Although only time can reveal all of the lingering effects the Great Recession, it is clear that in the immediate aftermath of the economic crisis, poverty has spread beyond the inner cities and is taking root in America’s suburbs, including in the bedroom communities outside the Birmingham city limits.
Birmingham, like many other cities across the country, is seeing an influx of young, more affluent people moving to the city center. The ripple effect has caused property values to skyrocket and has essentially pushed working-class families into the suburbs where housing is now more affordable — an effect of gentrification.
Gentrification in some of Birmingham’s neighborhoods has been well documented in recent years. Avondale is perhaps the best example of how gentrification and redevelopment often go hand in hand, increasing property values and pricing out those living on low incomes in those neighborhoods.
In many ways, it can be categorized as a reverse of white flight.
This trend is by no means limited to the Magic City.
For instance, a story published earlier this year by The Atlantic found that Atlanta has seen a 159 percent increase in suburban poverty between 2000 and 2011.
A recent study conducted by Brookings Institute found that the poor living in America’s suburbs now outnumber the poor living in the inner cities by about 3 million. The biggest increase came between the years 2000 and 2012 when the number jumped from 10 million to 16.5 million suburbanites living in poverty.
In a recent opinion piece for The New York Times, Thomas B. Edsall wrote about how urban population trends will affect not only the political leverage of minority groups, but also the spread of poverty to the suburbs.
“The nation’s urban centers are changing rapidly,” Edsall wrote. “Blacks are moving out, into the suburbs or to other regions of the country. Poverty is spreading from the urban core to the inner suburbs. White flight has slowed and in some cases reversed. Nationally, Hispanics have displaced blacks as the dominant urban minority.”
According to the United States Census Bureau, in 1990 whites made up 81 percent of the suburban population in America. In 2010, that number had dropped to 65 percent.
The influx of young white professionals to the city centers, however, seems to have been offset by the number of working-class white families who cannot afford to live in cities, not unlike the boroughs throughout Birmingham, because of increasing property values, which inevitably hike up the price of rent and decrease affordable housing opportunities.
Needless to say, minorities are also faced with the challenge of finding affordable housing as property values and rent increases.
“Over time, blacks stand to lose leverage,” Edsall wrote. “Cities have been a crucial base of power for African-American politicians. Insofar as the black population becomes diffuse, black leaders will have to grapple with a decline in black-majority districts, especially city council districts, in cities with declining black populations.”
In Birmingham, while the inner-city remains predominately black, making up 73.4 percent of the population, some of the neighborhoods surrounding the city center, like Avondale, Lakeview and Crestwood, are seeing major changes in their demographics. Some expect even more shifts in the demographics of both race and socioeconomics.
Consider the Birmingham housing market. Much to the delight of real estate agents, the local housing market has seen measurable growth in the last five years. Homes that once stayed on the market for over six months now often sell within two weeks.
Many of those homes are selling for over $200,000, well out of the price range for first time homebuyers and people living on low incomes.
“You are seeing serious growth in the downtown area,” said Gusty Gulas, owner and agent of Brik Realty. “You just take a look at the number of days houses in Avondale and Crestwood are on the market. They’ve been reduced quite a bit.
“Three years ago I was selling houses in Crestwood, and we were lucky to get an offer in six months. The last two homes we’ve listed have had five offers within a week. A lot of millennials just want to be a part of the revitalization in Birmingham.”
Still, with more than 30 percent of Birmingham’s population in poverty, increasing property values means the poor will often have to move away from rising home prices. That raises in some the question of what city government is doing to curb the effects of gentrification.
To understand the nature of Birmingham’s urban population trends, one must first look at the “white flight” that took place in the 1960s as a result of suburbanization, desegregation and interstate highway construction.
Flight of the whites
For over 30 years, Pam King has been on the ground in Birmingham, documenting the movement of different groups of people into and out of the Magic City.
King, a history professor at the University of Alabama at Birmingham and historical preservationist, believes that one of the major factors of white flight is the federal government, which gave states incentives to build interstates that moved affordable homes into the suburbs.
The suburbanization that took hold in Birmingham specifically during the 1950s and ’60s was not, according to King, a result of desegregation. That played a large role in white flight, she said, but there were other factors.
“White flight occurred for three primary reasons,” King said. “One was civil rights legislation. Two, maybe even more important, was suburbanization, which was something that happened on purpose. The third thing was building the interstate system. The last two are driven by the federal government, not individuals’ own opinion on race.”
