Deconcentrating Poverty
Toolkit

What is concentrated poverty?

Poverty is “concentrated” in a neighborhood when a large share of residents in a neighborhood do not have incomes sufficient enough to satisfy basic needs. The most common threshold, set by the Census Bureau in the 1970s, classifies an area as “concentrated poverty” when 40 percent or more of the population lives at or below the federal poverty level.

More recently, some researchers have avoided classifying neighborhoods based on income (i.e. poor/ wealthy, high opportunity/low opportunity), instead focusing on the percentage of all impoverished persons in an area that live in high-poverty communities.

We know, however, that a simple statistical measure cannot tell the whole story. A growing body of empirical research demonstrates the long-term, negative impacts that high-poverty neighborhoods have on their residents. Areas of concentrated poverty generally have lower-performing schools, fewer job opportunities, inadequate housing, scarce amenities, and poor infrastructure. For persons with already limited financial means, these environmental burdens make it nearly impossible to achieve economic stability. Concentrated poverty, without meaningful intervention, can doubly disadvantage households.

Because of this observed correlation between neighborhood and opportunity, deconcentrating poverty is generally understood as the process in which disadvantaged households are relocated to neighborhoods with greater access to resources and lower rates of poverty among residents. To the extent that poorer households can be relocated into mixed-income neighborhoods, deconcentrating poverty is a realizable goal. At the same time, poverty deconcentration should be seen as just one method to alleviating poverty, not a solution in and of itself. The question that remains is whether improving geographic mobility is the most effective area to target anti-poverty resources.

40%

An area is classified as “concentrated poverty” when 40 percent or more of the population lives at or below the federal poverty level.

Why is this important?

The spatial and social isolation created by concentrated poverty compounds the difficulty of individual poverty. Some argue this isolation has more profound effects on quality of life and economic mobility than our expanding income inequality problem.

Since 2000, the number of people living in extremely poor neighborhoods has doubled. These neighborhoods of concentrated poverty are still disproportionately in the densest urban places. Additionally, race must be considered in discussions about concentrated poverty: black Americans are 3.25 times as likely, and Hispanic Americans about twice as likely, as white Americans to live in high-poverty neighborhoods. While advocates and policymakers spend much time wrestling over the uneven impacts of concentrated re-investment in some low-income communities (i.e., gentrification), there are many more urban neighborhoods that remain significantly impoverished. These communities should not be ignored.

What are some of these impacts?

- Growing up in a high-poverty neighborhood is strongly correlated to a decrease of your potential future earnings. For example, in Richmond Virginia growing up in a high poverty neighborhood can cost you 15% in annual income by adulthood.

- Moving to a higher opportunity neighborhood can improve your health. Research has shown a correlation between lower rates of diabetes, obesity and depression when low-income families move to higher-income neighborhoods.

- The impact is compounded when multi-generational. Children whose families lived in poor neighborhoods for at least two generations score eight to nine points lower on cognitive skills tests. This equates to missing two to four years of schooling.

For additional research on concentrated poverty and mobility, see:

The Equality of Opportunity Project This Harvard, Stanford and Brown University collaboration (led in part by Stanford’s Dr. Raj Chetty) is a data and research project focused on U.S. poverty and the eradication thereof. Much of the analysis has focused on upward mobility and whether it is truly available to all Americans in all locations and socio-economic backgrounds (hint: it’s not).

3.25x

Decades of discriminatory economic policies, including redlining and urban renewal, created highly concentrated poverty in black communities. Black Americans are 3.25 times more likely to live in a high-poverty area than white Americans.

What are the challenges with this policy?

The scope and impact of concentrated poverty has been studied for decades. More recent research, however, has started to analyze whether certain initiatives to deconcentrate poverty have been successful. Some argue that policies aimed at deconcentrating poverty are simply an attempt to disperse or relocate low income individuals.

Studies in our research library approach concentrated poverty first by laying out a description of the state of the country as well as Virginia’s Cities and Counties. In 2016 Housing Virginia held a conference around the topic. Conference summaries and materials can be found here.

But the topic is not without controversy. It is argued that poverty deconcentration programs are oftentimes more about a goal of non-poor communities to displace or diffuse low income populations, rather than a policy about holistically improving the lives of the poor. “Ultimately,” posit the researchers behind Opportunity Insights, “we must make investments to make all communities areas of opportunity.”

Edward Goetz, Director of the Center for Urban and Regional Affairs at the University of Minnesota, echoes the notion that investments are crucial to effectively deconcentrating poverty:

“Addressing poverty directly through investments makes better use of the federal government’s resources in these preconditions rather than forcing a change of address for very low-income subsidized families. Regarding mobility, policymakers should focus on enhancing choices, not forcing a particular choice on recipients of assisted housing. Most of the research shows that the most highly motivated to move are the ones who experience the most benefits from deconcentration. The role of the federal government should therefore be to facilitate, to the extent possible, the moves of families who wish to move, while continuing to provide assistance to those who wish to remain.”

