The Shrinking Geography of Opportunity in Metro America

The Shrinking Geography of Opportunity in Metro America, May 10, 2022 By Thai Le, Edward Muña, Sarah Treuhaft, and Rasheedah Phillips* https://nationalequityatlas.org/shrinking-geography-of-opportunity

  1. Introduction
  2. Findings
  3. Interactive Map: Neighborhood Affordability for Renters in Metro America
  4. Recommendations for Expanding the Geography of Opportunity
  5. Conclusion
  6. Data and Methods
  7. Authors
  8. Acknowledgments

The coronavirus pandemic continues to both illuminate and deepen the challenges of structural racism and housing inequity in the United States. While rent relief programs are sunsetting and rents are skyrocketing, millions of renters negatively impacted by the pandemic’s economic fallout face crushing rent debt, eviction, and homelessness. And the renters who have been hit the hardest are disproportionately people of color and people living on low incomes. This extreme precarity stems from a housing crisis that has plagued communities for decades. At the onset of the pandemic, there was not a single state, region, or county in the US where a full-time worker earning the minimum wage could afford a two-bedroom rental home, and nearly half of Black and Latinx renters (and more than a third of all renters) were paying unaffordable rent.

Not only is there an overall shortage of affordable rental homes, but they are rarely located in “high-opportunity” neighborhoods that have high-quality schools, safe streets, clean air, parks, reliable transit, and proximity to jobs, retail, and services. Instead, they are concentrated in disinvested neighborhoods that lack these “opportunity structures” and are often replete with harms ranging from polluted air to decrepit infrastructure to excessive surveillance and police violence. The overcrowding of affordable homes in lower opportunity neighborhoods and lack of affordable homes in higher opportunity neighborhoods have significant negative consequences for people living on low incomes. Decades of research underscore that living in a neighborhood lacking critical opportunity structures negatively affects health, access to educational and economic opportunities, and life outcomes — especially for children

. In the past, racially discriminatory policies, including redlining, urban renewal, and government-backed home loans (almost exclusively for white homebuyers), created geographic concentrations of opportunity and disadvantage throughout regions. Today, policies that are not explicitly discriminatory yet have racially inequitable impacts (e.g., exclusionary zoning), maintain these patterns of spatial inequality — effectively locking many people of color out of educational and economic opportunity.

This analysis is the first in a series exploring the changing geography of opportunity in American metropolitan regions, building from our earlier analysis of the San Francisco Bay Area. In that study, we found that only 5 percent of census tracts in the region had median market rents that were affordable to a renter household of two full-time workers each earning $15 per hour. Those affordable neighborhoods were located on the outskirts of the region, and 92 percent of them were “low opportunity,” according to the Child Opportunity Index produced by researchers at Brandeis University. Our findings underscored the pattern of regional resegregation in the Bay Area described by Urban Habitat, in which tech-driven growth has been pushing low-wage service-sector workers out of core cities to the outer parts of the region.

Expanding our lens to the largest 100 metros, in this analysis we ask three questions: First, how does neighborhood affordability for low-income households differ across metros? Second, how does neighborhood affordability vary for Black, Latinx, and white households across metros? And third, is the geography of opportunity for low-income households and households of color shrinking over time, restricting housing choices to an even smaller number of neighborhoods far away from the locus of economic activity? 

We answer these questions using data on median market rents by zip code from Zillow and metro-level census data on household income overall and for Black, Latinx, and white households for the years 2013 and 2019 to capture the period of economic recovery between the Great Recession and the pandemic. Forthcoming analyses in this series will examine the changing geography of opportunity for Asian and Pacific Islander communities and Native American communities across the country.

Using median market rent as a measure of neighborhood affordability means two important things: First, we are focusing on the costs faced by households searching for available rental housing in a metro, not the cost of all rental housing units in a metro. (In other words, we are excluding the housing units of incumbent renters, which tend to have lower rents.) Second, given that a median means that half of the rents are below it and half are above it, this is a summary measure of neighborhood affordability, not a precise measure. So, affordable rentals might exist in a specific neighborhood, but they are not plentiful.

