The New Face Of Under-Resourced Communities
The New Face ofUnder-ResourcedCommunitiesby Peter Eberhardt, Howard Wial, and Devon YeeInitiative for a Competitive Inner CityOCTOBER 2020
SummaryThis report examines the current state of under-resourcedcommunities— relatively heavily populated areas of highpoverty and low income located in metropolitan areas. Itis often thought that these communities are largely Blackinner-city neighborhoods located in big cities. This reportshows that this common perception is incomplete.A majority of the residents of under-resourced communities are people of color and a disproportionate percentage(compared to the entire U.S. population) are Black but amajority are not Black. The residents of these communitiesdisproportionately live in large cities but there are manyunder-resourced communities in smaller cities andsuburbs.More than 1400 municipalities and unincorporated places(those without a municipal government) in 183 metropolitan areas include all or part of an under-resourced community as defined in this report. Analyzing data from theCensus Bureau’s American Community Survey for theyears 2014 through 2018, the report finds that:The residents of under-resourced communitiesmake up 14 percent of the U.S. population but31 percent of the nation’s poor.Taken together, the nation’s under-resourcedcommunities have a poverty rate of 29 percent,more than double the 13 percent poverty rate ofthe nation as a whole.Taken together, 52 percent of under-resourcedcommunity residents are people of color, comparedto 27 percent of all U.S. residents. These communitiesare 31 percent Black, compared to 13 percent forthe nation as a whole. Overall, Hispanics or Latinos(who may be of any race) are 38 percent of theresidents of under-resourced communities,compared to 18 percent for the nation as a whole.Under-resourced communities in the Midwest,South, and Northeast have high percentages ofresidents who are Black, while under-resourcedcommunities in the West are majority Hispanic orLatino and have a low percentage of residents whoare Black. Black residents are 43 percent of theunder-resourced community population in theMidwest, 37 percent in the South, 34 percent in theNortheast, and 9 percent in the West. The majority(58 percent) of residents of under-resourcedcommunities in the West are Hispanic or Latino,compared to 17 percent of residents in underresourced communities in the Midwest.Of those who live in under-resourced communities,69 percent live in principal cities and 31 percentlive in suburbs. Principal cities roughly correspondto traditional central cities but also include otherpopulation and employment centers.Both the total population and the poor populationof under-resourced communities are split aboutevenly between cities with populations of 250,000or more and those with populations below250,000. Cities with populations of 250,000 ormore are home to 51 percent of poor residentsand 48 percent of all residents of under-resourcedcommunities.The New Face of Under-Resourced CommunitiesICIC October 20202
For the 450 major cities that have under-resourcedcommunities, the report ranks those communities according to their level of economic disadvantage, measured bytheir poverty rate and the percentage of all poor residentsof the city who live in those communities. The rankingsshow that:Among the 450 ranked cities, the five mostdisadvantaged under-resourced communities arelocated in Dearborn, MI; Flint, MI; Youngstown, OH;York, PA; and Detroit, MI, while the five leastdisadvantaged are located in San Jose, CA;Berkeley, CA; Longmont, CO; Federal Way, WA; andBaldwin Park, CA. An online appendix providesgrouped rankings for all 450 cities.In general, under-resourced communities are moredisadvantaged if they:dAre located in the Midwest or Northeast.dAre located in principal cities.dHave large percentages of residents who are Black.Like the disproportionate percentage of underresourced community residents who are Black,this is a result, to an important extent, of systemicracism in many institutions, including historic andongoing discriminatory housing policies that havekept Black people behind in spite of their resistanceto those policies.These geographic and demographic patterns of disadvantage likely result from systemic racism; regional differences in the structure of local government; better publictransportation and older, less expensive housing in principal cities; and exclusionary zoning in many suburbs.The report recommends comprehensive communitydevelopment strategies to reduce concentrated poverty inunder-resourced communities in ways that benefit andreflect the priorities of low-income residents and build onthe strengths of their communities. A companion policybrief, It's Time for a Comprehensive Approach to FightingConcentrated Poverty, sets forth five principles thosestrategies should follow.A majority of the residents of underresourced communities are people ofcolor and a disproportionate percentage(compared to the entire U.S. population)are Black but a majority are not Black.The residents of these communitiesdisproportionately live in large cities butthere are many under-resourcedcommunities in smaller cities and suburbs. Are located in cities of 500,000 or more residents.The New Face of Under-Resourced CommunitiesICIC October 20203
