Richard Florida is a co-founder and editor at large of CityLab and a senior editor at The Atlantic. He is a University Professor and Director of Cities at the University of Toronto’s Martin Prosperity Institute, and a Distinguished Fellow at New York University’s Schack Institute of Real Estate.
An analysis finds metros with more polarized housing values are also more segregated.
Over the last two decades, America has become increasingly polarized by both class and geography. As the middle class and its neighborhoods have declined, our nation has increasingly divided into rich and poor, and neighborhoods of concentrated affluence have become surrounded by larger spans of concentrated disadvantage.
This pattern is both reflected and reinforced by housing prices. An analysis released today by the real estate company Trulia finds considerable overlap between racial segregation and polarization of housing values across America’s 100 largest metropolitan areas.
The analysis measures housing segregation as the share of neighborhoods with the highest versus the lowest housing values compared to the metro median. From that, the study draws out the “dissimilarity index,” a commonly used segregation metric that scores metros on a scale from 0 to 100, where higher values reflect higher levels of housing segregation.
The metros with the highest levels of housing segregation include Detroit (72.2), Milwaukee (66.7), Fairfield, Connecticut (61.0), Birmingham (60.6), and Dayton (58.3).
The chart below shows the metros which have seen the largest increases in housing segregation between 2011 and 2016. Detroit tops the list, followed by Charleston, New York, Greensboro, and Wichita. Rounding out the top 10 are Milwaukee, Albany, Birmingham, Allentown, and Boston. Of this group, most are hard-hit Rust Belt metros; just two—New York and Boston—are larger, expensive superstar cities.
Metros with the largest increase in home value segregation
|Metro Area||2011 Index||2016 Index||Change|
There are two distinct patterns here. On one hand, the polarization in housing values in New York and Boston is driven by the growth in very expensive neighborhoods. New York saw a nearly 10 percentage point change in high-end neighborhoods, compared to just a 2 percentage point change in very low-priced neighborhoods.
On the other hand, in the Rust Belt metros, the polarization of housing values is being driven by the growth in low-priced neighborhoods. While that could be a sign of early revitalization, the report finds that metros with the largest increases in home value segregation saw the gap grow at the bottom end of the market, where the share of least-expensive neighborhoods grew. In Detroit, for example, very low priced neighborhoods increased by more than 17 percentage points, while very expensive neighborhoods grew by less than 5 percentage points.
The maps below show the pattern of housing polarization in Detroit for both 2011 and 2016. Orange shows very expensive neighborhoods, yellow and light green are middle income neighborhoods, and dark green shows neighborhoods with very low housing prices.
In both periods, there is a sea of orange across the affluent suburbs to the west and the elite Grosse Pointe neighborhoods along the lakeshore, which mirror the pattern of my own analysis of Detroit’s class divides published here in 2013. But the consolidation of orange fields near the downtown core reflects the more recent gentrification of Detroit’s urban center.
The chart below shows the 10 metros where housing polarization has declined the most from 2011 to 2016. One thing that stands out is that these are all Sunbelt metros. Phoenix and San Diego top the list, which mainly includes metros in California and Florida. All of these areas continue to attract people. Most have experienced considerable sprawl. They are not built out and have been able to add considerable housing out in their suburban peripheries. Also, many of these metros were hard-hit by the 2008 housing crisis and saw massive decline in housing prices, which may have caused housing values to converge somewhat.
Metros with the largest decrease in home value segregation
|Metro Area||2011 Index||2016 Index||Change|
|San Diego, California||39.19||21.64||-17.55|
|Cape Coral, Florida||64.75||49.34||-15.41|
|Ventura County, California||29.19||17.11||-12.08|
|Deltona-Daytona Beach, Florida||45.57||34.77||-10.79|
The one big surprise is Oakland, which has experienced housing price pressure as a result of the tech boom the San Francisco Bay Area—so much so that the city has been the center of considerable protests over tech-fueled gentrification.
The polarization of the housing market varies between small and large metros, as well. In smaller metros, there is a bigger gap between affluent neighborhoods of homeowners and less expensive and less affluent neighborhoods of renters. In larger metros, owners and renters tend to be more mixed across neighborhoods.
You might think that the housing crisis would have reduced income segregation by lowering housing prices and making housing in middle-class neighborhoods more affordable for less-advantaged groups. But the study does not find that to be the case. Indeed, though housing polarization decreased in more than half of these metros (53 of 100), income segregation decreased in far fewer of them, just 36 out of 100 metros.
In fact, housing polarization seems to compound racial segregation, according to the study. Across these 100 metros, housing polarization and racial segregation appear to go together, as can be seen in the scatter-graph below.
The study suggests that efforts to combat segregation by income and race would benefit by expanding the housing choices available to residents. This will vary by type of city and metro area.
Smaller metros—especially those split between expensive single-family neighborhoods and low-priced renter neighborhoods—will benefit from expanding the stock of affordable rentals in upscale, largely suburban neighborhoods. Economically stagnate Rust Belt metros still need more upgrading of housing in distressed neighborhoods, and larger gentrifying metros need more housing and more affordable housing across the board.