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The number of concentrated-poverty neighborhoods in the Twin Cities has doubled since 1980

Once poverty is concentrated in a neighborhood, the neighborhood usually stays poor.

MinnPost photo by Peter Callaghan
In Hennepin and Ramsey counties, 40 percent of neighborhoods experiencing high poverty are newly poor, meaning they had poverty rates of less than 20 percent in 1980 and 30 percent or more in 2018.
Between 1980 and 2018, the number of neighborhoods in Hennepin and Ramsey counties with high levels of poverty — where 30 percent or more of residents had incomes below the poverty line — has more than doubled.

According to new research by the Economic Innovation Group, a research and advocacy organization focused on inequality, there were 19 high-poverty neighborhoods in the Twin Cities in 1980. By 2018, that number had grown to 41.

Those findings are important for two reasons: One, they show that once a neighborhood becomes a high-poverty neighborhood, it usually stays that way. And two: they show that the Twin Cities are a microcosm of the economic challenges facing the country.

Newly poor

For their report, EIG researchers examined poverty rates for Census tracts, small units of geography containing between 1,000 and 8,000 residents that approximate neighborhoods. Neighborhoods were considered high-poverty if more than 30 percent of residents were living below the poverty line at the time. (The current statewide poverty rate is 9.6 percent.) In 2018, a family of four would be considered to be living in poverty if their household income was under $25,465, according to the U.S. Census Bureau.

From there, researchers split neighborhoods into four categories: newly poor, deepening poverty, persistently poor and turned around.

In Hennepin and Ramsey counties, 40 percent of neighborhoods experiencing high poverty are newly poor, meaning they had poverty rates of less than 20 percent in 1980 and 30 percent or more in 2018.

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In Minneapolis, this includes tracts in Near North, Camden, Powderhorn and Cedar-Riverside. In St. Paul, this group includes parts of Summit-University, the North End, Payne-Phalen and Dayton’s Bluff.

The tracts are mostly in the core cities; part of Brooklyn Park that saw its poverty rate go from 5 percent in 1980 to 31 percent in 2018 is the only high-poverty suburban Census tract in Hennepin or Ramsey County by EIG’s measure.

Like the Brooklyn Park tract, Some of these neighborhoods saw poverty grow substantially between 1980 and 2018.

Deepening poverty

Roughly a fifth of the high-poverty Census tracts identified in the study were poor in 1980 and saw that poverty increase over the last forty years. Researchers defined neighborhoods where poverty had deepened by looking at places with a poverty rate between 20 and 30 percent in 1980 that increased to 30 percent or more in 2018.

In Minneapolis, that includes the northwest portion of Seward along Hiawatha, Stevens Square and a swath of Near North. In St. Paul, parts of Union Park, the West Side and Thomas-Dale. Although most of these neighborhoods have seen a reduction in their poverty rates since the Great Recession, they still have poverty rates more than 30 percent — higher than in 1980.

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One example of this is the Stevens’ Square area in Minneapolis, south of downtown. This neighborhood went from 29 percent of residents living in poverty in 1980 to 43 percent today.

The part of Willard-Hay in Near North Minneapolis bounded by Penn and Plymouth has seen poverty deepen since the 1980s, going from 29 percent of residents living below the poverty in 1980 level to 41 percent in 2018.

Persistently poor

Roughly another third of tracts experienced persistent poverty — poverty rates were 30 percent or above in both 1980 and 2018.

Minneapolis’ persistent poverty neighborhoods include several tracts in Near North and Phillips, much of the area hugging downtown, as well as Cedar-Riverside. St. Paul’s include parts of Thomas-Dale, Summit-University and the North End.

One example of a neighborhood with persistent poverty is the Thomas Dale area surrounding the state Capitol. The area has seen poverty rates between 40 and 60 percent for the last 40 years.

High poverty neighborhoods are generally high turnover neighborhoods. People move in, and out, renters move from building to building. The people living in a given home are changing, yet the poverty in these neighborhoods is persistent.

“Once a community dips into decline, it’s very hard to pull back out of it based on how residential markets are structured,” said Kenan Fikri, EIG’s director for research and an author of the research. “Once housing vacancies increase in a neighborhood and property values decline, all of a sudden it leads to just a negative spiral.”

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Leaving poverty

The study also looked at neighborhoods where the poverty rate decreased —  turnaround neighborhoods. Neighborhoods had turned around if they had a poverty rate of 30 percent or more in 1980 and less than 20 percent in 2018.

Examples of these neighborhoods were few nationwide: just 14 percent of neighborhoods that were high poverty in 1980 turned around by 2018. These neighborhoods generally tend to be near downtowns or innovation districts, and many of them were in New York City.

Construction workers working on a new apartment complex in the North Loop on Thursday.
MinnPost photo by Peter Callaghan
In Hennepin and Ramsey counties, there’s just one example of a turnaround neighborhood. It’s the North Loop, where turnaround was driven by new residential development.
In Hennepin and Ramsey counties, there’s just one example of a turnaround neighborhood. It’s the North Loop, where turnaround was driven by new residential development. The North Loop area was barely residential just two decades ago; home to less than 700 households in 2000. With the construction of high-rise apartment and condo buildings — housing for wealthy families — the number of households rose to more than 3,300 by 2015 and has only increased since. In 1980, North Loop’s poverty rate was nearly 36 percent. As of 2018, it was 15 percent.

Race and poverty

People who live in poverty are more likely to face hurdles with everything from health care to transportation and child care. When people in poverty live in high-poverty areas, those challenges are compounded by higher crime rates, poorer health outcomes, struggling schools and a lack of job networks.

“There are a set of issues wrapped up in neighborhood poverty that reflect systemic challenges facing the United States along cultural, social, demographic and racial lines,” Fikri said.

These neighborhoods also play a role in cementing other inequalities: In the Twin Cities, high-poverty areas tend to be segregated, with people of color — especially Black people — making up a large share of residents. Those patterns of segregation have deep roots in racially restrictive covenants and redlining, which dictated who could live where and who could buy housing, affecting patterns of education and generational wealth.

While the majority of Black residents of Hennepin and Ramsey counties do not live in high-poverty areas, Black residents are seven times more likely to be living in a high poverty neighborhoods than white residents, compared to six times more likely nationally.

The picture of Minnesota one the whole is one broad-based prosperity, Fikri said, but more targeted strategies are needed to reduce disparities.

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“You need to address not just poverty, but workforce development, education, even social capital and networks. Most people find jobs via other folks in their social network,” Fikri said. “Those networks in a highly segregated city — not just focused on racial lines but economic lines, means there’s complicated forces keeping poor places poorer.”

That, he said, makes the Twin Cities a microcosm of the challenges facing the country right now.

“It’s a powerful symbol right now. Minneapolis is a quintessentially blue chip metropolitan economy. It is the headquarters capital of the world almost,” he said. “It is a poster child of American prosperity on the surface, but then underneath you have these really deep pockets of persistent poverty and inequality that haven’t been able to be overcome despite the wealth generated on the metropolitan scale.”