the new units were built under government housing
programs for the poor, but this is only a conjecture; unfortunately, the
census tract data do not identify public housing or other subsidized housing.
Evidence from the 1960s, to be discussed later, suggests that about half the
new units added to poverty neighborhoods in that decade were subsidized.
There was little change in tenure or structure type. Real home values
declined in the course of the decade, but real rents rose slightly. The
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HOW POVERTY NEIGHBORHOODS ARE CHANGING
77
rent figure is obviously the more relevant, because few units were owner-
occupied.
One basic measure of housing conditions improved noticeably over the
decade. Households enjoyed more space in 1980. The number of persons
per unit declined and the number of rooms per unit increased; fewer units
were crowded.
The most surprising feature is the increase in the percentage of housing
units with fundamental deficiencies. This does not necessarily mean that
individual units deteriorated. Because the number of units declined, the
increased percentages actually represent stable or declining numbers of
units. The average number of units without complete plumbing was almost
unchanged, at about 775, and the number without central heat declined
from about 2,000 to about 1,700. The change in units without any heat
could well reflect sampling error; on average fewer than 100 units per
neighborhood reported this problem in each year, and the question was
asked only on the census "long form," which was sent to 20 percent of
housing units.
The change in housing units without complete plumbing facilities is
especially noteworthy. The presence of plumbing is the one measure of
housing quality reported in every decennial census of housing since the first
one in 1940, and the one attribute included in every definition of adequate
or standard quality housing since World War II. There has been dramatic
improvement in each decade, both for the population as a whole and for
the poor and minorities, insofar as data are available. There was dramatic
improvement in poverty neighborhoods in the 1960s. After all the progress,
the data for these neighborhoods in the 1970s strike a sour note.
The increase turns out to be the result of a little-noticed change in
definition, combined with a much-noticed change in the housing stock In
1970, a unit was deemed to have complete plumbing if the facilities were
located within the structure; in 1980, it was necessary that they be located
within the unit. This changes the classification of rooming houses, but that
is not the most important effect, statistically. More important is the afore-
mentioned increase in vacant, boarded-up buildings, particularly in New
York and Philadelphia. The poverty neighborhoods in these two cities were
almost the only ones reporting an increase in the incidence of units without
plumbing. In the Philadelphia neighborhoods, more than 60 percent of the
units lacking complete plumbing in 1980 were in such buildings, compared
with less than 20 percent in the Chicago neighborhoods.
Intraregional Changes
Bibles 3-3 through 3-6 show the same information separately for
Chicago, New York, and the smaller cities in each region. (Bible 3-6
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INNER-CITY POVERTY IN THE UNITED STATES
TABLE 3-3 Neighborhood Changes, Chicago
19701980 1970 1980 %
MeanMean % % Change
People
Population45,60032,900 - 25.9
White.5,1002,600 14.6 8.8
Black.37,40026,700 76.2 77.5
Hispanic2,6003,000 8.1 11.8
Other recess500600 1.1 1.9
Over 65 years3,8003,400 8.1 9.7
Under 18 years19,20012,100 42.3 37.6
Households14,20011,200 -20.2
Married couples6,1003,000 43.7 28.0
Female head5,5005,900 38.6 52.6
Male head, no spouse2,5002,300 17.7 19.4
Income and Economy
Median household incomeb$9,300$6,900 -26.8
Labor force
Percent unemployed4.18.3
Percent not in labor force49.255.7
Percent employed46.636.0
Percent with eamingsC79.054.5
Percent with income transfersC46.165.1
Median years of schooling9.310.2
Housing
Housing units15,70012,500 -19.8
Occupied housing units14,10011,200 -19.4
Vacancy rate (%)11.010.6
Percent renter-occupied89.889.1
Space
Persons per unit3.263.01
Median rooms per unit3.974.09
Percent crowded19.915.8
Quality
Percent without complete
plumbing8.56.5
Percent without central heat19.423.3
Percent without heat0.30.3
Age
Percent 30+ years old65.265.9
Percent built pre-194065.249.7
Percent <10 years old11.37.9
Percent in 1-unit structures6.46.2
Percent in 5+ unit structures67.568.0
Median home valueb$37,800$28,900 -29.4
Median rentb$155$134 -13.4
Non-Hispanic population.
bIn 1980 dollars.
