A report from the Brookings Institution, “How we define ‘need’ for place-based policy reveals where policy and race intersect,” examines eight well-known indices used to define “high-need areas” in economic development and housing policy. Across all measures, people of color are concentrated in these high-need areas. Under the broadest definition, half of poor white people live in high-need areas, compared to more than 80% of poor Black people and 76% of poor Latino people.
The authors reviewed eight indices of place-based need from existing policies and academic analyses. Four are based primarily or exclusively on economic criteria, including poverty: New Market Tax Credit’s Low-Income Communities (LICs), Opportunity Zones (OZs), USDA’s classification of persistent poverty counties or tracts (PPTs), and the Economic Innovation Group’s Distressed Communities Index (DCI). The other four include a broader range of criteria: the CDC’s Social Vulnerability Index (SVI), Diversity Data Kids’ Child Opportunity Index (COI), the Robert Graham Center’s Social Deprivation Index (SDI), and the University of Wisconsin’s Area Deprivation Index (ADI).
The different approaches yield variations in the number and location of communities identified as high-need. Indices that use a relative standard of need (e.g., comparing a place’s poverty rate with the state poverty rate) tend to cover more people and places than indices that use an absolute standard of need (e.g., poverty rate above a specific threshold). Even where designations identify roughly the same number of people and places as in need, the places identified vary. The variables included in an index affect which areas are identified as high-need. For example, the weight that the SDI puts on a household’s lack of a car means more urban areas are identified as high-end than in other indices.
Despite other variations, all the indices show that poor people of color are concentrated in high-need areas. Not only are people of color more likely to be below the poverty line, they are also more likely to be living in areas of widespread economic disadvantage. Even under the broadest definition of communities in need (LICs), just 50% of poor white people live in high-need areas. In contrast, over 80% of poor Black people, 76% of poor Latino people, and 74% of poor Native American people live in LICs. The other seven measures likewise show that poor people of color are more isolated and concentrated in high-need areas than poor white people. Regardless of income, all racial groups except white and Asian people are overrepresented in high-need areas. The authors attribute this racial pattern to the lingering effects of racist policies that segregated the U.S. and suppressed the economic mobility of people of color.
When compared with neighborhoods not identified as in-need, high-need areas face a range of structural challenges. Residents of high-need areas are twice as likely to work in low-wage service occupations. In high-need areas, a much higher share of households lacks internet access and health insurance, and more live in severely crowded homes. The homeownership rate in these tracts is almost half that of tracts not in high need, and housing cost-burden rates are 12 to 18 percentage points higher (depending on the index of need adopted).
The full report can be found at: https://brook.gs/30imAde