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Civic
Report

No. 88 June 2014


Poverty and Progress in New York I:

Conditions in New York City’s Poorest Neighborhoods

Stephen Eide, Senior Fellow, Manhattan Institute


Executive Summary

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OP-ED
It's Not Inequality -- Poverty Is The Point, Stephen Eide, New York Daily News, 6-6-14
New York City's Poor Neighborhoods: Tale Of Two Cities?, Scott Winship, Forbes.com, 6-5-14
Inequality In New York City, Scott Winship, Economics21.org, 6-5-14
A Tale of Neighborhoods, Stephen Eide, nyc21.org, 6-4-14
RADIO
Sirius XM's "The David Webb Show" interviewed Stephen Eide, 6-11-14
Table of Contents:
Executive Summary
About the Author
Introduction
Population
Income and Poverty
"Inequality in New York City"
by Scott Winship
Housing Costs
Crime
Welfare Dependence
Family Structure and Educational Attainment
Conclusion
Endnotes

New York’s City’s resurgence over the past three decades has been characterized by greater fiscal stability, less crime, less dependence on cash welfare, and sustained economic growth. Although income has increased broadly, the gains have been proportionately greater for the most affluent households. This rise of income inequality has prompted newly elected mayor Bill de Blasio to characterize New York as a “tale of two cities”—and to pledge to improve incomes and quality of life for the least well-off.

This study establishes a baseline against which future progress may be measured. It presents a quantitative profile, at the neighborhood level, of the low-income New York that Mayor de Blasio inherited. It inaugurates a new Manhattan Institute series that will chart the progress of poor New York neighborhoods over the coming years. How have the poorest neighborhoods in the five boroughs fared over recent decades? Have conditions improved, declined, or remained the same?

The neighborhoods examined in this report are: Mott Haven and Hunts Point in the South Bronx (Bronx Community Districts 1 and 2); Brownsville, Coney Island, and East New York in Brooklyn (Brooklyn Community Districts 16, 13, and 5); East Harlem and Central Harlem in Manhattan (Manhattan Community Districts 11 and 10); Elmhurst and Jackson Heights in Queens (Queens Community Districts 4 and 3); and Stapleton on Staten Island (Staten Island Community District 1). These are the poorest neighborhoods in their respective boroughs, in terms of median household income.

Conditions in these neighborhoods will be measured using several metrics: “against themselves,” to chart their progress over recent decades; and against wealthy neighborhoods, as well as the city as a whole.

Key findings:

  • Population trends are healthy in New York’s poorest neighborhoods. After catastrophic losses during the 1970s, several neighborhoods have seen double-digit population increases during recent decades, often outpacing the growth rate for the city as a whole.

  • The most unequivocal improvement in conditions in New York’s poorest neighborhoods has been the crime decline. In seven of ten neighborhoods surveyed, serious crimes declined by at least 70 percent between 1990 and 2013, with murders down by the same margin in nine.

  • Citywide, the poverty rate has not changed significantly since 1980 (21.2 percent now versus 20 percent then). Among the poorest neighborhoods in the five boroughs, some have registered a drop in their poverty rate since 1980 (East New York and Central Harlem are down by more than 10 percentage points). Others from the same cohort have seen their poverty rate climb (Jackson Heights and Elmhurst in Queens, both up by over 8 percentage points).

  • The record is similarly mixed for neighborhood-level changes in real median household income. Some poor neighborhoods have seen strong gains, and a few have experienced decline. It has been gentrifying neighborhoods, in Brooklyn and lower Manhattan, which have experienced the highest growth rate in median household income since 1980.

  • In nine of the ten poorest neighborhoods in the five boroughs, median gross rent has outpaced median household income since 1980.

  • Poor neighborhoods continue to show high rates of welfare dependence, although the kind of dependence has changed. A smaller share of the population now receives cash assistance than in 1980, but in nine of the ten neighborhoods, at least 40 percent of residents are on Medicaid—and in seven, at least a third of the population receive food stamps.