CFor families and unrelated individuals in 1970, households in 1980.
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100
INNER-CITY POVERTY IN THE UNITED STATES
TABLE 3-16 Regression Analysis of Changes in Neighborhood Unemployment Rate
Sample
Excluding
A1179 Excluding Los Angeles
Vanable Neighborhoods Los Angeles and New York
Constant +.02 +.01 +.01
SMSA unemployment rate change +.75 +.90 +1.09
(6~7) (4.7) (4.7)
Hispanic population change -.05 -.05
(3~3) (2~9)
Change in median years of schooling -.53
(2.4)
Mamed couple change -.05
(2.3)
Pemale-headed household change +.03
(1~9)
Change in occupied housing stock - +.06
(2.2)
R2 .48 .35 .53
NOTES: Figures in parentheses are t-raiios of the regression coefficients. All variables refer
to the neighborhood unless "SMSA" is specified. All variables are expressed as percentage
changes except the change in schooling, which is the change in the median number of years.
Labor force participation was less affected by the SMSA unemployment
rate and more by the neighborhood attributes: age and race consistently,
schooling and household composition in some cases Gable 3-17~.
In most of these neighborhoods, the unemployment rate rose over
the decade and labor force participation declined. It is frequently argued
that one important factor contributing to unemployment in urban ghettos
is suburbanization; increasingly businesses and jobs are moving to the
suburbs, leaving the urban poor, particularly minorities, unable to get to
them in effect, unable to supply their labor. Solutions to the problem
range from improving public transit systems to building subsidized housing
in the suburbs. (For an exposition of this view, see Kasarda, 1986.)
Data on job location within SMSAs, available in the decennial census,
permit some investigation of this issue. Individuals report whether they
worked the week that the census is taken the week of April 1 and where
they worked: in the central business district, elsewhere in the central city,
or in the suburbs. These responses were aggregated for the entire SMSA to
obtain a picture of the changes in job location and included in the statistical
analysis. Changes in job location for the central business district, the rest of
the central city, and the central city as a whole, were included as separate
independent variables in the analyses of unemployment and labor force
participation. Generally, the findings indicate that job suburbanization has
not mattered to the people in these poverty neighborhoods. None of the
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HOW POVERTY NEIGHBORHOODS ARE CHANGING
TABLE 3-17 Regression Analysis of Neighborhood Changes in Labor Force Participation
(measured as percentage of adults not in the labor force)
101
Sample
Variable _ _
.
All 76
Neighborhoods
Excluding
Los Angeles
Excluding
Los Angeles
and New York
Constant
Change in city's share of SMSA jobs
SMSA unemployment rate change
Elderly population change
+.05
-.12
(3~5)
+1.14
(4.7)
+.53
(2~9)
-.10
(1.6)
Change in population of "other races" -.54
(2.6)
Youth population change
Hispanic population change
Female-headed household change
Change in median years of schooling
R2
+.a7
-.10
(2.7)
+1.00
(4.2)
+.63
(3.4)
-.12
(2.1)
-.82
(3~9)
+.01
(1.3)
.55
-04
+.12
(1.4)
+~03
(2.5)
+.67
(2.7)
+.35
(1.6)
-.17
(1.5)
+.11
(2.5)
.50 .52
NOTES: Figures in parentheses are t-ratios of the regression coefficients. All variables refer
to the neighborhood unless "SMSA" is specified. All variables are expressed as percentage
changes except Me change in schooling, which is the change in the median number of years.
Lord Beach and Gary omitted.
locational changes was significant in any of the unemployment regressions.
Jobs have become more dispersed in most of these SMSAs, but that has
not affected the unemployment rates in the poverty neighborhoods.
The labor force regressions present a somewhat different picture. In
the two larger samples, a shift in jobs from the city to the suburbs results
in an increase in the proportion of neighborhood residents who choose
to drop out of the labor force altogether. The effect is small, however.
A decline of 17 percentage points in the city's share of SMSA jobs the
largest for any city in this sample is associated with a 2 percentage point
decline in the labor force participation rate. Moreover, the relationship
disappears, and in fact is reversed, when New York and Los Angeles are
excluded. The coefficient for the smallest sample is positive, and equally
large in absolute value, but it is not conventionally significant.
