The Rise of Suburban Poverty
The land of the American Dream is becoming the new face of American poverty
America is a suburban nation, and not by accident. Our current geography was built over decades by very intentional government and market action. The Federal Housing Administration made it easier to obtain a mortgage (for some people), the Federal Highway Act made it easier to get in and out of the cities (for some people), and then racism, public policy, and massive disinvestment pushed many former city residents into the surrounding suburbs. As a result, now just over half the country lives in a neighborhood they would describe as suburban.
These trends tend to form our baseline image of the suburbs as largely white and middle to upper class. Some see this as a good thing, some see it as a bad thing, but most people agree that most suburbs fit this basic model.
However, over the last few decades, the suburbs have been changing. On top of being the largest source of population growth overall, the suburbs have also become the largest source of the growing poor population in America. This has become so pronounced that, in the 21st century, almost 50% of people living in poverty now live in the suburbs. It’s time to actually take a closer look into what is actually going on.
Where Did Suburban Poverty Come From
By far the best work on this subject is Confronting Suburban Poverty in America, written in 2014 by Elizabeth Kneebone and Alan Berube. Unfortunately, it was done through the Brookings Institute, and so a lot of the actual solutions it suggests are piecemeal and insufficient, but it does an excellent job at looking into what is driving suburban poverty and what it actually looks like.
To begin, it is worth pointing out the suburbs were never the homogeneous places they were made out to be. While they were certainly more middle class and white than the cities, there were always poor people and people of color making up a very small, but very existent, minority in the suburbs. In the 21st century, the economy has started to change to expand that minority.
The broad range of causes for rising suburban poverty can be broadly split into two groups: those that caused existing residents to become more poor, and those that caused more poor people to move in.
How suburbanites became poorer
The decade from 2000 to 2010 was possibly the worst for the average American since the 1930s. While the Great Recession played a huge part in that, there were other factors that weakened the foundation that the recession pulled out entirely.
Despite national economic growth, the 2000s were not great for a lot of people. Slow job growth and stagnant incomes had already pushed up poverty across the country leading up to 2007. While the national dialogue was filled with tax cuts and privatizing social security, the poverty rate was slowly rising after consistently going down in the 1990s. This increased precarity opened up more people for blatant exploitation.
The most famous form of exploitation during this time was the subprime mortgage boom. Banks targeted poor people, working-class people, and historically under-housed communities with predatory loans under the guise of increasing access to home-ownership. And these targets weren’t urban or rural; suburban residents made up 73% of overall subprime mortgages.
In 2007–08, this all came crumbling down, and once, the target was mostly the suburban poor. Following the pattern of lending, 73% of foreclosures during that time were in suburban areas. If that was not enough, the Great Recession saw its biggest job losses in middle-income sectors and the following recovery saw its biggest gains in low-income sectors.
The result: millions of Americans in the suburbs lost their main asset, lost their solidly middle class job, and ended up buying a cheaper house or renting while working for a job that paid less than they had worked for before.
How poor people became suburbanites
While the recession had a huge effect on undermining existing suburban residents, there were other long-term trends that played a huge part in pushing poor people from other areas to the suburbs.
The most recent push started around the 1990s with the new wave of urban renewal that took place across America. Programs like HOPE VI allowed cities to demolish public housing towers to replace them with low-rise mixed income communities. But these new communities would frequently have less subsidized units or even less units overall, which forced residents to find someone else to go. At the same time, Section 8 vouchers were being expanded to encourage poor people to move out of urban and rural areas.
Many of these residents might have wanted to stick around the cities, but the cities themselves were also changing. As manufacturing and other industry started to leave major US cities, the void was filled with real estate and the new “creative class” who drove up housing prices. In some places, the returning jobs allowed some people to stay, but many people were driven out of the cities into the next most convenient place they could find: the suburbs.
Why Suburban Poverty is Here to Stay
Even when people do learn about suburban poverty, it is sometimes seen as a less pressing issue when compared to urban or rural poverty. After all, the suburbs have less concentrated poverty and more room for upward mobility, so surely any poverty is just temporary.
Unfortunately, this is far from true. The same trends that have driven poverty up in the suburbs have made it more malicious there as well. Between 2000 and 2012, concentrated poverty in the suburbs grew by 139%, which was three times faster than growth in the cities, and now almost half of people living in concentrated poverty live in the suburbs.
There are many aspects of the suburbs that make this rise in poverty even worse than urban or rural poverty. To put it bluntly: the suburbs were not designed well. The same incentives that accounted for the rise in suburbanization never put in place the systems that would be needed to maintain it. Strong Towns founder Charles Marohn described how he saw that the financing for something as simply as a cul de sac just didn’t add up.
A typical city will dedicate 10% to 15% of its budget to infrastructure. Much of that goes to new construction and expansion, but let’s pretend in this case that it all went to maintenance. And let’s pretend, in our cul-de-sac, that all that money just went to the maintenance of this particular local street. Not the drainage and underground utilities. Not the ongoing snow plowing or street sweeping. Not filling the potholes or sealing the cracks.
And let’s ignore any contribution the people along this cul-de-sac would be expected to contribute to maintaining the collector road, which was upsized on their behalf. Or the extra deep pipe, which was installed to accommodate them. Or the traffic signals, interchanges, frontage roads, lift pumps, water towers, or any other communal infrastructure investment they rely on to make their cul-de-sac work. Let’s ignore all of that and just assume that all of their share of the tax revenue allocated to infrastructure goes just to perform basic maintenance on their street.
At 10%, that’s a payback in 79 years. That’s just straight division, not accounting for any interest on a bond or discount rate to account for inflation, which would lengthen that term. I don’t bother with that extra math because 79 years is three times longer than the street is going to last anyway.
At 15%, the payback falls to 53 years, which is more than double the expected life of that street surface. These numbers are absurd, but they are pretty typical of what I was uncovering.
Suburbs were just not built to last. Getting the money to build out is very easy, but getting the money to maintain a community is very difficult. Most local governments are funded with property taxes, and when property values start to go down and community members start to get poorer, the budgets to maintain basic necessities become tighter.
This creates a feedback loop. A community becomes poorer through job loss or migration, community members are not able to pay as much in local taxes, the local government is less able to maintain the community, services and schools start to suffer, and the people who can move out do, which leaves the community even more financially unsound. We can’t blame poor people for this problem, most of them are doing the best they can. It’s the system that’s broken.
If the feedback loop was not bad enough, the existing programs are woefully unprepared for the changing geography of poverty. Most of the place-based support programs that have been put in place since the War on Poverty were focused on urban and rural areas, and are not fit to measure or alleviate the poverty that pervades the suburbs. Meanwhile, county and local government are constrained by budget limitations and the main form of community organization that most suburbs have are authoritarian HOAs.
This is a problem without an easy fix. It will either require a huge change in several fundamental parts of our economy. America’s anti-poverty apparatus will have to be completely overhauled, a lot of people are going to have to move, and the way that Americans build wealth will most likely have to fundamentally change.
But first, we need to acknowledge the problem, and work towards fixing it. Suburban poverty has been allowed to skyrocket with little to no public discussion, and the longer that goes on, the less prepared we will be when the next recession hits. It’s time to start taking this problem seriously.
