Virginia: a Great State for Minority Opportunity

best_metros

by James A. Bacon

The Center for Opportunity Urbanism has developed another set of metrics to suggest that Virginia, like much of the South, is a place where minorities enjoy superior economic opportunity. Bacon’s Rebellion has written in the past how African-Americans, in a reversal of the Great Migration a century ago, are moving back to the South. This new report, “Best Cities for Minorities,” indicates that Hispanics and Asians are prospering here, too.

The study ranks opportunity by four metrics: housing affordability, median household income, self-employment rate, and population growth. By these measures, Virginia’s three largest metropolitan regions — Washington, Hampton Roads and Richmond — consistently score among the most favorable of the nation’s 52 largest metropolitan regions.

“Overall, the analysis shows that ethnic minorities in metropolitan regions with significant economic growth and affordable housing tend to do better than in other locations irrespective of the dominant political culture,” write authors Joel Kotkin and Wendell Cox.

Urban geographers Kotkin and Cox have positioned themselves as defenders of suburban growth and opponents of “smart growth” policies that restrict new residential construction and drive up housing prices. While I would classify myself as primarily in the “smart growth” camp, arguing for the advantages of compact, walkable development, I agree that such policies, as implemented in California and other parts of the country, are prone to creating housing crises and displacing less affluent, minority populations.

Bacon’s bottom line: Virginia’s political class needs to take a close look at these numbers.  The politics of racial grievance is not as likely to play well here as in other metros where economic opportunities for minorities, especially blacks, are more limited. Given the rapid growth of minority populations, due largely to the decisions of thousands of households to move here from somewhere else, the politics of shared opportunity will likely strike a more responsive chord.

Let all those who have ears listen…

(Hat tip: Tim Wise.)

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28 responses to “Virginia: a Great State for Minority Opportunity

  1. but it’s MORE than just city whole. I DOES very much matter what zip codes within those cities:

    Zip Code Matters: Better Neighborhoods Lead to Better Outcomes

    ” The latest research from Harvard economist Raj Chetty and The Equality of Opportunity project is a game-changer in the evolving conversation about how to expand the American Dream.

    Our cross-sector, national, bipartisan campaign believes that the zip code of one’s birth should not condemn anyone to an inescapable economic fate in the United States. Yet too often, this is the case.

    Chetty’s groundbreaking study looks at where low-income children who moved to better neighborhoods through a federal voucher program two decades ago ended up. The results:

    Children who moved from poor neighborhoods into more affluent ones had far better outcomes than their peers who remained behind.
    The earlier the children were moved, the better the outcome.
    In fact, every year spent in a better environment improved the children’s chance of success.”

    https://opportunitynation.org/latest-news/zip-code-matters-better-neighborhoods-lead-higher-incomes/

    also – GOOGLE this:

    In Climbing Income Ladder, Location Matters

    which references a study – “Equality of Opportunity”

    which details within the METRO areas – which sub-areas provide good opportunity and which ones are much worse.

    Bottom Line: it’s not just whole cities. Within each METRO area – there are places were opportunity is significant and there are other places inside the same METRO area where opportunity is terrible.

    the question is – why – if the same school system is in charge of all the schools in the METRO area?

  2. Interesting information. I would offer a few caveats and inquiries…

    – Home ownership != home affordability, although the two are obviously related. I’d be interested to see the median age of Black homeowners in these cities, which I’d lay money would skew older than the categories for Asians and Latin@s. I’d be curious to know how much of the home ownership is comprised of older residents who simply never left (out of loyalty or limited economic opportunities to do so) these metros in the first place. A cursory glance at the top 10 major metro areas supports this idea, as most are cities that were largely abandoned by whites during the 70s through 90s.

    – I know we all love a good counterintuitive finding (“How can the South be racist? Minorities have superior economic opportunities!”), but a further bit of data on the Virginia metros are that all three are also centers for government, and as a result hotbeds of non-discriminatory hiring practices and SWAM requirements.

    – I know Richmond is a long, long way off from being New York City, but I’d really hate for a similar situation to happen here as is happening there, where rich people are buying up property they have no intentions of occupying just to induce demand and raise property values.

    • ” … where rich people are buying up property they have no intentions of occupying just to induce demand and raise property values.”

      You’ve got me with that one. I’ve been spending a couple of days a week in New York City since the start of the year and I’ve never heard anything about that.

