July 27, 2006

Reports of a declining urban middle class

Recently, the Berkeley Daily Planet (July 14-20) and the New York Times (July 23) carried articles about the disappearance of the middle class and middle class neighborhoods in some of our major metropolitan areas. The articles are based on a recent Brookings Institute report titled "Where Did They Go? The Decline of Middle-Income Neighborhoods in Metropolitan America." The data is from the 2000 U.S. Census and contains family and neighborhood information from 100 of the largest metropolitan areas and a selection of 12 of these : Atlanta, Baltimore, Chicago, Denver, Indianapolis, Los Angeles-Long Beach, Louisville (KY), Oakland, Philadelphia, San Antonio (TX), San Francisco, and Washington D.C. According to the Daily Planet, between 1970 and 2000, "middle-income neighborhoods were replaced in roughly equal measure by low-income and very high-income neighborhoods" in the 12 select metropolitan areas. There are multiple effects report the New York Times : limited upward mobility in terms of housing, reduced quality of schools as well as the number of quality schools, and fewer bridging social ties. In addition, commentators predict polarized politics. One solution to retain the urban middle class might be housing. On July 26, the Wall Street Journal reported that the Phoenix Realty Group has raised a $243 million fund to finance for-sale and rental housing. While there are government subsidies for low-income housing, the new fund is an instance of "housing for a more middle-income bracket." For now, target markets include Los Angeles (civil servants, first time home buyers) and northeastern areas like Port Chester, NY and Hartford, CT.

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