  • Family structure has been unstable in New York City’s poorest neighborhoods for decades. The same six community districts (Mott Haven and Hunts Point in the Bronx; East Harlem and Central Harlem in Manhattan; Brownsville and East New York in Brooklyn) that had 50 percent, or more, of families headed by a single mother in 1980 continued to do so in 2012.

  • Some of New York’s poorest neighborhoods have made substantial progress in rates of educational attainment. Whereas seven had single-digit rates of adults with a college degree in 1980, only the South Bronx still has not yet reached 10 percent.

 

About the Author

Stephen D. Eide is a senior fellow at the Manhattan Institute’s Center for State and Local Leadership. He edits PublicSectorInc.org (@PubSectorInc), a project of the Manhattan Institute, and is also a contributor to the site. His work focuses on public administration, public finance, political theory, and urban policy. His writings have been published in the Worcester Telegram and Gazette, Orange County Register, the New York Post, Interpretation: A Journal of Political Philosophy, and City Journal.

He was previously a senior research associate at the Worcester Regional Research Bureau, and holds a bachelor’s degree from St. John’s College in Santa Fe, N.M., and a Ph.D. in political philosophy from Boston College.


Introduction

The closest New York gets to an official designation for neighborhood is the “community district,” of which there are 59 citywide. First set out in the mid-1970s, community district boundaries define the jurisdiction of community boards, whose members advise city government on land use, budget, and municipal service issues. Community districts range considerably in size, from that of a large town (midtown Manhattan is the smallest, at 52,000) to a moderate-size city (Flushing is 250,000). They can be quite diverse—Brooklyn Community District 6, for instance, encompasses both Red Hook and Park Slope. Most encompass several of what would informally be known as “neighborhoods.”[1]

Table 1 lists the ten poorest (lowest median household income) community districts in the five boroughs, in 1980 and 2012.[2]


Population

New York City is the only old, former industrial city whose population now stands at its historical peak. The city lost 800,000 residents in the 1970s, a 10 percent drop, but those losses have been more than recouped over the past three decades (Table 2).

Since 1970, population trends in New York City’s poorest neighborhoods have been more exaggerated than for the city as a whole: there were deeper losses during the years of decline; and relatively stronger gains during the recent decades of revitalization. Over 1980–2010, double-digit gains in a decade have been posted in nine instances. All ten of the poorest neighborhoods in the five boroughs have gained population since 1980.


Income and Poverty

Poverty and income metrics among the poorest neighborhoods in the five boroughs vary considerably, depending largely on the borough (Tables 3 and 4). The poorest community district in Queens has a median household income twice that of the poorest community district in the Bronx. And the poverty rate of Staten Island Community District 1, though it has increased in recent decades, is roughly equal to that of the city as a whole: 21 percent.

New York City’s poverty rate (21.2 percent) has been virtually unchanged throughout the last 30 years (1980: 20 percent; 1990: 19.3 percent). Since 1980, some neighborhoods have seen their poverty rates drop by 9 percentage points or more (East and Central Harlem, East New York), whereas others have seen theirs increase by 9 points (Jackson Heights and Elmhurst in Queens).

The record with median household income is similarly mixed. Whereas some community districts have seen real income increase by half (East New York, East Harlem) or nearly double (Central Harlem), two have seen their income decline since 1980.

 

As Table 5 reveals, the neighborhoods that experienced the largest income increases since 1980 were gentrifying neighborhoods.

In other words, at least in terms of neighborhoods, the last 30 years has not quite been a story of the rich getting richer and poor getting poorer. Although the Upper East Side’s median household income has increased 58 percent (a figure similar to East New York’s), measures for Staten Island #3 (Tottenville) and Queens #11 (Douglaston)—the top-income neighborhoods in 1980—have trailed that of the city as a whole. Indeed, as Chart 1 shows, the correlation between current income and total increase in income over the past 30 years is low (R2=0.3199).

