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Rust Belt Cities Need Investment, Not Gentrification Worries

AKRON, Ohio—There is a type of neighborhood that you never hear about in the gentrification story mostly told by writers living in the coastal centers of power. It is the type of neighborhood where the majority of ordinary people in ordinary cities like Akron actually live.

This type of neighborhood is a lower-income, working-class, mixed-race community, comprised primarily of single-family homes, many of which are owner-occupied.

The standard gentrification narrative is typically about affluent newcomers displacing existing lower-income residents—driving up housing prices, rents, and property taxes to stratospheric heights.

But there are millions of people throughout the cities of the Rust Belt living in neighborhoods with the opposite problem. They are lower-income, working-class homeowners, living in deteriorating homes, with no foreseeable prospects for property appreciation.

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The working poor living in these neighborhoods typically cannot afford to reinvest much in their property to begin with, and even the few who can often choose not to, because they will never come close to getting their money back.

These are places where the property values are so low that people have to sell their houses at a loss—if they can even find anyone interested in buying them at all—and where there is little economic incentive for homeowners to improve their properties.

Consequently, over time, these houses begin a long and tortuous cycle of decline and neglect, as they transition from owner-occupancy, to reputable rentals, to disreputable rentals, to vacancy, tax delinquency, abandonment, and eventual demolition – often at public expense.

South Akron is a perfect example of the type of neighborhood that I am describing. The residential heart of the neighborhood is located about a ten-minute walk from where Firestone Tire and Rubber’s massive industrial complex and world headquarters once stood. The neighborhood reached its zenith in the 1930s, populated by thousands of predominately Eastern European immigrants, many of whom worked at Firestone, and at other nearby machine shops and foundries, at a time when the rubber and tire industry alone employed nearly 60,000 people in Akron.

Census tract 5045 is representative of what South Akron looks like today. The median household income is $28,684. The poverty rate is 45 percent. Of the more than 800 housing units, 92 percent are single-family detached homes, and 46 percent are owner-occupied. The typical home was built during World War I. The median value of an owner-occupied house is $62,300. Only 9.1 percent of the population over the age of 25 has a 4-year college degree.

Forty-four percent of the population is white, 34 percent is black, and 22 percent is Asian, Latino, or multiracial. It probably goes without saying that this neighborhood is more racially diverse than 99 percent of the census tracts in the United States.

Yet this is the type of place that is routinely ignored by urbanists and pundits. It is a community that is already racially diverse, and where many residents may be poor, but are also employed, and also own their home. This is the type of place where the binary, coastal gentrification narrative of rich versus poor, or white versus black, simply does not apply.

In many of Akron’s neighborhoods, just like this one, and in neighborhoods throughout the Rust Belt, the problem is not that housing costs are so high that virtually no one can afford to pay the rent. The problem is that houses routinely sell for less than $50,000—which is essentially the point at which, even in a low cost-of-living market like ours, it no longer makes any economic sense to maintain them.

New investment and residential redevelopment is not the enemy of these types of neighborhoods. It is their best friend. If new housing were built, it would help raise the values of existing homes to levels that would at least warrant cost-effective investment in their renovation and rehabilitation.

So what does gentrification look like in a place like South Akron?

It doesn’t look like hordes of bourgeois newcomers building million-dollar homes and displacing long-time residents.

It looks like ordinary middle-class people incrementally drawn back to the neighborhood by private investment in new infill housing construction and rehabilitation of existing homes, all incentivized by the City of Akron’s newly-launched 15-year, 100 percent residential property tax abatement program.

It looks like a $40,000 house that gradually becomes an $80,000 house. In a city where the median household income is $35,000, that $80,000 house is still affordable for the typical family. But the critical difference is, unlike the $40,000 house, the $80,000 house is worth maintaining and improving.

