Some Notes on Neighborhood Effects:
1) Disinvestment leads to decay of a few properties. Decay of those properties lowers the value and desirability of each property on the block. This leads to disinvestment in surrounding properties. More properties are left to decay, and the downward spiral begins.
2) Neighborhood safety is a function of knowing your neighbors, and collective trust. Low rates of home ownership increases the transient nature of the population, which decreases the ability of communities to organize. High rates of crime in the neighborhood decrease the neighbors' willingness to trust each other. Abandoned buildings serve as foci for crime, and low levels of trust and neighborhood organization leave the population vulnerable to ever increasing rates of crime.
3) Concentrated poverty drastically lowers the number of adults who have the kind of responsible jobs that can serve as an example to the youth.
4) Public schools serve neighborhoods. As the neighborhood enters a state of decline, it becomes more difficult to attract skilled teachers. As safety of the children in and around the school becomes more of a problem, it becomes more problematic for parents to leave the children at school and go to work.
5) Because of concentrated poverty, ghetto neighborhoods can't support the kind of retail markets and social service providers that they need. As a result, ghetto residents have to travel further and pay more for services. Ghetto residents pay more for milk and pampers at the corner store than downtown residents pay at the supermarket, because the corner store buys in small quantities, and the corner store pays higher insurance rates.
6) Because middle and upper class Blacks still face substantial segregation, their higher incomes don't allow them to move very far from the heart of the ghetto. As a result, they are often unable to purchase the kind of middle or upper class amenities (quiet streets, safe schools with dedicated teachers, low rates of property crime, freedom from violent crime) that their income would otherwise allow.
7) For these and other reasons, racial segregation is a tax on the segregated minority (in this case, Blacks) that they are forced to pay in all sorts of ways, every day.
8) Things to think about: What do the housing audit experiments show? How do Massey and Denton demonstrate that segregation concentrates poverty?