These results suggest that suburbanization of jobs is a problem for
people living in poverty neighborhoods in New York and Los Angeles, but
not in the other large eastern and midwestern cities. One might speculate
that the problem is more serious in New York though the regression
results do not particularly suggest it. Half the New York neighborhoods
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INNER-CITY POVERTY IN THE UNITED STATES
are in Brooklyn; the nearest suburbs are in Nassau County, with Queens
in between. (There is only one poverty neighborhood in Queens.) Some
Manhattan residents are close to New Jersey, but the census data for the
borough as a whole show relatively little commuting in that direction. Most
of the Los Angeles neighborhoods are close to the Civic Center and have
good access to freeways. Several neighborhoods are just inside the city
limits; Watts is essentially a peninsula surrounded by suburbs on three
sides.
This is about as far as one can go with the current data set. More
detailed information on job location would be needed, as well as further
tabulations of census tract data on automobile ownership. It would also be
desirable to include other cities in the analysis.
POLICY IMPLICATIONS: WHAT MIGHT HELP?
Poverty neighborhoods clearly have persistent problems and they may
be deteriorating. Public policy at best kept them from getting worse during
the 1970s; it did not make them better. One purpose of this committee's
study is to evaluate alternative policies that might help. In this concluding
section, some past and present policies are considered in light of the
changes and current conditions in these neighborhoods. It is convenient to
categorize policies in terms of their orientation: Do they try to help people
or try to help places? Some programs have tried to do both, but most have
a primary focus on one or the other.
Programs for the Poor
Income transfers are increasingly important to the people in poverty
neighborhoods, though they are not necessarily urban programs. Transfer
payments probably account for a larger share of neighborhood income;
certainly more residents have been receiving them. The data tabulated for
this chapter do not distinguish between Social Security and welfare pro-
grams, but given the changing age distribution and household composition
in these neighborhoods, it is likely that both have become more important
income sources. These transfers are surely helping the people, but they
are probably not doing much to make the neighborhoods more desirable
places to live.
The Family Support Act of 1988 may help. This welfare reform
legislation has several features intended to deter the formation of single-
parent families. The law establishes mandatory child support by absentee
fathers, including establishing paternity, automated tracking of support
payments, and use of Social Security numbers. In addition, states can
deny Aid to Families With Dependent Children to single mothers who are
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HOW POVERTY NEIGHBORHOODS ARE CHANGING
103
minors, if they have moved out of their parents' home. These changes
may reduce the proportion of female-headed families in these poverty
neighborhoods. As a by-product, they would also probably reduce the
demand for housing units; some married couples would exist in place of
two separate households, and some young women would continue to live
with their parents. The worst housing in these neighborhoods would drop
out of the housing stock more rapidly.
The Family Support Act also includes a `'workfare" component that
consists of mandatory job training or schooling, as appropriate. Either could
help some people in these neighborhoods to participate more effectively
in the labor force. One of the few positive factors in these neighborhoods
has been the improving educational level of the adult population, which
apparently increased labor force participation and reduced neighborhood
unemployment; this did not, however, translate into higher incomes in the
neighborhoods. Unfortunately, the typical adult still had less than a high
school education.
Education and training will not completely reverse the decline in labor
force participation, no matter how successful they are. Many residents
are out of the labor force simply because they are old. A one percentage
point growth in the elderly population translated into a one percentage
point decline in labor force participation, and the growth in the elderly
population in the average neighborhood accounted for about a quarter of
the decline in participation.
Single mothers accounted for another substantial share of the decline
in participation, and they might benefit from welfare reform in the long
run. Mothers with very young children would not have to participate in
workfare, so the short-term effectiveness would depend on whether the full
package of reforms successfully deterred single parenthood.
Housing
Housing programs are in an intermediate category; they attempt to help
people and places at the same time. The decade of the 1970s witnessed
unprecedented production of both private and subsidized housing. The
subsidy programs may have helped improve the quality of life in the poverty
neighborhoods. New low-income housing projects seem to have slowed the
loss of population, and they may have given the residents more space to
. .
ve In.
