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«AmericAn neighborhoods: inclusion And exclusion Volume 16, Number 3 • 2014 U.S. Department of Housing and Urban Development | Office of Policy ...»

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The clear differences between these neighborhoods depend on which majority racial or ethnic group lives in the neighborhood. The poverty rates are, unsurprisingly, mirror images of median household incomes. Black neighborhoods had the highest average poverty rate, at 45.2 percent, which is four times the national average. Nearly 40 percent of all Black neighborhoods had more than one-half of all families living below the poverty line, and one neighborhood in Cleveland, Ohio, had a poverty rate of 74 percent. Hispanic neighborhoods also had a very high poverty rate overall, at 42.1 percent. Three Hispanic neighborhoods had poverty rates of more than 70 percent.

Poverty rates in Hispanic neighborhoods have steadily increased since 1990. Like median household incomes, this increase is a result of the change from mixed to predominantly Hispanic neighborhoods.

White and Asian and Pacific Islander neighborhoods had the lowest poverty rates overall. These rates are still more than twice the national average, however. American Indian neighborhoods are the only neighborhoods for which poverty rates declined between 2000 and 2006–2010, although they remain at slightly more than 40 percent.

Labor Force Participation Rate Closely linked with poverty rates are labor force participation rates and unemployment rates (see the following section). Labor force participation rates for applicant neighborhoods are shown in exhibit 7. Overall, applicant neighborhoods had a labor force participation rate of 56 percent in 2006–2010, which is much less than the national rate of 65 percent for this period. Labor force participation has increased slightly on average across Choice applicant neighborhoods between 1990 and 2006–2010 and in most neighborhood types. Choice applicant neighborhoods’ labor force participation rates lag behind citywide rates on average; rates in applicant neighborhoods exceeded citywide rates in only about 9 percent of applicant neighborhoods.

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neighborhoods have very low labor force participation rates compared with the national average or with other applicant cities. Black neighborhoods have labor force participation rates that are farthest behind citywide rates, a full 11 percent less. More than 40 percent of all Black neighborhoods have labor force participation rates that are 10 percent or more less than citywide rates, including 13 neighborhoods that are more than 20 percent less.

Labor force participation rates across most neighborhood types have been increasing over time.

The largest increases have been in American Indian, Hispanic, and White neighborhoods. Hispanic neighborhoods, in particular, have seen substantial increases between 2000 and 2006–2010, including eight neighborhoods that had increases of more than 20 percent. These data are for the same period during which Hispanic populations in these neighborhoods increased substantially;

this new population had higher labor force participation rates than the population that it replaced.

Asian and Pacific Islander neighborhoods have seen decreases in labor force participation. Some of this decline may be attributable to aging populations in these neighborhoods.

Black neighborhoods have had stagnant levels of labor force participation during the past two decades overall. This statistic masks that 57 percent of Black neighborhoods have experienced declining participation rates during this period, including seven neighborhoods with declines of more than 20 percent. Nearly 40 percent of predominantly Black neighborhoods have labor force participation rates of less than 50 percent. In one Baltimore, Maryland neighborhood, less than one-fourth (23 percent) of the population older than 16 years of age was participating in the labor force and another two neighborhoods had labor force participation rates of less than one-third (29 percent and 30 percent).

Unemployment Rate Applicant neighborhoods also had high rates of unemployment among those individuals older than 16 years of age participating in the labor force. Unemployment rates for applicant neighborhoods by racial and ethnic majority are shown in exhibit 8. Applicant neighborhoods had an average unemployment rate of 17 percent, nearly double the national unemployment rate of 9.2 percent for this same period. Unemployment has been increasing in applicant neighborhoods since 1990, with much of this increase attributable to an increase in unemployment in Black neighborhoods.

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Both the American Indian (8 percent) and Asian and Pacific Islander (7 percent) neighborhoods have unemployment rates that are less than the national rate in the most recent period. Asian and Pacific Islander neighborhoods have unemployment rates consistent with the cities within which they are located. American Indian neighborhoods have unemployment rates substantially lower than those in their cities, likely due to the efforts of tribal governments to increase employment within these neighborhoods. White neighborhoods (11 percent) had a rate that was slightly more than the national average.

Unemployment rates in Black neighborhoods were the highest, at 21 percent, and eight Black neighborhoods had unemployment rates that were more than 30 percent. Three-fourths of Black neighborhoods experienced increased unemployment between 1990 and 2006–2010. Hispanic and mixed neighborhoods also had high rates of unemployment. Three Hispanic neighborhoods had unemployment rates of more than 30 percent.

Housing Vacancy Housing vacancy rates in Choice applicant neighborhoods are high, and they increased during the past decade, as shown in exhibit 9. This increase corresponds with the large number of housing foreclosures during this period. Vacancy rates in applicant neighborhoods are higher than in surrounding areas and than in the cities in which they are located.

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Conclusions and Implications The Choice Neighborhoods Initiative integrates some potentially positive changes to the HOPE VI Program. It opens up a wider range of housing and neighborhoods for revitalization and encourages engagement with more partners to pursue revitalization. It has the potential to have a wider, although perhaps not deeper, effect than HOPE VI. Like the program it replaces, Choice is meant to address concentrated poverty, but the program is likely to have uneven racial effects simply due

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to the demographics of high-poverty neighborhoods. Beyond a sizable population that lives below the poverty line and the presence of distressed subsidized housing, however, little was clear about the constitution of the neighborhoods.

As presented in this article, most Choice applicant neighborhoods have majority minority populations and are highly segregated and isolated, and most have been so for at least the past 20 years.