IntroductionRacial inequality and overall economic inequality areamong the defining issues of the current moment. Concentrated poverty stands at the intersection of these twoissues. The concentration of poor people in high-povertycommunities perpetuates income and wealth inequalityacross generations, as children who grow up in those communities experience continuing economic disadvantageas adults.1 Poor people of color, especially poor Blackpeople, are more likely than poor whites to live in highpoverty neighborhoods,2 so that the disadvantages ofconcentrated poverty are more severe for people of color,especially for Black people. At the same time, growingincome gaps between rich and poor lead to more residential segregation by income, creating more very poor neighborhoods as well as more very rich ones.3 Moreover,communities of concentrated poverty are primarily communities of color and, to an important extent, became thatway because of discriminatory housing policy4 reinforcedby systemic racism in a variety of institutions.In addition to its impacts on inequality, concentratedpoverty has other negative effects on community residents. People who live in high-poverty neighborhoodshave little access to high-quality schools, grocery stores,parks, health care facilities, and public transportation. Theyexperience high levels of violence and crime and, especiallyin communities of color, high rates of arrest, imprisonment, and police violence. High rates of exposure to environmental hazards are also more common in very poorcommunities as well as in communities of color.5The New Face of Under-Resourced CommunitiesRacial inequality and overall economicinequality are among the defining issuesof the current moment. Concentratedpoverty stands at the intersection ofthese two issues.This report examines the current state of concentratedpoverty in the U.S. through the lens of under-resourcedcommunities—relatively heavily populated areas of highpoverty and low income located in metropolitan areas. (Weintroduce our full technical definition of an underresourced community in the next section of the report.)The report describes the demographic and geographiccharacteristics of these communities. It shows thatalthough both race and city size are associated with economic disadvantage, the common perception that concentrated poverty in metropolitan areas is a problem oflargely Black inner-city neighborhoods in big cities isincomplete. The report also ranks under-resourced communities by their level of economic disadvantage. Therankings are intended to motivate public, private, and nonprofit decisionmakers to reduce concentrated poverty sothat the communities that are currently under-resourceddo not remain that way. The report concludes by recommending comprehensive community development strategies as a means of achieving that goal. A companionpolicy brief, It's Time for a Comprehensive Approach toFighting Concentrated Poverty, explains five principlesthose strategies should follow.6ICIC October 20204
Defining and DescribingUnder-Resourced CommunitiesOur definition of an under-resourced community includesrelatively large high-poverty, low-income areas in all butthe smallest metropolitan areas. These communities maybe located in either traditional central cities or suburbs.Our definition reflects ICIC’s longstanding interest inplace-focused economic development policies and strategies that create, grow, and improve businesses and jobs.We exclude places with high percentages of residents whoare not likely to benefit from such policies and strategies(such as undergraduate and graduate students and residents of dormitories, prisons, and nursing homes).We define an under-resourced community as a group ofcontiguous census tracts that meet specific requirements.Census tracts are small, relatively permanent geographicareas defined by the U.S. Census Bureau. Because censustracts are typically small in population and land area,researchers often refer to them as “neighborhoods.”ddAccording to our definition, each tract in an underresourced community must have all of the followingcharacteristics:dIt is part of a group of two or more contiguous census tracts that have a combined population of atleast 8,000. The purposes of this requirement are toinclude large areas of concentrated poverty, excludeisolated pockets of poverty whose residents are lesslikely to experience the disadvantages of concentratedpoverty, and ensure that an under-resourced community has a population large enough to support at leasta convenience store (regardless of whether the community currently has a convenience store). The 8,000population minimum corresponds to the combinedpopulation of two typical census tracts and is roughlythe midpoint of convenience store support estimatesseen from retail and site selection