What is regional equity?
In the context of the San Francisco Fed’s work, regional equity means ensuring that all individuals, regardless of race, ethnicity, geographic location, or other demographic factors, can fully contribute their talents and skills to the economy and benefit from it. The San Francisco Fed studies the underlying conditions that influence people’s access to opportunities as part of its mission to promote a healthy, inclusive, and sustainable economy and support the nation’s financial and payment systems. Where people live within a region—whether it’s the Bay Area, the Inland Empire, the Seattle metro area, or the Salt Lake City metro area—significantly impacts their starting point for economic participation.
Regional equity involves understanding the barriers people face to participating in the economy, such as securing a job or starting a business. It encompasses factors like access to quality schools, affordable housing, and convenient, affordable transportation options, all of which influence people’s access to jobs, financial stability, and long-term career opportunities.
How regional equity impacts the economy
Research indicates that regions with higher levels of equity produce better economic outcomes. A 2015 study by Chris Benner and Manuel Pastor found a positive correlation between a metropolitan region’s ability to sustain job growth and higher levels of regional equity, including lower income inequality, less residential segregation, reduced barriers to regional governance, and a smaller divide in poverty rates between cities and suburbs. Another study by Amanda Weinstein, Michael Hicks, and Emily Wornell on smaller regions also found a positive relationship between investments in quality of life amenities, such as schools and transportation options, and growth in employment and population. A significant challenge in promoting regional equity is balancing job creation with housing availability.
Choosing between home affordability and commute time
For lower-income households, the lack of remote work options often forces a difficult choice between affordable housing and long commutes. Housing and job markets operate at a regional level, meaning decisions in one area affect the entire region. Cities frequently encourage job creation without ensuring sufficient housing for people at all income levels or allocating adequate resources for affordable housing. Many large cities lack affordable housing for lower-wage workers, and wages for low- and moderate-income populations often do not keep pace with the cost of housing near job centers.
The Effects of Zoning
Zoning and Housing Affordability
Zoning that restricts housing development to primarily large-lot, single-family homes creates a patchwork effect in regions. Some cities become less affordable enclaves, while others have a more diverse mix of incomes.
Historical Context and Current Impact
Research indicates that zoning laws banning townhouses, duplexes, apartments, and condos were initially designed to exclude racial minorities. Today, these laws continue to limit access to housing and quality schools for low-income people and people of color. Although racial discrimination in mortgage lending was outlawed in the 1970s, its legacy persists. People of color are less likely to inherit wealth through housing and have less access to opportunity-rich neighborhoods.
Efforts Towards Inclusive Zoning
Some cities and states are moving towards more inclusive zoning, allowing for a variety of housing types—apartments, townhouses, duplexes, and condos—which can improve affordability. However, housing shortages still impact regional economies. Many lower-wage workers face choices between overcrowded housing, long commutes within a metro area, or even longer commutes from more affordable areas. A study by the San Francisco Fed on housing displacement in the Bay Area found that low-income people often relocate to areas with fewer opportunities and amenities.
Indicators of Regional Equity
Poverty Rates as an Indicator
Poverty rates in different cities and towns within a region indicate regional equity. In the 2000s, the number of people below the federal poverty line in suburbs surpassed those in big cities, though poverty rates remain high in many large cities. My research with coauthor Margaret Weir shows that poverty growth is uneven across suburbs, signaling differences in opportunity and challenges for regional equity. In the Western U.S., served by the San Francisco Fed, poverty rates have grown mainly in large suburbs with populations over 50,000. These suburbs often lack the infrastructure and resources to address poverty but do have access to federal funding sources like the community development block grant (CDBG).
Community Development and Suburban Poverty
The rise in suburban poverty does not negate the need for community development in low- and moderate-income urban areas. Community development institutions and funding sources have been slow to follow the increase in suburban poverty due to institutional inertia and challenges in identifying low-income populations in suburbs. Systems for delivering public and philanthropic services remain urban-focused, even as suburban poverty grows. The COVID-19 pandemic spurred the growth of online and mobile social services, but many remain in urban areas.
Suburbanization of Poverty in the Western U.S.
Poverty Trends in Suburbs
Our recent report examines poverty rates in different types of suburbs across fourteen metropolitan regions in the Western U.S. The region, with its history of suburban development, has seen significant but uneven suburbanization of poverty:
- Larger metro areas show a trend of growing poverty in large suburbs, sometimes surpassing poverty levels in principal cities.
- In some areas, poverty in unincorporated regions has grown to become the largest regional share.
- In many smaller metro areas, the largest share of poverty remains in the region’s largest city.