To examine affordability by race/ethnicity, we define an affordable zip code as one with a median market rent that is affordable to households at the median household income for that racial/ethnic group within that metro. For example, in 2019, 13 of 350 zip codes were affordable to Black households at the median income for all Black households in Chicago ($76,394) and 48 zip codes were affordable to Latinx households at the median income for all Latinx households in Chicago ($101,643). In the proceeding analysis, the terminology “median-income Black households” and “Black households at the median income” refer to Black households at the median household income for Black households within that metro. This is true for Latinx and white households as well.

Data and Methods

Our key findings include the following:

  • Working-class households face a shrinking geography of opportunity in metro America. Across the 100 most populous metropolitan areas, the number of zip codes where the median market rents are affordable to low-income households declined 50 percent between 2013 and 2019 (from 17 percent of zip codes to 8 percent). The trend of declining affordability was widespread: the number of neighborhoods with affordable median market rents shrunk in 81 metropolitan regions, remained approximately the same in 16 of them, and increased in only three regions. 
  • Black and Latinx households have the fewest choices when it comes to affordable neighborhoods. In 2019, only 7 percent of zip codes in the top 100 metros had median market rents affordable to Black households at the median income for all Black households in the metro. For Latinx households at the median income, just 16 percent of zip codes had affordable median market rents.
  • Black households experienced the steepest declines in affordable neighborhoods in the years preceding the pandemic. Between 2013 and 2019 — even as the economy was recovering and median incomes increased for households of all races and ethnicities — the number of zip codes with median market rents affordable to median-income Black households decreased by 14 percent.
  • The majority of neighborhoods affordable for Black, Latinx, and low-income households are lower opportunity neighborhoods. Among the zip codes with affordable rental housing for the median-income Black household, 82 percent were either “low” or “very low” — the bottom two quintiles on the Child Opportunity Index — while only 38 percent of zip codes affordable for the median-income white household were “low” or “very low” opportunity.

While the rental affordability crisis is affecting all households, it is disproportionately impacting low-income renters and renters of color. As market rents have increased, the number of neighborhoods affordable to working-class households in American metros has declined dramatically, contributing to growing economic segregation and further limiting choice, access, and opportunity for the very same people most harmed by exclusionary and discriminatory policies. Black renters, in particular, face an extremely limited — and diminishing — number of neighborhood choices. Shrinking neighborhood affordability in many large metros is both reinforcing longstanding patterns of racial segregation and creating new ones in which low-income Black and Brown working-class households are confined to neighborhoods on the outskirts of prosperous cities.

Although this analysis is based on pre-pandemic data, all signs indicate that the trend of shrinking housing opportunity continues, and, if anything, conditions have worsened. In 2021, rents increased by at least 10 percent in 149 metropolitan regions, whereas only three metros experienced that level of rent growth in 2019. Lower income renters, low-wage workers, and small businesses serving communities of color were hardest hit by the pandemic’s economic fallout. Nearly six million renter households are currently behind on rent — about double the pre-pandemic baseline.  

Achieving racial equity and a just economy requires changing this paradigm and ensuring that households living on low incomes can live in affordable homes in neighborhoods that support their health and economic success. This requires a multipronged approach to invest in equitable recovery strategies and enact transformational policies. We recommend four broad arenas for policy action:

  • Keep renters in their homes by making eviction protections and rental assistance programs permanent, and stabilizing rents
  • Preserve and expand affordability in all neighborhoods, including high-opportunity and gentrifying areas
  • Open up access to high-opportunity neighborhoods while investing in the neighborhoods where working-class renters of color already live
  • Improve neighborhood quality where housing is affordable and invest in spatial reparations

Renters in Metro America Face Shrinking Maps of Affordable Neighborhoods

Across the 100 largest metros, the number of neighborhoods with affordable rental housing for low-, median-, and moderate-income households declined between 2013 and 2019. The steepest decline was for low-income households, who saw a 50 percent drop in zip codes with affordable median market rents (about 750 zip codes) — leaving less than 10 percent of zip codes in the 100 largest metros affordable to these renters. The number of neighborhoods affordable to median-income renter households declined by 37 percent (nearly 1,500 zip codes). Neighborhoods with affordable median market rents for moderate-income renter households decreased by 22 percent.

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Looking exclusively at neighborhoods affordable to low-income households, we find the following:

The number of metros with no affordable zip codes tripled. Between 2013 and 2019, the number of metros with zero zip codes affordable to these working-class renters increased from 14 to 42. The majority of these unaffordable metros are in California and Florida. Among California’s 11 large metros, only Riverside has any zip codes where the median market rent is affordable to residents making 80 percent of the area median income, and since 2013, the share of affordable zip codes in this region has declined by 75 percent. 

