High-Poverty Neighborhoods:

The Genesis and Development of Concentrated Poverty in America

In a country that proclaims the significance of the individual and emphasizes the value of equal opportunity, the prevalence of high-poverty neighborhoods within the U.S. is not only distressing, but perplexing. In this essay I will outline the factors that led to the origination of high-poverty neighborhoods, the factors that have exacerbated the problems of high-poverty neighborhoods, and the factors that allow high-poverty neighborhoods to persist, seemingly without remedy. I will then present a variety of views on how to effectively combine poverty alleviation with community development in order to revitalize communities suffering from condensed poverty.

The foundations of impoverished urban neighborhoods were set into place through the enactment of public policy as early as 1934. In the wake of the Great Depression, the widespread foreclosure of mortgages spurred the U.S. government to implement the Federal Housing Administration (FHA). The primary purpose of the FHA was to invigorate the housing market by underwriting home mortgages and to increase the viability of citizens to purchase homes. However, the advantages of this program were not equally spread across geographic regions and disproportionately affected inner-city regions, which were often viewed as “higher risk” housing investments. The practice of “redlining” resulted in these neighborhoods being fully rejected from receiving mortgage capital. Prospective homeowners and developers were strictly denied mortgages, and this led to a decrease in opportunities for building and maintaining quality housing in these regions. These actions disproportionately affected black, inner-city neighborhoods, leading to a decline in housing and development within the communities.

Additionally, public housing acts, specifically the Wagner Housing Act of 1937 and the Housing Act of 1949, helped to instigate the growth of high-poverty black communities. The Wagner Act was designed to protect private rent levels while providing sanitary public housing options for impoverished families. The Housing Act appended strict income restrictions to the Wagner Act that made public housing available only to highly impoverished families. As the Second Great Migration transported a high number of blacks into northern cities, housing demands increased, producing a pushback from whites opposed to living in race-integrated neighborhoods. This pushback by white communities resulted in strict zoning laws that restricted opportunities for the development of public housing in suburban areas, forcing public housing developments to take root in declining inner-city environments which effected the concentration of impoverished black families within these struggling neighborhoods. (Wilson 2008–9)

Zoning laws and public housing policy played a significant role in establishing high-poverty communities within inner cities, but government policy regarding interstate highway systems through inner-city neighborhoods also had a dramatic impact. These highway systems, stretching from the city through the suburbs, lent feet to those that were financially capable of escaping the city, and provided them with the means to spread to the suburbs. This resulted in a large movement of middle-to-upper-class whites to the suburban areas, creating even more egregious concentrations of poverty within urban neighborhoods.

Not only did interstate systems create greater racial and social class segregation within urban neighborhoods by facilitating movement away from the city, they also did this by creating geographic boundaries that often separated poor, minority neighborhoods from important business districts within the city. This separation from key local businesses resulted in greater economic drought for these already-disadvantaged neighborhoods. The segregation along race and social class lines was also perpetuated through other government policies that were enacted in discriminatory fashion. For instance, the GI bill, aimed to help WWII veterans readjust to civilian life through provision of benefits such as low-cost mortgages, loans with low interest rates, and other financial aid, was predominantly utilized by white beneficiaries and aided almost no people of color. This removed a valuable source of financial support that could especially have aided minorities isolated in high-poverty, urban neighborhoods. (Wilson 2008–9)

Although public policies enforced a battery of restrictions on the movement of minorities away from impoverished urban neighborhoods and accentuated racial segregation within them, the pre-existing issues within high-poverty neighborhoods have been exacerbated by a variety of factors since. Beginning in 1980, under the Reagan administration, federal support for urban programs began to decline and that has continued. Decreases in the federal funding of inner-city neighborhoods, commonly used to create opportunities for disadvantaged people and maintain fossilized infrastructure, had drastic negative impacts on the development of inner-city populations, specifically black and other minority populations. These financial limitations combined with rising immigrant populations in urban centers and created serious issues for cities that were not financially equipped to deal with the plethora of issues that arise within concentrated populations of poverty. Throughout the 1980s and onward, structural shifts within the U.S. economy began to render negative effects to the populations of urban centers. As the country began to embrace free trade, the economy began to transition from manufacturing to other industries, specifically technology-based industries. This shift away from manufacturing had adverse effects on many low-skill workers in inner-city areas, leaving them either without work or forcing them to search for employment in other available industries, specifically in retail and service, which generally meant decreasing job benefits, security, and wages. Additionally, as higher income residents migrated away from urban centers to the suburbs, the suburbs transformed into the economic hubs that inner cities used to be. This introduced “spatial mismatch,” a term describing the state of employment opportunities being geographically disconnected from the labor force that is searching for such a job. This spatial mismatch creates segregation between low-income urban communities and high or middle-income members of other groups. This factor is identified by Quillian as one of the three main factors which produces and perpetuates concentrated poverty within inner-city neighborhoods. (Quillian 2012, 354; Wilson 2008–9)

