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Study Of Chicago Investment Reveals 'Starkly Segregated City’

A new study has found that though Chicago has access to a relatively healthy stream of capital, the wealth is far from being spread equally across neighborhoods with different racial and income demographics.

Urban Institute’s analysis of public and private investment, including real estate investment, found Chicago is a “starkly segregated city” when it comes to which neighborhoods are enjoying capital flows, with those made up of white, wealthy residents receiving the lion’s share of real estate, small business and public investment.


Urban Institute analyzed investment trends from 2010 to 2020 and found that the larger the share of Black residents in a neighborhood, the less investment occurred. Over the decade, neighborhoods with more than 80% Black residents received just 37% as much per-household investment as neighborhoods with fewer than 20% Black residents.

The connection between race and investment held true for Latino neighborhoods, as well, although to a lesser extent. Neighborhoods that were more than 80% white, however, benefitted from five times the overall investment of neighborhoods that were less than 20% white, the study found.

“There isn’t just one story of investment trends in Chicago,” Brett Theodos, lead researcher of the analysis, said in a release. “Depending on where you look, Chicago can be highly invested and affluent or it can be disinvested and declining. With nearly 3 million residents spread across 234 square miles, the city’s economy looks very different depending on the neighborhood where someone lives or works.”

Theodos and his team also found the city’s investment is segregated by income levels, noting the lowest-poverty neighborhoods received 3.6 times more single-family lending per household and 1.8 times more multifamily lending per household than the highest-poverty neighborhoods receive.

“Because of historical and current systemic racism and discriminatory practices around property appraisal, sales, purchase, and lending, neighborhoods with large shares of people of color are often also neighborhoods with large shares of people experiencing poverty,” the study states. “In fact, 78 percent of majority-Black census tracts and 38 percent of majority-Latine census tracts in Chicago had poverty rates above 20 percent in 2020.”

It is little surprise then that the South side, farther West side and parts of Southwest Chicago, with large shares of Black and Latino residents and high poverty rates, rank at the bottom of the city when it comes to per-household investment. The study found much healthier per-household investment in the South Loop, West Loop and the North and Northwest areas of the city.

Per the analysis — an expansion of a similar 2019 effort — Chicago ranks 40th in overall investment per household annually among the 100 largest metros in the U.S., suggesting it does not suffer from underinvestment overall.

“These long-standing trends are not only a result of decades of disinvestment and exclusion; they are also a cause of continued inequality across neighborhoods,” the study concludes.

Related Topics: Urban Institute, Brett Theodos