Housing in the Context of Neighborhood Decline

Housing in the Context of Neighborhood Decline

Parker Lester, Social Science Analyst

Urban disinvestment increased during the 20th century as many cities experienced depopulation and deindustrialization.

“Housing in the Context of Neighborhood Decline,” a working paper from the Joint Center for Housing Studies of Harvard University written by Sharon Cornelissen and Christine Jang-Trettien, discusses the effects of urban neighborhood decline on housing. The working paper is designed to divert readers’ attention away from gentrification and the affordability crisis of housing in more affluent neighborhoods and toward the housing crisis in neighborhoods with chronic disinvestment. In their analysis, the authors conclude that “quantitative studies have found gentrification to be concentrated in the nation’s most prosperous cities, while it remains rare in smaller cities and neighborhoods on the urban periphery.”

Cornelissen and Jang-Trettien define neighborhood decline as “growing neighborhood poverty, decreasing housing values, and the deterioration of neighborhood services through the withdrawal of public and private investment capital.” They stress that this decline disproportionately affects Black Americans. Throughout the 20th century, Black Americans “were usually relegated to substandard homes in cities’ older cores.”  These Black neighborhoods soon became overcrowded, and landlords took advantage of the tight housing market to inflate prices. Further exacerbating this housing crisis, say Cornelissen and Jang-Trettien, was that “most banks refused to lend to Black families, forcing would-be Black homebuyers to depend on intermediaries who used exploitative land contracts, and sometimes profited doubly as both broker and seller.”

Urban disinvestment increased during the 20th century as cities throughout the country experienced depopulation and deindustrialization. Companies relocated to the suburbs, and their workers soon followed. Cornelissen and Jang-Trettien state that, because of “racially-exclusive FHA mortgage loan guarantees, the federal government sponsored white families’ homebuying in the suburbs across the nation, while it denied loans to Black families and in Black neighborhoods.” The authors suggest that these discriminatory financial systems helped form the foundation of contemporary development and have created significant disparities in Black and white neighborhood vitality and divergent trajectories for the residents of these neighborhoods.

Cornelissen and Jang-Trettien suggest that cities that are at the forefront of globalization have benefited from the return of young professionals and reinvestment in specific urban neighborhoods. Cities such as Baltimore and Detroit, however, are still wrestling with depopulation thanks to their historic reliance on manufacturing as agglomeration economies. Now, according to the working paper, the issue of neighborhood decline exists primarily on a regional rather than a national scale, but the effects of discriminatory practices persist in major American cities. Other events that underscore urban decline include the rise of institutional investors following various U.S. economic crises as well as the housing market crash in 2008. As the paper notes, “In Detroit, property values fell precipitously due to large numbers of mortgage foreclosures and the recession that began in 2008. This exacerbated the city’s fiscal crisis, and in 2013 Detroit became the largest city to declare bankruptcy in U.S. history.”

To best ameliorate the issues that lead to urban decline, Cornelissen and Christine Jang-Trettien propose a conceptual shift in research direction to include new indicators in addition to poverty rates. They argue that this shift will accomplish the following:

• Situate contemporary housing inequalities, as conditioned by historical and ongoing trajectories of urban decline.

• Theorize contemporary racial inequalities in housing by focusing on historical trajectories of urban decline in predominantly Black neighborhoods.

• Balance out housing scholars’ disproportionate focus on gentrification.

• Attune scholars to ongoing sociopolitical and structural transformations shaping cities.

Such a conceptual shift would ideally involve generating new ideas and new questions through the following:

• Understanding how policies and practices that determine how local governments tax, buy, sell, and classify disinvested property can significantly impact local housing markets.

• Understanding the role of homeowners in declining markets and the informal housing markets that may emerge in disinvested neighborhoods.

• Understanding the instrumental role of real estate investors in sorting renters across neighborhoods.

• Documenting and analyzing residents’ lived experiences of homes and property in declining neighborhoods.

Cornelissen and Jang-Trettien explain that in low-income neighborhoods, urban decline is more common than gentrification. Although many voices focus on reviving U.S. neighborhoods, urban decline has gone understudied. The authors state, “[U]rban decline is an ongoing process of urban transformation, shaped by ever-changing institutions, socio-economic trends, and residential preferences,” thereby providing the context behind the enduring and systemic issue of urban decline.

See the working paper here: Housing in the Context of Neighborhood Decline | Joint Center for Housing Studies (harvard.edu)