Key points:
- American cities are divided between prosperous and impoverished neighborhoods.
- Poverty is geographically and economically entrenched in today’s cities.
- Housing costs outpace economic opportunity, causing social and environmental damage.
More than a decade ago, Alan Mallach published The Divided City: Poverty and Prosperity in Urban America, a clear-eyed, deeply researched look at how American cities were being reshaped—not only by revival, but by growing inequality, stagnation, and spatial segregation. In 2025, the book reads not as a historical analysis but as a diagnosis of our present crisis.
Mallach’s central argument is that American cities—especially older industrial ones—have become sharply divided. Some neighborhoods, usually close to downtown, are being revitalized through investment, institutional growth, and an influx of young professionals. Others, often on the urban periphery or in inner-ring suburbs, are in steep decline, with shuttered schools, vacant homes, absentee landlords, and a fraying civic fabric. What he described over a decade ago has only deepened, especially in California.
One of the book’s most enduring insights is that poverty itself is not new—but the way it is geographically and economically entrenched today is new. Cities once served as ladders of upward mobility. Today, too many neighborhoods have become traps of intergenerational poverty, where the poor remain poor not because of lack of effort, but because the opportunity structures around them have collapsed. Where there were once jobs, transit, decent schools, and upward pathways, now there is isolation, disinvestment, and a punishing cost of survival.
The heart of the crisis is a profound misalignment between housing and economic opportunity. Mallach drives this point home repeatedly: there are places in the U.S. where housing is cheap—where you can buy a house for $30,000 or rent for under $800—but they are cheap because there is no opportunity there. The jobs are gone, and with them went the schools, the tax base, the grocery stores, and the sense of possibility. And the places where opportunity does exist? Housing is unaffordable, zoning is exclusionary, and demand has far outpaced supply.
Nowhere is this tension clearer than in California. We are a state of economic dynamism—home to the tech industry, world-class universities, global research hospitals, and a booming clean energy sector. But we are also home to the highest poverty rate in the nation when adjusted for housing costs. Rents have risen alongside incomes for the wealthy, while outpacing incomes for everyone else. And despite a strong labor market, we have a homelessness crisis that defies reason—because access to housing no longer follows access to work.
This divide doesn’t just trap people in poverty. It exhausts them. Across the state, millions of Californians are forced to commute hours each day because they cannot afford to live where they work. This takes a measurable toll—on health, family life, productivity, and civic engagement. It strains public infrastructure and deepens environmental damage. It leaves working people one flat tire or missed paycheck away from eviction. And it breaks the social compact that says if you work hard and play by the rules, you should be able to afford a place to live.
Mallach’s term for this is “the uncoupling of the economic city”—the idea that wealth is being generated in specific nodes (innovation districts, university-adjacent neighborhoods, gentrifying downtowns), but not shared beyond them. Economic growth is real, but spatially bounded. The poor are not lifted by the rising tide. In fact, the tide is washing them out of the places where opportunity now clusters.
This mismatch isn’t just economically inefficient—it’s morally corrosive. When we locate opportunity in places where only the affluent can afford to live, we reinforce a form of economic apartheid. And when public policy either ignores or tacitly accepts this arrangement, we’re not just tolerating inequality—we’re entrenching it.
Mallach is clear-eyed about how this happened. The decline of manufacturing didn’t just mean job losses—it meant the collapse of a local economy that once had civic rootedness. Unlike today’s footloose capital, the old “civic capitalism” of local entrepreneurs and industrialists had their fortunes tied to the city’s well-being. When they thrived, so did the workers and neighborhoods around them. Today’s economy, built around global capital, higher ed, and health care institutions, generates wealth—but often for a workforce that commutes from afar and spends its money elsewhere.
Meanwhile, the tools of housing production and development have done little to reverse these trends. Tax credit programs tend to concentrate affordable housing in already-distressed areas. Zoning and CEQA delays block housing in affluent communities. And well-intentioned urban redevelopment efforts often fail to alter the deeper dynamics of segregation and capital flight. Mallach’s example of the Sandtown-Winchester initiative in Baltimore—a $130 million investment that ultimately did little to alter the neighborhood’s trajectory—shows how hard it is to rebuild a place that people are still trying to leave.