In post-World War II America, King explained, federal policy conspired to build affordable housing out of the city for middle-class people and to build interstates through cities, which led to low property values.
“Which means if you have the money and the option to get out, you’re going to get out,” King said.
Birmingham was no exception. The racial components only exacerbated the suburbanization movement in Birmingham, she said.
Jim Crow zoning regulations had already limited the neighborhoods in which black Birmingham residents could live during the first half of the 20th century. Smithfield in particular was one of the main neighborhoods where black families were allowed to live during this time. Eventually other neighborhoods like South Titusville began to see more African American homeowners, particularly following World War II as returning black soldiers settled in such areas.
As homeownership among African American families began to rise, much to the dismay of segregationists, the few neighborhoods allotted to minorities were not enough. Eventually black homeowners began to move into other Birmingham neighborhoods, Fountain Heights in particular.
“In a capitalistic society, if you’ve got money in your pocket, people are going to let you spend it,” King said. Families living in Smithfield moved into Fountain Heights, a working-class neighborhood then largely inhabited by low-income white families. From 1949 to the mid-1960s, Fountain Heights became one of the first desegregated neighborhoods in Birmingham. But not without trouble.
“So what happened is you have these white families who don’t have the option to move to Mountain Brook or Homewood or even Norwood at the time. They had no place to go. When black people started to move into their neighborhoods this led to an upswing in violence and a lot of [Ku Klux Klan] activity,” King said. Eventually, Fountain Heights would earn the nickname “Dynamite Hill” because of the frequency of bombings during the time of segregation.
Meanwhile, white families that had economic mobility moved out of Birmingham and over the mountain to Mountain Brook and Vestavia Hills. White homeowners remaining in Fountain Heights saw African-Americans moving up socially and well-to-do white families heading to the suburbs. They felt resentful and trapped, King explained, leading to violence by local white supremacists.
By the mid-1960s, Fountain Heights was almost exclusively African-American.
Other neighborhoods felt the pressure of shifting demographics as well, such as Norwood, which today stands as a reminder of what years of abandonment and isolation by interstate can do. Sitting at the northern edge of downtown, just above Interstate 59, Norwood is not far from a number of industrial plants.
In the early 1920s, Norwood was an upper-middle-class neighborhood. “In the 1930s you see a big movement of people leaving Norwood, not because of race relations, but they wanted to breathe cleaner air and to be in Mountain Brook,” King said.
Left behind were blocks full of homes and small mansions that remain hollow and forgotten.
“Working-class white families began to move in to Norwood, and the upper-class white families who were still there began to raise hell because of this,” King said. “There were even bombings. This was white-on-white crime. The people who had been there were just trying desperately to cling to their property values. They were just horrified that this was happening.”
By 1969 black middle-class families began to move into Norwood as the upper-class families relocated to suburbs like Gardendale and eastern neighborhoods like Roebuck. By 1979, Norwood was almost exclusively African-American.
Similar events occurred in almost every corner of Birmingham, King explained, making race only one factor. Interstate construction and affordable housing farther from the inner city played equally, if not bigger, roles in white flight.
Back from the ’burbs
Poverty in suburbia is nothing new. However, since the Great Recession, there has been an increasing number of people who live below the poverty line leaving inner cities for more opportunities in the suburbs. Coupled with the cost of living associated with major cities, America’s suburbs have become an economic haven for low-income families.
Dr. Lonnie Hannon III is an associate professor of sociology and statistics at Tuskegee University who specializes in urbanization. Hannon said that any time there are urban migration movements — like what Birmingham is experiencing — there will be racial and socioeconomic impacts.
“What we see is a national trend where individuals are moving into the city centers,” Hannon said. “What I’ve found is that nationally when we see a neighborhood that is transitioning from majority white to majority African American, we see a 32.8 percent decline in property values. When we see a neighborhood transition from African American to white we see a 39 percent increase in home value. And this is looking at data from 2000 to 2013.”
Hannon said this trend also applies to the suburbs, which he said are becoming more populated by African American families.
“What we see is that through gentrification efforts these property values are increasing substantially in some of these neighborhoods,” Hannon explained. “When these property values increase they become less populated by African-Americans. We see the reverse happening in the suburbs where these once pristine suburban areas that were highly valued. Once we start to see them become more populated by African Americans, we see about a 33 percent decline in property values.”
Hannon said that nationally, more people are moving to the city centers, resulting in climbing property values that push poorer people out into the suburbs. That essentially relocates the concentrated pockets of poverty further from the city centers, he said.
