How Free Markets Banish the Poor to Suburbia, and What We’ll Need to Stop It

In East Contra Costa County (above), a suburb 45 miles east of San Francisco, the number of people living in poverty grew a whopping 70% during the 2000s – Photo by Brookings Institution

The latest casualty of the free market is the urban poor. The suburbanization of poverty is making life even more difficult for the populations that have it the hardest. Not only do we need to start providing more assistance for the poor in suburbs – we need to stop them from being forced out there in the first place.

Before World War II, the United States did not have the infrastructure or resources to have suburban areas large enough to house any considerable proportion of the population. There were only modest “streetcar suburbs” immediately adjacent to big cities. It was not until the postwar period that significant highway infrastructure and mass automobile ownership allowed an entire group to move out to the suburbs – largely affluent white people.

What began as a way to escape urban overcrowding only accelerated over the decades as race riots, the HIV epidemic, and the crack epidemic scared people out of cities. Sure, there were urban neighborhoods such as New York’s Upper East Side or San Francisco’s Pacific Heights that remained affluent. But as for most areas of basically every major American city, urban places became, in the second half of the 20th century, home to the poorest of the poor.

Then a paradigm shift started to occur. Just as baby boomers reacted against the relatively urban lifestyles of their parents, members of Generation X began reacting against the suburban lifestyle of their parents in the 1990s. The trend continues with millennials today. The value of a car-based lifestyle in pristine, spread-out suburbs has proved to be temporary. Today, young adults want to live in exciting cities with walkable neighborhoods that have a sense of community that suburbs somehow lack. We typically think of suburbs as the tranquil, serene home of the affluent and cities as the dirty, cramped home of the poor. But clearly, that is changing rapidly.

With an influx of young affluent people into previously impoverished neighborhoods, many urban communities have become unaffordable for those that have resided in them for decades. Often in these gentrifying neighborhoods, minorities come to be replaced by a white population. While much attention has been paid to the changes occurring in these neighborhoods, few are talking about what happens to the residents who are forced to leave by rising real estate prices.

In the past few years suburban poverty rates have grown alarmingly – about five times as fast as cities. Indeed it makes sense, that as cities come to be perceived as a desirable place to live, those with the least resources are being forced to live in the least desirable areas. It is not just “inner ring” suburbs that are seeing increases in poverty, those earlier developments that have always tended to be working class. The real estate market is now effectively banishing low-income populations to the least accessible, outer-ring suburbs: those low-density, brand new developments literally adjacent to farmland.

Throughout discussion of the suburbanization of poverty, it is important to keep the racial implications in mind. Communities of color are most frequently the ones displaced to outer suburbs by urban gentrification. In the San Francisco Bay Area, the area of East Contra Costa County, at the far Northeastern edge of the metro area, was built up in the mid-2000s, experiencing a massive wave of foreclosures soon thereafter. Informal analysis of Census data reveals decreases in the black population, from 2000 to 2010, in virtually all of the communities that African Americans have traditionally lived in, such as Oakland, Richmond and San Francisco’s Western Addition and Bayview/Hunters Point neighborhoods. These decreases are accompanied by far greater increases in East Contra Costa County. The farther east away from San Francisco, the higher these increases are. Two Oakley census tracts (303102 and 303203), seemingly at the edge of civilization, each have black population increases of over 1,100% for those years. As we consider the changes that the suburbanization of poverty entails, it is important to keep in mind that economic justice and racial justice are often inseparable.

This is troubling, to say the least. The suburbanization of poverty is a complete game-changer. When poverty was exclusively an issue of densely-populated urban areas (excluding rural poverty, an entirely different circumstance), it was something that everyone couldn’t help but notice. In visible urban centers, the plight of the poor is on full display. But as the affluent reclaim the city, the poor are being virtually hidden away in the suburbs, putting them literally out of sight and out of mind for the privileged. The suburban infrastructure of cars, single-family homes and cul-de-sacs that once allowed the rising middle class to effectively separate their private and public lives, is now isolating the private lives of the poor from public consciousness and political discourse.

In their book released earlier this year, Confronting Suburban Poverty in America, Brookings Institution scholars Elizabeth Kneebone and Alan Berube detail the new set of challenges that suburban poverty presents. Mainly, the apparatus of policymakers, funders and community providers charged with aiding low-income individuals are stuck in an urban paradigm that is becoming increasingly outdated. Funding and organizational structures are based on the level of municipalities and are often unable to adapt to the county or regional level necessary for addressing poverty that is no longer contained within a single city. Additionally, since suburbs were designed for affluent people with automobiles, most suburban areas have a lack of public transportation options. Without public transportation and many of the other resources that urban areas have historically provided, low-income individuals risk falling even deeper into poverty since they no longer have, for instance, a reliable way to get to work. These are the American refugees of gentrification.

But the authors understate the role that gentrification plays in the suburbanization of poverty, and therefore do not fully appreciate the possibility of mitigating this demographic shift before it gets worse. Of course, there will always be some very affluent suburbs and some less desirable urban areas, but it is my contention that the geographical divide of wealthy and poor neighborhoods in the 21st century will be far stronger than what has been seen in the 20th century if it is left unchecked. With increasing income segregation and socioeconomic homogenization of American communities, economically diverse neighborhoods are disappearing. This, in turn is the result of skyrocketing income inequality and the disappearance of the middle class in general and leads to lower rates of social mobility and a whole host of other problems for those not privileged enough to be at the top of the economic ladder.

It is tempting to think of these types of massive demographic changes as inevitable shifts that occur periodically throughout history, such as post-WW2 suburbanization. It seems that the fate of suburban and urban neighborhoods will always change with the market. Wealthier individuals will always generally have power over the less affluent in terms of being able to choose where they live. And as many suburban communities become less desirable and real estate prices drop there, the less affluent will continue to move there. Or at least, that will be the case if we once again let the free market have its way.

There is no doubt that, going forward, advocates for the poor will need to address their subject differently in a new, suburban context. But we cannot simply let the real estate market continue to punish the poor. Rather, there must be activism that intentionally utilizes mechanisms for preserving socioeconomic diversity in both urban and suburban areas. Gentrifying cities must institute some form of rent control. In hyper-gentrifying cities such as San Francisco, there must be additional vigilance against landlord evictions. For example, in California, nonprofits are fighting against the Ellis Act, which is being used as a rationale for landlord evictions. Also, as brand new buildings rise in gentrifying neighborhoods, developers should be required to also build below market rate housing. If this isn’t happening in the big city you are closest to, start fighting for it. Without such protections, we face only a demographic inversion of suburban and urban populations, and disinvestment will hit suburbs tomorrow like it hit big cities yesterday. Rather, let’s take advantage of this demographic shift to create more socioeconomically balanced communities.