What’s more likely to cause a housing affordability crisis: a 44 percent collapse in black median incomes or a 6 percent increase in average rents?
Without trying, a forthcoming report by the Center for Urban and Regional Affairs has raised this question. According to data from that report, both trends have taken place in Minneapolis over the past 15 years.
Yet while common sense suggests that plummeting incomes merit intense concern, the Star Tribune and local leaders have preoccupied themselves with the much smaller bump in average rents. In doing so, they have summoned the perpetual boogeyman of urban policy: gentrification.
For example, in “Few pockets left for low-income renters” (Nov. 28), the Star Tribune reported that “[a]s rents rise across the city, there are fewer and fewer places for poor people to live.” Joining in this claim is Minneapolis City Council Member Alondra Cano, who argues that she can “feel” gentrification in her ward. Even the report’s authors relay fears that while “renewed investment is a positive development, it is also leading to … gentrification and displacement.”
But turning to the actual data produced to back these assertions, one finds almost no support for them. Instead, the numbers show Minneapolis rents as stagnant — increasing only $3 per year since 2000. Home values grew more quickly, but affordability declined in few areas, and improved in almost as many. The numbers suggest Council Member Blong Yang had it right when he described a “slow, natural progression” in neighborhood economic development.
Why, then, does the same research show a huge loss of rental affordability for black and Latino Minneapolis residents? Simple: massive income declines among renters. The median income for black renters in Minneapolis was almost cut in half in just 15 years — a shocking decrease. Latino renters also saw average incomes fall rapidly. The forthcoming report flags Phillips West as somewhere that has gentrified — a claim hard to square with the fact that incomes in the neighborhood have fallen 34 percent.
When incomes drop so precipitously, housing quickly becomes unaffordable, regardless of whether a neighborhood is declining or booming. This has nothing to do with the pace of economic development or how many white college graduates have moved into an area — it’s a simple problem of poverty. Gentrification this is not: The “g-word” refers to thriving neighborhoods where longtime residents are left behind, not stagnant neighborhoods where residents face economic desolation. The choice to describe this problem as gentrification probably reflects political sensibilities. In rich and poor areas alike, neighborhood newcomers make easy scapegoats for social troubles.
Housing policy in the Twin Cities does face a serious challenge, but that challenge is not gentrification. Instead, the most pressing concern is the concentration and growth of extreme poverty, particularly in low-income, racially segregated neighborhoods. Indeed, the wrenching income declines seen in the upcoming report are at least partly attributable to concentration of poverty: Affected areas are disproportionately found in Minneapolis and St. Paul, as well as a number of inner-ring suburbs.
When the Institute on Metropolitan Opportunity conducted a neighborhood-level analysis earlier this year, it found that housing costs in less-prosperous Minneapolis and St. Paul communities are typically below the regional average, and growing slowly, if at all. By contrast, housing prices in the cities’ most affluent, least affordable neighborhoods continue to grow rapidly, putting these places far out of reach for low- and moderate-income families.
The current geographic divides between rich and poor are yawning wider by the year — the very opposite of gentrification.
In the worst-case scenario, a devastating feedback loop forms, as intensifying poverty drives all but the poorest residents out of struggling neighborhoods. (One of the surest symptoms of poverty concentration is the decline of population density.) This process is especially ruinous in suburbs, where changing demographics can more quickly impact a community’s tax revenue, threatening basic services.
Unfortunately, anti-gentrification activism has offered no real solution to these endemic problems. Frequently, it results only in vague appeals for additional construction of affordable housing — in areas where housing is already the most affordable — combined with intense skepticism toward any development that looks to spur economic revitalization. In the long term, a single-minded obsession with housing costs is a recipe for failure: Low rents alone cannot protect residents from the panoply of misfortunes that accompany extreme poverty.
There is a better approach. Economically and racially integrated communities — with residents spanning the income spectrum — break the poverty feedback loop. There, density and diversity fuel an economic engine, growing jobs and tax base. But vibrant places can’t grow if we panic at the sight of middle-class families moving into historically impoverished neighborhoods.
Instead, we should help struggling families access places that are prosperous, and bring prosperity to places that are not.
Myron Orfield is a professor of law at the University of Minnesota Law School and director of the school’s Institute on Metropolitan Opportunity. Will Stancil is a research fellow at the institute.