An array of factors has contributed to persistent, condensed poverty in inner-city neighborhoods. One of the predominant factors is lingering racial stigma within our society. Racial stigma is so deeply engrained in our social fiber that we rarely notice its effects on our viewpoints. These stigmas often create pre-suppositions of people that fit certain stereotypes, thereby causing us to view people through a racialized lens and not on the merit of their true personal identity. Loury notes that these negative stereotypes can create “self-sustaining processes in which the failure of [minorities] to make progress justifies for whites the very prejudicial attitudes that, when reflected in social and political action, ensure that [minorities] will not advance.” (Loury 2005, 2) Negative racial stereotypes are manifest in two forms of discrimination; contract and contact. Discrimination in contract refers to legal forms of discrimination; contact refers to less tangible forms of discrimination, such as excluding certain people from particular social circles. Minorities in America, specifically blacks, have suffered from this form of discrimination for an extended period, and by it often suffer from lack of social capital, or the lack of stable social networks which play an important role in developing an individual’s personal achievement. “Because access to developmental resources is mediated through race-segregated social networks, an individual’s opportunities to acquire skills depend on present and past skill attainments by others in the same racial group.” (Loury 2005, 5) Persisting negative racial stigmas and racism, perpetuated through discrimination in contact, is key to understanding the continued issues within high-poverty, urban neighborhoods.

The role of socio-economic class and social mobility is another key factor in understanding persistent, condensed poverty. Social mobility is essentially the ability for an individual to rise through economic strata and achieve a better position in life. However, social mobility is not completely fluid, as many Americans would prefer to believe, and is significantly determined by an individual’s socio-economic class at birth.

Children born into families with limited financial resources often suffer from a lack of high-quality education, healthcare, and other fundamental ingredients for successful child development. Studies by the Brookings Institute indicate that individuals born into the bottom income quintile in America have a 36% chance of remaining there and have only a 10% chance of making it into the top income quintile. Race is also a strong factor in economic mobility, as variance in economic mobility by race has been shown to be significant and has continued to persist over time. Black Americans born into the bottom income quintile have approximately a 50% chance of remaining in that quintile. Whether this is because of discrimination in contact or other factors, the correlation between race and economic mobility is undeniable.

Another factor that is highly deterministic in economic mobility is the family structure that an individual is born into. Erickson points out that “from 1970 to 2000, the proportion of U.S. births occurring among unmarried mothers tripled,” and that “the high proportion of single-earner households with children contributes to the persistence of poverty in these communities.” (Erickson 2008, 174) Children born into single-parent households in the bottom income quintile also have a 50% chance of remaining there. Children that are born into poverty often suffer from a lack of investment in their education and in relevant skill sets that would allow them to be economically viable in the future. They often face a lack of ability to gain pertinent experience in internships and in employment opportunity. This barrier to developing human capital often handicaps individuals in urban neighborhoods and helps perpetuate the cycles of inner-city poverty. (Brookings 2014; Brown 2016, 17–31)

Beginning in the 1930s, public policy such as housing policies, interstate highway policies, zoning laws, etc. served as the bedrock of condensed, inner-city poverty. Structural economic shifts, such as the outsourcing of manufacturing and movement of economic hubs into the suburbs, served to exacerbate the problems of high-poverty neighborhoods. Meanwhile, continued issues such as institutionalized racism, lack of social mobility, and lack of human capital development have allowed condensed urban poverty to linger in America. As such, it is crucial to examine how we might reverse these cycles and revitalize the communities and neighborhoods that have been ravaged by the effects of decades of condensed poverty.

The first step in community revitalization is implementing processes that will reduce poverty. One of the most critical factors for decreasing poverty and improving opportunity is education. Therefore, one of the most effective ways to fight poverty and improve opportunity structures for low-income families is to improve available education for low-income individuals. While improvement at every level of education is important, Haskins and Sawhill note that providing disadvantaged children with quality preschool education is highly effective in terms of preparing children for long-term educational success. They claim that these programs have, “dramatically improved high school graduation rates, college enrollment, adult earnings, crime rates, teen childbearing rates, and other outcomes” (pg. 10, 2007), all outcomes that play a significant role in improving opportunity structures for these individuals.

