Half of Homes In Seattle and Washington, D.C. Are In Economically Integrated Neighborhoods--a Bigger Share Than Other Major U.S. Cities
SEATTLE, Feb. 17, 2021 -- (NASDAQ: RDFN) -- One in five residential properties across 30 of the largest American cities are in economically integrated neighborhoods, according to a new report from Redfin (www.redfin.com), the technology-powered real estate brokerage. Economically integrated neighborhoods are areas with roughly equal numbers of affordable and high-end homes. These neighborhoods are more common in cities like Seattle, Washington, D.C., Boston and Denver than in cities like Los Angeles, Detroit and Oklahoma City.
Seattle took the number-one spot in Redfin's analysis, with more than half (54.2%) of Seattle's homes in 2020 were located in neighborhoods with about the same amount of affordable and high-end homes. Redfin defines an affordable home as a property with a monthly mortgage payment that's no more than 30% of the local median monthly household income as of 2019. In Seattle, where the median 2019 income was $102,486, that would be a home with a monthly mortgage payment of no more than $2,562, or a total market value of $786,500.
Washington, D.C. was the only other city where about half of homes (49.5%) were in economically integrated neighborhoods. Boston and Denver rounded out the top four, at 41.6% and 41.0%, respectively.
These cities exist in stark contrast to places like Los Angeles, where more than three-quarters of homes (79.1%) are in high-end neighborhoods, and Oklahoma City, where almost all homes (96.7%) are in affordable neighborhoods. This is likely contributing to varying rates of homeownership in these two cities. Oklahoma City is relatively affordable, with more than half (57.5%) of residents owning homes in 2019--the third highest rate among the 30 cities in this analysis. Meanwhile, closer to a third (36.5%) of L.A. residents owned homes, the second lowest rate, behind only Boston.
More Economic Integration Doesn't Necessarily Signal Equality
Where people live can play an important role in defining their future success. It can determine where they work, who they meet and what school they send their children to. Research has shown that children who grow up in impoverished neighborhoods are more likely to be incarcerated and have lower earnings, while children who live in economically integrated neighborhoods have comparable economic and health statuses as children from higher-income families. Having a mix of affordable and high-end homes isn't synonymous with equality, Marr noted.
"Some neighborhoods may appear to have a good balance of affordable and high-end homes, when in reality it's just an affordable neighborhood transitioning into a high-end neighborhood due to gentrification," Marr said.
In Seattle, a Push for Dense Housing Helped Neighborhoods Become More Economically Integrated
Although Seattle has a reputation for being one of the most expensive places to live in the U.S., local leaders have made significant strides in recent years when it comes to balancing out expensive neighborhoods with affordable housing.
Seattle officials used upzoning--the practice of changing zoning regulations to allow for dense multifamily buildings instead of just single-family homes--to expand housing supply and provide less expensive options for families who can't afford to buy single-family homes. The Seattle City Council voted as recently as 2019 to upzone 27 additional neighborhoods and require developers in those areas to include low-income apartments in their buildings or pay fees.
The share of Seattle homes that are in economically integrated neighborhoods increased from 48.7% in 2016 to 54.2% in 2020. Over the same period, the share of homes that are in high-end neighborhoods decreased from 39.9% to 15.6%, and the share of homes that are in affordable neighborhoods increased from 11.3% to 30.3%.
In Washington, D.C., Older Homes and Converted Rowhouses Coexist Alongside Luxury Buildings
About half (49.5%) of Washington, D.C.'s homes in 2020 were located in economically integrated neighborhoods, little changed from 2016. However, during the same period, the share of homes that are in high-end neighborhoods decreased from 32.0% to 15.0%, and the share of homes that are in affordable neighborhoods increased from 18.6% to 35.5%. For the purposes of Redfin's analysis, an affordable home in Washington, D.C. (based on the 2019 median income of $92,266) is a property with a monthly mortgage payment of no more than $2,307, or a total market value of $708,200.
"Washington, D.C. is diverse in income, occupation, race and place of life," said local Redfin real estate agent Leslie White, who lives in D.C.'s Mount Pleasant neighborhood. "Mount Pleasant has four-story tall rowhouses that sell for $2 million, but it also has small, simple condos that go for $400,000--although there are many folks who wouldn't consider $400,000 affordable. The people who have the ability to get loans and become homebuyers tend to be wealthier than the people who are renting."
Gentrification could be playing a role in making once-affordable D.C. neighborhoods appear economically integrated. While Washington, D.C. recently fell to 13th place from 1st place on the National Community Reinvestment Coalition's ranking of the most intensely gentrifying cities, the region continues to experience gentrification and displacement.
A Lack of Balance In Los Angeles, Detroit
In Los Angeles, more than three-quarters of homes (79.1%) are in high-end neighborhoods. While that's an improvement from 88.6% in 2016, it still makes L.A. the city in this analysis with the highest share of properties in expensive neighborhoods. Just 16.3% of homes in L.A. are in economically integrated neighborhoods, and only 4.6% are in affordable neighborhoods.
Other expensive California cities, including San Francisco, San Jose and San Diego, also had relatively high proportions of homes in high-end neighborhoods.
"For the most part, L.A.'s neighborhoods are homogenous. Expensive homes are typically in expensive neighborhoods, and more affordable homes are in affordable neighborhoods," said local Redfin real estate agent Sylva Khayalian. "A good example is Pasadena, where it's almost impossible to find a home for under $900,000."
Detroit falls on the other end of the spectrum, with 95.2% of homes in affordable neighborhoods. Just 3.5% of the city's residential properties are in economically integrated neighborhoods, and only 1.3% are in high-end neighborhoods.
"Detroit is highly segregated by economic status," said Redfin Chief Economist Daryl Fairweather. "Although the downtown and midtown areas have gone through a revitalization in recent years, much of the rest of the city remains trapped in a cycle of poverty where low property values lead to underfunding of schools and public services, which causes more affluent residents to leave, and further degrades property values."
To read the full report, including the full city-by-city data breakdown and more, please visit:
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