Promoting Inclusive Urban Growth in Three U.S. Cities

The booming economy in the Dallas/Fort Worth metropolitan area, fueled by corporate relocations, business expansions, and in-migration, can mask some of the region’s heady challenges: rising home prices, a high poverty rate, and long-term racial and economic segregation. A new study of three U.S. cities looks at mitigating inequality without stalling development.

“Dallas in many respects is a microcosm of America,” said Cullum Clark, director of the Bush Institute–SMU Economic Growth Initiative and an adjunct professor of economics at Southern Methodist University, while speaking at an event in Dallas, cosponsored by ULI North Texas, in January. Clark is a contributing author to Beyond Gentrification: Towards More Equitable Urban Growth, a new report from the Center for Opportunity Urbanism (COU) in Houston that was distributed at the event.

The report’s five other authors, including Joel Kotkin, the executive director of the COU and a fellow in urban futures at Chapman University, also spoke.

The report takes a deep dive into development in three major cities—Chicago, Los Angeles, and Dallas—and the impact on working-class and minority neighborhoods. While some gentrification occurs organically as the result of market forces, some occurs as the result of conscious public policies, such as tax increment financing, or a combination of both.

Over the past couple of decades, Dallas’s city center has undergone transformative changes with an expanded and revered arts district, new downtown luxury residential high-rises, two Santiago Calatrava–designed bridges spanning the Trinity River, and the creation of Klyde Warren Park, a popular urban oasis built over a freeway that connects portions of the urban core that had been previously bifurcated by the highway.

Dallas’s problems, however, are visible for anyone venturing south of Interstate 30, where high rates of poverty are concentrated in mostly minority neighborhoods marked by a history of neglect.

Dallas imposed racial housing segregation by law in 1916, and that segregation was reinforced through federal, state, and city policies through the years. And even though legal segregation ended during the 1970s, it continued in other forms such as redlining by the banking industry, city code enforcement that resulted in the demolition of minority-owned homes, and years of neglect of minority neighborhoods by Dallas City Hall.

Dallas has not had the high-displacement gentrification that other places such as San Francisco, New York, or Southern California have experienced, although fear exists that it could be headed in that direction, Clark said. So far, several gentrified areas of Dallas appear to be thriving without large displacements of moderate-income people, including east Dallas, Bishop Arts, and the Cedars.

Plenty of opportunities exist for the Dallas area to forge a path toward more inclusive urban growth in the future, he said, due in part to the abundant, affordable land for development and redevelopment in the southern sector, where the city’s poor, minority residents live. “We’ve had too little capital coming into southern Dallas, not too much,” said Clark, who said the land mass of southern Dallas exceeds the whole city of Atlanta. Of southern Dallas’s 250 square miles (647 sq km), an estimated nine square miles (23 sq km) are vacant and available for development, according to the report.

Clark said there are economic arguments to consider for inclusive urban growth initiatives.

“Historically, cities are the world’s greatest engines of upward mobility, but we now know that where a person grows up and lives has enormous impacts on their prospects in life,” he said.

The number of jobs in Dallas’s lower-income zip codes—an area with 750,000 residents—has declined by 16.6 percent since 2000 while the population in those zip codes has grown by 7.1 percent, according to proprietary research using census data by Wendell Cox, a coauthor of the report and a senior fellow at COU and the Frontier Centre for Public Policy in Winnipeg, Manitoba, Canada.

Said Clark: “I believe we are on a path that will pose real challenges to the sustainability of the whole region’s economy. We have really large numbers of potential workers who are enormously spatially removed from where the best opportunities are.” That creates severe labor market inefficiencies for the booming northern suburbs where businesses cannot find enough low- and middle-skilled workers.

Potential solutions outlined in the report include a revamp of the city’s notoriously slow and difficult zoning and permitting process, pursuit of federal funding opportunities such as the low-income housing tax credit and the new Opportunity Zone incentives, creation of a public or nonprofit large-scale land bank to acquire cheap land for future development, and the mobilization of private capital to build 60,000 affordable homes that experts say are needed in Dallas.

Henry Cisneros, former U.S. secretary of the Department of Housing and Urban Development under the Clinton administration, said that changes toward more equitable urban development means focusing on things such as educational opportunities from pre-kindergarten through community college, mobility to get lower-income residents to job centers, infrastructure spending to support growth initiatives, and affordable housing.

“A key element of this is intentionality,” Cisneros said. “Local communities have to decide, intentionally, to create this harness between the growth opportunities and the human capital needs,” he said. “It’s not good enough to just talk about this among the leadership elite at a cocktail party.”

COU’s Kotkin said that gentrification in America’s large cities had some positive results since it helped people rediscover the advantages of living in an urban core, but it failed to help the plight of the middle class and working poor.

“The shift into the cities has slowed very dramatically,” Kotkin said, noting as an example the slowing population growth in New York City and the declining population of San Francisco. While urban renewal worked on some levels, it also came with its own set of problems. “This great urban renewal—urban renaissance—hasn’t ever really reached a large percentage, or even a majority, of the people in these urban areas,” he said. “Gentrification created its own undoing . . . by becoming so expensive.”