A Tale of Two Neighborhoods

By Mike Craw (University of Arkansas)

Two recent experiences have led me to conclude that we need to go further in analyzing the effect of neighborhood-level institutions on racial segregation across urban neighborhoods. As a board member for the University District Development Corporation (UDDC) in Little Rock, I participated in a decision last year to extend the UDDC’s boundaries to include a neighborhood with significantly lower income and a larger nonwhite population compared to that of the University District. By including this neighborhood within the University District, the UDDC is in a position to organize responses to physical blight and crime that spillover into the University District, improving confidence of homeowners in both communities.

Three months after the UDDC expansion, I was approached by the Little Rock planning department to provide analysis that would help resolve a controversy about new apartment development along South Bowman Road, a fast-developing area on the western edge of Little Rock. Concerned that additional apartment development would increase traffic and crime and lower property values, neighborhood and homeowner associations in this area had successfully persuaded the Little Rock city council to adopt a one-year moratorium on new apartment development in this community. A permanent moratorium might make single family homeowners feel more secure, but also make housing less affordable in this area of the city.

These examples illustrate the contradictory effects that neighborhood organizations might have on racial and income segregation within a city. By including a mostly Black and low income neighborhood, the UDDC is in a position to boost quality of life and confidence among homeowners in both the District and its adjoining neighborhood. The decision further promotes racial integration by providing a way for the UDDC to better manage physical and social disorder that White homeowners associate with neighborhood racial change. On the other hand, the exclusionary response of the South Bowman Road neighborhoods illustrates the ways in which neighborhood organizations might reinforce racial segregation by limiting new housing development and raising housing costs in the neighborhood.

In a recent research project described in Urban Affairs Review (“Exit, Voice and Neighborhood Change: Evaluating the Effect of Sub-Local Governance”), I make a first cut at answering these questions. My strategy in this project is to measure differences across Little Rock neighborhoods in the effect of neighborhood race on property values. I analyzed sales prices for 41,500 single family homes in the city of Little Rock from 2000 through 2014. In this analysis, I used data from the American Community Survey at the block-group level to measure the racial composition of the neighborhood in which each sale occurred.  And I used boundaries provided by the City of Little Rock’s Department of Housing and Neighborhood Programs to determine whether each sale occurred in a voluntary neighborhood association, homeowner association, or neither.  The analysis controls for the way other neighborhood characteristics like median income, vacancy rate, and proximity to downtown affect property values.

What I find is somewhat surprising: race has a smaller effect on property values in Little Rock neighborhoods served by homeowner associations compared to unorganized neighborhoods. This might be the case if homeowner associations increase confidence of White homeowners that the neighborhood will control issues of physical and social disorder that Whites perceive to be associated with racial integration. Contrary, then, to perceptions that homeowner associations are exclusionary, this research suggests that they may play an important role in reducing White homeowner fears about physical and social disorder following racial change, making them more likely to stay in a neighborhood with Black and Latino residents.

This research also finds that race has a larger effect on property values in neighborhoods served by voluntary neighborhood associations. This could be the case if neighborhood associations provide a way for White and higher income residents to limit the supply of more affordable housing by making it easier to organize not-in-my-backyard (NIMBY) activity. In this way, neighborhood associations have added value in neighborhoods that are mostly White.

These results are far from telling the whole story about how neighborhood-level institutions affect urban racial segregation. This study examines a single city and focuses on only two sorts of neighborhood organization. But the results do matter in two important ways. First, they establish that neighborhood organizations mediate the relationship between neighborhood race and property values. In turn, this is strong (if indirect) evidence that neighborhood institutions shape patterns of racial segregation across urban neighborhoods.  Second, the results suggest that we should avoid two assumptions that seem to be common in community development practice: 1) that homeowner associations by their very nature are exclusionary and 2) that neighborhood associations bring residents together to mutual benefit.  The data from this project suggest that homeowner associations might, at least in some cases, reduce the effect of race on property values, perhaps by reducing concerns of White households that racial change might produce physical or social disorder.  At the same time, neighborhood associations, at least in some cases, might reinforce racial exclusion, perhaps by providing a means to carry out NIMBY-style collective action. What is most clear is that a significant gap exists concerning the effects neighborhood organizations have on patterns of racial and income segregation within major U.S. cities.

Read the article here.

Photo by Brandon Johnson on Unsplash

Author Biography

Mike Craw is an associate professor of public administration at the University of Arkansas at Little Rock’s School of Public Affairs. His research focuses on urban equality, local public finance, and community development. His work has appeared in UAR and the American Journal of Political Science.

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