The result is a vicious cycle. Neighborhoods that are affordable often become dumping grounds for absentee landlords, speculators, or predatory investors—what Mallach calls “milkers”—who extract rent while doing nothing to maintain the property or invest in the community. Over time, even the affordable housing becomes unlivable. And when that happens, the so-called affordability turns into a trap rather than a stepping stone.
At the same time, high-opportunity neighborhoods and cities like San Francisco, Palo Alto, or Davis block new housing, creating artificial scarcity and driving up prices. The people who clean the offices, care for the children, or serve the food are pushed farther and farther out. The housing-jobs imbalance becomes an engine of inequality.
So what can we do?
Mallach offers no silver bullets, but he outlines a set of priorities that still hold. First, we need to improve the quality of life in distressed neighborhoods—not just by building housing, but by investing in schools, transit, safety, and public health. Second, we need to connect people to opportunity by building housing near jobs, creating reliable transit networks, and breaking down exclusionary zoning barriers. Third, we need to give people options—including the option to leave distressed neighborhoods and move into areas with more opportunity, better schools, and safer streets.
That last point is key. It is not enough to “revitalize” distressed communities if the people who live there cannot benefit. Nor is it enough to talk about affordability in the abstract. We must talk about access—to jobs, to schools, to transit, to upward mobility. And that means rethinking land use, funding public housing, reforming tax credit programs, and prioritizing long-term planning over short-term returns.
Ultimately, Mallach’s message is that revival without inclusion is not success—it’s failure by another name. A city cannot thrive when prosperity is walled off from most of its residents. And a housing market that fails to house the people who keep it running is not a market—it’s a machine for deepening inequality.
The housing crisis is not just a crisis of supply. It’s a crisis of political will, institutional inertia, and systemic exclusion. If we want to build cities—and a state—that work for everyone, we have to realign housing with opportunity. Otherwise, we are not solving poverty. We are cementing it.
Alan Mallach saw all of this clearly more than a decade ago. That we are still grappling with the same questions—and often falling further behind—is not just a policy failure. It is a moral one. The longer we look away, the harder it becomes to fix. But the longer we wait, the more urgent the task becomes.
“At the same time, high-opportunity neighborhoods and cities like San Francisco, Palo Alto, or Davis block new housing, creating artificial scarcity and driving up prices. The people who clean the offices, care for the children, or serve the food are pushed farther and farther out. The housing-jobs imbalance becomes an engine of inequality.”
You’re listing Davis in the same category as San Francisco and Palo Alto? Really?
And “only” Davis – and not any other city within the region?
From article: “Mallach’s central argument is that American cities—especially older industrial ones—have become sharply divided. Some neighborhoods, usually close to downtown, are being revitalized through investment, institutional growth, and an influx of young professionals. Others, often on the urban periphery or in inner-ring suburbs, are in steep decline, with shuttered schools, vacant homes, absentee landlords, and a fraying civic fabric. What he described over a decade ago has only deepened, especially in California.”
Sounds like a suburb like Davis should be torn down. But I’m confused as to the argument in regard to “decaying cities” that are simultaneously being “revitalized” – within the same paragraph above. How can it be “both” decaying AND revitalized?
I have another question.
I see that the cited author is actually dividing cities into “neighborhoods”, and “inner-ring suburbs” rather than the city as a whole.
But don’t neighborhoods (even crappy ones) have relatively-easy “access” to whatever a given city offers? For that matter, don’t “inner-ring” suburbs also have such access, albeit a little farther away than the crappy neighborhoods within a given city?
Seems like (as usual) the argument here is that space should be made in “good” neighborhoods for everyone living in a “crappy” neighborhood. (Presumably, with the crappy neighborhood then torn down, after everyone is vacated from it.)
Sounds like a plan (and one which reminds me of what the local school district puts forth).