Applying national narratives about gentrification, without understanding the realities of our regional real estate market, can lead people to the mistaken belief that new housing, or any change at all, is bad. But new residential development and private reinvestment is exactly what the traditional working-class neighborhoods of the Rust Belt desperately need. Opposing it is like bringing a fire extinguisher to a flood—it is bringing the wrong tool to the wrong disaster.

Jason Segedy is director of planning and urban development for the City of Akron, Ohio. Segedy has worked in the urban-planning field for the past 22 years, and is an avid writer on urban development issues, blogging at Notes from the Underground [1]. A lifelong resident of Akron’s west side, Jason is committed to the city, its people, and its neighborhoods. His passion is creating great places and spaces where Akronites can live, work, and play.

19 Comments (Open | Close)

19 Comments To "Rust Belt Cities Need Investment, Not Gentrification Worries"

#1 Comment By Dave On April 5, 2018 @ 10:29 pm

You are looking in the wrong direction. Housing stocks were not an issue while there was a healthy manufacturing payroll flowing through the local economy. Forget about housing. Focus exclusively on bringing in manufacturing plants, and ALL the rest will take care of itself.

#2 Comment By Patricus On April 6, 2018 @ 3:10 am

It seems a return of tire manufacturing, or some other manufacturing, could help more than some welfare program.

#3 Comment By Roger On April 6, 2018 @ 5:27 am

How exactly is building a bunch of fancy new houses supposed to help folks without a job? It’s a money issue. No doubt these people would like to fix up their homes, but when you’re getting paid 8 bucks an hour at Target because the mill went to Mexico it ain’t happening.

#4 Comment By Dan Green On April 6, 2018 @ 9:56 am

Globalization is like taking a prescription drug it takes a few years to experience the side effects. The rust belt in our current economic arrangement and digital economy will not receive new investment.

#5 Comment By Ken T On April 6, 2018 @ 10:15 am

The unanswered question is, what will attract those “ordinary middle-class people” to invest and move into that neighborhood? A tax-abatement program is useless to someone who can’t find a job. The 60,000 working class jobs that built the area in the 1930’s are gone, never to return. That’s the roadblock. Working class jobs tend to be location-specific, centered around a manufacturing complex. Whereas the higher class tech jobs that bring in the gentrifiers are more easily portable.

#6 Comment By Clarence Rutherford On April 6, 2018 @ 12:06 pm

Warren Buffett mocks academic economics for its assumption that something is worth what someone will pay for it. He uses houses as an example. What do you care what someone will pay for your house if you enjoy living in it? And the less you bought it for the better! Saying a house isn’t worth maintaining seems to assume that you don’t live there. Perhaps the author is thinking from a landlord’s point of view. Meanwhile, doesn’t the city need the tax revenues? If someone can’t afford the property taxes after buying the house for peanuts, that is rather odd. But if I were a landlord, sure, I wouldn’t want to pay property taxes and would contribute to the campaigns of politicians promising to release me.

#7 Comment By Nate Wessel On April 6, 2018 @ 1:09 pm

I think the bigger issue here is the loss of jobs and money from the regional economy… or the loss of stable middle class jobs perhaps. I grew up near Akron, and there are certainly a great many neighborhoods in the region (and Ohio generally) that match your description – places that need basic investment in infrastructure – places that would gladly welcome a little gentrification if it meant rising property values and better city services. But I think the property values are so low, essentially, because there aren’t enough jobs to draw people to the region to find work, and people’s kids keep leaving for better opportunities if they have the option.

The only part of the region economy that might be growing in these places is perhaps medical, and that only because people are aging and dying.

I left Canton for Cincinnati, and then Cincinnati for Toronto, all in search of better opportunities. It really pained me to leave Cincinnati, and I think I can empathize with your work to make Akron a better place to live, but we may ultimately be struggling with forces larger than ourselves, and larger than city or even regional planning can begin to address. Not that it’s not worth struggling against the current!

