When Poverty Strikes Suburbia

From The Economist

Et in Arcadia ego
The suburban sunbelt is the scene of terrible poverty

THE statistics are worthy of Detroit or Newark: almost half the children in the local schools are from families poor enough to be eligible for free or cut-price lunches; a tenth of households qualify for food stamps; one in eight residents gets free meals from soup kitchens or food banks; perhaps one in 12 has suffered a recent spell of homelessness. Yet the spot in question is not a benighted rust-belt city, but Sarasota, Florida—a balmy, palm-studded resort town on the shores of the Gulf of Mexico.
The Sarasota-Bradenton metropolitan area, a two-county sprawl of condominiums, marinas and retirement homes, saw the proportion of people living below the poverty line rise by more between 2007 and 2009 than any other big city in America, from 9.2% to 13.7%, according to the Census Bureau. Nor is Sarasota an aberration. All the other metropolitan areas that saw jumps of four points or more are also formerly fast-growing southern and western cities: Bakersfield, California; Boise, Idaho; Greenville, South Carolina; Lakeland, Florida and Tucson, Arizona. Arizona now has the second highest poverty rate in the nation, after Mississippi. The especially severe housing bust that ended the breakneck growth of these sunbelt cities has brought with it deprivation on a scale they have never previously encountered and are struggling to address.

Poor inner cities in the Midwest and north-east still have higher overall poverty rates, but in recent years, notes Elizabeth Kneebone of the Brookings Institution, a think-tank, poverty has grown fastest in the suburbs, especially in the sunbelt. A third of America’s poor, she notes, now live in suburban areas. Many cities in the sunbelt, adds Margaret Simms of the Urban Institute, are suffering from what it calls “double trouble”, meaning a plunge both in property values and employment, with concomitant jumps in poverty. This trend is significant, says Scott Allard of the University of Chicago, since it is harder for the poor to seek assistance and to hunt for jobs amid the suburban sprawl.
Sarasota epitomises all these trends. For many years it prospered by offering tourists and new residents—especially retirees—relatively cheap accommodation in a sunny climate. The population grew by about 5% a year for decades. At the height of the boom, in 2006, construction, property finance and related services accounted for at least a third of the local economy, says Kathy Baylis, the head of Sarasota County’s economic development corporation. Her hairdresser (a traditional harbinger of bursting bubbles) was speculating in property, teaming up with friends to buy and “flip” condos.

When property prices began to drop, the effects on the area were particularly pernicious. Those in the building or tourism trades, as well as retirees living off their investments—a huge share of the population—quickly felt the pinch. Unemployment soared, from 3.1% on average in 2006 to 13.4% in January of last year (it is 12.3% now). It would be higher still had some not moved away, causing the population of the county, like the state, to fall for the first time in living memory in 2008.

That has left people like Ken struggling to keep body and soul together. He describes how he gave up his cooking job to look after his ailing mother in 2007. When he started to look for work again a few months later, he could find only a part-time job, which soon evaporated. He had no savings, so could no longer afford to rent. He wound up in a tent in a camp for the homeless called Pinellas Hope, which was set up by the Catholic church in the town of Clearwater, 50 miles up the coast from Sarasota. He is relatively lucky: Steve Barton, a carpenter from Ohio, is one of several hundred living in the woods outside Venice, 20 miles south of Sarasota. He has been out of work for over two years, so is no longer eligible for unemployment payments. He lives entirely off charity.

In addition to the cooks, chambermaids and construction workers who hit the skids soon after the recession began, many former professionals have now exhausted their savings and are beginning to fall back on local charities. Angie Sammann, a former loan officer at a bank, is another of the tent-dwellers at Pinellas Hope. She tells the story of how she lost her job due to illness, then her apartment, then part-time work in a deli, then the room she was renting and finally the possessions she had put in storage. She got a month’s work from the Census Bureau last year, but otherwise has not seen a pay cheque for over a year. “I don’t care if I scrub toilets,” she says, “I just want a job.”

Pinellas Hope has 255 tents and 28 huts, all of which are occupied. The Salvation Army branch in Sarasota is equally overrun. It has 200 beds for the homeless, but regularly ends up accommodating 250 or more, according to Bryan Pope, the manager. A special phone service that directs those seeking help to local charities can only help one in five callers, says Richard Martin, the head of a local homelessness charity.

Much of the money for such schemes comes from different local, state and federal government agencies. But all are tightening the purse strings. The county’s revenues have fallen with property values, so it is cutting back. The state, meanwhile, has cut its grants to Mr Martin’s outfit by 80% over the past four years. Many of the federal grants come courtesy of the stimulus bill of 2009, and so are quickly drying up. When the federal money runs out, says Carolyn Mason, a county commissioner, “that’s pretty much the end of the road”.

Moreover, cities like Sarasota are unsympathetic places for those down on their luck. One of the reasons they grew so fast in the boom years were their low taxes, leaving little money for social programmes. Homelessness is often seen as a threat to migration and tourism. Sarasota city council made several attempts to outlaw sleeping rough, finally finding a formula that passed muster with the courts in 2005. That year it was named the meanest city in America by the National Coalition for the Homeless. All the other cities in the top ten were also in the sunbelt.

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