The increasing wage-gap has far-reaching effects, especially in housing.
Middle-class neighborhoods, long regarded as incubators for the American dream, are losing ground in cities across the country, shrinking at more than twice the rate of the middle class itself.
In their place, poor and rich neighborhoods are both on the rise, as cities and suburbs have become increasingly segregated by income, according to a Brookings Institution study released Thursday. It found that as a share of all urban and suburban neighborhoods, middle-income neighborhoods in the nation's 100 largest metro areas have declined from 58 percent in 1970 to 41 percent in 2000.
If you don't live in one of the more affluent areas, your children are also effected.
"It means that if you are not living in one of the well-off areas, you are not going to have access to the same amenities -- good schools and safe environment -- that you could find 30 years ago," he said.
But, it's not only the folks at the Brookings Institute that see this decline. Their findings are supported by others.
Several urban scholars who had no role in the Brookings study said that its findings are consistent with what they have seen in cities from Los Angeles to Cleveland, as the middle class hollows out and as an economic chasm widens between rich and poor neighborhoods.
"We are increasingly being bifurcated on an economic basis," said Paul Ong, a professor of public affairs at the University of California at Los Angeles. "It has taken a big chunk out of the middle."
But check this out. The link between neighborhood homogenation and discrimination is pointed out.
"As upper-income Americans are drawn to the new houses, neighborhoods become more homogenous," he said. Echoing the Brookings study, he said: "The zoning is such that it prevents anything other than a certain income range from living there. It is our latest method of discrimination."
This homongenizing can be seen in Knoxville, TN as well. The prices for basic basement ranchers and split-level ranchers in my little working-class neighborhood have sky-rocketed, the average house in the neighborhood was $95,000 nearly 5 years ago, and now are going for as much as $160,000. And there is nothing special about them. These houses were/are basic, inexpensive housing, and the same phenomenon is covered in the article.
That has pushed up the price of housing in mixed-income neighborhoods. Gentrification often pushes the poor away to less-desirable suburbs.
But, there is more to it, that I have noticed, that the article doesn't discuss. As the ARM's were the mortages pushed on lower-middle-class people trying to climb to better living standards, these people that overpaid for basic housing are now having a hard time. (Now, I don't know for sure if these same people are the victim of ARM's, I'm only guessing, but it would make sense based on my own observations, nor am I trying to put down these people, they are very nice people.) I have noticed the utility company going around each month, putting up their very bright and hard to miss diconnect notices more and more often, particularly on houses that were bought at what I consider inflated prices, by people trying to escape low-income housing.
Meanwhile, high-end subdivisions have proliferated. Polo Club, Mallard Bay, just to name two (and two that we, meaning my business, have done work at). But, I am seeing the more and more signs that things are slowing. Some of the houses in these high-end subdivisions are sitting, and have been sitting for months, not selling. The slowed buying of houses has trickled down to the construction companies. More and more workers are stopping by the job sites looking for, and sometimes begging for, work. While I've always felt that Knoxville was an anomoly compared to national trends in housing, when it starts showing signs of national trends, you take notice.
For the small construction comapanies, such as my own, it is now past time to make decisions on your companies direction.