#8 Comment By Buckeye1 On April 6, 2018 @ 2:49 pm

I believe that the hope is more for small light manufacturing rather than huge plants like the rubber industry. Akron has a lot to offer plastic manufacturing due to a leadership role in plastics at the University of Akron. Niche companies in medical equipment could do well given the proximity to Cleveland that holds a world wide medical research place.

#9 Comment By JonF On April 6, 2018 @ 3:00 pm

No matter what happens in regards to trade issues, we will never have huge workforces employed in manufacturing again because automation has ended the need for that. The problems now are two: 1) How to retrain and place workers in new jobs– our current retraining and job placement system stinks and 2) how to improve the pay and benefits of the jobs that are available.

#10 Comment By LouB On April 6, 2018 @ 5:08 pm

Here in Michael Madigan’s corner of the land of Lincoln we have different problems.
We too have managed to chase away most of the remaining industry with our focus on the corporate headquarters mentality and the ridiculous taxation levels.

The housing stock is quite highly priced relative to other areas of the country which necessitates higher wages to compensate for reduced standard of living.

And it becomes a vicious circle when areas with declining industrial employment lose skilled industrial workers and have no draw to attract replacements.

And yet large swaths of the (former) second city remain intractably blighted.

So our problems are different from Akron’s but it does circle the same drain of dwindling industrial employment.

#11 Comment By D On April 6, 2018 @ 5:13 pm

Your heart is clearly in the right place, but as others have noted the issue isn’t cheap housing that’s not worth the effort. It’s the fact that people can’t afford to maintain the homes in the first place, and the macro economic conditions that created that reality.

#12 Comment By Tom Tomko On April 6, 2018 @ 9:54 pm

You’re talking about a problem without a solution, like so many other problems that are existent today in most of the parts of the country. I’m a native of the Youngstown area which was prosperous during the 30′ and 40’s. It will never again live to see the golden days of manufacturing in the rust belt. I would highly recommend that the young people in those areas leave those deplorable areas for greener pastures, as I did in the 40s, for the Denver area. Best move I ever made. 99% of the people remained in those areas only to experience what is now called the Rust Belt. If you can’t change it, get out and go where the jobs are, while you still can. Open borders will soon change that dream too.

#13 Comment By Charles R Williams On April 7, 2018 @ 7:46 am

I know this area very well. I lived and worked there 10 years, lived close by another 25 years and have in-laws there. The problem cannot be solved by subsidizing housing investment. By 1980, tire production was largely phased out, leaving headquarters operations. These in turn were largely dismantled by financial restructuring. So what is left is neighborhoods with low cost housing, high taxes, poor and expensive schools, social pathology and poor long term job opportunities. People live there because housing is cheap.

The downward spiral started because the URW union mentality made reinvestment in local manufacturing to make radial tires unattractive. Foolish policies at the state and local level exacerbated the problem.

I do not see an easy fix at the local level.

#14 Comment By Chris Mallory On April 7, 2018 @ 5:31 pm

As long as a property owner is planning on living in a home, there is reason to maintain it.

“Property appreciation” only helps two groups. Those who are looking to flip their house and move somewhere else and government employees who live off the higher taxes that property appreciation brings. It sounds like Mr. Segedy has spent his life living off the sweat of the property owner’s brow and wants to keep his gravy train flowing.

#15 Comment By WSC On April 8, 2018 @ 9:31 am

I’m a transplant to the Cuyahoga Falls area just north of Akron. While living here has inflamed my militant antipathy toward the ever-grumpy yuppies and left-leaning baby boomers, it has also caused me to realize how much I really have in common with the working class blacks with whom I work.

For all of the media’s race-baiting the reality on the ground just doesn’t fit with their narrative. We live in the same neighborhoods and as a consequence we have learned to get along with one another (because we have to). I believe that you’re correct; the coastal experience with its deep racial tensions (and higher income inequality) just doesn’t neatly apply here. The average person living in the Rust Belt, of whatever race, is primarily concerned with being able to take care of their families, full stop- not some broader, media-driven movement which only truly appeals to the overeducated, bourgeois left who have the free time and who lack genuine commitments to family, religion, place, etc.

