Income Diversity by Neighborhood

Census Tracts with High and Low Income Diversity

In October, we wrote about the most mixed-income neighborhoods in Indianapolis. We measured income diversity as the probability that, if you select two individuals from a neighborhood, they will be from different income groups. We then normalized this to a 0-100 scale, where zero is the lowest possible income diversity and 100 means residents are divided equally among all income categories. The typical tract in the region scored 61.

Income diversity is important because, generally, researchers agree that mixed-income neighborhoods can have advantages for low-income residents in the form of place-based improvements, like better schools, safer neighborhoods, well-maintained infrastructure. (Research generally does not show evidence for positive effects from low-income residents interacting with people from other socioeconomic classes. See the previous article for an overview of the literature.)

Some of the most income diverse neighborhoods were the Old Northside and Herron Morton, Rocky Ripple and Crows Nest, and the area near Pike High School.

Now we are focused on the least income diverse neighborhoods, where income is highly concentrated around a few categories. A tract could have low income diversity because most households are concentrated in low-income groups, middle-income groups, or high-income groups.

The map below shows the predominant income group located in each tract. We based the cutoffs for these income groups on the region’s typical household income (called the area median income, or AMI), which was $66,700 in 2016. We considered incomes from $50K-$99.9K to be near the median. Households earning less than $50K are below, and households earning $100K are above.

Predominant Income Group in 2016

(Below Median, Near Median, Above Median)

If you layer the two maps we’ve seen so far, you see tracts with relatively low diversity of income groups, shaded based on which income groups are concentrated there. In the map below, tracts are filtered so only the bottom third in terms of income diversity are shown (scoring 58 or below).

Generally, the results show that tracts with incomes concentrated above the median are located in the northern suburbs, tracts with incomes concentrated near the median are located in southern suburbs, and tracts with incomes concentrated below the median are located on the southwest side of Indianapolis and the east side, between 16th and 30th Streets.

Below, we will walk through an example of each of the areas: concentrated high income, middle income, and low income.

Predominant Income Group in Areas with Low Income-Diversity

(Below Median, Near Median, Above Median)

Concentrated Middle Incomes in Franklin Township Incomes

Income Diversity in Tract 3904.02 in 2016

Three Examples of Low Income Diversity

Concentrated in Middle-Income Categories

Eastern Franklin Township (Tract 3904.02)

This part of Marion County’s Franklin Township has become less income diverse since 2011. In 2016, it was one of the least income diverse areas in the region, with a score of 38.75.

Most households are concentrated in the middle income categories, and this concentration is increasing. In 2016, 56 percent of households earned $50K-$99.9K, up from 50 percent in 2011. The share of the population below that income level fell by 9 percentage points, and above that fell by 3 percentage points.

Concentrated Low Incomes in Martindale Brightwood

Income Diversity in Tract 3508 in 2016

Concentrated in Low-Income Categories

Martindale Brightwood (Tract 3508)

More than a third of households here earn less than $10K per year, and 95 percent earn less than $50K per year. This concentration in low-income categories makes this one of the least income diverse areas in the region. It scores 39.16, and that has fallen by over 6 points since 2011.

The decrease in diversity is due mostly to redistribution within the low-income categories, rather than redistribution between low, middle, and high categories. In 2011, there were to “peaks” in the income distribution chart, with large concentrations at $0-$9.9K and $15K-$24.9K. By 2016, there was only peak, concentrated at $0-$9.9K.

Concentrated High Incomes in Carmel

Income Diversity in Tract 1109.07 in 2016

Concentrated in High-Income Categories

Tract 1109.07 in Carmel

This Carmel tract scores only 36.64 in terms of income diversity, because four in ten households are in the $200K or more category. Three quarters of the tract earns $100K or more, while only 8 percent earns less than $50K. While the income diversity score has not changed much since 2011, the location of the income concentration has shifted from $100K-$149.9K to $200K and above.

In 2011, 36 percent of households earned $100K-$149.9K. By 2016, that had fallen to 21 percent, while households earning $200K or more grew from 22 percent to 39 percent.

Further Questions

In future weeks, we will look at tracts that have changed the most in terms of income diversity. The spatial pattern with this data is not clustered, meaning tracts with increasing or decreasing income diversity are not necessarily clustered together. Instead they are scattered throughout the region. The average tract got moderately more income diverse (an increased score of 1.7).

Income diversity can change for a few different reasons. It could be an increase in high, middle, or low income groups. It could be the addition of income groups that were not present before. It could represent the transition from one income concentration to another. We will explore all these possibilities and sort out which patterns exist in which parts of the region.

See How Your Neighborhood Has Changed

Find more interactive content from our series on neighborhood change.

Story Map: Race and Migration Since 1970

In 1970, half of the region's Black population lived in 12 square miles north of downtown Indianapolis. As Black residents moved into '60s suburban communities, 120,000 White residents left the city's core for newer suburbs.

Story Map: Moving Out – Suburbanization Since 1970

Indianapolis and Anderson were the region's urban centers in 1970. Three-quarters of the population lived in those counties. Now, just over half the population live there, and Hamilton County is the second largest urban center.

Changes in Indy’s Historic Black Neighborhoods

In the 1970s, 4,000 residents left this nearly all-black neighborhood. Why? An increasingly desegregated housing market and closure of one of the country’s first public housing projects.

Income Inequality High Where Golden Hill and Northwest Indianapolis Converge

In the area where wealthy Golden Hills converges with the working-class neighborhoods of Northwest Indianapolis, income inequality is high and increasing. The area is also experiencing a growth of white households above the median income.

In Little Flower, More College Graduates, Young Adults, but Incomes are Falling

There's a shrinking share of people in their 20s in this German/Irish neighborhood, but a growing of share in their 30s and 40s, as well as a growing population of children. These residents are less likely to live in poverty than other age groups, but they have still seen ...

After Public Investment, St. Clair Place’s Housing Market Significantly Stronger

Mortgage activity in St. Clair Place shows a dramatic increase in home purchases and home value since 2007. The area is more diverse than ever and poverty is falling for people of color. But home buyers are still 76 percent white.

The Growing Divide Between Rich and Poor Neighborhoods

In 1970, there was a $22.6k gap between average family income in high- and low-income (80th and 20th percentile) neighborhoods. By 2016, the gap had doubled to $53.5k. Incomes grew for wealthy and middle-income neighborhoods, but fell for low-income neighborhoods.

In Neighborhoods North of Speedway, Diversity Among Highest in Indy

Though they developed as all-white suburbs between 1940 and 1970, the neighborhoods near the Indianapolis Motor Speedway are some of the densest and most diverse in Indianapolis.

Indy’s Most Mixed-Income Neighborhoods

We measured income diversity in every neighborhood in the region, and the most mixed-income neighborhoods include the Old Northside, the tract containing Rocky Ripple and Crows Nest, and the area near Pike High School.

Indy’s Least Mixed-Income Neighborhoods

Explore neighborhoods where residents are highly concentrated into a few income groups. We dive into examples of concentrations of low-income residents, high-income residents, and middle-income residents.

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