The housing programs of the 1970s had other purposes as well. At
the beginning of the decade, Sections 235 and 236 had as one objective
opening up the suburbs for the urban poor.4 They could have contributed
4 Most subsidized housing programs (including Section 235 and 236) are commonly known by
the number of the section of the National Housing Act in which they are created, or else (as in
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INNER-CITY POVERTY IN THE UNITED STATES
to the emptying of poverty neighborhoods. Apparently, however, they did
not. The programs were large but short-lived, and suburban subsidized
housing did not affect city housing conditions during the early 1970s (We-
icher, 1982~. Section 8, in the last half of the decade, was even larger. The
Section 8 New Construction program, at least during the 1970s, dispro-
portionately served the white elderly poor, allowing them to live in decent
neighborhoods. It might have contributed to the population decline in
the poverty neighborhoods, but the program came so late in the decade
that any substantial effect by 1980 is not likely. The Section 8 program
evaluations to date have not addressed this issue.
Whatever effects housing construction programs had during the 1970s,
they will probably prove to have smaller effects during the 1980s. The
Section 8 New Construction program was terminated in 1983 and no con-
struction program has been passed to replace it, but even so, a substantial
number of new units have been added to the stock during this decade.
Moreover, the "pipeline" is long; like other federal low-income construc-
tion programs, Section 8 New Construction projects often take several years
to complete. Nonetheless, a larger share of the newly subsidized households
in the 1980s live in existing housing and receive rental assistance under the
Section 8 Existing Housing certificate program or the more recent voucher
program. These programs serve many households who already live in de-
cent housing but have a high rent burden, and they stimulate some modest
improvements and perhaps some increased maintenance of the existing
stock. The programs can also be used to move into better housing in a bet-
ter neighborhood. The effect on the neighborhood depends basically on the
general quality of housing to begin with. If the local private housing stock
is generally decent, the programs help poor people afford the housing and
promote neighborhood stability. If the stock is substandard, the programs
help poor people move out of the neighborhood. The neighborhoods in
this study probably fall more in the latter category.
Several of these neighborhoods include traditional public housing
projects. Public housing offers special problems and special opportuni-
ties. Many urban projects consist of concentrations of the poorest and
least skilled members of society. Some projects have been notoriously
undermaintained, and many of the largest public housing authorities have
been officially designated as "troubled" by the U.S. Department of Housing
and Urban Development (HUD), meaning that they fail to manage their
projects efficiently. At the same time, much of the public housing stock is
, ~
.
the case of Section 8) by their section number in the act adding them to the National Housing
Act.
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HOW POVERTY NEIGHBORHOODS ARE CHANGING
105
structurally adequate and decent; it is better than the private housing avail-
able in many poverty neighborhoods. Moreover, public housing projects
have more stable populations than poverty neighborhoods in general.
Resident management and tenant ownership of public housing have
been strongly advocated by the Bush administration and by HUD Secretary
Jack Kemp. They may be one way to achieve neighborhood improvement.
At first sight, this may seem an unlikely strategy; many public housing
residents are very poor, and projects in many poverty neighborhoods consist
of high-rise apartment buildings. Tenant ownership must perforce take the
form of cooperative or condominium ownership, or ownership by a resident
management corporation. Nonetheless, there have been some spectacular
resident management success stories in urban public housing projects, and
a number of projects have been converted to resident ownership since
1985, in a demonstration sponsored by HUD. Some badly deteriorated
projects have been turned into attractive communities. The process of
managing and owning a project has enabled the residents to acquire skills
that they can use in other aspects of their lives. Since resident ownership
and tenant management have become important components of housing
policy, they have generated significant expressions of interest from public
housing residents in many projects across the country.
Tenant ownership typically requires financial support from the federal
government. Some projects need to be rehabilitated. In addition, because
the tenants are often very poor, they may need subsidies to meet the
ongoing operating costs of the projects, at least for a time, just as they did
while renting.
Community Development Strategies
It is hard to assess the potential of programs to help places rather than
people in poverty neighborhoods. Since they are persistent slums, they are
by definition places where local economic development either has not been
tried or has not worked. If it had succeeded, the neighborhood would have
moved out of poverty.
There may have been some successful neighborhood development
projects in low-income urban areas, but not many. A few census tracts
in the cities under study moved out of poverty during the 1970s, but
very few were in or near the poverty neighborhoods. The reason for
the improvement cannot be ascertained from census data alone. The
Washington, D.C., neighborhood mentioned earlier is an example of pure
gentrification, rather than a public or private community development effort
to help the poor.
