14 million Americans live in extremely poor neighborhoods

Nearly 14 million Americans live in extremely poor neighborhoods, more than twice as many as in 2000.

The economic downturn in the early 2000s, which was followed by slow job growth and then the Great Recession, sent the poverty rate soaring. The growing concentration of poverty is closely linked to the availability of affordable housing, the report from Brookings Institution's Metropolitan Policy Program found.

In 2000, there were just over 2,000 Census tracts with concentrated rates of poverty -- where 40% or more of residents are poor. in the period between 2010 and 2014, that number had grown to nearly 4,200. Brookings compared data from the 2000 decennial Census and from the American Community Survey that looked at 2010 through 2014.

Poverty often becomes concentrated in neighborhoods with blocks of public or subsidized housing. Also, it can happen when middle income families move away, leaving the poor behind, said study co-author Elizabeth Kneebone, a Brookings fellow. Or, working class neighborhoods can slide into concentrated poverty if the local economy goes south and residents lose their jobs.

A growing body of research shows that one's chances of getting ahead in America depends on where one grew up. For instance, young children who moved to better neighborhoods had higher incomes as young adults. This is particularly true for boys, Harvard researchers Raj Chetty and Nathaniel Hendren found.

Suburban neighborhoods fell into deep poverty at more than double the rate of cities, according to Brookings. Almost three times as many people lived in concentrated suburban poverty in 2010-14 than in 2000. Also, a growing number of suburban neighborhoods are on the cusp of extreme poverty.
Lower income Americans have been flocking to the suburbs in recent years, following the jobs in construction, retail and restaurants that relocated there. But the suburbs lack the transportation, social services and affordable housing to help lift poor residents up the income ladder, Kneebone said. And those who lose their jobs become stuck in poverty there.

Blacks and Hispanics are more likely to live in concentrated poverty than whites, the study found.

Whites make up 44% of the nation's poor, but account for just 18% of the poor people living in concentrated poverty. Poor blacks are almost five times as likely to live in extremely poor neighborhoods as whites, and poor Hispanics are more than three times as likely.


Low-Income Americans Can No Longer Afford Rent, Food, and Transportation

Updated by  on March 30, 2016, 11:00 a.m. ET 

Low-income Americans are experiencing a staggering price hike in housing costs — a change that makes it sometimes impossible to afford basic necessities.
new Pew Charitable Trusts analysis of data from the Bureau of Labor Statistics shows that in 2013, low-income Americans spent a median of $6,897 on housing. In 2014, that rose to $9,178 — the biggest jump in housing spending for the 19-year period of data that Pew studied.
The cost of other necessities, like transportation and food, also rose, albeit not as dramatically. 2014 was the first year that Pew studied in which median spending on these three categories was higher than the median income for those in the lower third of income groups.

Median housing, food, and transportation expenditures across lower, middle, and higher income level groups from 1996 to 2014.

Lower income groups earn less income, while the costs of basic living are rising. Rent is making up nearly half of their expenditures. Download the data here.
"We show in these figures that over time, [lower-income groups] consistently spend more on transportation and considerably more on housing," Erin Currier, the project director at Pew Charitable Trusts, said. "Lower-income renters are spending nearly half their income on rent, while upper-income groups spend about 15 percent on rent. The disparity really shows that lower income families don’t have much slack in their budgets for mobility-enhancing investments like savings and wealth building."

Middle- and upper-income families also tightened budgets

The Bureau of Labor Statistics administers a quarterly interview survey to American households that collects data on monthly income and expenditures across a number of different categories. Pew's compilation of the past 19 years of data is especially striking when you look at how today's low-income Americans spend a significant percentage of their incomes on basic necessities.
The rise in housing costs was particularly drastic for low-income Americans. For middle and high earners, the increase was noticeable but smaller, about 6 to 9 percent in 2014. Their budgets also had a lot more slack; basic necessities didn't even come close to consuming nearly half their income.
Median incomes decreased across the board, though there was still room in their household budgets to return expenses to pre-recession levels. The average upper-income household spent nearly three times as much a month on entertainment spending as its lower-income counterpart.

Rents are rising as housing stock becomes scarce

What accounts for the dramatic increase in rent for low-income Americans? As my colleague Matt Yglesias wrote last week, housing inventory across the country is at a historic low, and exclusionary zoning laws in many cities and suburban areas prevent construction of multifamily units in favor of single-family homes:
The good news ought to be that a low level of housing supply leads to a boom in house building, which puts people to work and eventually ameliorates the shortage.
But it's not happening. Instead, construction of new homes remains at an abnormally low level.
Construction of McMansions has rebounded strongly, but overall construction remains in a fairly profound funk even as the population today is much larger than it was back in the 1970s.
So what's going on? The basic story seems to be that after years of financial crisis and recession, a large share of Americans are simply too burdened by low wages, past foreclosure, depleted savings, and overhangs of other debts (student loans, medical bills, etc.) to buy starter homes. And while investors were willing to pick up vacant or bank-owned single-family homes for pennies on the dollar during the peak slump years to operate them as rentals, nobody is excited enough about the business of operating single-family rental homes to actually go out and build vast new tracts of modest-size single-family homes destined for the rental market.

Being labeled a pit bull can doom a shelter dog’s chances of adoption