INEQUALITY IN NEW YORK CITY

Scott Winship, Walter B. Wriston Fellow, Manhattan Institute for Policy Research

Since the Occupy Wall Street demonstrations, income inequality has featured prominently in policy debates and in economic reporting. At the national level, President Obama has said that addressing “a dangerous and growing inequality and lack of upward mobility” is the “defining challenge of our time.” Locally, Mayor de Blasio argues that New York City’s inequality “fundamentally threatens our future.”

Inequality is certainly remarkably high in New York, even compared with the U.S. as a whole. At the national level, the share of income received by the top 1 percent rose from 10 percent in 1979 to 24 percent in 2007, which matched the previous high, set in 1928. It then fell through 2009—yet by 2012, the top 1 percent was receiving 22 percent of income and was headed back up to its previous heights.[1]

In New York State and New York City, inequality followed the same trend. In 2007, New York and Connecticut had the second-highest and highest levels, respectively, of income concentration across the states (New Jersey was further down the list).[2] New York City saw the share of income received by its top 1 percent rise from 12 percent in 1979 to a remarkable 44 percent in 2007. Since 2009, it has partly recovered, to 39 percent.[3]
Drilling down still further, from 1996 to 2000, a period in which the top 1 percent of New York City residents received about 30 percent of income, the share of parent income received by the top 1 percent of Manhattan’s parents reached 54 percent. This was far ahead of San Francisco, the runner-up among the 250 largest counties, at 37 percent. Brooklyn was ranked 32nd (21 percent), while the other boroughs had shares of 9 or 10 percent. (Westchester County ranked 11th, with 25 percent, and Nassau County was 35th, with 20 percent.)[4]

Another way to measure inequality, one that focuses more on income differences within “the 99 percent,” is to compare the average income gap between households with the average household’s income—a measure based on the “Gini coefficient.” In 2012, the average gap in New York City was slightly larger than average household income (108 percent). That was high enough to place it 19th among U.S. cities and seventh among the nation’s 100 largest cities.[5] Manhattan and Brooklyn, considered “counties” by the Census Bureau, rank first and third among sizable counties in the U.S.[6]

Despite such high levels of inequality in New York, it is far from obvious that the poor and middle class have been hurt. Income growth, after all, is not a zero-sum game, particularly at the local level. Indeed, if the city’s financial sector were ever to relocate to Connecticut, this would hardly benefit “the 99 percent.”

For context, New York City ranks ahead of all but 27 American cities in the largest 100, in terms of median income. Meanwhile, its poverty rate (20 percent) puts it squarely in the middle of the pack (ranked 56th).[7] As inequality rose, median income in New York City increased by at least one-third between 1979 and 2007, while poverty fell.[8] In fact, the income concentration figures cited above are overstated, for a variety of technical reasons, with the median income and poverty estimates understated.[9] Finally, new data show that four of the five boroughs (all but Staten Island) rank in the top 40 among the 250 biggest American counties, in terms of intergenerational mobility.[10] In the New York labor market, moreover, mobility was no lower among children born in 1993 than among children born in 1980.[11]

It is not clear that the de Blasio administration can do anything to reduce inequality, given the national and global forces driving income concentration—to say nothing of the growing importance of Wall Street in the American economy. But even if it could, it is, likewise, far from clear that this would be desirable.


