Bring on the wealthy to ease inequality in Detroit

Arguments about gentrification are too simplistic and miss the obvious benefits of changes in Detroit, according to Joe Cortright, an urban-affairs consultant who writes for City Observatory among other sources.

“There are finally signs of a turnaround, a first few glimmers that the city is stemming the downward spiral of economic and social decline,” Cortright wrote recently. “But for at least a few critics that’s not good enough: not content with cursing the darkness, they’re also cursing the first few candles that have been lit, for the sin of failing to resolve the city’s entire crushing of decline everywhere, for everyone, and all at once.”

Cortright, who is based in Oregon, argues that neighborhoods thrive when the rich and poor cohabitate. And he contends that those who complain about changes to a few areas ignore the far larger problem – that poverty continues to exist in too many.

Bridge: You argue the problem in urban areas isn’t gentrification, but a growing population that lives in high-poverty neighborhoods with few ways out. Can you expand on that?

Joe Cortright: For very good reason, we’re concerned about poverty in the U.S. It has devastating effects on people’s lives, and it tends to propagate inter-generationally. Kids who grow up in poor families have their opportunities permanently foreclosed. One of the things we’re increasingly coming to understand about poverty is, as bad as it is to be poor and to grow up in a poor family, all of the negative effects of poverty are amplified if you grow up in a neighborhood where a large fraction of your neighbors are also poor.

There’s a stereotype with gentrification, that a neighborhood completely flips, that it goes from all poor people to none. But again, if you look at these neighborhoods, they tend to not have zero poverty. And the ones that do rebound, they tend to gain population. So the choice isn’t between a neighborhood staying the same, it’s between whether a neighborhood grows and improves or whether it actually loses population.

The other point that’s key is that concentrated poverty has tripled in the U.S. since 1970, and there are twice as many people living (there). More poor people, as a fraction (of the population) now live in these neighborhoods, which we know makes all the effects of poverty worse.

So gentrification is a rarity, then? And gets written about more because of this?

As humans, we have this cognitive bias: We’re very keen observers of abrupt changes in our environment. So when new buildings go up, when the faces change, we notice that. What we don’t notice is the slow erosion of a neighborhood over a period of decades. So these neighborhoods that have (declined), they’re what we call fallen stars – they were demonstrably middle-class neighborhoods in 1970 or 1980. And slowly, steadily, they deteriorated. It happened so gradually that no one paid attention to that. When you juxtapose the rapid changes happening in these gentrifying neighborhoods, you don’t have a frame of reference for that.

You recently wrote, “As a practical matter, the only way forward for the Detroit economy is if more middle-income and even upper-income families choose to move to the city (or stay there as their fortunes improve). That will nominally make some of the income numbers look less “equal” but will play a critical role in creating the tax base and the local consumption spending that will – gradually – lead to further improvements in Detroit’s nascent economic rebound.”

You’re making a backdoor argument that it’s not a bad thing to have wealthier people move into a neighborhood. They may be hipsters, but they’re bringing in money and a lot of things that end up helping poorer residents.

It may be contentious and fractious to have new neighbors who have more money, and look different from you, and it may intensify people’s awareness of inequalities, but it’s demonstrably better to have wealthier neighbors than poorer ones.

So are you saying that it’s better to have some gentrification, with the displacement, the inequality, all of it, than to have increasing suburban segregation? That it may be half a loaf, but at least there’s some bread there?

Gentrification is a very contested, very ambiguous term. A lot of people equate gentrification with displacement; there’s this assumption that if one new person moves in, it must be that one moves out. We know that’s not true. The evidence is very weak that it leads to displacement. In contrast, we know that if you define displacement as a decline in the poor population, we know that (it’s already happening), (when) neighborhoods decline. There’s implicitly this false comparison, that if gentrification didn’t happen, this neighborhood would stay the same, and that’s not the alternative.

“It’s demonstrably better to have wealthier neighbors than poorer ones.”

The question you have to ask is, would the people in the inner city of Detroit be better off if some or more of the businesses locating in Detroit instead chose to locate somewhere in the suburbs? And I think the answer to that is, mostly no. All the costs of running Detroit city, the schools, will be spread over fewer and poorer people. And the prospects for it getting any better will be that much weaker.

Something else you wrote: “What’s called ‘inequality’ at the neighborhood level is actually a sign of economic mixing, or economic integration – a neighborhood where high-, middle- and low-income families live in close proximity and where there are housing opportunities at a range of price points.”

That sounds like what some say about the ideal of small towns, and the way well-off and poor people come together in schools and other places because it’s harder to remain separate. It’s a little paternalistic, but there’s some truth to it. Is that what you’re saying here?

Yes. That’s a critical part of it. The good news in the U.S. over the last 40 years is, racial and ethnic segregation has been decreasing. We’re less likely to live in neighborhoods with (only) people of the same race. But economic segregation has been increasing. Rich people and poor people don’t live in the same neighborhoods, what (former U.S. Secretary of Labor) Robert Reich calls “the secession of the successful.” So the lawyer’s daughter only hangs out with the architect’s sons.

Can you summarize what you see in Detroit now and what we might expect in the future? Is it possible that gentrification can become plain old neighborhood improvement?

Even in places like New York, you find a much finer mixing of high- and low-income people. Even in neighborhoods that have gentrified, you have that. If the city does things that make it easy to build housing, if it finds money for affordable housing, then it can have mixed-income neighborhoods anywhere. I’m in Portland (Oregon), and here, in an old industrial neighborhood near downtown that redeveloped, the city set aside some of its tax increment financing money from that neighborhood, about 30 percent of it, and plowed it into affordable housing. So we have about 2,400 units of affordable housing (in an area) that has some of the most expensive condo towers in the city. And they’re next to each other. It’s very possible, with public policy, to encourage mixed-use development.