      Anyway …

      Induced demand is the economic observation that when the supply of a good or service increases the demand for that good or service also increases. This is because the increased supply lowers the price which, in turn, induces demand. I am not sure how that pertains to your theory of rich people buying houses they don’t intend to occupy to raise property values. Higher property values would increase costs and reduce demand not induce it.

      Do some wealthy people see New York City real estate as a good investment and do they buy property to rent and then sell later (at a profit)? Yes. If supply remained constant would this raise property values? Yes. However, supply is not remaining constant. New York City is in the midst of a “housing boom”:

      http://www.huffingtonpost.com/toni-haber/past-to-present-changing-_b_7256472.html

      Unfortunately, the housing boom isn’t keeping pace with the population growth. Hence, rising prices. The question is whether the growth in housing will eventually cause prices to stabilize or even fall (in real terms).

      From the New York City government:

      “As of July 2014, New York City’s population was estimated at 8,491,079 by the U.S. Census Bureau. This represented an increase of 315,900 residents (or 3.9 percent) over the April 2010 decennial census count of 8,175,133. Population growth was fueled by the continued surplus of births over deaths due to life expectancy in the city reaching a record high, coupled with a net influx of people into the city.”

      In the four years from 2000 – 2004 NYC increased its population by 1.5X the population of the City of Richmond.

      Jim Bacon is getting his wish. People are moving into the cities. They are also living longer. These factors are increasing the demand for housing and raising home costs and rents. Consequently, less affluent people are being forced out as the housing costs are affordable only by more affluent people. This is causing demographic changes. Washington, DC was majority African-American from 1960 through 2012. No longer.

      From the Washington Examiner:

      Though Washington was a natural attraction for freed slaves following the Civil War, the city remained majority-white until 1960, when blacks made up more than 53 percent of the residents, according to census data.

      The black population peaked in 1970 at more than 71 percent of the population.

      But now, because of the urban revitalization that began in cities more than a decade ago, housing prices are climbing in the District and lower-income residents are being priced out of the District. Since 2000, nearly 40,000 blacks have left D.C., according to census data.

      Mark Mather, a demographer with the Population Reference Bureau, said it’s likely whites will continue to gain a larger share in the District.

      “I can’t think of any economic or social trend that would lead to a reversal of what we’re seeing right now,” he said. “There hasn’t been a lot of progress made in terms of retaining African-American families in the city. I think we’re going to continue to see out-migration into Prince George’s County.”

      • As soon as I wrote it I realized induced demand wasn’t what I meant. Constricting supply is probably closer, although if there’s a term for that in economics I’m not sure what it is.

        Regardless, rich people and corporations buying real estate in NYC they have no intentions of ever living in and then sitting on it is in fact a very real thing. The effects on people looking for somewhere to live and not just “store their wealth” are real, too.

        http://www.bloomberg.com/news/articles/2015-04-21/new-york-apartments-art-top-gold-as-stores-of-wealth-says-fink

        “The two greatest stores of wealth internationally today is contemporary art….. and I don’t mean that as a joke, I mean that as a serious asset class,” said Fink. “And two, the other store of wealth today is apartments in Manhattan, apartments in Vancouver, in London.”

        The median sale price for existing condos in Manhattan jumped to a six-year high of $1.3 million in the first quarter, driven up by buyers seeking alternatives to out-of-reach new developments, according to Corcoran Group, a brokerage. In the U.K., asking prices for property climbed to a record in April as values in London rose 2.5 percent, Rightmove Plc said on Monday.

        “It’s become much more accessible for global families worldwide to store wealth outside their country,” said Fink. “And they don’t have to own gold.”

        • Fair enough. There definitely is considerable interest in buying condos as investments. The same thing happened in London. However, I think the condos are almost always put up for rent. However, the cycle in London certainly raised housing prices to astonishing levels. I imagine that the same thing is happening in New York.

      • This from a long read in New York Magazine:

        http://nymag.com/news/features/foreigners-hiding-money-new-york-real-estate-2014-6/index1.html

        “The Census Bureau estimates that 30 percent of all apartments in the quadrant from 49th to 70th Streets between Fifth and Park are vacant at least ten months a year.”

        Daniela Sassoun, a Portuguese-speaking Corcoran broker who used to work in Swiss banking, frequently travels to São Paulo and Geneva to sell elite buyers on New York. “We give them the state of the market, and the lawyers explain how to purchase this under an LLC or a trust,” Sassoun says. “It’s wealth advisory: Here is an option for you to diversify your $100 million.”

