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The Lifeblood of Cities

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The Lifeblood of Cities

“Middle” neighborhoods—neither affluent nor poor—remain crucial to urban success. January 9, 2018

The media tend to portray urban neighborhoods as either booming gentrified districts or zones of impoverishment. Neighborhoods in between get overlooked. But these older urban and inner-suburban “middle neighborhoods” may be where the next generation of urban problems—or solutions—will be found. Cities once held vast tracts of such neighborhoods, populated by workers in manufacturing or the civil service. With what analysts call a “barbell” economy dividing increasingly into rich and poor, it’s no surprise that urban middle-class neighborhoods are feeling squeezed.

One of the culprits here is sprawl. In slow-growing regions where new home construction exceeds household growth, new homes put downward pressure on the price of existing homes. Those who can afford the newer, less centrally located homes move, reducing the price of comparable housing in older neighborhoods, leading poorer people to move into these older neighborhoods. This process is called filtering, and it can be a healthy, renewing process in a vibrant local economy. But in stagnant areas, filtering leads to the hollowing-out of the oldest housing stock and ultimately to distressed, abandoned neighborhoods.

For example, Buffalo built nearly 60,000 new homes between 1980 and 2011, even as the area population was shrinking. The Cleveland area continues to build new suburban developments, as its regional population shrinks. This expansion of construction amid economic stagnation is a recipe for distress for older middle neighborhoods.

Another source of stress is demographic change. Many middle neighborhoods contain a monolithic housing stock predating 1960. They were built for the postwar traditional nuclear family. That family structure is in decline, and today’s traditional family often prefers different housing types. As Allan Mallach noted in On the Edge: America’s Middle Neighborhoods, “Many of these neighborhoods are now facing a demographic trap: the demographic for which they were designed and which sustained them for most of the past century has declined drastically as a share of the urban population and no new source of demand capable of sustaining these areas has emerged.”

In some core cities like Cincinnati, the share of households consisting of married families has fallen into the single digits. The share of single-mother households, by contrast, has increased. As Mallach notes, regardless of what anyone thinks of them, single-mother households have far lower median incomes than married-family units, and significantly higher poverty levels. In cities like Baltimore and St. Louis, about half of single-mother households live in poverty. They simply lack the financial means to maintain older housing. These forces can tip neighborhoods from unglamorous but stable, middle-class districts into zones of deterioration.

The housing crash helped catalyze this phenomenon. One example is the neighborhood of Belair-Edison in Baltimore. Baltimore is famous for the extremes of its poor, violent zones and its glamorous Inner Harbor waterfront, but significant tracts of the city could be classified as middle neighborhoods, with solid blocks of aging but intact row houses and high levels of home ownership. Pre-crash, in 2006, 99 percent of Belair-Edison’s home sales were standard owner-to-owner transactions, 75 percent of which were conventionally financed. But in 2015, over 60 percent of home sales were either bank-owned sales resulting from foreclosure, or short sales. And 70 percent of all transactions were financed with cash. The per-square-foot prices of foreclosure and short-sale transactions were less than half those of standard sales, undermining values and appraisals for regular homeowners trying to sell, and making it tough for ordinary would-be buyers to get financing. The entities buying foreclosed properties for cash are often out-of-town investors, many operating the properties as low-grade rentals.

While the public image of urban middle neighborhoods probably still resembles the white, working-class Queens featured in TV shows like All in the Family, today’s middle neighborhoods also include many of America’s black middle-class bastions, like Chicago’s Chatham neighborhood. For many of these neighborhoods, a lack of investment and dearth of next-generation homeowners are far bigger concerns than gentrification. Like older white suburbs, these urban black middle-class neighborhoods have seen their share of youth population decline as millennial lifestyle choices shifted. Community leaders in places like Chatham are trying to make their neighborhoods more appealing to younger black renters and homebuyers, but they lack the capital to build out amenities and add features to make the communities attractive.

With many aid programs restricted to poor areas, and much of the urban discussion focused on gentrification, middle neighborhoods are neglected, to the detriment of many cities. To the extent that urban leaders want to retain a middle class, not just the rich and poor, in their cities, these existing middle neighborhoods are the key to making it happen.

Photo by Grzegorz Kieca/iStock

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