Studies Show Neighborhood Investment Doesn’t Reduce Place-Based Inequality


According to a recent study, reducing neighborhood inequalities will require more than focusing on place-based investment and disinvestment solutions. In their study, Placing Prosperity, The Data Center explores how neighborhood inequality is based in generations of history. Segregation and Jim Crow era redlining continue to shape neighborhood inequalities into today. In fact, the study found that patterns of neighborhood inequality across the city haven’t changed since that time. In addition,  more recent crises like Hurricane Katrina, the 2008 Great Recession, and the current COVID-19 pandemic all create additional challenges that can make people’s chances at prosperity more difficult based on where they live.

However, while many proposals focus on a place-based approach of neighborhood investment and disinvestment, these do little to reduce the challenges of structural racism and can lead to further exacerbate issues with gentrification. As neighborhoods are rezoned and development is subsidized to facilitate development, the housing that is developed often leads to the displacement of current residents as rising housing prices push them out of previously affordable areas. Previous studies have already shown the effects of these policies in post-Katrina New Orleans; the number of Black residents in New Orleans fell from 67 percent in 2000 to only 59 percent in 2017. In addition, from January 2015 to June 2018, one in every four households in New Orleans’ majority Black neighborhoods faced a court-ordered eviction, with the highest eviction rates occurring in what were supposed to be some of the city’s most affordable neighborhoods.

Rather than eliminating neighborhood inequality, Placing Prosperity shows that neighborhood gentrification simply shifted the incidence of poverty. The study shows that although the poverty rate in New Orleans proper declined by four percent from 1999 and 2018, the poverty rate across the metro area remained steady. This is further highlighted by the fact that poverty rates in middle- and outer-ring New Orleans neighborhoods with “significant black populations” such as New Orleans East, the Westbank, and Gentilly, have increased since 2000.

The Data Center’s findings echo those of presented in a January report by the New Orleans Center for Racial Justice titled Black Workers Matter: Black Labor Geographies and Uneven Development in Post-Katrina New Orleans. That report noted that much of the post-Katrina development across New Orleans focused on the development of new restaurants, retail businesses, and construction jobs. However, the focus on these typical unstable and low-wage jobs only strengthened neighborhood and racial disparities across the city. These have now further been exacerbated by the COVID-19 pandemic, which has hit these industries particularly hard. 

The investment is in structures, but not the people that live here. You know it’s sad to say, they done a good job of that. … Once those structures are up, you’re not even invited to come in. Unless you’re working under slave wages … Since Katrina, you see privatization, more discrimination, and mass incarceration. That’s what happened after the water dried up. That’s what we see. Mass incarceration, discrimination, you know, and gentrification.

Mr. Alfred, Stand with Dignity organizer, 2015

According to the report, although over 25 percent of post-Katrina residents in New Orleans lived below the poverty line, the majority of the city’s redevelopment focused on luxury developments. This created an increase in “wage-desert” neighborhoods where 80 percent of workers earned less than $3,333 per month. At the same time, the income disparity between Black and white households increased: while Black residents still represented around 60 percent of the city’s population, white residents occupied 60 percent of the city’s managerial and professional positions. 

The results of both studies show that reducing neighborhood inequality isn’t as simple as adopting place-based solutions; poverty just moves. Instead, it is important to focus on creating and opening opportunities in higher-paying industries. Long-term economic and social inequities need to be addressed ways that integrate multiple domains, including education, employment, health, and safety. 

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