        But the boom, and potential glut, at the billionaire end of the market obscures the broader trend, the one that has pushed up prices for everyone. New development in New York has only slowly regained its momentum since 2008, and sales inventory remains mired near a decade-low point. The relatively rare new developments that offer apartments in Manhattan’s “affordable” price range, like 400 Fifth Avenue near the Empire State Building, are the ones that have proved particularly popular with foreign investors (400 Fifth Avenue has a large population of Chinese buyers). As of January, there were around 12,000 apartments in Manhattan’s development pipeline, but they will probably not come rapidly enough to change the equation for the foreseeable future. Competition will continue to drive the wealthy—foreign and domestic—to Brooklyn and middle-class buyers to despair.

        • somewhere in all of that – there is ….rent control…

          • LifeOnTheFallLine

            Rent control is about ~2% of dwellings.

            “For an apartment to be under rent control, the tenant (or their lawful successor such as a family member, spouse, or adult lifetime partner) must have been living in that apartment continuously since before July 1, 1971.”

            “An apartment in a one- or two-family house must have a tenant in continuous occupancy since April 1, 1953 in order to be subject to rent control. Once it is vacated after that date, it is no longer subject to regulation.”

            “The long-term trend is towards zero rent-controlled apartments.”

            Rent control has long been misunderstood and isn’t nearly the factor people think it is.

        • “Competition will continue to drive the wealthy—foreign and domestic—to Brooklyn and middle-class buyers to despair.”

          Now, that’s the truth. Brooklyn was what I’d call “the forgotten borough” when I commuted to work every week in NYC in the 80s. No more. Dumbo (Down Under the Manhattan Bridge Overpass) has become the technology hot spot in NYC for start-ups in so-called Silicon Alley. The affordable housing once found in Brooklyn is becoming unaffordable pretty quickly. Meanwhile, even places like Hell’s Kitchen (famed backdrop for many Damion Runyon stories) has gentrified.

          This is the dirty underside of the new urbanism. Relatively rich people move into the cities driving the middle class and poor out. Needless to say, the poor who have lived in those neighborhoods for generations as renters don’t like to be forced out by newly arrived richie riches. In NYC, DC, SanFrancisco tensions are rising. The far left mayors of those cities need to figure out how to generate sufficient taxes to provide affordable housing for the people who have lived in those cities for generations.

          • LifeOnTheFallLine

            If Bill de Blasio and Muriel Bowser (I have no frame or reference for San Francisco) are far left then this country’s political options are in much worse shape than I previously thought.

      • at the risk of riling folks up.. I just would respectfully assert that increasing supply won’t necessarily increase price much less demand.

        Making more 80K-priced cars in the middle of an economic downturn won’t increase demand even if the price goes to 70K.

        hiring more people to make more widgets won’t cause demand for widgets to increase…. usually demand for widgets increases and that causes the producers of widget to hire more folks to produce more widgets.

        what would cause people to be able to buy more widgets? well that’s the $64 question. if the widget saves people money so they free up money for other things – then that might produce increases sales but whatever the money used to be spent on – that got “saved” and then redirected may cause harm to whoever was producing the thing that the widget enabled less need for….

        say – a car that gets better mileage… but you buy less gas from the folks who were producing the gas…

        or a fridge that uses 1/2 the electricity – so you’re buying less power from the electric company..

        all of that goes out the window when it comes to land.

        A home in a semi-abandoned town in Nebraska can be had for 15K .. that same home in NYC would be 750k, maybe more.

        A single family detached on Fairfax will cost 750K or more – in Fredericksburg that same house will be 299K…

        then we have gentrification… and it’s cousin – MacMansionification of older neighborhoods…

        • “I just would respectfully assert that increasing supply won’t necessarily increase price much less demand.”

          Who would claim that increasing supply would increase price? However, “induced demand” is a well known and accepted part of economics. It is often used when discussing the widening of roads. When a road is widened and the congestion decreases more people use the road and people who would not have made an extra trip now make extra trips. The reduction in congestion increased the desirability of using the road which increased congestion.

          Certainly making the wrong product – in whatever quantity – won’t induce demand. I wouldn’t start a new slide rule company for example no matter how efficiently I thought I could manufacture slide rules.

          • re supply side = as in supply side economics.

            induced – as in “free” roads where no money is involved.

            all other transactions that include money – work differently – including new toll roads that people are NOT “induced” to use.

      • But yeah…white people moved out to the suburbs and tapped into a source of wealth accumulation that was largely shut out to their Black counterparts and then after throwing all the Black people living in the city in prison decided that maybe cities aren’t so bad after all, and there is precious little in the way of protection for the people who decided to stay in the first place. It’s frustrating and as disheartening as watching rural communities get paved over and turned into Starbucks outposts for yuppies in the midst of gestation.