  1. See the spreadsheet at http://elsa.berkeley.edu/~saez/TabFig2012prel.xls, table A3. These are updated figures from Thomas Piketty and Emmanuel Saez (2003), “Income Inequality in the United States, 1913–1998,” Quarterly Journal of Economics 118(1): 1–39.
  2. Estelle Sommeiller and Mark Price (2014), “The Increasingly Unequal States of America: Income Inequality by State, 1917 to 2011” (Washington, DC: Economic Analysis and Research Network), table 2, http://s2.epi.org/files/2014/Income-Inequality-by-State-Final.pdf.
  3. Fiscal Policy Institute (2014), “New York State Economic and Fiscal Outlook 2014–2015,”
    http://fiscalpolicy.org/wp-content/uploads/2014/02/FPI-Budget-Briefing-Book-2014-2015.pdf.
  4. Raj Chetty, Nathaniel Hendren, Patrick Kline, and Emmanuel Saez (2014), “Where Is the Land of Opportunity? The Geography of Intergenerational Mobility in the United States,” working paper, online data table 3, http://obs.rc.fas.harvard.edu/chetty/website/v2.1/online_data_tables.xls. The counties are ranked by size on the basis of the number of children in their sample.
  5. American Community Survey. See http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml. Multiplying the Gini coefficient by two yields the figures cited in the text.
  6. Adam Bee (2012), “Household Income Inequality Within U.S. Counties: 2006–2010” (Washington, DC: U.S. Census Bureau), http://www.census.gov/prod/2012pubs/acsbr10-18.pdf, table 4.
  7. American Community Survey. See http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml. These are five-year estimates, covering 2008–12. Cities are actually “places,” including, e.g., unincorporated counties. They are ranked by size on the basis of number of households.
  8. 2007 estimates are from the American Community Survey. For 1979 estimates, see U.S. Census Bureau, “Money Income of Households in the United States: 1979” (Washington, DC: U.S. Census Bureau), http://www2.census.gov/prod2/popscan/p60-126.pdf, table 11; and U.S. Census Bureau, “Characteristics of the Population Below the Poverty Level: 1979” (Washington, DC: U.S. Census Bureau), http://www2.census.gov/prod2/popscan/p60-130.pdf, table 10.
  9. Scott Winship (2013), “Has Income Inequality Really Risen?” economics21,
    http://www.economics21.org/research/has-income-inequality-really-risen-0; idem (2014) “Choosing Our Battles: Why We Should Wage a War on Immobility Instead of Inequality,” testimony before the Joint Economic Committee of the U.S. Congress,
    http://www.economics21.org/research/inequality-testimony-joint-economic-committee; and idem (2014), testimony before the Committee on the Budget, U.S. House of Representatives, http://budget.house.gov/uploadedfiles/winship_testimony_before_the_committee_on_the_budget.pdf.
  10. Chetty et al. (2014, online data table 3).
  11. Raj Chetty, Nathaniel Hendren, Patrick Kline, Emmanuel Saez, and Nicholas Turner (2014), “Is the United States Still a Land of Opportunity? Recent Trends in Intergenerational Mobility,” working paper, online data table 1,
    http://obs.rc.fas.harvard.edu/chetty/website/v2.1/onlinedata1_trends.xls. The New York “labor market,” or “commuting zone,” includes the five boroughs plus Westchester, Nassau, Suffolk, and Putnam Counties. The mobility measure used is the “rank-rank slope,” which indicates the increase in child-income percentile, per one-percentile increase in parental income.


Housing Costs

As Table 6 indicates, most, if not all, of New York City’s poor neighborhoods boast significant concentrations of public housing units within their borders. (In the two Queens districts, 0 percent of residents live in units owned and operated by the New York City Housing Authority.) When figures for subsidized housing are included, the median neighborhood among this cohort (i.e., the ten community districts studied) has one-third of its rental units dependent on public support.

As the Furman Center has documented,[3] low-income areas tend to face greater affordability challenges than more affluent areas. Though modest compared with those found in more affluent neighborhoods, poor neighborhoods’ rents are still high relative to their income levels.

Among the poorest neighborhoods in the five boroughs, in only one case (Central Harlem) has median household income kept pace with median gross rent (Chart 2). In other words, nearly all these neighborhoods face a greater affordability challenge than they did in 1980.


Crime

The best-known feature of New York City’s comeback—and one of the easiest features to quantify—is its crime decline. After reaching a historical high in the early 1990s, crime began falling, with the trend continuing throughout the next two decades and longer. It is still falling: 2013 saw 334 murders, the lowest number since 1963 (when the city began recording such statistics). Over recent decades, crime in New York City declined further, across more categories of crime, and for longer, than in other major cities.[4] As a result, “[i]f there is a low crime major metropolis in the United States, the twenty-first-century edition of New York City would seem to qualify.”[5]

Table 7 makes clear that poor neighborhoods benefited substantially from the great New York City crime decline.[6] In five cases, murders dropped by over 88 percent.


