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Mixed communities and income equality in cities

Knowledge-based industries could increase city income inequality by 2040, so public interventions to secure mixed communities are likely to increase

Mixed communities and income equality in cities

Income inequality remains a major topic of debate in the UK. In the three years to 2015/2016, the income of someone just inside the top 10% was eight times higher than someone just inside the bottom 10% of earners.

The Centre for Cities argues that Cambridge is the least equal city in the UK and that the UK’s most equitable cities are those with lower average incomes and fewer knowledge-based services. Those cities most at risk from the disruption associated with the growth of the knowledge economy are those which are considered to be less productive, more reliant on welfare and have less knowledge-intensive workers.

This results in an uneven geography of disruption at the national level but also at the city level, with the income equality in some cities in the north of the UK being disproportionately affected by recent growth in this sector.

20_mixed communities_pullquote_ 270x143Should the economy continue to grow and diversify into knowledge-based industries, by 2040 we could see cities becoming more economically segregated. Even individual neighbourhoods could be affected by diversification and disruption to the economy. However, while economic inequality could be argued to be a result of growth, this does not mean that the impacts of inequality cannot be managed and mitigated against at the city level.

However, how to create more mixed communities within cities that avoid segregation by income is a very tricky policy issue. Even the definition of a mixed community is decidedly slippery, while the evidence that such communities actually help tackle inequality and deprivation is itself mixed, with some arguing that they are in fact the result of muddled thinking about causation. However, as we write elsewhere, it’s much clearer that area-based deprivation is extremely difficult to shift, and there is (for example) clear evidence of a correlation between social renting households and unemployment. So, to the extent that social housing is provided in large blocks and estates (which in the UK it often is), spatial concentrations of lower income households have been a likely consequence.

Figure 1: Unemployment rate for working age residents by housing tenure, 2013

20_A-tale-of-two-cities-mixed-communities-and-income-equality-_746x215

Source: National Housing Federation

Planning policies at a national and city level have long argued for ‘mixed communities’ for these reasons. The new National Planning Policy Framework, for example, explicitly promotes ‘mixed and balanced’ communities, and policies within the London Plan clearly set out a strategy to ensure the delivery of a more socially-integrated city. Emerging policies require new development to integrate a range of dwelling types, styles and tenures at different affordability levels, thus ensuring the delivery of public amenity space and mixed uses to drive cohesion and integration within the community.

However, policies aimed at creating a more mixed community can be a double-edged sword. For example, as we write elsewhere, new transport infrastructure can result in newcomers to an area pricing out the existing community, which leads to political tensions. That might well increase mix within a community, but it could also be represented as unwelcome gentrification. And other forces, particularly high-density development at transport hubs (as we discuss elsewhere) could also polarise parts of the city.

There’s no doubt that cities will continue to try to tackle deprivation and inequality among their citizens. Beyond the current Estate Regeneration Fund, funding for regeneration in its own right looks like it will be more difficult to come by in future. Transport and economic growth funding has been a key focus of recent City Deals and we see no sign of this changing given the powers recently handed to city mayors.

If income inequality does increase as city economies move to more knowledge-based sectors, we expect that public sector leaders will feel its necessary to strengthen interventions on mixed communities in order to prevent cities from becoming more segregated.

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