While improved education is crucial for low-income individuals, another effective method for reducing poverty is reinforcing married, 2-parent family structures. This can be accomplished through reduction of divorce and the birth of children out of wedlock. While there are a variety of vehicles to accomplish this goal, it primarily involves educating youth through public messages regarding the proper sequence of life events (i.e., education, employment, marriage, etc.), providing youth with proper sex education and relationship skills, and providing family planning services especially to low-income women. The issue of divorce could be addressed through increasing relationship skills for married couples or couples pondering marriage, which could be increased by implementing programs that increase the number of couples receiving pre-marital and marital counseling. (Haskins and Sawhill, 2007)

Another important factor that could help lift low-income individuals out of poverty is by “making work pay”. Creating greater incentives and payouts for low income individuals would not only spur the growth of employment within low-income communities, but better benefits and income would assist these workers in their fight to escape poverty. Making work pay may involve methods such as increasing minimum wage an appropriate amount, expanding tax cuts for working, low-income individuals, and providing better family services, specifically childcare. (Haskins and Sawhill, 2007)

While making work pay is important for poverty relief, it can only be effective if individuals have work to begin with. As we discussed in the previous section, individuals in high-poverty neighborhoods have suffered as many jobs have moved from the city centers to the outer fringes in the suburbs, making these labor opportunities inaccessible. Creating more jobs for those in low-income neighborhoods could be partially accomplished through the return of these businesses to the urban centers that are in close geographic proximity to many high-poverty neighborhoods. This may be accomplished through providing a variety of incentives for businesses, especially those in the manufacturing industry, to return to urban centers. While these, and other factors are crucial in alleviating poverty among individuals living in high-poverty neighborhoods, alleviating poverty will not necessarily be sufficient to end the epidemic of condensed poverty within the United States. (Haskins and Sawhill, 2007)

In order to end concentrated poverty, it is essential not only to implement policies that will help lift individuals out of poverty, but to develop systems within high-poverty neighborhoods that promote long-term, sustainable capital increases within the community. Ferguson and Stoutland lay out levels and sectors as “critical dimensions for locating positions on a conceptual map of the community development system.” (pg. 36, 1999) They define sectors as being comprised of two primary categories, namely product sectors and institutional sectors. Product sectors are determined by the types of services which they provide and include public health, business development, education, security and public safety, and a variety of others. They distinguish institutional sectors as for-profit, nonprofit, and governmental. Every organization is some intersection of an institutional sector and product sector(s), and most services that a given sector produce could be produced through another sector, although possibly with loss of efficiency or by a different method. Sectors are useful for defining the services and assets provided by different organizations and levels capture the hierarchal position of organizations. There are four levels, namely levels 0–3, each of which describes the position of the organization. Level 0 is the “ground” level. It encapsulates individuals within communities and their social capital and includes voluntary community groups within the community. Level 1 organizations are those that are “ground” level organizations but generally utilize paid staff. Level 1 organizations typically use these paid staff to directly serve and assist the community through representation or to administer goods and services to the community. Level 2 is the local structure of the policy designers, funding experts and those that provide the necessary authorization and support for Level 1 organizations to be successful. Level 3 describes the same structure as Level 2 just on the state, regional, and national level. In summary, Level 0 and Level 1 are important as they describe organizations and individuals that are directly imbedded within the community and Level 2 and Level 3 are important as they provide the funding and support that allow Level 0 and Level 1 entities to function successfully and develop. While these levels and sectors are outlined as distinct entities, individuals often serve functions in multiple levels. This intertwining of levels and sectors results in a wide-spread network of relationships which form the channels through which a variety of resources can flow. Individuals from various sectors and levels join with others in their social network to form alliances. Ferguson and Stoutland define the purpose of alliances as being formed within the community development system to fight for a common goal of “devising strategies, making policies, fighting political battles, running programs, and mounting projects.” (pg. 40, 1999)

For alliances to be successful in achieving community development goals there are essential ingredients, which are as follows: capacity, self-interest, power, and trust. Of these factors, Ferguson and Stoutland identify trust as the most important factor for and the foundation of successful alliances. Trust is essential for alliances to be successful and thus for successful community development and is dependent on four characteristics. For a solid foundation of trust within an alliance, individuals must trust the motives of their allies, their allies must be competent in the relevant area, their allies must be dependable in the fulfilling of their duties, and their allies must be collegial in their interactions. If these principles of trust are in place, alliances have a strong foundation from which to build, which will in turn lead to a strengthened community development system and will help promote long-term, sustainable capital increases within high-poverty communities. (Ferguson and Stoutland, 1999)

