Earlier this year, Daniel Hartley of the Cleveland Fed and Nathan Baum-Snow of Brown University published a novel analysis of what has been called the “Great Inversion”: the shift of higher-income people from the periphery of American metropolitan areas towards the center. (Previously, we covered another excellent visualization of this phenomenon from the University of Virginia.)
Essentially, Hartley and Baum-Snow broke down every Census tract in over a hundred metro areas into thirds, based on their income. Then they measured what percentage of people within three miles of their city’s central business district lived in a Census tract that was in the top third. Unsurprisingly, in almost every city, that percentage increased dramatically between 1980 and 2010.
Pay particular attention to cities that crossed the 33% threshold, which we’ve highlighted with a dotted line in the chart above. If high-income neighborhoods were evenly distributed across a metropolitan area, you would expect exactly 33% of downtown residents to live in a top-third tract. But in 1980, these tracts were underrepresented in all but two of the 49 largest American cities’ downtowns. By 2010, in many of these regions, they were overrepresented, reflecting the increased desirability of dense inner-city areas.
Still, despite all the progress American central cities have made in economic development, it’s important to note that most of these areas remain disproportionately poor. Even in 2010, cities where upper-income neighborhoods were underrepresented in central areas outnumbered those where upper-income neighborhoods were overrepresented by 32 to 17. And in two cities – Detroit and Indianapolis – there are no upper-income Census tracts within three miles of their respective downtowns.
Although the phenomenon is complex, we were also struck by how much overlap there was between the Cleveland Fed’s data and our findings from City Observatory’s Young and Restless report late last year. We looked just at a small slice of central cities’ demographic change – the growth in the number of young adults with at least a bachelor’s degree – but there’s a strong relationship between that indicator and Hartley’s indicator of central city prosperity:
Of course, it’s likely that a big part of this effect is about college-educated residents in general, not just the young ones. Still, juxtaposing the Cleveland Fed study with Young and Restless underscores the linkages between highly-educated residents and more prosperous central cities – as well as just how dramatically many American metropolitan areas are changing, and how far many of them have to go.