        • you’re a pretty cynical guy but I do admit, I’ve never walked in your shoes… so maybe it’s well earned…

          😉

          • LifeOnTheFallLine

            I’m not cynical, I just read history. The GI Bill and the expansion of the highway system after WWII opened up fast swaths of American land for suburban development that Black citizens – even war veterans – weren’t given the opportunity to access.

            Deed covenants and blatant discrimination kept Black families out of the suburbs:

            http://depts.washington.edu/civilr/covenants.htm

            “Racial deed restrictions became common after 1926 when the U.S. Supreme Court validated their use. The restrictions were an enforceable contract and an owner who violated them risked forfeiting the property. Many neighborhoods prohibited the sale or rental of property by Asian Americans and Jews as well as Blacks. In 1948, the court changed its mind, declaring that racial restrictions would no longer be enforced, but the decision did nothing to alter the informal structures of segregation. It remained perfectly legal for realtors and property owners to discriminate on the basis of race. Only after Congress passed the Housing Rights Act in 1968 were there measurable openings in Seattle’s system of housing segregation.”

          • you’re a more thorough and careful student of history than I although I am aware in general of the things you speak of.

            I lived in Virginia during Massive Resistance and went to a segregated school – they integrated a year later and “Christian” schools began to pop-up more in some places than others.

            As a youth I was very familiar with the separation of facilities – we had two movie theaters in town, all the govt buildings had white only and colored water fountains – and even bathrooms. My mother had a black maid that she openly called the “N” word… even in her presence… she was forbidden to eat off of “family” plates or use their silverware. She had her own set ..but she could sure cook the meals and I quite sure she was a “taster”.

            many other experiences including watching black folks fire-hosed and set upon with dogs.. lynched… dragged behind cars.. etc..

            and yes.. they were systematically kept out of neighborhoods…and actually when they traveled they need the Negro Motorist Green Book so they’d know where they could buy fuel and find a restaurant and a place to spend the night.

            back in those days – there were the overt racists – and then there were folks who herded up with them in Church and in white-only restaurants and faciltiies.. that usually had black folks in the kitchen…

            and the white folks .. who wanted nothing to do with anyone who had openly taken a stand against the racism.. they basically stayed out of the issue.. did not want “trouble”.

            At some point , I knew that it was not only wrong – but grotesquely so and “outed” myself… and have – ever since – known that I did the right thing and have continued to make sure others know how and why blacks today are where they are today.. and why we have the problems we have today.

          • LifeOnTheFallLine

            At the same time, FHA-backed mortgages weren’t available to Black citizens in urban centers to reinvest in their communities thanks to redlining:

            http://www.bostonfairhousing.org/timeline/1934-1968-FHA-Redlining.html

            “Through an overt practice of denying mortgages based upon race and ethnicity, the FHA played a significant role in the legalization and institutionalization of racism and segregation. The Underwriting Manual established the FHA’s mortgage lending requirements, ultimately institutionalizing racism and segregation within the housing industry. The following presents information about the national context of redlining and is not specific to Greater Boston.

            The FHA was instrumental in alleviating the home ownership crisis. However, despite it’s positive impact, the FHA also had significant negative effects. FHA insurance often was isolated to new residential developments on the edges of metropolitan areas that were considered safer investments, not to inner city neighborhoods. This stripped the inner city of many of their middle class inhabitants, thus hastening the decay of inner city neighborhoods. Loans for the repair of existing structures were small and for short duration, which meant that families could more easily purchase a new home than modernize an old one, leading to the abandonment of many older inner city properties.”

            “In the late 1930’s, as Detroit grew outward, white families began to settle near a black enclave adjacent to Eight Mile Road. By 1940, the blacks were surrounded, but neither they nor the whites could get FHA insurance because of the proximity of an inharmonious racial group. So, in 1941, an enterprising white developer built a concrete wall between the white and black areas. The FHA appraisers then took another look and approved the mortgages on the white properties.”