In an article published by Governing magazine, Daniel C. Vock outlines some of the reasons for the increase in suburban poverty.
“Poverty has been growing in vastly different kinds of suburban territory,” Vock wrote. “Inner-ring suburbs, abandoned by wealthier residents who pulled up stakes in pursuit of more modern and spacious housing, are now attracting low-income families looking for more affordable places to live. Farther out from city borders, the housing market collapse and job losses of the Great Recession have taken a huge toll on communities where growth was fueled by cheap credit and residents’ optimistic planning. Even predominantly wealthy suburbs have seen an influx of lower-income families trying to live close to new jobs.”
During the years between 2000 and 2010, the number of people living in poverty jumped from 33.9 million to 46.2 million according to the Brookings Institute. As Vock pointed out in his article, the suburbs saw the biggest jump of people living in poverty. “More poor Americans now live in suburbs than cities,” Vock wrote.
The Brookings study, conducted by Elizabeth Kneebone and Alan Berube, found that in 1970, 6.4 million people in the suburbs lived below the poverty line. As of 2012, that number was up to 16.5 million people. At the same time, the number of poor in the cities also climbed from 7.4 million in1970 to 13.5 million in 2012.
Vock also noted that the population shift also puts a strain on public services such as health clinics and public transportation that have not been traditionally concentrated in the suburbs. “Nonprofit agencies are usually structured and located to deal with urban poverty,” he wrote. “Outreach efforts, from health clinics and food pantries to legal services and subsidized housing, are still clustered in city neighborhoods. Providers are trying to figure out how to make those services available to a population scattered throughout sprawling metropolitan regions.”
The trend also includes falling property values in the suburbs, which feeds the cycle as upper-middle class people who have called the suburbs home for the last 50 years are seeking more modern and convenient housing accommodations in urban areas.
In Birmingham, young professionals are flocking to neighborhoods like Avondale, Crestwood and Lakeview, which have all seen tremendous growth within the last five years due largely to interested buyers who are relocating from the surrounding suburbs.
“We’re seeing property values increase across the board in Birmingham,” Gulas said. “Some places in Crestwood, those properties have increased by 20 percent in the last year. We get a lot of young professionals and medical residents who want to be close to downtown.”
Gulas said another key component to the revitalization of Birmingham’s housing market is the changing perception of the downtown area: “People just feel more safe here than they did, say, 20 years ago. When they see activities like the Barons playing or the new Rotary Trail being built, it just attracts more people. They want to enjoy these things without having to sit in traffic for over an hour during their commute down 280. It really is about the quality of life that is available to people wanting to move downtown.”
Since January 2015, values for homes that were actively on the market in Avondale have increased by about 26 percent. At the beginning of 2015, the median listing for a home that was actively on the market in Avondale/Crestwood was $190,000. By the end of July, that number was up to $240,000. And, as Gulas said, these homes are only staying on the market for a couple of days due to the high demand.
Prices for homes in downtown Birmingham have hovered around $150,000 during that same time period.
Adrianne Curran of LAH Real Estate has also made note of the wave of young people moving from the suburbs to Birmingham. “I jokingly tell people it’s because of the breweries and the baseball stadiums,” Curran said. “But in actuality, I honestly think that has played a tremendous role in bringing people downtown.”
Curran also mentioned the increase in property values throughout Birmingham in recent years. “It’s kind of a catch-22,” Curran said of the sudden migration of people returning downtown. “I do wonder in the back of my mind if we are growing a little too fast and we’re going to flood our market with too many condos. I can’t predict what’s going to happen in several years but as of right now, I still see Birmingham growing.”
Curran, who lives downtown, said when a condo or home goes on the market she barely has to advertise it before someone is interested in buying. But, she added, “The market is still starved for rentals.”
As of now, there are at least a dozen luxury condominium projects under construction downtown. “As far as selling goes, I helped list the Burger-Phillips building. We would have people making offers before the tenants even moved out,” Curran said, referring to the apartments currently being transformed into luxury condos. “Condos aren’t staying on the market for very long at all, maybe a month at the most,” she said.
Some of those condos are selling for $224,000 according to Curran. The Burger-Phillips building is just one of what is expected to be a long list of luxury accommodations that will be available to buyers within the next several years, but that may not bode well for people on fixed incomes.
Gentrification on the radar
The migration back to city centers is something that economists have predicted for a long time, said John Colon, the city of Birmingham’s director of community development.
