Originally Posted: Feb. 5, 2019
Many U.S. cities face growing challenges in building economies in which each generation lives better than the one before. A significant part of the challenge is rooted in home affordability, as lower- and middle-income people increasingly can’t afford to live in high-opportunity areas and are seeing more of their income consumed by housing costs. The urban middle class is shrinking, and cities are becoming bifurcated into “have” and “have-not” neighborhoods.
These patterns pose a threat to upward mobility, for three reasons. First, when lower- and middle-skilled Americans live far from high-opportunity areas it’s difficult for them to access to good jobs, particularly in highly productive, knowledge-rich cities. Also, families in areas with low “social capital” –high poverty and low neighborhood cohesion, civic engagement, and home ownership – tend to have worse school and life outcomes, even controlling for a family’s own circumstances.
Second, high urban home prices are driving down home ownership rates, depriving working families of a valuable hedge against rising rents and a path toward building wealth. This problem is especially acute among African-American and Hispanic families, whose median net wealth has declined significantly over the last decade to approximately $4,000 and $6,000. The median for white families is just over $180,000.
And third, surging housing costs leave less for education, health and wellness, and new businesses.
To address these issues, the George W. Bush Institute recently held a symposium on “Policies to Promote Inclusive Urban Growth,”in conjunction with partners at SMU’s Folsom Institute for Real Estate and the Center for Opportunity Urbanism. Seven panels developed recommendations for America’s cities. READ MORE