          • LifeOnTheFallLine

            Meanwhile the police were throwing Blacks in jail for drug crimes at rates far outsized that of their white counterparts, the disparity between mandatory sentencing for crack and cocaine is well known, so the government was essentially locking people up for having the temerity to deal the drugs it was paying smugglers to bring into the country.

            http://en.wikipedia.org/wiki/Kerry_Committee_report

          • LifeOnTheFallLine

            It’s why I get on edge whenever those “Gee golly, what is it about Black culture that makes them so gosh darn poor?” As if the white government in this country didn’t spend centuries either outright stealing the fruit of Black labor or putting its thumb on the scale to make sure Black citizens were judged unworthy of the same avenues for wealth creation as their white counterparts. And this is to say nothing of incidents like the Tulsa Race Riots of 1921 where whites marched into Greenwood and burned 35 blocks of the Black Wall Street to the ground.

          • ” Gee golly, what is it about Black culture that makes them so gosh darn poor?”

            rumor has it that it’s in their genes…. not their fault…

          • LifeOnTheFallLine

            And I know you weren’t trying to be dismissive or insulting, but it is frustrating that folks like us get categorized as “cynical” or playing “the politics of racial grievance” just because we have the audacity to remember massive resistance or stuff like this:

            http://atlantablackstar.com/2013/12/04/8-successful-aspiring-black-communities-destroyed-white-neighbors/

            Or the fact that pretty much anywhere the National Highway System had to go near a major city it was the Black neighborhoods that got leveled. It’s no accident that I-95/64 cut through Jackson Ward while I-195 broke up the Black neighborhoods south of Carytown.

          • well I guess I should retract the “cynical”, eh?

            some of what you have brought up had exposed things submerged in my memories.

            We can’t fix many if not most of the wrongs.. but what frustrates me is the denial about why blacks are where they’re at today.

            When mom herself barely has a 3rd grade education and works at whatever jobs she can – when she can – gets blamed for not reading to her kids.. it exposes some not nice stuff about us..

            what also frustrates me is why – within the same school district there are schools that are terrible.. while just a couple miles away in another neighborhood -the schools are “good”

            not understanding why we have such difference between schools within the same school district.

        • Segregation was a fact of life but it was as prevalent in the cities as the suburbs. Baltimore had plenty of “white only neighborhoods” in the patchwork of neighborhoods that comprised that city. Boston has its Southies. Meanwhile, I grew up in Fairfax County just south of Alexandria. My parents and the parents of my friends were members of the WWII and Korean war generations. As I recall, my high school was about 40% African-American, 40% White and 20% “other”. There still were some vestiges of segregation including a neighborhood of very nice homes entirely occupied by middle-class African-American families.

          I think segregation was more complicated than whites moved out of the cities and into the suburbs.

          • no complicated, systemic – in all facets of life…in schools, in churches, at public facilities, in restaurants, gas stations and motels… even doctors and separate entrances at the ER.

          • LifeOnTheFallLine

            Not really, no. There were certainly some white people that stayed in the cities and there were certainly some Black people that were able to pool enough capital to build their own suburban enclaves, but the broad settlement patterns are what they are and the FHA policies and the language in deed covenants were what they were and did what they did, which was shut out the suburbs to large swaths of Black Americans while enabling white people to accrue wealth via property on the new land.

  3. here’s an illustration from the equality of opportunity project for the Washington Metro Area:

    http://www.equality-of-opportunity.org/images/Slide6.PNG

  4. The title says: ” Virginia: a Great State for Minority Opportunity”

    and the bottom line says: ” Virginia’s political class needs to take a close look at these numbers. The politics of racial grievance is not as likely to play well here as in other metros where economic opportunities for minorities, especially blacks, are more limited. Given the rapid growth of minority populations, due largely to the decisions of thousands of households to move here from somewhere else, the politics of shared opportunity will likely strike a more responsive chord.”

    But Virginia does have a problem and using wide scope data – at the state level or even the city level – it does not really describe the reality at the neighborhood school level which is submerged when average with other schools.

    we’re distilling it down to a sound-bite average that masks significant geographic pockets of really terrible education opportunity and you can see this when you look at district-wide school data where whites score in the 90% range on reading and minorities and economically disadvantaged score in the 70’s. When you break this out at the individual school level you see why. because the largely white schools do quite well while the neighborhood schools in economically distressed areas do quite terrible but when you average it – the depth of the low schools get’s “average” with the much higher scoring “good” schools.

    a better, more accurate way to reflect a more true picture would be to not use averages but to use medians and histograms to represent all schools and where they rank in the overall groups.

    I do not know precisely why the low schools score so badly especially when they are run by minorities but it lends itself to the conventional wisdom that bad teachers and bad teachers lead to bad outcomes for kids.

    But I think we do ourselves a monumental disservice when we continue to focus on what we’re good at and continue to mask the significant pockets of serious shortfalls.

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