To put it another way, John Goering, of City University of New York, emphasizes that relocation should, indeed, be a choice:

“Although not a silver bullet, voluntary mobility is among the critical tools that government and the nonprofit worlds should continue to engage in as they pursue comprehensive, effective, and equitable outcomes for cities, neighborhoods, and poor households.”

For practitioners, these critiques must be understood and internalized to create quality policy.

13.8 million

The number of people living in concentrated poverty has grown staggeringly since 2000, nearly doubling from 7.2 million in 2000 to 13.8 million people by 2013—the highest figure ever recorded.

What does concentrated poverty look like in Virginia?

Over 900,000 of our fellow Virginians live in poverty. It affects rural, suburban, and urban areas alike—but the areas of highest poverty aren't distributed equally. Mapping these neighborhoods of concentrated poverty helps us understand how past and present decisions led to such inequality, and help us target meaningful solutions. Click below to explore new maps on poverty and opportunity in Virginia.

Virginia's Poverty Landscape

Use the story map below to explore what poverty looks like across Virginia. Click through the tabs to see where communities of high poverty and concentrated poverty are located. You can also use the search tool to see what poverty looks like in your own neighborhood. To see more housing-related interactive maps, visit Housing Virginia's MAPBOOK.

The Opportunity Atlas

Your childhood neighborhood has a tremendous impact on your potential for success later in life. The Opportunity Atlas, published by Raj Chetty and the Census Bureau, illustrates this phenomenon using demographic data and anonymized historic tax records for thousands of Americans born in the 1970s. The data track these Americans' outcomes and compares them to the conditions of the neighborhoods they grew up in. The Atlas clearly demonstrates the lasting, generational inequities created by areas of concentrated poverty. Use the tool to explore these communities, and to see historical outcomes for your own neighborhood. Click the image below to open the Atlas in a new window.

15%

15% of Virginia's total population live in census tracts with a poverty rate above 20%. This number has roughly doubled since 2000.

What are some Virginia-based best practice approaches to deconcentrating poverty?

Critiques of existing poverty deconcentration measures must be taken into consideration when crafting new programs. The question must be asked, is poverty being alleviated by the measures, or simply transferred or dispersed?

In Virginia, efforts to deconcentrate poverty have guided policies in resource allocations in certain municipalities to improve workforce development, early childhood education, and neighborhood revitalization. Find out more below.

→ The City of Norfolk Plan to Reduce Poverty

→ Housing Opportunities Made Equal (HOME), Richmond

→ Office of Community Wealth Building (OCWB), Richmond

The common thread among these best practices is a multi-pronged approach to deconcentrating poverty, which recognizes that the process is neither simple nor straightforward. Successful programs targeted key areas such as ‘early childhood education, workforce development, youth employment, and neighborhood revitalization.’

Virginia’s Housing Development Authority (VHDA) uses the State Low Income Housing Tax Credit program to address issues of poverty concentration. Through it’s scoring criteria for LIHTC projects, the State prioritizes deconcentration in new affordable housing developments.

Washington DC-based Poverty & Race Research Action Council regularly evaluates States on how much their scoring criteria prioritizes such things as poverty deconcentration. Their 2015 evaluation can be found here. The identify LIHTC scoring that addresses poverty concentration including:

  • Encouraging development in high-income areas
  • Prioritizing developments in the context of neighborhood revitalization plans
  • Incentivizing affirmative marketing
  • Valuing projects that include units for lowest-income households, persons with disabilities and families with children.

142,778

The total number of Virginians living in census tracts with poverty rates above 40%.

How does concentrated poverty connect with other issues?

Concentrated poverty is, as we've seen, part of a web of interrelated issues. It connects to Housing and Health, as neighborhood life expectancy is really a measurement of concentrated poverty. Because of the way in which public schools are funded, concentrated poverty is reflected in the tie between Housing and Schools. Poverty deconcentration is a means to alleviating poverty, not a solution in and of itself. It therefore goes hand-in-hand with policies such as inclusionary zoning, regionalism and transportation, and early childhood education.

It’s also important to remember that policy aimed at deconcentrating poverty can raise issues of NIMBYism. The process of relocating households to neighborhoods with lower rates of poverty could be met with fear and opposition from residents. Go to our NIMBY page to get more information. We must see that concentrated poverty is inextricable from issues such as health, education, transportation and employment, in order to promote a more effective and multifacted approach to deconcentrating poverty.