Poverty, Planning & Politics

After many large cities began to feel the full effects of suburbanization and their declining tax base, many city planners and politicians began to turn to radical solutions involving huge tax cuts for big business and mega-developments.

For those of you who aren't familiar with New York, this is a picture of the projects in New York City.

During the mid-1900s, the construction of large clusters or rows of high-rise low-income housing projects like these became a popular option for planners in dealing with the problem of urban poverty in large cities such as New York, Chicago and Boston. In some cases, such as in Chicago from 1950 to 1965, the political and planning leaders of the city “supported the construction of these giant complexes of elevator buildings as a way to prevent the growing African American population from spreading into white neighborhoods”. So why were they built like this? A lot of it clearly had to do with racism.

This is a picture of a restrictive covenant, and these were drafted from the beginning of suburban sprawl in the early 20th century all the way into the 1940s when the Supreme Court ruled against their existence. The purpose of these hateful documents was to keep minorities out of the suburbs. They did, however, still exist with slightly different wording a good ways into the 1960s.

But it didn't end in the 1960s. The effects of these plans to segregate the urban population on a massive scale still exist today. Thousands upon thousands of working-class people living in these “projects” with underfunded schools and dangerously neglected infrastructure are forced to compete with one another for a few hundred jobs, and many of the current residents living in these conditions are disproportionately minorities ever since their grandparents’ generation was kept away from predominantly white suburban neighborhoods by racist politicians and city planners of the 1950s.

Even aside from the problem of racial segregation is the problem of having too many high-rise low-income public housing buildings grouped together in a way that makes it impossible to have enough low-skill jobs available within walking distance of the projects for all of the residents there to be employed. Why do jobs have to be within walking distance? Because many residents in the projects don't have cars, and certainly don't have the money to take a taxi to the other side of town every day.

So how could this situation be improved? Planners of the past tried urban renewal, and it worked horribly. Another possibility is the implementation of fiscal regionalism techniques, so I'll talk about that in a later post. Be sure to check back for updates!

- David

Have you ever wondered why some of the downtown areas of big cities are in such bad shape? Why is it so much nicer to live in places with names like The Oaks or Foxville Springs than it is to live on Main Street or Roosevelt Avenue?

According to the Census Bureau, the United States has an average poverty rate of roughly 12.7%. Within major cities, however, the poverty rate changes to 28.5% in Miami, 30.7% in the Bronx and 29.1% in Providence to name a few.

And to make it worse, severe poverty can even be segregated within a large city by packing it into separate municipality lines. Some examples include a 26.3% poverty rate in Cleveland with a 32.0% poverty rate in East Cleveland, and a 24.6% poverty rate in St. Louis with a 35.1% poverty rate in East St. Louis.

What this is trying to show is that poverty is being packed into specific areas of the big cities. So what? Is this a problem?

Yes, this is a big problem that makes it extremely difficult for people who are currently in poverty to ever have a chance of making it out of poverty. Why? People living in these areas of the big cities with high poverty rates have to deal with the following problems:

1. High property taxes
2. Ever-devaluing property
3. Low total tax revenue
4. Underfunded and inadequate schools
5. High crime rates
6. Better educated residents leaving
7. Low-skill jobs leaving the city

With the spread of suburbanization, many wealthy people began to leave the cities in order to live in the new suburbs. Because of this, the cities no longer had tax revenue from some of the wealthiest members of the population. To make up for the difference, cities had to then raise the tax rates. This raise in taxes caused businesses to close shop in the cities as well in favor of cheaper places to do business in the suburbs. The businesses leaving put many of the poor workers in the cities out of work, leaving the cities with even less of a tax base and forcing them to continue to raise taxes.

In the end, cities were stuck with higher tax rates than the suburbs, but less actual tax revenue because the majority of the people still in the city were poorer residents who could not afford to buy a house in the suburbs. Without a good amount of tax revenue, many inner city areas have to cut spending on education, police, fire protection, and infrastructure. This lowers the quality of inner city schools, make the streets of inner cities less safe, and leaves buildings in the inner city to fall apart. And without many businesses in the area, many residents are left without job opportunities and are forced to live on welfare.

So, just in case you were wondering why the downtown areas of cities are in such bad shape, there are a few reasons why.

One possible solution to this problem is the concept of fiscal regionalism, which will be covered in a later blog post. Stay tuned!

- David