Exciting new research by Raj Chetty and Nathaniel Hendren of Harvard University examines the impacts of neighborhoods on future earnings. The findings suggest that low-income children should move at an early age from a highly segregated neighborhood riddled with crime to communities with less income inequality. While that makes intuitive sense and should be promoted, we also need to think about development strategies for lower income neighborhoods that are being left behind.
Chetty and Hendren’s results are startling and dramatic. In the list of the largest 100 counties, they record differences in adult earnings results of low-income children. Top on the list is Dupage County, Illinois. If a low-income child grows up there, he or she will earn 15 percent more at age 26 than if they grew up in the “average” place. Fairfax, VA ranks sixth among 100 counties and Montgomery County, MD ranks 9th. The District of Columbia comes in at 37th, with earnings just .5 percent higher than the average place. The City of Baltimore comes in last, with earnings of low-income children 17 percent lower as adults than if they lived in the average place. This is a particularly sad finding in the wake of the Freddie Gray injustice.
Chetty and Hendren find five characteristics that distinguish higher earnings counties from others: less segregation by race and income, less income inequality, better schools, less violent crime, and a higher share of two parent households. That higher levels of racial and income segregation is associated with lower earnings is likely related to concentrations of poverty. Commonsense also suggests that a place with high crime rates and low quality schools do not inspire children to aspire towards a better future.
In a companion paper, Chetty and Hendren confirm that using Section 8 vouchers to subsidize families moving to counties with the five favorable characteristics boosts earnings. It is my hunch that the findings on counties also translates to neighborhoods. If lower income and minority families move to less segregated neighborhoods with better schools, their children will perform better academically and earn more as adults. I bet you that this salutary effect occurs among the families the Manna has housed. Manna homeowners in neighborhoods like Shaw, Logan Circle, and Columbia Heights reside in communities that are gentrifying and are by definition less segregated.
A sensible development strategy would be for the nonprofit, public sector, and private sector to collaborate to provide opportunities for lower income families to move to integrated communities. City governments should use parcels they own through tax liens or via other means to provide opportunities for nonprofits to rehabilitate the housing and offer lower income homeownership opportunities like the District of Columbia has done in providing the 8th and T parcel in Shaw to Manna. Lending institutions should engage in an explicit strategy to provide loans to lower income and minority buyers in integrated neighborhoods. If they are not providing these opportunities, members of the public should use Community Reinvestment Act (CRA) process to encourage them to do so .
But what happens to lower income and segregated neighborhoods? Do we empty them out? Do we try to mix everyone into integrated neighborhoods? I think we pursue strategies of integration for families that want to move to integrated neighborhoods but that we also develop lower income and minority neighborhoods.
Ethnic enclaves have a long history in this country including immigrant enclaves like Chinatown in the District and New York City, Little Italy in New York City, and Jewish communities in the lower East Side in New York City in the early twentieth century that my grandparents knew. Under the right conditions, these communities can thrive, though it is not easy.
Manna, Inc. has pursued an East of the River Campaign promoting homeownership in Wards 7 and 8 that are more than 95 percent African-American. We are confident that development can succeed East of the River as well as in Northwest DC. Will it be easy? Of course not. It will require the cooperation and collaboration with other nonprofit such as Training Grounds and public sector entities that can promote better schools and job training opportunities. Perhaps the best evidence that development can work in tough and gritty neighborhoods is Manna and Rev. Dickerson’s own experience of starting a church and a nonprofit in the Shaw neighborhood in the 1990s when Shaw was overrun with drugs and violence.
Some may say that pursuing both strategies – moving to opportunity in integrated neighborhoods and developing lower income and minority neighborhoods – is Pollyannaish and not realistic given resource constraints. Cities and counties will decide upon their own mixes of moving to integration and/or developing in place. Economic conditions and political considerations will shape various development strategies, but the District of Columbia and Manna experience shows that a combination of both is possible.
Josh Silver is the Development manager at Manna, Inc. Prior to his time at Manna, Josh served as the vice president of research & policy at NCRC. Josh is an avid District sports fan and loves spending time with his daughter.