Also sounds like there’s no hope for some place like the entire city of Stockton, after everyone is vacated from it. (Truth be told, I don’t necessarily view that as a bad outcome. I can think of several more that the state and country would be better-off without, as well – some of which aren’t necessarily inexpensive.)
So perhaps I’m “on board” with this plan, after all? When are the bulldozers scheduled?
A key point Mallach makes is that low-income neighborhoods don’t have easy access to things like jobs, transportation, or services — not even in the physical sense.
He argues the situation is much more unequal than it looks. Jobs tend to cluster in suburban or revitalized urban areas, often far from where poor residents live. And even when public transit exists, it often doesn’t connect people to those opportunities in any meaningful or reliable way.
Poor neighborhoods also tend to be cut off from the networks that help people get ahead. Schools are underfunded, social capital is thin, and residents face stigma that further isolates them.
Geographic proximity, in other words, doesn’t mean inclusion.
On top of that, city governments often focus their investments and planning efforts on areas with more political clout or economic potential. That leaves struggling neighborhoods with crumbling infrastructure, fewer services, and higher crime — which only deepens the divide.
Mallach also points to how exclusionary zoning, racial segregation, and housing discrimination have shaped urban geography in ways that reinforce inequality, no matter how close one neighborhood is to another.
So no — your assumption is almost the exact opposite of what Mallach actually finds.
David says: “Geographic proximity, in other words, doesn’t mean inclusion.”
So he’s defining “inclusion” as being different than geographic proximity. In other words, the poor neighborhoods (and sometimes, poor cities) are actually quite close (geographically) to the wealthier neighborhoods.
And yet, he (or you?) then goes on to state things like this:
“Today’s economy, built around global capital, higher ed, and health care institutions, generates wealth—but often for a workforce that commutes from afar and spends its money elsewhere.”
(They’re not traveling from “afar”, if there’s crappy neighborhoods and entire cities right next to wealthier ones.)
East Palo Alto comes to mind, as does Marin City (adjacent to Sausalito) and Hunter’s Point/Bayview district (in San Francisco).
Oakland and Richmond also come to mind, though they’re not as “close” as the other examples.
The people who are ACTUALLY traveling from “afar” (e.g., from the central valley to Silicon Valley) are generally those who just want more bang for their buck – not necessarily due to lack of opportunity. So unless housing prices can be forced to be the same “everywhere”, that motive will continue.
Yes, he’s arguing that proximity is not the same as inclusion
Mallach’s core argument is not that every commuter is driven purely by exclusion or poverty rather it’s about who gets to benefit from economic growth — and who gets left out, even if they live nearby.
David says: “Mallach’s core argument is not that every commuter is driven purely by exclusion or poverty rather it’s about who gets to benefit from economic growth — and who gets left out, even if they live nearby.”
So that would mean that the problem he envisions isn’t a “lack of housing”.
Truth be told, this has been going on for decades and never changes. Nothing to do with housing.
Though redevelopment in the 1960s eliminated entire neighborhoods.
The problem is what you would likely define as the result of “systemic racism”, whereas conservatives might define as “what the hell is wrong with you people” – that you can’t get it together (when there’s immigrants who prove otherwise).
I dunno – maybe the situation is slowly improving, regardless.
But I was just looking at some videos this morning regarding problems on cruise ships, which single-out a particular demographic. Reportedly a result of lowering prices.
Dr. Phil’s program examined this, as well. (So it’s not just a bunch of YouTubers.)
In other words, blaming the culture itself (which is another conservative argument). And not a problem with “lack of opportunity”.
Of course, it’s not really possible to determine which came “first” – the cultural behavior, or what you define as systemic racism.
Mallach would say the problem is partly about housing — but not just about quantity. It’s about where housing is built, who has access to it, and how housing policy has long reinforced segregation and inequality.
Mallach also points out that even where rent is technically low, it often isn’t affordable for people living in deep poverty. And in the places where housing is affordable — think deindustrialized towns or disinvested urban neighborhoods — there are often no jobs, no transit, and no upward pathways.
