What segregation is costing Chicago

Photo by Stacey Rupolo

Despite its diversity, Chicago consistently ranks among the nation's most segregated regions. Little Village, a neighborhood in South Lawndale, is home to a large Mexican population. The Chicago region has one of the highest Latino-white segregation rates among the 100 largest U.S. metro areas.


Listen to the interview. (Produced by Yingxu Jane Hao)


The Chicago area is the fifth most racially and economically segregated region in the nation. A new study by the Metropolitan Planning Council and the Urban Institute examines how segregation affects the region financially and the price that all residents pay in “lost income, lives and education.”

The Cost of Segregation argues that reducing Chicago’s segregation could result in higher incomes, greater educational achievement and fewer homicides across the region. Incomes for African-Americans would rise an average of $2,982 per person per year and the Chicago region’s gross domestic product, a key indicator of economic performance, would jump by $8 billion.

Alden Loury, director of research and evaluation for the Metropolitan Planning Council and an author of the study, talked to the Reporter about its findings.

What makes this study unique is that it explores how segregation affects economic growth and the quality of life for an entire city and region. We’ve read stories about Back of the Yards, Austin and other communities of color defined by high poverty rates. What prompted researchers to frame the inequality in those communities from a regional and citywide standpoint?

The Metropolitan Planning Council a couple of years ago, long before I got there, embarked on this journey with essentially two questions. [First], we’re very aware that we are a very segregated region. We’re a segregated city within that region. … There also was an understanding that in order for us to really address segregation and really commit ourselves to addressing segregation maybe the region needed more people to feel impacted.

“So is there a way we can kind of quantify those costs?” That was the first question. The second question was, “So what do we do about whatever we find?”… That kind of launched us on this path. We reached out to the Urban Institute, which had done similar work.

The premise of the study is that the region would do better if we addressed segregation in three areas: lost income, lost lives and lost opportunity, with a focus on education. Let’s start with the city’s homicide rate, which ranks 8th out of the 10 U.S. cities with the highest murder rates. The study states that the Chicago area could have boosted its economy simply by being “a safe place to live.” How is that?

When [the Urban Institute] conducted its analysis, it found a statistically significant relationship between Chicago, and between all of the metro areas, their level of black-white segregation and their rate of homicides.

If the Chicago region were to fall from 10th, which is where it ranked [in black-white segregation] to the median between 50 and 51, the Urban Institute determined that we would see a 30-percent reduction in homicide. That’s based on the lower levels of homicides that are generally found in regions that have less segregation than Chicago.

We wanted to find out what does that actually mean in real-life costs in the Chicago region. So we leaned on supplemental research, in particular research done by the Center for American Progress just a couple of years ago, where they actually asked that question: “What would happen if eight major metros saw a 10 percent or a 25 -percent reduction in the levels of homicide?”

For Chicago what the Center for American Progress found was lower policing costs, lower corrections costs and earnings [that would have occurred] if there were fewer victims of homicide. And there would also be a boost in residential property values based on research that the Center for American Progress conducted, which found that growth in homicides equated to a decline in residential property values. We took those numbers that the Center for American Progress developed and extrapolated them based on the Urban Institute’s prediction that the Chicago region would see a 30-percent reduction in homicides. … What that equated to was $65 million of policing and fewer policing cost, $218 million fewer corrections cost and the $6 billion bump in the residential property values for the entire region.

Between 1990 and 2010, two-thirds of the nation’s largest regions reduced their economic segregation more than Chicago did. Chicago declined by 10 percent, but to keep up it would have to decline by 19 percent  in terms of economic segregation, 28 percent in terms of Latino-white segregation and 36 percent in terms of African-American and white segregation.  Why did other cities make more progress than Chicago in reducing segregation?

The analysis gives us more of the what than it does the why. And so in the second phase of our work, we are seeking input from a whole host of experts and stakeholders around what policies and strategies we should recommend to address the segregation. We also want to take a look at some places that have seen a sharper drop in economic segregation, that have seen stronger progress in terms of mostly black-white segregation. And then also looking inward because Chicago has seen declines across the board and is in fact the only metro area of those 100 metro areas that saw from 1990 to 2000 and from 2000 to 2010 minor drops in all three of those measures of segregation.

There’s a difference in the segregation gap between African-Americans and whites and Latinos and whites. Why does it vary so much in Chicago?

The level of black-white segregation is measured by something the Urban Institute used called the spatial proximity index. In Chicago in 2010 that number was 1.87. That number was 1.5 for the Chicago region in terms of Latinos and whites. And so there are differences. And across the nation, generally speaking, the levels of black-white segregation were higher than the measures for Latino-white segregation.

It’s not 100 percent clear at least from the research why that is. [Surveys in Chicago] have shown among the white respondents that there is a greater willingness to live next to Latino neighbors than to African-American neighbors. Some of the other things that may play a part in that is that as Latino migration has  increased dramatically over the past 40 years or so, there are greater entry points and perhaps more opportunities that have been explored by Latinos.

In Chicago the way that’s played out is Latinos initially were migrating to the city. But increasingly over the last 20, maybe 30 years or so, that destination has trended toward the suburbs. As a result, that has produced a kind of a lessening of segregation because Latinos are found throughout the suburban regions of Chicago far more often than you’ll find African-Americans. African-Americans are largely in two clusters to the south and to the west in suburban Chicago. Latinos are far more spread out, and their numbers are higher in the suburbs and in more places.

To some degree, at least through the surveys that we’ve seen, there is perhaps less of a reaction to Latino neighbors. But that’s not to say that there isn’t white flight in response to Latino migration or other challenges. … While we don’t present any statistically significant findings of the cost of Latino-white segregation [in the study], we see greater amounts of gentrification in Latino neighborhoods that are seeing an influx of white residents. And while Latinos are more suburbanized, they, generally speaking, are more likely to be segregated in more deindustrialized and declining communities in the suburbs. And Latino children are more likely to be in largely Latino schools serving low-income students.

This interview was condensed and edited for clarity.

  • John Jones

    What a great report. Wonderful to see the cross partnering that taken place to produce this report. In West Englewood, we are witnessing reduced homeowner value that is drawing Hispanic families. This action was prompt by FY 2006 action in Springfield to wipe out the black community access to mortgage companies and black brokers ( the hb4050 law was rescinded in 2007). Preceded by city action denying black access to pension jobs via police, fire and teacher positions (class action suits and cancellation of federal consent decrees). Meanwhile, South and West regional workforce agencies are being undermined by temp agencies that cater mainly to green card holders. What a challenge we face. However, the fight was expected! This report will serve as a helpful tool to challenge what the future holds.

  • sugarntasty

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    Rahm just vote neglect social responsibility whom eager displace Blacks Chicago? Latins friends of NAFTA economic dominance whom buying REITS Indians where is resolution gangs continue destroy,
    social respect. Conflict is embattled “narcotics wars” worth billions don’t use racism it’s apathy okay!