Sunday, March 10, 2013

The Borough's Burden, Part 2

Modern zoning concentrated and homogenized housing types, moved homes away from places of employment, and then moved places of employment away from urban centers and low-income workers who rely on public transit to get to those jobs.

Are You In the Zone?

Yesterday I posted a series of maps with information showing how low incomes and low rents are concentrated in Pottstown and, to a similar extent, in other older boroughs like Spring City, Royersford and Phoenixville.

In terms of the problems Pottstown faces, they clearly showed the "what," but little of the why.

One possible answer to that question may come a 2012 paper I came across recently written by researchers at Harvard University and the Harvard's Kennedy School of Government with the sleepy title of  “Why Has Regional Income Convergence in the U.S. Stopped?”

In plain language, "income convergence," is the narrowing of the gap between rich and poor, something there hasn't been a lot of lately.

Now I won't lie to you. I took a look at that study, full of formulas and figures, and my eyes started to bleed.

Luckily, there is something called the "Journalist's Resource," a project of the Kennedy's School's Joan Shorenstein Center on the Press, Politics and Public Policy at Harvard University, which looks at scholarly studies like these and translates them into results we mere mortals can more easily understand.

Their blessedly simpler summary of this study tells us that its findings implicate as a contributing factor to this stalling of the American Dream and growing concentration of poverty, an unlikely culprit -- zoning.

From 1880 to 1980, the income gap between rich states and poor states steadily closed as workers moved to where the highest paying jobs where.

Zoning often draws the line between 

the rich and poor.
Then something changed.

"Research suggests that the phenomenon may be partly explained by housing prices and more stringent land use and zoning laws that made certain housing markets increasingly unaffordable for lower-wage workers," the summary explains.

"The concept of more restrictive zoning — even deliberately exclusionary zoning — in high-income neighborhoods is a familiar one in many regions, and it turns out that the aggregate effects may have helped reshape opportunity in the United States."

Here are some more of the study's findings as explained in the Shorenstein summary:
  • Income convergence in the United States increased rapidly between 1940 and 1980. The rate slowed between 1981 and 2010, and in some years during the second period, there was essentially no convergence. Since 1960 the difference in housing prices between rich and poor areas relative to differences in income has become increasingly large.
  • “Rising housing prices disproportionately reduce the value of living in productive areas for low-skilled workers. The net effect is that the returns to living in high-income areas for low-skilled households have fallen dramatically when housing prices rose, even as they have remained stable or grown for high-skilled households.”
  • High-income areas have become prohibitively costly for low-skilled workers due to increasing housing prices in these areas. Low-skilled workers are moving away from these areas, while high-skilled workers are moving in. This is a contrast to earlier periods, in which both high- and low-skilled workers were migrating to these areas.
  • Housing-price regulations are highly correlated with price increases: “Housing supply constraints reduce permits for new construction, raise prices, lower net migration, slow human capital convergence and slow income convergence.” In addition, the authors find that land-use restrictions have become increasingly common over the past 50 years. Between 1960 and 2010, the number of such regulations quadrupled.
  • Heightened land-use restrictions prove to have had multiple negative effects: “First, we find that tighter regulations raise the extent to which income differences are capitalized into housing prices. Second, tighter regulations impede population flows to rich areas and weaken convergence in human capital. Finally, we find that tight regulations weaken convergence in per-capita income. Indeed, though there has been a dramatic decline in income convergence nationally, places that remain unconstrained by land-use regulation continue to converge at similar rates.”
The zoning which gave rise to sprawl development 
separates housing from high-paying jobs so

only those who can afford a car can get to work. 
Let's boil it down.

In the 1980s, the pursuit of wealth became a national religion (it's no accident that many televangelists will now tell you outright God and Jesus both want you to be rich).

It also coincided with the first of many housing bubbles, meaning much of a family's wealth was more closely sunk into the value of their home. It was no longer just a place to live and raise a family, but a major investment.

As farm fields were gobbled up into sub-divisions, townships re-zoned those lands to ensure no undesirables showed up adjacent to those homes, thus preserving their market value and, by happy coincidence, their high assessment and resulting high property tax revenue for those who did the zoning.

For lower-income folks, it became increasingly difficult to find an affordable place to live near to where the good jobs were.

The effect of those conditions on our region, here in Southeast PA will be addressed in tomorrow's post, which is based on yet another study, this one by the Delaware Valley Regional Planning Commission.

Until tomorrow....

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