The major urban policy proposal of the Reagan and Bush adminis-
trations has been the enterprise zone. The current zone proposal offers
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INNER-C~ BERM IN THE UNFED STARS
both capital and labor subsidies, in the form of tax incentives, to businesses
located in areas with high unemployment. It is intended to promote en-
trepreneurship and business formation, as well as job creation. The labor
subsidy takes the form of a 5 percent refundable tax credit for the first
$10,500 of wages paid to individuals working in the zone and having total
wages of less than $20,000. The credit phases out between $20,000 and
$25,000.
A related policy is the subminimum training wage included in the
minimum wage increase enacted in 1989. This may enable residents of
poverty areas to find their first job and get a start on a better life, even
if they are not immediately lifted out of poverty. At the same time, the
overall minimum wage increase will tend to reduce employment of low-
skilled poverty neighborhood residents, if anything.
National Economic Policy and Poverty Neighborhoods
The differences between the 1960s and 1970s and the connections
between the neighborhood and metropolitan area economies illustrate the
importance of national economic changes and macroeconomic policies.
Real economic growth was substantial in the 1960s, and people in poverty
neighborhoods fared better in real terms, though they lost ground relative
to people in the rest of the SMSA Economic performance was weaker in
the 1970s; the increase in family income for the nation as a whole was half
as great. In most of the poverty neighborhoods in this study, real incomes
declined.
Macroeconomic policies had other neighborhood repercussions. Hous-
ing production was much greater in the 1970s, in large part because of
accelerating inflation. Early in the decade, a stimulative macroeconomic
policy held interest rates down and encouraged record housing production.
In the late 1970s, double-digit inflation fueled a speculative housing boom
as part of a flight from financial assets to real ones. Geographically, the
suburbs became more popular, the cities became less desirable, and the
poverty neighborhoods emptied out. Inflation promoted filtering.
Despite the strong record of economic growth during the l980s, it
seems clear that the decade will be similar in key respects to the 1970s.
The poverty rate for central cities was substantially higher in 1988 (the latest
year available) than it was in 1979: 18.3 versus 15.7 percent. (Measured
consistently, the rate was 16.5 percent in 1988 and about 14 percent in
1979.) While 1989 was a year of continued economic growth, the poverty
rate surely did not decline to the 1979 level. The rate during the 1970s
also increased; it was 13.4 percent in 1969. (Poverty neighborhoods are
delineated after each decennial census on the basis of annual incomes
reported for the preceding year.)
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HOW POVERTY NEIGHBORHOODS ARE C~4NGING
107
The overall increase in central-city poverty in the 1980s is the net
result of a sharp rise during the recession years from 1980 to 1982, and
a steady but smaller decrease during each year of the economic recovery
that continued through the rest of the decade. The official central-city
poverty rate rose from 15.7 percent in 1979 the last full year of the
cyclical recovery that began in 1975 to 19.9 percent in 1982. The rate rose
substantially during the mild 1980 recession to 17.2 percent for the year.
This is of some interest because the 1980 election marked a significant and
controversial change in social welfare policy, and because public discussion
of poverty trends during the decade often confuses the economic cycle
that started at the beginning of 1980 with the political policy shift that
started at the beginning of 1981. Although central-city poverty increased
in both cycles, the increase during the Reagan administration (1980 1988)
will probably be noticeably less than the increase during the decade of the
1980s (1979~1989~.
The last two decades have seen a disturbing concentration of poverty
in central cities. The overall poverty rate in 1988 was slightly lower than in
1969 (measured consistently), but the central-city rate was markedly higher.
The logical inference from these data is that poverty neighborhoods in big
cities expanded geographically during the 1980s, repeating the pattern of
the 1970s.
CONCLUSION: PROSPECTS AND POSSIBILITIES
Looking at places rather than people is inherently discouraging. The
hypothetical average person living in a poverty neighborhood was worse
on in 1980 than 1970, in many ways. But any real individual probably
did better than this hypothetical average. There were fewer people in the
neighborhoods in 1980, and many of them may not have lived there in
1970. We tend to think in terms of neighborhoods because data exist for
neighborhoods. Because "the neighborhoods" are worse off both relatively
and absolutely, we think of their residents as an underclass. But this is
potentially misleading, because of mobility. The slums have persisted, but
many of the people have moved on, and we do not know whether they are
better or worse off.