John Perkins’ model of community development also emphasizes the importance of “ground level” interaction within a community and especially focuses on the Biblical command to love our neighbor in the same way that we love ourselves. This focus of loving one’s neighbors as oneself shifts the lens of community development from providing quick-fix aid to endowing communities with long-lasting solutions that result in residents being involved in and taking pride in their communities. Perkins’ model focuses on three main processes that facilitate this type of enduring community development. The three processes that he outlines are relocation, reconciliation, and redistribution. The initial step of relocation involves facilitating the relocation of individuals in high-poverty neighborhoods to higher-income areas that improve their wellbeing and opportunity structures, if individuals so desire. Turner and Rawlings point out that these place-conscious interventions have been shown to reap great benefit in the lives of low-income families, especially women and children, and are worth the costs that they incur. However, not all individuals in high-poverty neighborhoods wish to relocate to other neighborhoods, and families that are receiving place-base assistance should be supported in their desire to remain in a locale if that is their desire. The main point of place-conscious assistance is that it recognizes that relocating people from high-poverty neighborhoods to higher-income locations can significantly improve their wellbeing and opportunities. (pp. 4–8, 2005) Relocation not only involves the movement of impoverished people from high-poverty neighborhoods to higher-income areas but the transition of privileged, connected individuals into high-poverty neighborhoods. Perkins argues that it is impossible for anyone to truly understand the underlying causes of impoverished communities without living within the communities themselves and lacking this understanding will cause one’s efforts to help to be entirely fruitless. Relocation does not refer simply to living among the poor, but also encapsulates the bettering of their lives in all fashions; spiritually, physically, socially and emotionally. This type of lifestyle creates mutually beneficial relationships between the relocator and the members of the community, creating a sense of belonging and responsibility toward the community. (Essenburg, 2000)

Reconciliation addresses the long-standing injuries within inner-city communities brought about by racism and classism. Whites bear the guilt from past injustices and a sense of superiority, while blacks carry blame and a sense of inferiority. Guilt often births the type of giving that is short term, such as welfare and charity, in order to remove said guilt. Blame often results in using whites as a scapegoat for impoverished individuals’ failures, with disregard for personal responsibility. Immanuel Katongole and Chris Rice mirror many of Perkins’ ideas in their description of reconciliation as a dynamic movement from speed, distance and innocence to journey, relocation, and confession. Specifically, speed, distance and innocence describe a pre-reconciliation state of utilizing “quick-fix” solutions from a socially and geographically distant position with an innocence of our own responsibility in the systems that perpetuate poverty-stricken communities. The movement to journey, relocation, and confession describes the necessary conditions for true reconciliation namely, working alongside people in struggling communities, moving in social and geographic proximity to these communities, and confessing or understanding the roles that we have played in maintaining the systems that perpetuate poverty-stricken communities. In Katongole and Rice’s framework this movement is a necessity to achieve true social and racial reconciliation. For development within impoverished communities to successfully continue, it is essential that true race and class reconciliation happen. Black leadership, an essential ingredient for successful inner-city community development, and technology, predominantly regulated by whites, can only truly be united through the occurrence of race and class reconciliation. (Essenburg, 2000)

Perkins’ views on redistribution extend far beyond simple charity and government programs. When leaders have relocated in the way described above and are involved and active among the poor, when true reconciliation has occurred, and people are loving each other’s neighbors as they love themselves, redistribution will follow as a natural outcome. Essenburg quotes Perkins’ definition of redistribution as “putting our lives, our skills, our education, and our resources to work to empower people in a community of need.” (pg. 211, 2000) When leaders, spurred by God’s love with a passion for economic development, justice, social action, and evangelism, relocate to struggling communities, using the social alliances and networks, as described by Ferguson and Stoutland, they join or create a parish church and utilize their alliances to form a community development institution. These institutions form vehicles to promote community development by developing leaders within the community and by overseeing the processes of relocation, reconciliation, and redistribution. In this way, the three r’s form a cohesive base for successful community development within high-poverty neighborhoods.

While discussion of poverty relief and understanding frameworks of community development are crucial for understanding how to remedy the challenges faced by high-poverty neighborhoods, these valuable concepts will all come to naught if the public never grasps them. Enlightenment views have played a dramatic role in forming modern institutions and thought in America. Through the establishment of “biological” racial differences and other similar viewpoints, Enlightenment and post-Enlightenment views enforced race distinctions and racism within the U.S., which hugely affected the modern predicament of high-poverty neighborhoods. Additional Enlightenment views, specifically the heavy emphasis on negative personal rights, play an important role in American thought today. Many Americans, likely the majority, support the upholding of negative rights for all citizens while at the same time rejecting the notion that the enforcement of positive rights is necessary especially for people groups such as African Americans who have been historically disadvantaged by the systems and institutions in our country. Until a general recognition of the necessity of the enforcement of positive rights for minorities and those living in poverty is achieved, it will be impossible to effectively implement broad poverty relief and community development models in an effort to resolve the problems faced by high-poverty communities. In short, while Enlightenment views have given us much benefit such as Democracy, a market economy, etc., they have engrained our society with unfortunately short-sighted views on poverty, poverty alleviation, and community revitalization.

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