Home / Daily Dose / A Look at ‘Economically Integrated’ Neighborhoods
Print This Post Print This Post

A Look at ‘Economically Integrated’ Neighborhoods

 

affordabilityA new Redfin study analyzed the mix of affordable and high-end homes in neighborhoods across 30 of the largest American cities to determine which are the most economically-integrated. Overall, one in five residential properties across those 30 cities were in economically-integrated neighborhoods, or areas with roughly equal numbers of affordable and high-end homes.

Seattle took the top spot, as more than half (54.2%) of its 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. Seattle’s tech boom has resulted in increased incomes for many (but not all) residents.

Washington, D.C., was the only other city where nearly half of the number of homes (49.5%) were in economically-integrated neighborhoods. Boston at 41.6% and Denver at 41% rounded out the top four.

The findings in Seattle and Washington, D.C., differ greatly from a city like Los Angeles, where 79.1% of the homes are in high-end neighborhoods, and Oklahoma City, where almost all homes (96.7%) are in affordable neighborhoods.

“When affluent Americans cluster in luxury gated communities, their wealth stays concentrated in those areas,” said Redfin Lead Economist Taylor Marr. “When affluent Americans share neighborhoods, parks, and restaurants with lower- and middle-income Americans, wealth and economic opportunity is distributed more evenly throughout our cities.”

And while Seattle has a reputation for being one of the most expensive places to live in the nation, local leaders have made great strides in recent years when it comes to balancing out expensive neighborhoods with affordable housing.

Seattle officials have used upzoning—altering zoning regulations to allow for dense multifamily buildings, instead of just single-family homes, in order 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.

“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.

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%.

Nearly 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 in high-end neighborhoods decreased from 32% to 15%, and the share of homes that are in affordable neighborhoods increased from 18.6% to 35.5%.

Using Redfin’s methodology, 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.

Click here to see more from Redfin study.

About Author: Eric C. Peck

Eric C. Peck has 20-plus years’ experience covering the mortgage industry, he most recently served as Editor-in-Chief for The Mortgage Press and National Mortgage Professional Magazine. Peck graduated from the New York Institute of Technology where he received his B.A. in Communication Arts/Media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books and has served as Copy Editor for Entrepreneur.com.
x

Check Also

Listen: What a New Administration Means for Housing Policy

In a new podcast, SitusAMC's Tim Rood speaks with Brian Montgomery, former Deputy Secretary of the U.S. Department of Housing and Urban Development, about "myths, misconceptions, and facts surrounding the policy-making process.

Your Daily Dose of DS News

Get the news you need, when you need it. Subscribe to the Daily Dose of DS News to receive each day’s most important default servicing news and market information, absolutely free of charge.