Eighty-one of the 100 most populous regions in the United States saw a decline in affordability. This decline ranged from a 48-percentage-point drop in Boise, Idaho (where 48 percent of zip codes were affordable in 2013 but none were affordable in 2019), to a decline of three-fourths of a percentage point in the Boston metro area (from 0.75 percent to 0 percent of zip codes being affordable). On average, these 81 regions saw a 12-percentage-point decrease in the proportion of affordable zip codes. Twenty-eight of these metros became entirely unaffordable with zero affordable zip codes in 2019. In 64 of these metros, zip codes located in principal cities became unaffordable, signaling possible gentrification and displacement of lower income people of color to the outer areas of regions. 

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Sixteen metro areas saw no change in the number of zip codes affordable to low-income households. The vast majority of these metros (14 out of 16) already had no affordable neighborhoods in 2013, and still had no affordable neighborhoods in 2019. They include many large California metros (Los Angeles, San Diego, San Francisco, San Jose); Honolulu; El Paso and McAllen, Texas; New Orleans; Little Rock, Arkansas; and several Florida metros, including Miami and Sarasota.

Affordability increased in just three metro areas. Only three metro areas saw an increase in zip codes affordable for low-income households: Baton Rouge, Louisiana, (from 2 to 7 percent affordable); Madison, Wisconsin (20 to 24 percent); and Wichita, Kansas (37 to 48 percent). In these three metro areas, there were moderate declines or increases in rents leading to increased affordability. In the case of Wichita and Madison, median household income decreased at a slightly lower rate than rents.

Black Households Have the Fewest Neighborhood Choices 

Extreme racial inequities in income contribute to the persistent economic and racial segregation that has long characterized metropolitan housing markets in America.

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Examining neighborhood affordability by race and ethnicity across the largest 100 metros reveals that Black households have the fewest neighborhood choices by far: In 2019, just 7 percent of neighborhoods were affordable to median-income Black households and only 16 percent of neighborhoods were affordable to median-income Latinx households. In contrast, the median-income white household could afford 69 percent of the neighborhoods.

Black Renters Experienced the Steepest Declines in Affordable Neighborhoods

Black households experienced the steepest declines in affordable neighborhoods in recent years. During the economic upswing between 2013 and 2019, the number of neighborhoods affordable to Black households decreased by 14 percent in aggregate across the largest 100 metros. 

Looking at variation among metros, affordability declined for Black households in 39 of the 100 largest US metros, while affordability only increased in 25 of them. In 2013, there were 40 metro areas where no zip codes were affordable to Black households at the median income, increasing to 48 metros in 2019.

Growing racial income gaps — along with rising rents — have contributed to this decline in access to affordable neighborhoods for Black households. From 2013 to 2019, after adjusting for inflation, the median household income of Black households increased by just $800 compared with about $3,000 for white households and $3,700 for Latinx households.

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White households at the median income also saw a decline in affordable neighborhoods (by 4 percent). Affordability decreased in 52 metros, stayed the same in 13 metros, and increased in 35 metros.

Latinx households experienced a slight increase in neighborhood affordability in aggregate across the 100 metros (2 percent more affordable neighborhoods in 2019 compared with 2013). But the local experience is quite mixed: Affordability declined for Latinx households in 39 metros, increased in 38 metros, and stayed the same in 23 metros. In addition, the number of metros where no zip codes are affordable to Latinx households at the median income for all Latinx households in the metro grew from 25 in 2013 to 33 in 2019. The 39 metros where affordability declined for Latinx households include 12 metros with zero affordable zip codes for median-income Latinx households in 2019. This list of 12 includes Los Angeles, Orlando, and Miami — major metropolitan regions with historically large Latinx enclaves.

The Majority of Neighborhoods Affordable to Low-Income Households Are Lower Opportunity

Decades of research demonstrate the importance of neighborhood conditions in determining the health, life chances, and economic mobility of residents — and how Black, Latinx, and other people of color people have been locked out of neighborhoods with well-resourced schools, safe streets, parks, transportation, and other crucial ingredients for social and economic success. 