consultants.The New Face of Under-Resourced CommunitiesdIt is located in a metropolitan area whose population is at least 250,000. This requirement excludesnonmetropolitan areas and very small metropolitanareas, whose low population densities make theirlocal economic development problems quite differentfrom the community development problems of central cities and suburbs in larger metropolitan areas. Atthe same time, the 250,000 population cutoff is lowenough to include the 187 largest U.S. metropolitanareas, of which 183 have under-resourced communities according to our definition.It either (a) has a non-student (undergraduate andgraduate) poverty rate of at least 20 percent or (b)has a non-student poverty rate of at least 18 percentand is contiguous to at least one census tract thathas a non-student poverty rate of at least 20 percent. A 20 percent poverty cutoff is most commonlyused in the research literature. We exclude currentlyenrolled undergraduate and graduate students fromthe calculation of poverty because students are notpopulations for which anti-poverty policies are typically intended. Based on our contextual knowledge ofseveral large and medium-sized metropolitan areas,the 18 percent contiguous-tract cutoff includes areasthat local residents typically perceive as part of aninner city or large area of concentrated poverty.Its median household income is less than the nationwide median household income. Although the overwhelming majority of neighborhoods with povertyrates of at least 20 percent also have median incomesbelow the national median, some do not. Those thatdo not are located mainly in relatively high-incomeareas in a few very high-income metropolitan areas.They typically have very high-income residents livingin close proximity to poor residents. We exclude theseareas because our contextual knowledge suggestsICIC October 20205
that local residents regard these areas as high-incomeareas with pockets of poverty and because placefocused policies may not be relevant to the problemsof low-income residents in these areas.dddNo more than 65 percent of its population consists ofundergraduate or graduate students. Our 65 percentcutoff is deliberately conservative; less than 1 percentof neighborhoods in the U.S. have student populationpercentages over 65 percent.No more than 65 percent of its population consists ofresidents of group quarters (such as college dormitories, nursing homes, and prisons). As with students,our 65 percent cutoff is deliberately conservative.It meets requirements designed to exclude lowdensity exurban and semi-rural areas that are oftenlocated at the fringes of metropolitan areas.7 Weexclude tracts that either have populations spreadout over large land areas or are in small towns thatare separated from the population centers of largemetropolitan areas by large, low-density areas. (TheRiverside-San Bernardino-Ontario, CA, metropolitanarea is an example of a large metropolitan area thathas both of these kinds of tracts.)Under-resourced communities may extend across municipal or county lines. For example, much of Newark, NewJersey, and adjoining low-income areas in parts of EastOrange, Orange, and Irvington form a single underresourced community. However, because government andsome private and nonprofit decisionmakers often limittheir attention to areas within governmental boundaries,we use those boundaries to describe and rank underresourced communities. Thus, for example, this reportconsiders the under-resourced communities in Newarkand each of its suburbs separately.The New Face of Under-Resourced CommunitiesMore than 1400 separate municipalities and Censusdesignated unincorporated areas (places without a municipal government) have a least one neighborhood that ispart of an under-resourced community. In this report, wedistinguish between two types of places that haveunder-resourced communities:dd450 cities8 with at least 50,000 people or principalcities of any size. These include the traditional central cities of metropolitan areas as well as some otherolder cities and large suburbs. We rank these citieson the level of disadvantage in their under-resourcedcommunities.284 counties or portions of counties that includeother under-resourced communities that are notlocated in the 450 cities described above. We includethese “county balances” in our descriptions ofunder-resourced community demographic and geographic characteristics but do not rank them becausethey are extremely heterogeneous.Our data come from the Census Bureau’s 2014-2018American Community Survey (ACS) five-year estimates,which are the most recent data available. All the geographic and demographic categories we use are the sameas those used by the Census Bureau. We describe the totaland poverty populations of under-resourced communitiesas a whole. We also examine the racial and ethnic composition of residents. Following Census Bureau convention,we treat Hispanic or Latino ethnicity separately from race,so that Hispanics or Latinos may be of any race. However,when reporting data on the white population, we distinguish between Hispanic and non-Hispanic whites. In addition, we compare under-resourced communities accordingto the region of the country in which they are located, thesize of the city in which they are located, and whether theyare located in a principal city (roughly, a traditional centralcity or other population or employment center)9 or asuburb (which we define as any portion of a metropolitanarea that is not a principal city).ICIC October 20206