#16 Comment By connecticut farmer On April 8, 2018 @ 12:38 pm

It’s all about jobs. Build the business and they will come. Then build the homes so they will stay.

#17 Comment By Youknowho On April 8, 2018 @ 10:25 pm

One thing that would help if people started planting community gardens and keeping chickens. That would lower their grocery bills, plus you could have a local economy, based on barter, true, but an economy nevertheless.

The big factories will not come back, but it is time to start small manufacturing shops, taking advantage of 3D printers, and if needed do piecework at home. All the skills learned in the Old Country, how to make do, repurpose, and use and reuse can come into play. Recovery of useful materials from trash piles.

And start a microlending program. In the Third World such lending has lifted many families from poverty. I refuse to believe that the people living there have less gumption or willingness to try that Third World poverty stricken peope.

#18 Comment By Managing Director On April 9, 2018 @ 10:14 am

Since everything is for sale, I suspect our tariff system was on the selling block. Jobs – Heck! We can employ these out-of-work Americans as cannon fodder for imperial Israel and Saudi Arabia in their exhortations to us to fight the endless war on their behalf. If a trade war with China means we seek equal treatment with tariffs then Donald – go for it. Cut back on their gizmos and it will mean one less carrier group China can deploy to disrupt and threaten S.E. Asia. Ike and JFK would be aghast at how we have sold out on the traditional concept of America. Mind-boggling.

#19 Comment By Christian Sokolowaki On June 12, 2018 @ 1:28 am

I have worked at a business in that exact neighborhood for just shy of 20 years. I went from the lowest paid employee to top level management in that time. One day I will own the company. During that time I have seen the neighborhood continue to decline for the reasons stated by others above. JOBS is the problem. We have worked hard to build our small manufacturing company from just 5 employees to 14 in total now. Despite the recession which almost closed our doors we have more than doubled the annual sales during my time there. Whenever possible we have hired local yet over half our staff chooses not to live within city limits. Crime and poor schools are the most common reason. It doesn’t help that either our plant or our offices have been burglarized or vandalized on many occasions. Yet still we press on.

One thing I often note about the area is the plethora of vacant commercial buildings which I hear the city is going to do something about. I have not read the details yet but I would hope the plan is to attract NEW BUSINESSES. Anything the city can do to add to the manufacturing base will cause the other dominos to fall in line. New jobs will revitalize that neighborhood and the rest of the city faster than anything else.

In order to fix the problems that plague us we must first understand what happened and then reverse it. During Akron’s boom years there was no need to offer incentives for new homes. The exploding population due to a strong job market created the housing demand. Simply building new houses is certainly no guarantee people will buy them. Where is the demand?

Further to the west Akron still maintains it’s three premier neighborhoods: Merriman/Portage Path, Fairlawn Heights, and Sunsetview. These are homes that people DO invest in, they DO renovate them. I should know, I live in that area. New homes, for the most part, do not fit these neighborhoods either. At least not on streets lined with grand old homes approaching 100 years old. In those neighborhoods it’s the homes themselves that are the charm. Larger than average lots also add to the demand. The city’s reluctance to sell the few vacant lots in these areas to adjacent homeowners really makes no sense. A grand old home with an extra large lot adds value to that home but also the neighborhood. These “buffer zones” as I like to call them provide much welcomed space in the neighborhood. When permitted to purchase these lots the homeowners generally tie in the landscaping and beautify the whole street as a result. Surely in the grand plan to revitalize the city this idea demands consideration.

I do agree with the author, who happens to be the city’s Director of Planning and Urban Development, that we need new residents. I further agree that new housing for all income levels is a step in the right direction IF there is demand. That demand will come in the form of JOBS if we can pull that off. I’m doing my part!