Most are also surrounded by neighborhoods that are nearly as segregated. The level of isolation in applicant neighborhoods far exceeds that found in typical neighborhoods, and residents of these applicant neighborhoods have far less exposure to individuals of other races than a typical American of the same race. Applicant neighborhoods also exhibit high levels of characteristics associated with neighborhood distress, including low educational attainment; low median incomes; and high poverty, unemployment, and vacancy rates. The presence of these characteristics is not distributed evenly across all applicant neighborhoods. Rather, they are more pronounced in majority Black and majority Hispanic neighborhoods. Majority Black neighborhoods, in particular, have significantly lower median incomes and significantly higher poverty, unemployment, and vacancy rates.

These results confirm that Choice, like previous poverty deconcentration programs, is likely to have uneven racial and ethnic effects. Depending on location, assets, and market strength, strategies to transform applicant neighborhoods to neighborhoods of choice may involve deconcentration by relocating low-income residents to other parts of the city or MSA and by attracting high-income residents to the transformed neighborhood. Concentration of minority population and opportunities for reducing segregation should be key considerations in either scenario.

In strong market neighborhoods, where the potential for gentrification and neighborhood change is high, applicants must be cognizant of and particularly sensitive to the potential implications and complications that could arise from targeting a racially homogenous area for revitalization and redevelopment activities. Issues of displacement, racial or ethnic turnover, and relocation counseling should be explicitly addressed as part of planning for neighborhood transformation. Measures to protect or expand the supply of affordable housing in these neighborhoods are crucial to ensure that neighborhood residents have the choice to remain. Aggressive, proactive enforcement of fair housing should also be pursued to protect neighborhood residents choosing to relocate with this, ideally, involving a coordinated metropolitanwide effort. In addition, as neighborhoods with higher minority concentrations are correlated with other issues, including low educational attainment and low labor force participation, these underlying disparities must be directly addressed through activities, such as coordination with other programs such as the Promise Neighborhoods initiative, or through partnerships with local service providers.

In weak markets (as well as in some strong markets), the high degree of racial and ethnic homogeneity adds a complicating factor to attempts to create more diverse, mixed, and integrated communities. Racial and ethnic differences, unlike class differences, are nearly always visible. These visible differences may complicate efforts to attract higher income households with different backgrounds.

As various studies have shown, neighborhoods with high minority populations, in particular high Black populations, are perceived as having higher rates of crime, lower quality schools, and lower property values, even when this is not the case, and that promoting integration of racially or ethnically segregated neighborhoods and of maintaining diversity after integration has been achieved requires sustained effort (Briggs, 2005; Charles, 2005; Clark, 1986; Ellen, 2000; Ellen, Horn, and O’Regan,

Cityscape 111Gebhardt

2012; Lewis, Emerson, and Klineberg, 2011; Massey and Denton, 1993). Although improving amenities and leveraging anchor institutions may be sufficient to overcome these perceptions in strong market neighborhoods, more aggressive or extensive measures may be necessary in neighborhoods with weak markets.

The data do not clarify why Choice applicants selected the neighborhoods they did and whether targeting segregated neighborhoods was an intentional strategy or the unintended consequence of selecting neighborhoods based on high levels of distress that also happened to be segregated.

Regardless of the reason, more specific guidance needs to be provided to Choice Planning Grant applicants regarding concentrated minority populations. Although applicants for Implementation Grants are required throughout the evaluation criteria to document that their Transformation Plans contain steps to understand and address concentrated minority populations, no similar criteria apply to the Planning Grant applicants.

More explicit consideration by Planning Grant applicants of racial and ethnic segregation in applicant neighborhoods should be required. At a minimum, Choice Planning Grant applicants should be required to demonstrate that the planning process they intend to undertake meets the affirmatively furthering fair housing, or AFFH, mandate, which explicitly identifies racial segregation as a problem to be addressed and does not decouple race and poverty in the way the Planning Grant does. Choice applicants should be required to articulate how, through the planning process, they intend to identify and understand racial or ethnic segregation within the targeted neighborhood, ascertain the scope and causes of this segregation, and incorporate strategies for addressing these concentrations. Transformation Plans produced by Planning Grant recipients should be monitored and evaluated to ensure compliance.

Beyond AFFH, national policymakers and local officials have practical reasons for a more explicit consideration of race and ethnicity. First, although it is unnecessary to have received a Planning Grant to apply for an Implementation Grant and receipt of a Planning Grant is no guarantee of receiving an Implementation Grant, the structure of Choice is to facilitate this path. Better linking the two grants by encouraging proactive approaches to addressing racial and ethnic segregation and concentrated minority populations in the Planning Grant NOFA and technical guidance may help produce better plans that are more likely to satisfy the requirements of the Implementation Grant NOFA as well as the Choice program as a whole.

Second, the process of developing a Transformation Plan is an opportunity for making explicit issues of segregation and discrimination and for crafting strategies to address these. The planning process is a venue for including participants, creating buy-in, and building momentum. Leaving race and ethnicity largely unaddressed in the Planning Grant seems to indemnify applicants for actions that may adversely affect minority populations through efforts to address concentrated poverty rather than encouraging applicants to actively pursue strategies to reduce segregation. Attempts to address significant issues that are as contentious as segregation, discrimination, and integration after a plan is complete create an unnecessary level of difficulty and reduce the likelihood of success.

Finally, Choice was conceived as a program that would not repeat the mistakes of the HOPE VI Program. That race and ethnicity should have been more explicitly and appropriately addressed is one lesson that has been made very clear through newspaper accounts, scholarly reports, and

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academic research, as well as from protests and lawsuits. To not address race and ethnicity in Choice, particularly the Choice Planning Grant program, which is likely to affect the largest number of neighborhoods and cities, is to not learn from the lessons of the past.

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