Why Should We Care about Middle Neighborhoods?

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Philadelphia's Germantown (Valerii Iavtushenko / Shutterstock.com)
November 1, 2017

On June 20th, 2017, the Philadelphia City Council Committee on Housing, Neighborhood Development, and the Homeless held a public hearing on the decline of “middle neighborhoods.” Four panels, consisting of witnesses from different sectors and organizations, introduced and explained the importance of investing in “middle neighborhoods” in Philadelphia and other U.S. urban cities. Through this investment, the economic stability and quality of life in these neglected communities would improve and provide residents with opportunities to participate in the overall economy, ultimately creating bigger returns to the city. 

Middle neighborhoods are defined as “neither the poorest nor the wealthiest neighborhoods in a city, typically experiencing neither precipitous decline nor rapid appreciation.” The Reinvestment Fund identifies middle neighborhoods through Market Value Analysis (MVA). This tool utilizes local real estate market data including home sales prices, mortgage foreclosure filings, owner occupancy, vacancy, code violations and construction permits to categorize specific city neighborhoods. Through MVA, census tracts in Philadelphia were classified as middle neighborhoods based on ranges approximately 50% below and above ($49,674 to $148,248) the city’s median home sale price ($96,500). Currently, about 40-45% of the population in Philadelphia live in areas identified as middle neighborhoods, such as Rhawhurst, Germantown, Mayfair, Tacony, Wynnefield and Olney. These neighborhoods provide many benefits to Philadelphia; they comprise a large portion of the tax base and exhibit less racial and income segregation. Additionally, middle neighborhoods have higher voter turnout in elections, and residents have higher than average rates of educational attainment and home ownership.

Usually, middle neighborhoods are affordable and attractive to live in, but they have become vulnerable in recent years due to neglect from policymakers and service providers. Benefits have diminished because city government has focused its efforts and allocated its resources on gentrification, downtown revitalization and poverty-stricken “distressed neighborhoods.” Therefore, the availability of jobs has decreased, houses have become outdated and the markets for these homes have declined due to the destabilization of these neighborhoods. As a result, residents have started to move to other parts of the city or the suburbs, adding to the destabilization. Unfortunately, this is not just a local problem. Approximately 46% of the nation’s urban population lives in middle neighborhoods. Unlike other neighborhoods, middle neighborhoods are often excluded from current available resources. As in Philadelphia, only distressed neighborhoods qualify for federal grant dollars while strong neighborhoods attract private investment. Without available resources, a lack of awareness and a strategic intervention, middle neighborhoods will more likely become distressed and ultimately harm urban cities economically and socially. 

To avoid this worst-case scenario, the City of Philadelphia should take a proactive approach in addressing this issue with middle neighborhoods. While these neighborhoods aren’t currently distressed, intervention and increased efforts to stabilize middle neighborhoods would be less costly than working on the same neighborhoods if they become distressed. Not to mention, “middle neighborhoods are essential to the city’s tax base, identity, and the ability to offer economic mobility and security.” Since almost half of the population in Philadelphia lives in middle neighborhoods, the complete decline would be detrimental to Philadelphia’s economy; it would be strategic for the city government to focus on these issues now rather than later.

Fortunately, local policymakers and other service providers have begun to react. Cities like Baltimore and Milwaukee have adopted “healthy neighborhood programs” to improve these neighborhoods through increased resident involvement, neighborhood marketing and the availability of favorable mortgage and home-improvement loans. In Philadelphia, policymakers held multiple hearings to hear testimony from experts regarding the significance of middle neighborhoods and potential initiatives to combat the destabilization. However, there are still no local and national agendas to assist middle neighborhoods in Philadelphia. While the creation of strategic policy initiatives and investments from public-private partnerships are important, it’s imperative to expand communications with local and federal governments, service providers and the public to raise more awareness about this issue. This way, priorities will shift and middle neighborhoods can become included in the policymaking process.

Fels Institute of Government

The Fels Institute of Government
3814 Walnut St. 
Philadelphia, PA 19104

(215) 898-7326

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