Our analysis of the neighborhoods with rental housing affordable to low-income households reveals that over three-fourths of them (76 percent) were categorized as “low” or “very low” in 2019, according to the  Child Opportunity Index produced by researchers at Brandeis University. Among the neighborhoods affordable to median-income households, 56 percent had low or very low opportunity levels. And among neighborhoods affordable to moderate-income households, 43 percent had low or very low opportunity levels. Despite the economic resurgence at the time, there was growth in the number of affordable zip codes falling into the very low category across all income groups from 2013 to 2019, especially for low- and median-income households who saw the number of affordable zip codes in the very low opportunity category rise by 7 percent.

Black and Latinx Renters Have Very Limited Access to Prosperous Neighborhoods

Our analysis also revealed racial disparities in access to neighborhoods that are affordable and opportunity-rich. In 2019, just 6 percent of zip codes affordable to the median-income Black households were high-opportunity zip codes and none were very high-opportunity, while 14 percent of zip codes affordable to the median-income Latinx household were high- or very high-opportunity neighborhoods. This starkly contrasts with affordability for white households for whom just over 40 percent of affordable zip codes were high and very high-opportunity zip codes.

Looking at how access to affordable and high-opportunity neighborhoods has changed over time, we see that although the share of affordable neighborhoods with high- or very high-opportunity levels increased for Black and Latinx households between 2013 to 2019, the majority of zip codes affordable to these households were still low opportunity. In 2019, 83 percent of zip codes affordable to the median-income Black household and 66 percent of zip codes affordable to the median-income Latinx household were either low or very low opportunity.

Expanding the Geography of Opportunity Is Key to Shared Prosperity

This analysis reveals how the rental affordability crisis, driven by systemic inequities and ever-widening income inequality, is disproportionately impacting working-class people and people of color. With the rise in market rents between 2013 and 2019 — a trend that has accelerated since 2021 — the number of neighborhoods affordable to working-class, Black, and Latinx households in American metros has declined. Shrinking neighborhood affordability and the dearth of affordable neighborhoods that provide the necessary conditions for health, well-being, and economic success in many large metros are reinforcing longstanding patterns of racial segregation and creating new ones.

Reversing the trend of shrinking neighborhood opportunity for low-income renters and ensuring that all residents have access to safe and affordable housing in opportunity-rich neighborhoods is crucial to reversing the racial and economic inequities that prevent equitable, prosperous regions. In this moment in which states and localities are deciding how to spend federal “recovery” resources, policymakers should invest in equitable housing strategies. In addition, the pandemic has underscored the need for new and refreshed approaches to housing justice that address the roots of systemic racial inequities, with an ethos of reckoning, repair, healing, transformation, and equity.

We recommend four priority arenas to usher in a more just housing future:

1. Keep renters in their homes by making eviction protections and rental assistance programs permanent, and stabilizing rents.

2. Preserve and expand affordability in all neighborhoods, including high-opportunity and gentrifying areas.

3. Open up access to high-opportunity neighborhoods while investing in the neighborhoods where working-class renters of color already live.

4. Improve neighborhood quality where housing is affordable and invest in spatial reparations to address past harms caused by targeted disinvestment.

Conclusion

The crisis of housing affordability remains an urgent challenge for communities across the country, and it is being driven by both national and local forces. As our analysis shows, there is a growing gap in access to affordable housing and high-quality neighborhoods for working-class renters and renters of color. Protecting renters at risk of eviction and ensuring all households have access to safe and affordable housing is key to an equitable recovery and a strong economy built on shared prosperity. 

Authors

Thai Le, Postdoctoral Fellow, USC Equity Research Institute
Edward Muña, Project Manager, USC Equity Research Institute
Sarah Treuhaft, Vice President of Research, PolicyLink
Rasheedah Phillips, Director of Housing, PolicyLink

Acknowledgments

We appreciate the many individuals and advisers who provided invaluable guidance and insights on this research. A special thanks to our amazing colleagues, Justin Scoggins of the USC Equity Research Institute (ERI) and Michelle Huang, Abbie Langston, and Jennifer Tran of PolicyLink, for their research and data visualization contributions to this report. We also thank Andrew Aurand and Dan Emmanuel of the National Low Income Housing Coalition and Phil Tegeler of Poverty and Race Research Action Council for their thoughtful reviews and suggestions.

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