Economic Distress in Inner City Neighborhoods

Economic Distress in Inner City Neighborhoods

Introduction

  • The economic distress in inner-city neighborhoods is characterized by the inability of companies, families, and individuals to generate sufficient income to meet their financial needs.
  • This issue can be analyzed through various human geography themes.

Human Geography Themes

  • Spatial Distribution: Concentration of poverty in specific areas.
  • Movement of Jobs: Impact of offshoring on local economies.
  • Human Environment Interaction: Presence of brownfields (contaminated industrial sites).
  • Region: Common characteristics defining a broad geographical area experiencing similar economic challenges.

Government Policies, Real Estate Practices, and Banking Practices

  • These factors contribute to economic distress and are often connected to race and ethnicity.
  • Context: Historical background of Jim Crow Laws and the Plessey v. Ferguson Supreme Court case, which legalized segregation, set the stage for discriminatory practices.

The Great Migrations

  • 1910-1930: Approximately 1.5 million people migrated.
  • 1940-1970: Approximately 5 million people migrated.
  • Historical Population Increase:
    • 1910: 40,000
    • 1940: 278,000
    • 1960: 800,000

Racial Segregation in Cities

  • Racial Zoning Laws: Laws designed to keep racial/ethnic groups separate.
  • Restrictive Land Covenants: Legal contracts establishing rules for buying and selling property, often excluding specific groups.
  • Exclusionary Zoning Laws: Laws that indirectly prohibit specific groups from living in certain neighborhoods.

Redlining

  • Redlining is the practice of designating areas as too risky for investments or loans.
  • Rating System:
    • “A” Rating (Green): Newer, more affluent areas.
    • “B” Rating (Blue): Newish areas.
    • “C” Rating (Yellow): Declining older city neighborhoods.
    • “D” Rating (Red): Areas considered most risky for investments or loans.

Discriminatory Practices

  • Filtering: A pattern of movement for individuals and families affecting their living conditions.
  • White Flight: The phenomenon of white families moving out of neighborhoods when black families move in.
  • Buying “on contract”: A predatory lending practice.

Blockbusting

  • A real estate practice where agents create panic among White homeowners to sell their homes at a discount.
  • Real estate agents persuade owners to sell property at a low price due to fear of other ethnic or social groups moving into the neighborhood, then reselling at a higher price.

Buying on Contract

  • Purchasing a house from the current owner but not owning it until the entire cost is paid.

Predatory Lending

  • Purchasing a house at an interest rate well above the normal rates; 73% of such loans targeted specific communities.

Urban Blight

  • Urban Blight is the decay of a neighborhood into disrepair.

Urban Renewal

  • Redevelopment of blighted neighborhoods by demolishing slums and rebuilding with new homes and amenities
  • Goals:
    • Attract Middle Class
    • Increase Tax Revenue (Sales Tax and Property Tax)
  • Issues:
    • Chicago demolished 350,000 housing units during the 1960s.

Public Housing - The Projects

  • Goal: Filtering
  • Reality: Often resulted in the "3 Ds"
  • Example: Robert Taylor Homes in Chicago, designed for 11,000 but housed 27,000 residents (20,000 were children); demolished in 2007.

Filtering

  • The natural movement of people from low-income housing to higher-income housing.

Development of the Urban Poor

  • A socio-economic class with income sufficiently below the poverty line, requiring external assistance.

Deindustrialization and Brownfields

  • Deindustrialization and Brownfields also contribute to inner city neighborhoods becoming economically distressed.

Gentrification

  • Redevelopment of inner-city neighborhoods by renovating and bringing in new middle-class residents without displacing the current residents.
  • Details: Involves loans and scattered/mixed housing.
  • Positive Effects:
    • Beautification
    • Increased Property Values
    • Increased Taxes
    • Jobs
  • Negative Effects:
    • Housing becomes more expensive
    • Original residents can be displaced

In-filling

  • The process of developing vacant or underused parcels within existing urban areas that are already largely developed.
  • This is often done to make more efficient use of land and infrastructure, reduce urban sprawl, and revitalize communities.

Observation on Gentrification

  • Mixed Residential & Scattered Site Approach
  • Current Residents:
    • Household income of families living within a 3/43/4 mile radius
  • Future Residents:
    • Household incomes within proposed Atlantic Yards
  • Low Income Families:
    • Less than 21,270:2421,270: 24
    • 21,270 to $28,360: 10
    • 28,361 to $35,450: 7
  • High Income Families:
    • 42,540 to $70,900: 7
    • 70,901 to $99,260: 16
    • 99,261 to $113,440: 6
    • More than 113,440:7113,440: 7