As a society, we are really more interested in the well-being of people
than places. In fact, the most important public policies toward povertr
neighborhoods have not been place oriented. Explicit public policy has
increasingly centered on income maintenance; implicitly, policy has en-
couraged people to leave poverty areas. That is not a bad combination for
the future. It should be abundantly clear by now that poverty neighbor-
hoods are generally unattractive places to live. We should expect people
to seek better neighborhoods, if they can. At the same time, we can
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INNER-CITY POVERTY IN THE UNWED STATES
probably improve current income maintenance programs so that they help
beneficiaries find their own way out of poverty, and perhaps out of poverty
neighborhoods.
Part of the income maintenance and also part of the inducement to
move could be a housing voucher program or an expansion of the Section
8 Existing Housing certificate program. Public housing, Section 8 New
Construction, and other low-income construction programs have proven to
be much more expensive than using the existing stock to house the poor.
Public housing changes the neighborhood as well as the housing stock. It has
slowed the rate of population decline in poverty neighborhoods and lowered
the turnover. Improvements in neighborhood housing quality, however,
have been small at best. Overall, the beneficial effects on the neighborhood,
if there are any, are probably far too small to justify the expense. This
conclusion is based on the objective neighborhood changes reported in
the decennial census. This chapter has not tried to analyze the role of
subsidized housing construction in creating an underclass or promoting a
culture of poverty, which are more important but more nebulous issues.
A declining but substantial minor fraction of the people in these
neighborhoods are children (about one-third in 1980, down from about
40 percent in 1970~. The strategy of income maintenance for the current
residents may not help the children get out of poverty when they grow up.
They need more and better education. A campaign to discourage dropping
out of school would help. Public schools in many poverty neighborhoods do
not provide an adequate education, however. Improving the schools would
make the neighborhoods more desirable places to live, but that is obviously
a tall order. Education vouchers would let poor people send their children
to better schools outside the neighborhood, which might keep relatively
high-income households in the poverty neighborhoods when their children
reach school age. That would promote neighborhood stability and perhaps
neighborhood development.
Whatever policies are followed, the prognosis is for further population
decline. This need not be the fate of every poverty neighborhood; some can
probably be turned around. But these neighborhoods seem to be attractive
mainly to new immigrants in growing metropolitan areas. Some of the
neighborhoods in the eastern and midwestern cities were ports of entry for
immigrants from Europe until immigration was restricted after 1924. A
few have drawn the new immigrants from Latin America; if the study were
extended to include more southern and western cities, there would be more
such neighborhoods. The Simpson-Mazzoli Act of 1988, if it is effective,
will discourage new immigration in the future. Within a few years, the
Los Angeles poverty neighborhoods are likely to start losing population as
some of the new immigrants move up on the economic ladder and can
afford better places to live. The poverty neighborhoods in the East, which
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HOW POVERTY NEIGHBORHOODS ARE CHANGING
109
have seen some influx of Hispanics and Asians, will continue to emptier out,
probably faster.
ACKNOWLEDGMENTS
The author benefited from discussions with Cicero Wilson and assis-
tance from Carlton Henry and David Hover in the initial stages of the
research, and from comments on an earlier draft by John L. Goodman, Jr.,
Daniel Weinberg, and the members of the Committee on National Urban
Policy. Sole responsibility for any errors rests with the author.
This study was supported by a grant from the Joyce Foundation to
the American Enterprise Institute, and was completed while the author
was in residence at the American Enterprise Institute. The opinions and
conclusions are also those of the author, and not necessarily those of
the American Enterprise Institute, the Joyce Foundation, or the U.S.
Department of Housing and Urban Development.
REFERENCES
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Butler, Edgar, et al.
1969 Moving Behavior and Residential Choice: A National Survey. National
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Greenberg, Michael R., and Thomas D. Boswell
1972 Neighborhood deterioration as a factor in intraurban migration: a case
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Lowly, Ira S., ed.
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Nathan, Richard
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110
Putnam, Israel
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INNER-CITY POVERTY IN THE UNITED STATES
Poverty Neighborhoods in 105 Large Central Cities, A Special Tabulation
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Representative terms from entire chapter:
labor force
