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Posted Dec 30, 2017, 11:35 PM
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Join Date: Aug 2002
Location: Toronto
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The Places That May Never Recover From the Recession
The Places That May Never Recover From the Recession
DEC 29, 2017
Read More: https://www.theatlantic.com/business...ession/549350/
Quote:
HEMET, California—Many cities across America are doing better today than they were before the recession. This is not one of them. A decade after the start of the Great Recession, it struggles with pervasive crime and poverty.
- Hemet is not alone in its troubles. A report released this year by the Economic Innovation Group, a research group started by Silicon Valley entrepreneurs, found that one in six Americans lives in what the group calls “economically distressed communities” that are “increasingly alienated from the benefits of the modern economy.”
- Such communities have high shares of poverty, many housing vacancies, a large proportion of adults without a high-school diploma, high joblessness, and a lower median income than the rest of the state in which they are located. They also lost jobs and businesses between 2011 and 2015.
- Many of these distressed communities are located in Rust Belt states like Ohio, New York, and Michigan. They include Youngstown, Buffalo, and Flint. But there’s another type of left-behind community that’s gotten far less attention. These towns are located in the suburbs of the American west, in regions hit hard by the housing crisis—Southern California, Las Vegas, and Arizona.
- Why hasn’t Hemet found surer footing? For one thing, the region where Hemet is located was decimated by the housing crisis, with among the highest foreclosure and unemployment rates in the nation; many families are still recovering. But Hemet’s problems are also the result of structural changes in the economy—changes that have been underway for decades but were masked by the heady days of the housing boom.
- Middle-class jobs have been disappearing while high-wage and low-wage jobs have grown—but in different geographic locations. High-wage jobs are often located in big cities, while low-wage jobs are in relatively cheap locations like suburbs and small cities. — This dynamic changes the housing markets of these cities, too, with big cities getting more expensive as more high-wage workers migrate there, and low-wage workers leaving cities to seek more affordable housing in the far-away suburbs they can afford.
- “The crime level just keeps getting higher,” Toni Willden, who bought her home in 2005, told me recently, about Willowalk. The gates that keep out nonresidents get broken once or twice a week, she said. Just about everybody in town knows the code to the gates anyway—I got it by asking the clerk at the hotel where I was staying.
- Another woman, Amy Aschenberg, whose family in 2014 bought a five-bedroom home overlooking a pond, told me that she and her husband realized they’d made a mistake soon after buying their home. The gated community was filled with renters, who didn’t keep up their homes and who hosted parties late into the night, especially in the summer. Home burglaries—in the middle of the day—happened with alarming regularity.
- This gated community is an example of how some neighborhoods that were once middle-class are becoming poorer. “The lack of construction in coastal cities has forced people who are marginally educated and low-income to move inland,” said John Husing, the chief economist of the Inland Empire Economic Partnership. Median rents in Hemet rose just five percent between 2009 and 2016; in Los Angeles, they rose 20 percent, according to Census data.
- Renters aren’t necessarily bad for a neighborhood, but the transition of a neighborhood from one of homeowners to one of renters can be disruptive. When a home is lost to foreclosure and then changes hands a number of times, it can upset the community ties in a neighborhood. — When homeowners live in their own homes, they are invested in the community, and their own fortunes are bound to those around them.
- When they live far away and are renting them out, they’re often less able to put time into maintenance and upkeep. Detached single-family rental housing tends to really upset the social structure of communities. — After investors bought up single-family homes and rented them out in the Phoenix suburb of Chandler, Arizona, the neighborhoods had more service calls to police about violent crime. — The problem is not the influx of renters, necessarily, but instead the absentee landlords who don’t keep up homes.
- In the end, Hemet is stuck. The city itself can’t convince companies to pay better wages, and it has no control over the rents in big cities that are pushing people out to the suburbs. It has tried to force absentee landlords to keep up their homes, but has limited resources to do so, and struggles to smooth over its transition from a community of homeowners to one of renters. — Like many other suburbs and small cities across the country, the economic tide has turned against its residents, leaving them seemingly no path back to vitality.
- As Hemet and many suburbs like it are finding, growing poverty can lead to even bigger problems—lower tax revenues, fewer businesses able to stay put, worse services like schools and police. This, of course, makes them even less attractive for people who have other choices about where to live. Over time, the situation only gets worse. As nearby cities prosper, and the recession appears as just a bump in the road in the rearview mirror, distressed areas are still there, unable to move ahead.
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