Data Insights
In several Western U.S. metro areas, the share of people below the federal poverty line living in large suburbs matches or exceeds that in the region’s largest city. For example:
- In the Boise, Idaho metro area, 39% of people experiencing poverty lived in large suburbs from 2014-18.
- In the Los Angeles metro area, 38% of people experiencing poverty lived in large suburbs during the same period.
- In the Riverside metro area, 50% of those experiencing poverty lived in large suburbs from 2014-18.
- In the Salt Lake City region, 39% lived in large suburbs during this period.
- In the San Francisco-Oakland-Hayward metro area, 39% of people experiencing poverty lived in large suburbs.
- In the Seattle metro area, 28% lived in large suburbs from 2014-18.
Unincorporated Areas
In some regions, unincorporated areas have the largest share of people experiencing poverty:
- Nearly 47% of the Las Vegas metro area’s population experiencing poverty lived in unincorporated areas from 2014-18.
- In the Sacramento region, 40% lived in unincorporated areas during this period.
Exceptions and Unique Governance Structures
Not all regions have more poverty in suburbs than in cities, often due to unique governance structures:
- Honolulu’s city-county government encompasses the entire island of Oahu, including many high-poverty communities.
- In the Phoenix metro area, nearly half of the population experiencing poverty lives in Phoenix, while a quarter lives in large suburbs.
- In the Portland metro area, poverty rates in Portland proper have decreased, with a growing share in large suburbs.
- In the San Diego region, a significant portion of those experiencing poverty lived in San Diego proper.
- In Silicon Valley, 60% of people experiencing poverty lived in San Jose.
- In the Tucson region, the majority lived in Tucson proper, with a smaller share in unincorporated areas.
Why Do These Patterns of Poverty Growth in Suburban Areas Matter?
First, they highlight the uneven spread of poverty into suburban areas. New pockets of poverty in more affordable suburban regions present challenges for equity and community development. For instance, the burden of providing equitable access to housing and transportation to sustain the regional economy isn’t evenly distributed among jurisdictions, even though the benefits are shared.
Second, they reveal governance opportunities within regions. Regional organizations aiming to coordinate efforts should consider the number of jurisdictions with large low-income populations and the resources available to them based on their size and incorporation status. Currently, unincorporated areas compete with one another and with small suburbs for federal community development funding within their county. These areas often lack the transportation options found in larger jurisdictions, which are crucial for low- and moderate-income populations to access jobs and services. Additionally, they don’t have a city government that can directly apply for grants and technical assistance from state and federal sources.
Strategic Considerations for Regional Equity
At the San Francisco Fed, we are dedicated to identifying opportunity gaps and sharing strategies for regional equity through our research and engagement efforts. Here’s what we’ve discovered so far.
Regional collaboration among public, private, and nonprofit sectors can ensure equitable access to healthy and resilient communities by investing in infrastructure such as public transit, bike and pedestrian facilities, parks, and street trees, especially in more affordable suburbs where these are often lacking.
“First/last mile” improvements to transit stations—whether by foot, bike, or car—can enhance job accessibility.
Green ridesharing models can improve access to medical care and other services in low-density suburban and rural areas.
Strategies for producing and preserving affordable housing, along with tenant protections, can help prevent residential displacement due to these investments.
Regional collaboration can also address broader equity issues like housing affordability and transportation options, providing job and service access in various metro areas.
For instance, the newly established Bay Area Housing Finance Authority, housed at Bay Area Metro, aims to boost affordable housing across the region.
Regional government entities often provide data, apply for grants, and convene regional actors. The San Joaquin Valley Council of Governments, for example, received a state grant to support local planning for affordable housing.
Business leaders often identify gaps in access to housing, transportation, and livable communities for the regional workforce. In Silicon Valley, business leaders convene through the Silicon Valley Leadership Group to tackle regional equity issues such as housing and transportation, collaborating with policy, philanthropy, community development finance organizations, and the public sector.
Identifying the locations of low-income populations within a metro area relative to different jurisdictional boundaries is a first step towards understanding regional opportunity gaps affecting equity. Our team’s ongoing engagement and research in this area includes sharing this data with local stakeholders and conducting further research on the geographic patterns of nonprofit service provision.
Elizabeth Mattiuzzi is a senior researcher in Community Development at the Federal Reserve Bank of San Francisco. Her research focuses on the impacts of land use planning and governance in metropolitan regions on housing affordability, climate resilience, and economic opportunity for low- and moderate-income communities and communities of color. She holds a PhD in City and Regional Planning from the University of California, Berkeley.
