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Economists' Outlook

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Rising Poverty in the American Suburbs: A Presentation by Dr. Katrin Anacker in the REALTOR® University Speaker Series

December 10, 2015
Financing & Credit
By: Scholastica (Gay) Cororaton

In a presentation at a REALTOR® University Speaker Series held recently,[1] Dr. Katrin Anacker, Associate Professor of Public Policy at George Mason University’s School of Policy, Government, and International Affairs, presented the major findings of her recently published edited book, “The New American Suburb: Poverty, Race, and the Economic Crisis.” The book looks at the economic transformation of American suburbs, which have increasingly seen rising poverty in the wake of slow recovery after the housing downturn and the Great Recession.

According to Kneebone and Nadeau, suburban poverty increased from 2000 to 2005-2009 (Chart 1).  In the 100 largest metropolitan areas, the total population in suburban extreme poverty tracts, where 40 percent or more of the population is poor, increased by 36 percent (from about 907,000 in 2000 to about 1.24 million in 2005-2009). The poor population living in these suburban extreme poverty tracts rose 40.6 percent (from about 400,000 to about 570,000). The fastest growth in poverty occurred in exurban extreme poverty tracts, where the total population and the number of poor people more than doubled from 2000 to 2005-2009.

Chart 1.

extreme poverty
Lee, Green Leigh, and McMillan analyzed longitudinal data and also found rising poverty in the inner-ring suburbs from 1970 to 2007 (Chart 2). Here, the poverty rate increased from less than 10 percent in 1970 to about 15 percent in 2007. Rising poverty in the inner-ring suburbs is correlated with although not necessarily caused by the decline in college-educated population (Chart 3).As these studies show, suburban poverty has increased sharply after the housing market collapse in 2006 and the slow economic recovery after the recession, which technically ended in June 2009. One of the reasons for the slow recovery in the suburbs is that many of them are less able to draw from public resources to deal with the aftermath of the crises in subprime lending, foreclosure, and possible long-term economic decline. According to the Keating, who conducted three case studies of foreclosures in the Cleveland metropolitan area, suburban stakeholders have faced a more severe lack of municipal resources to address the current economic situation.  At the same time, many suburban municipalities have found themselves in dire straits during a time of increasing needs yet decreasing revenues, for example through the local property tax. Roth and Allard show that the suburban infrastructure lags behind the somewhat well-established infrastructure in central cities, indicating the need for improvements by the public and private sectors, and possibly philanthropy.

Chart 2.

metro growth

Chart 3.

decline

For more information on the book “The New American Suburb: Poverty, Race, and the Economic Crisis”, please contact kanacker@gmu.edu.

REALTOR® University provides on-line education on real estate and other topics at the MBA and undergraduate levels. The REALTOR® University Speaker Series provides a venue to learn about and stimulate discussion of economic and real estate issues in support of NAR’s mission as the Voice of Real Estate. The Speaker Series presentations can be accessed on this webpage.

[1] The REALTOR® University Speaker Series on “The New American Suburb: Poverty, Race, and the Economic Crisis” was held on December 7, 2015 at the NAR Washington Office.

 

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