That’s the housing–jobs mismatch Mallach keeps emphasizing – as do I. And this is where I believe you misunderstand the housing crisis by trying to tie it strictly to things like supply and costs.
This is why I wrote the piece and why frankly you should read the book (you’ll find you agree with vast parts of it). Mallach shows that it’s not just about building more units or driving down average rent.
Instead, we need to ask more questions: where is that housing located? Who has access to it? What jobs, schools, services, or transportation systems surround it? And what histories of exclusion shaped it? (There are whole discussions about redlining and gentrification that I didn’t even touch here).
In the end, he argues that you can flood the market with units and still leave people behind — if those units are in places they can’t get to, can’t qualify for, or can’t sustain a life in because the jobs, schools, and services simply aren’t there.
In some of these old rust belt towns in Pennsylvania, you can buy homes for less than $100K, but there’s a reason for that – there are no jobs there and so most of those towns are losing population.
That’s why the crisis persists -its not just a market failure but a systemic failure, one that is rooted rooted in decades of policy decisions that segregated opportunity — geographically, racially, and economically.
Or (to clarify my comment), not really a question of which came “first”, since we already know which one did.
But more of a question of what is the cause (and solution), now.
But again, there absolutely “is” opportunity near some of the communities I just mentioned. And yet, those residents somehow don’t take advantage of them.
The fact that immigrants do take advantage of those opportunities, while living temporarily in those same crappy areas show that the problem isn’t the “area”. (And as a side note, this often leads to resentment on the part of those who get left behind, while watching their immigrant neighbors succeed.)
California certainly isn’t Pennsylvania.
Ron O
Of course it’s obvious that systemic racism that started in the early 17th century came before the “cultural” aspects that some blame for continued poverty of certain groups. When your economic capital has been robbed for over four centuries, your cultural group is going to respond is particular ways.
Ron O
Of course it’s obvious that systemic racism that started in the early 17th century came before the “cultural” aspects that some blame for continued poverty of certain groups. When your economic capital has been robbed for over four centuries, your cultural group is going to respond is particular ways.
I believe “systemic racism” started a lot earlier than that.
But it is interesting that some groups (who have also been discriminated against) find a way to succeed, regardless. Immigrants in general come to mind.
For that matter, it seems pretty likely that many of the “colonizers” weren’t finding opportunity in their own countries of origin. Of course at that time, the country was not as developed.
Maybe at some point, people will stop pointing fingers at what some dead people did to some other dead people, and claiming that living people “owe” them something as a result. Or, they can continue trying to “collect” based upon dead ancestor claims – and see how that continues to go. (Unfortunately, that does seem to “work” at times – usually at the expense of the collective good.)
I’ve posted at least two article from the Atlantic discuss the real problem is a jobs/housing imbalance that keeps many groups away from economic opportunity. These groups include not only disadvantaged ethnic groups that live within cities, but also those living in rural areas that have declining economies. And this is now happening all across the US: https://www.theatlantic.com/economy/archive/2025/06/zoning-sun-belt-housing-shortage/683352/
For those groups living in cities with economic opportunity, the problem is likely more specific to how they have been disadvantaged over time. We see when neighborhoods become gentrified, the location is not the cause of the impediment. Rather its that the previous residents lost the lottery of resources and attributes that are favorable to success in our society and economy. The answer is to both change how those attributes and resources are weighed and to inject more resources into those communities so residents can take advantage of the nearby opportunities.
That said there are other places where people will need to move to the new economic opportunities. Mobility in the US has slowed drastically in the last 50 years which is creating this problem: https://www.theatlantic.com/magazine/archive/2025/03/american-geographic-social-mobility/681439/
No one looks in the mirror and sees dank housing — or housing of any kind. This picture is the key to finally understanding the Davis Vanguard’s clinical obsession with housing. This photo is an understanding of what DG sees, vulnerably shared by our blogmeister so that we may understand. So rather than arguing into eternity, we now understand this is a cry for help. Won’t you help?