When Governor Jerry Brown killed redevelopment two years ago, he cited the need to divert property tax revenues to education and other social programs. And while funding such services is essential to the state's economic well-being, the governor's decision also had a major downside: It choked off the ability of cities to finance affordable housing. And a study released last week, co-authored by a UC Berkeley researcher, provided strong evidence that cities need to build more affordable housing and mixed-income housing developments now more than ever. If they don't, then large numbers of urban families may be doomed to entrenched poverty for decades to come.
The study, conducted by Bryan Graham, associate professor of economics at Cal, and Patrick Sharkey, associate professor of sociology at New York University, analyzed 34 metropolitan areas nationwide. Funded by The Pew Charitable Trusts, the study found that America's urban centers are increasingly divided along economic lines. That is, people now more often live in areas of concentrated wealth or concentrated poverty.
And that's a big problem for low-income residents, and for society at large. Why? The researchers found that in areas of concentrated wealth and poverty, low-income residents are far less likely to improve their economic situations during their lifetimes. And so are their children and grandchildren. In fact, in many areas, it can take at least four generations before families can climb up from the lower-economic rung.
Millions of American families, in other words, are stuck in poverty. They live in crime-ridden neighborhoods with low-performing schools. And so their children are often unable to succeed financially when they grow up. In fact, the study found that the lack of economic mobility is directly linked to economic segregation. The results of the study were first reported by Reuters.
The study also blew a hole in conventional wisdom. In 2011, The Pew Charitable Trusts conducted a national survey and found that 80 percent of Americans believe that the main factors for how people can get ahead financially are "hard work, ambition, and access to education." But, in truth, the new study concluded that research has increasingly found that "location actually matters a great deal."
Indeed, communities with the least amount of economic segregation tend to have the highest rates of economic mobility. That is, low-income families are more likely to improve their economic lot if they live in mixed-income areas. Such neighborhoods tend to have less crime and better schools, and more opportunities for children to thrive.
In California, two of the state's metropolitan areas — Los Angeles-Long Beach and San Francisco-Oakland — ranked in the top third nationwide in terms of the most severe economic segregation. Both areas also have what the study's authors called "average economic mobility" — although they were quick to point out that "average" means that it will take more than three generations for low-income families to attain incomes close to the mean in their areas. Moreover, the authors noted that economic mobility rises and falls from city to city and from neighborhood to neighborhood in metropolitan areas, depending on the severity of economic segregation.
Portions of the Bay Area are, of course, highly segregated. And perhaps in no city is that truer than Oakland, a community divided between wealthy hills neighborhoods and the poverty-ridden flatlands of East and West Oakland.
To help address economic segregation, the authors point to the need for more affordable and mixed-income housing developments. In the past, California cities used redevelopment, which tapped property tax revenues, to help finance affordable housing (affordable housing often requires a subsidy because the money generated from renting or selling units doesn't cover the cost of building them). However, without redevelopment, cities like Oakland now have no money to help build affordable or mixed-income housing.
Consequently, many Oaklanders and other urban families living in segregated neighborhoods in California may be destined to live in poverty for a long time. But it doesn't have to be that way. Brown and the Democrat-controlled legislature should reinstitute redevelopment next year for affordable and mixed-income housing.
And they should do it in a focused way. Building affordable housing in low-income neighborhoods will only deepen segregation and make it more difficult for families to move up the economic ladder. Instead, cities should be building affordable housing in mixed-income areas and more mixed-income housing overall. According to the study, such strategies could give low-income families the best chance of escaping poverty.
Sell the A's, Already
Attorneys for Major League Baseball revealed late last week that Commissioner Bud Selig sent a letter in June to owners of the Oakland A's, informing them that the league had denied the team's request to move to San Jose. "MLB denied the Athletics' relocation request on June 17, 2013," the league's attorneys wrote in court filings, according to the Associated Press.
Yet despite Selig's letter, A's co-owner Lew Wolff subsequently indicated that he will keep pushing to move the team to the South Bay.
In other words, it seems clear that Wolff has lost his grip on reality and that it's way past time for him and his business partners to put the A's up for sale and find new owners who will keep the team where it belongs — in Oakland.