Welfare Dependence

Welfare reform was, after the crime decline, arguably the second-most striking feature of New York City’s comeback.[7] Having peaked at almost 1.2 million in 1995, the number of individuals receiving cash assistance from the city’s Human Resources Administration has since declined, to slightly more than 340,000 by the end of 2013, a 71 percent drop.[8] Due in part to the new flexibility accorded by the federal Personal Responsibility and Work Opportunity Reconciliation Act, Mayors Giuliani and Bloomberg adopted a “work first” approach to welfare administration. Time limits were imposed on aid, and seeking work was made a rigorously-enforced condition of receiving assistance. Welfare reform did not reduce spending, nor did it lead to a reduction in overall dependence, in that enrollment in other social assistance programs has increased. The city’s Human Resources Administration viewed food stamps, Medicaid, and other forms of noncash assistance as “work supports,”[9] crucial tools in the effort to get more poor New Yorkers back into the workforce.

This is abundantly reflected in the data. All ten neighborhoods’ populations are less dependent on cash assistance now than they were in 1980 (Table 8). At the same time, rates of reliance on Medicaid and food stamps are up in nearly every case (Tables 9 and 10).


Family Structure and Educational Attainment

New York City’s poorest neighborhoods continue to struggle on educational attainment (Table 11) and, especially, family structure (Table 12). Though most lag behind the city in the share of population with a bachelor’s degree, all have seen those rates steadily increase over recent decades. The rate of single-mother families, by contrast, has barely budged at all—either for the city as a whole or in the poorest neighborhoods.


Conclusion

The greatest legacy of the Bloomberg and Giuliani administrations may have been to demonstrate that New York City is governable and that public policies matter. Mayor de Blasio, has, if anything, a more optimistic belief in what government can accomplish than his predecessors did—which he plans to bring to bear on a different set of policy challenges. The most critical measure of success, based on de Blasio’s own reasoning, will be how much he improves conditions in the poorest neighborhoods.


Endnotes

  1. A nonexclusive list of neighborhoods included in the community districts (CDs) covered in this report include: Mott Haven, Port Morris, and part of Melrose (Bronx #1); Hunts Point and Longwood (Bronx #2); Brownsville, Ocean Hill, and part of Broadway Junction (Brooklyn #16); Brighton Beach, Coney Island, Sea Gate, West Brighton, and part of Gravesend and Homecrest (Brooklyn #13); Cypress Hills, East New York, Highland Park, New Lots, Spring Creek, Starrett City, and part of Broadway Junction (Brooklyn #5); East Harlem, Randalls Island, and Wards Island (Manhattan #11); Central Harlem (Manhattan #10); Corona, Corona Heights, Elmhurst, Lefrak City, and South Corona (Queens #4); East Elmhurst, Jackson Heights, and North Corona (Queens #3); Mariner’s Harbor, Stapleton, and St. George (Staten Island #1).
  2. In some of the tables that follow, data for Bronx CDs #1 and #2 are not strictly comparable with past decades since, for some of the 2012 data, the New York City Planning Department has grouped the two community districts together into one statistical unit.
  3. Vicki Been et al., “State of New York City’s Housing and Neighborhoods: 2012,” Furman Center for Real Estate and Urban Policy, July 2013,
    http://furmancenter.org/thestoop/entry/furman-center-releases-state-of-new-york-citys-housing-and-neighborhoods-20.
  4. Franklin Zimring, The City That Became Safe (Oxford: Oxford University Press, 2012).
  5. Ibid., p. 40.
  6. Community district and police precinct boundaries often coincide, but not always. All ten CDs listed in Table 7 fit neatly within the precincts indicated, with the exception of Staten Island #1, which also includes a portion of Precinct #121.
  7. Kay S. Hymowitz, “How Welfare Reform Worked,” City Journal (Spring 2006).
  8. Source: New York City Human Resources Administration.
  9. Robert Doar, “10 Welfare Reform Lessons,” National Review (April 21, 2014).
 
 

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