Less diverse metropolitan areas in the US are integrating much faster than diverse metros

A new study by US think tank the Urban Institute finds that segregation of black and white has fallen substantially over the last 40 years in urban areas. What’s especially interesting is the cost of housing might be a key factor explaining much of the change.

The Urban Institute’s research project (How far have we come since the fair housing act?) looked at Census data for 268 metropolitan areas over the period from 1970 to 2010.

The researchers used a dissimilarity index to measure segregation. It’s zero if the mix of whites and blacks is the same in every neighbourhood and 100 if there are no neighbourhoods with blacks living in them (or neighourhoods without whites).

Over the 40 year period, the index for all metropolitan areas fell from 76 to 55.6, indicating a significant reduction on average over the period. However there were some important differences.

Larger metros are more segregated than smaller ones and improved less over the period. The dissimilarity score for the largest 10% of metros was 58 in 2010 compared to 43 for the smallest 10% of metros.

Metros with a higher proportion of blacks in the population are also more segregated.  The dissimilarity score for the 10% of metros with the largest black populations in 2010 was 50, almost double the score of 27 for the 10% with the lowest share of blacks in their population.

This represents an important change – in 1970, 1980 and 1990 there was no correlation between segregation and the black share of the population. However it became important after 1990 – the 10% percent of metros with the smallest black populations reduced segregation by 25 points over the last 20 years, while the 10 percent with the largest black populations reduced segregation by just 4 points.

Charlie Gardner from The Old Urbanist argues that the sprawling Sunbelt metros are among the most integrated in the US (see second exhibit). Looking at the ten largest metros in the country, he says Dallas, Atlanta and Houston have lower levels of segregation and experienced much larger improvements over 1970-2010 than “old” metros like New York, Chicago and Philadelphia (segregation actually increased in NY).

His contention is there’s abundant evidence “that low housing costs are a major weapon against segregation”. The improvement made by the Sunbelt metros is due to their ability to provide housing at much lower prices than older cities.

As I’ve discussed before, land is generally cheap and the cost of constructing houses is low in sunbelt cities (Can US sunbelt cities teach us something?). No doubt there are other factors that influenced the change in segregation, but the cost of housing sounds like a very plausible and important one.

It suggests that high housing costs have potentially damaging social implications. In Australian cities, the escalating price of housing and rents in the inner city and inner suburbs is resulting in an increasingly homogeneous and privileged population closer to the centre.

The decline in diversity in our cities is less about race and ethnicity, though, and more about segregation by education and income. For example, the median weekly income of a household with two earners in Werribee in Melbourne’s outer western suburbs at the 2011 Census was $2,106; in the inner city suburb of Northcote it was $2,904.

A key reason housing costs are low in US sunbelt cities is due to sprawl. Residential densities are low, car orientation is high, and expansion at the periphery is relatively unfettered. Sprawl has well-documented downsides but, as the relatively slower progress on reducing segregation in the older US cities shows, so too does restricting land and housing supply.

City managers in Australia need to think seriously about housing affordability and how it’s affected by constraints on the supply of new land and dwellings. Continuing growth at the urban periphery is necessary and inevitable but most of all Australian metros must grow in established areas because, especially as they get bigger, that’s where most residents want to settle.

Policy-makers should respond to that demand by finding ways to increase the supply of housing in existing suburbs – in other words, to increase densities (I’ve canvassed some ways this might be approached before e.g. herehereherehere, here and here).

Dissimilarity Index scores for the ten largest metros in the US, 1970 vs 2010