“This trend is something that we have been anticipating,” Colon said. “We are at risk of losing our place as the state’s largest city. We realized we needed to put an emphasis on positioning the city to be as attractive as it possibly could to attract the people back into the city center. That was the impetus for a lot of the investment and growth in the city center.”
As an indication of how these investments are transforming the mindset of the private sector, most of the early investments that were made in the city center had been subsidized, Colon explained.
“Now we are seeing the private sector bringing in market rate units that are not subsidized at all,” Colon said. “That was really our goal the whole time, to create a market that the private sector had confidence in and could invest in such a way that made sense to them financially.”
One of the most notable investments was the redevelopment of the Pizitz building, long-abandoned since its prime as one of Birmingham’s hometown department stores.
The $66 million renovation will have 143 apartments and commercial retail space on the first floor, but Colon said, the city wants to make sure that there are affordable housing options available in the Pizitz building.
When condominiums are being built, Colon explained, his office reaches out to developers to offer federal funding to include affordable units.
“What we get from that is 26 of those units are going to be affordable units,” Colon said. “These are high-end luxury apartments we’re talking about. And 26 of them will be affordable to our low to moderate-income families. Whenever we are involved with a project that is usually what we try and do.”
Colon said that the way the housing market is going in Birmingham, it is a challenge to maintain affordable housing for low-income families. But not all the developers working downtown want to take the money offered for including lower income residents.
Colon named one developer in particular and then asked that the name be withheld so the company wouldn’t be vilified in the press. “They wouldn’t take the money because the truth of the matter is that federal money comes with a lot of red tape,” he said.
“They felt their project was strong enough to support itself without any federal subsides,” Colon said. “They raised their own capital and are moving forward on their own. We wanted to offer them money to inject some affordable units into that project, but they wouldn’t go for it. When the market is doing well, like it is now, it’s hard to get developers to want to include affordable units.”
Issues surrounding gentrification are definitely on the city’s radar, Colon said, especially with so many luxury condos popping up all over the city.
One major aspect of the fight to maintain affordable housing in Birmingham is the city’s cooperation with the Birmingham Housing Authority and the federal Rental Assistance Demonstration. This is a designation that the federal government bestows upon units that allows them to be converted from traditional public housing units to single-family structures.
“Really, the main goal of R.A.D. is to help decentralize poverty,” Colon said. He believes this to be a powerful tool for creating affordable housing options in Birmingham.
One example is Southtown, a public housing development situated right next to the growing St. Vincent’s Hospital and just blocks away from the sprawling UAB campus. Southtown qualifies for the R.A.D. program, Colon said. “If we convert that development to a mixed-income development, that would be a great opportunity to bring those residents to a new development that will allow for more mobility and opportunities,” he said.
There have already been a series of public meetings held to discuss renovating Southtown, one of the oldest public housing projects remaining in the city.
There are examples in the city showing the potential of mixed-income development. The newly completed $13.6 million Wood Station Townhomes in Woodlawn, which were spearheaded by the Woodlawn Foundation, were developed as a way to revitalize Woodlawn by having affordable housing options available to the working class.
In a previous interview with Weld, Sally Mackin, executive director of the Woodlawn Foundation, explained the importance of having affordable housing options in the community.
“This is a platform we hope that will really build a foundation for the private market to really drive the rest of this mixed-income model,” Mackin said. “In order to truly have a mixed-income community, we’ve got to be able to attract the private sector to come in and develop market-rate housing. And we’re hoping that this development will really be the catalyst that will stabilize this piece of the community, which will help with crime and perception and help to develop vacant properties. All these things are contributing to building that platform for the market to take over. That’s really what we want to happen.”
On another front, the Birmingham Land Bank Authority has been hailed as one of Birmingham’s biggest achievements over the last decade in terms of combating blight. The land bank operates solely to repurpose tax-delinquent properties and inject them back into the local economy.
“We are looking to develop these properties into affordable housing and increase the ownership stake of current residents, so when property values increase they aren’t priced out of the market like they have been in places like Brooklyn,” Colon said. “We plan to offset some of the effects of gentrification by offering residents these parcels which will increase the value of their estate.”
Even though Birmingham recently topped the Forbes list of most affordable cities in the country, realtors in the city are reveling in the fact that the housing market is on an upward trajectory as more and more people flock from the suburbs to buy into the Magic City renaissance.
The extent to which skyrocketing property values in Birmingham’s neighborhoods and the influx of people moving from the suburbs will impact affordable housing options for those living in poverty remains to be seen.
Update: A previous version of this story incorrectly described homes in Norwood as “antebellum.”