Most cities around the world have areas of great wealth interspersed with areas of great poverty.  That such divides are common in all cities suggests there is a degree of inevitability to it, but new research from Ohio State University suggests the divide is getting wider.

The study highlights that some of the factors typically believed to affect neighborhood values, such as transport links and proximity to the center of town, aren’t as influential as previously thought.  Instead, what appears to drive value are unique local characteristics and amenities, such as local businesses, schools, and social networks.

What’s more, these features become self-reinforcing over time, which leads to any divide becoming starker between rich neigborhoods and poor neighborhoods.  It’s a finding that the researchers believe reinforces the need for government officials to provide direct investment into low-value neighborhoods to break free from this cycle.

Wealth divide

The researchers utilized high-resolution data regarding housing transactions from CoreLogic to analyze nearly 500,000 property sales in the Columbus area between 2000 and 2015.  It was a period in which high-value neighborhoods typically became more prosperous, while low-value neighborhoods lost value.

The study period encapsulated the financial crash of 2008, whcih resulted in property prices falling across the city between 2008 and 2011, but the recovery was far from evenly felt.

“Areas that traditionally had high housing prices regained much of the recession-induced loss, while other areas did not,” the researchers explain.  “This unequal recovery made the polarized neighborhood values in Columbus even worse.”

Typically, the highest price housing was located near the center of the city, with suburban areas also high value.  The areas in between these were typically where you would find low house prices.

After analyzing how far each neighborhood was from amenities, such as universities, zoos and downtown, they were able to show that the distance from these amenities didn’t appear to influence the value of the neighborhood over time.

“This suggests that the reasons why neighborhoods are becoming more polarized has more to do with what is going on each individual neighborhood,” the researchers explain.

Transport links

What did appear to influence values is the proximity of major transport links.  For instance, Interstate 71 was influential in shaping polarization, with many rich neighborhoods located to the west of the highway, and poorer neighborhoods to the east.

“This is consistent with work by public policy and urban history scholars documenting that highways were constructed to purposefully cut through poorer, minority neighborhoods and avoid more affluent ones,” the researchers explain.  “It has served to further reinforce patterns of economic segregation.”

The researchers believe their findings highlight the difficulty low-value neighborhoods have in improving on their own, and that direct investments are often required to kickstart development.  They argue that governments can play a role by investing in job market training, for example, in an attempt to offset some of the self-reinforcing negative effects that can send neighborhoods on a downward spiral.