Low-income neighbourhoods: not what they seem

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According to a report published by national social housing organisation Aedes last week, low-income neighbourhoods in the Netherlands are sliding away further. Poverty levels are increasing, the quality of life is declining rapidly and residents feel less safe. The notion of ‘underprivileged’ neighbourhoods made a reappearance, and some media are already describing them as future ghettos.

There’s no concrete evidence that the situation of these neighbourhoods’ residents is deteriorating. Sandra Phlippen Chief Economist ABN AMRO

For the people living in those neighbourhoods, this carries a very unpleasant stigma. Moreover, such conclusions tend to give birth to plans for ‘upgrading’ neighbourhoods, by tearing down existing housing and replacing it with more expensive development. While these upgrades might look attractive on paper, they do not actually benefit the local residents. Often already vulnerable, they find themselves obliged to move elsewhere, which then forces house prices and rents up. And what does this achieve? Do people actually benefit from having richer and healthier neighbours?

I decided to study the underlying report, and it confirmed my suspicions: the report provides no concrete evidence that the situation of these neighbourhoods’ residents is deteriorating. Instead, the middle and higher incomes have left, largely as a result of prolonged efforts to move high-income tenants out of cheap housing. The exodus of middle and higher incomes from neighbourhoods that are dominated by social housing is in fact the result of that policy. They move away, and free up homes for people on the waiting lists with less money to spend. So that is good news.

Another positive development has been the massive shortage on the labour market of the past few years. Many workers with flexible employment contracts and lower incomes have finally been given regular jobs, opening up the possibility of buying a home or renting in a more expensive neighbourhood. However, if people leave their neighbourhood once their situation improves, that does not necessarily mean that the situation of those left behind is declining: the drop in average income might make it seem that way on paper, but that is a misinterpretation of the statistics.

What matters is the situation of the vulnerable people themselves, now that they are more likely to have vulnerable neighbours too. The survey identified a declining sense of safety, and interpreted this as fact: that the situation has actually become worse. That is not necessarily the case, however. A greater perceived lack of safety (which might be coupled with an actual decline in safety) among vulnerable residents will mean that they will also report a lower average safety rating. These factors might appear to be minor details, but they are in fact crucial.

What happens after reports like this, after all? You guessed it: Housing Minister Van Veldhoven announced the need for ‘diverse neighbourhoods’: social housing should be torn down to make place for more expensive development. Research shows that mixing rich and poor does not automatically improve the situation for poorer people, however. Instead, vulnerable residents benefit from the right facilities, strong neighbourhood teams and social support networks, generally provided by others in similar situations. Forcing locals out to artificially improve the neighbourhood’s statistics will in fact break the community ties, and to the best of my knowledge the dream of social relationships between rich and poor in mixed neighbourhoods is one that rarely comes true. We need to take the problems of these people seriously and invest in the facilities that they need, rather than hiding them away behind manipulated statistics.

Every week, Sandra writes a newspaper column for daily newspaper AD (in Dutch only), which can also be read here.


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