The Demographics and Geographyof Under-Resourced CommunitiesOur analysis of the ACS data shows that:1The residents of under-resourced communitiesmake up 14 percent of the U.S. population but31 percent of the nation’s poor.10 (See figure 1.)Under-resourced communities, therefore, include asubstantial minority of the poor. The majority of thepoor, who do not live in under-resourced communities, live in either low-poverty communities withinmetropolitan areas, high-poverty communities in theexurban and rural fringes of metropolitan areas, ornon-metropolitan areas.Figure 1. Percent of U.S. Total and Poverty Populations Living in Under-Resourced Communities2Taken together, the nation’s under-resourced communities have a poverty rate of 29 percent, morethan double the 13 percent poverty rate of the nationas a whole. (See figure 2.) The aggregate 29 percentpoverty rate of under-resourced communities isalmost 50 percent higher than the 20 percent povertyrate that we require for the vast majority of neighborhoods to be included in those communities. Althoughthe poverty rates of the under-resourced communities in the 450 individual cities that we rank rangefrom 19 percent to 43 percent, the aggregate povertyrate of under-resourced communities indicates thatthere is a substantial need to reduce the concentration of poverty in those communities as a whole.Figure 2. Aggregate Poverty Rates of UnderResourced Communities and Entire U.S.29%31%14%Percent of TotalPopulation13%Entire U.S.Percent of PopulationBelow Poverty LineSource: ICIC analysis of U.S. Census Bureau American Community Survey 2014-2018Five-Year Estimates.The New Face of Under-Resourced CommunitiesUnder-ResourcedCommunitiesSource: ICIC analysis of U.S. Census Bureau American Community Survey 2014-2018Five-Year Estimates.ICIC October 20207
3Taken together, 52 percent of under-resourced community residents are people of color, compared to27 percent of all U.S. residents. The population ofunder-resourced communities is 31 percent Black,25 percent non-Hispanic white, 24 percent Hispanicwhite, 5 percent Asian, 1 percent Native American orAlaskan Native, less than 1 percent Native Hawaiianor Pacific Islander, and 16 percent people of other ormultiple races.11 Compared to the U.S. as a whole,under-resourced communities have substantiallyhigher percentages of residents who are Black or Hispanic white and a substantially lower percentage ofresidents who are non-Hispanic white. (See figure 3.)Altogether, people of color (defined as people whoare not white) are just over half the residents ofunder-resourced communities, nearly double theirpercentage of all U.S. residents.Contrary to common perception, most residents ofunder-resourced communities as a whole are not Black.However, the Black percentage of their population ismore than double the 13 percent of all U.S. residents whoare Black.Compared to the U.S. as a whole, underresourced communities have substantiallyhigher percentages of residents who areBlack or Hispanic white and a substantiallylower percentage of residents who arenon-Hispanic white.Figure 3. Racial Composition of Under-Resourced Communities and Entire U.S.UNDER-RESOURCED COMMUNITIES 1% Native Hawaiian orPacific Islander1% Native Americanor Alaskan Native16% Other15% OtherENTIRE U.S. 1% Native Hawaiian orPacific Islander31% Black35% Asian1% Native American8% Other15ther Black13% Blackor Alaskan Native5% Asian12% Hispanic White24% Hispanic White24% Non-Hispanic White25% Non-HispanicWhite24% Non-Hispanic White61% Non-HispanicWhiteNote: Totals may not sum to 100 percent due to rounding.Source: ICIC analysis of U.S. Census Bureau American Community Survey 2014-2018 Five-Year Estimates.The New Face of Under-Resourced CommunitiesICIC October 20208
Taken together, under-resourced communities are 38percent Hispanic or Latino, compared to 18 percent for thenation as a whole (figure 4). (Recall that Hispanics orLatinos may be of any race.) If all people of Hispanic orLatino ethnicity were included as people of color alongwith members of all racial groups other than whites, peopleof color would make up 75 percent of the total populationof under-resourced communities, compared to 39 percentof the nation’s population.Unde
The New Face of Under-Resourced Communities ICIC October 2020 5 Defining and Describing Under-Resourced Communities Our definition of an under-resourced community includes relatively large high-poverty, low-income areas in all but the smallest metropolitan areas. These communities may be located in either traditional central cities or suburbs.
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