Watch CBS News

RX For Baltimore Economy: More Residents With Money To Spend

BALTIMORE (AP) -- The fragility of Baltimore's economy was exposed by Freddie Gray's death from a spinal injury suffered while in police custody.

The tragedy unleashed protests, looting and a widespread recognition that Baltimore's poor have long lacked job opportunities. But it also revealed the easily overlooked absence of a stable upper-middle class, the same group that has revitalized cities such as New York and Washington. Baltimore is actively seeking to bring these people back, since their spending power could help restore neighborhoods, expand the economic base and energize what has been a tentative comeback for the 620,000-person city.

Compared with rival cities that have enjoyed a renaissance, Baltimore's upper-middle class remains a relatively small slice of the city. Nearly 43 percent of families in Washington proper earn at least $100,000, for example, compared with just 16 percent in Baltimore. A greater share of families living in New York City, Boston and Richmond, Virginia, enjoy six-figure incomes.

Baltimore has added nearly 4,000 upper middle-class families since 2010. But residents say the city lacks the critical mass of stable incomes to revive a city crushed by decades of neglect and poverty. Without a solid foundation of customers with money to spend, major retailers are less likely to invest in a community. Reports that the unrest damaged at least 350 businesses and televised images of a CVS pharmacy being looted were a reminder that vast stretches of the city contain few supermarkets, restaurants or stores.

"What's missing in a lot of these neighborhoods is real retail -- opportunities to go shopping without having to get on two buses or walking a mile," said William H. Cole, president of the Baltimore Development Corporation.

New York, of course, has richly benefited as a global financial capital. And Washington has long prospered from government-related jobs. But as a longtime industrial port city that has lacked a base of higher-paying jobs, Baltimore has attempted a more difficult reinvention.

Eric Hontz, a 33-year-old lawyer, moved from Washington two years ago to buy a home in the West Baltimore neighborhood of Reservoir Hill. He has seen both worlds.

"I've heard people say that Baltimore is 30 miles to the North and 30 years behind D.C," Hontz said. "But we don't have the presence of the federal government as a safety net."

The Census Bureau shows that Baltimore has added 3,700 families with incomes above $100,000 since 2010, gains that have helped pull many neighborhoods out of a decades-long slide.

In Reservoir Hill, a community farm now fills a once vacant lot. Residents note proudly that the open-air drug market and drive-by shootings have given way to children bicycling along the streets. The relative poverty just a few blocks away has made it easier for these families to buy homes that would be prohibitively expensive elsewhere.

From 2011 to 2013, Census figures show an additional 77 families with incomes above $200,000 settled in Baltimore's 21217 ZIP code, which includes Reservoir Hill and the Sandtown-Winchester neighborhood where Gray lived.

Hontz and his neighbors say they foresee the gains lasting. Yet any improvements that would further anchor growth and generate jobs for those living in comparative squalor depend on more people flowing back into previously abandoned neighborhoods. Hundreds of Gilded Age homes have slumped into seedy neglect. Here and there, new owners have restored the 15-feet tall molded ceilings, marble fireplace mantels and winding staircases to modern elegance.

When Robert Ginyard and his wife moved to Reservoir Hill more than a decade ago, five of the row houses on their street were being renovated. For Ginyard, a 52-year-old married father of two who works for the city, the key was knowing that a group was rebuilding the neighborhood, rather than a few scattered pioneers and an occasional debt-fueled developer.

"No one wants to be a lone ranger and go into a block where there are a majority of vacant" homes, he said.

Whether the population growth can occur in sufficient numbers throughout the city remains far from clear. Mayor Stephanie Rawlings-Blake has announced plans to add 10,000 families by 2020. The city has added wealthier households, though it's actually shed 2,865 families since the mayor assumed office in 2010.

Baltimore does fare better in attracting families with six-figure incomes than such cities as Philadelphia and Cleveland, which are seeking to rebalance their economies.

Additional possibilities for offices and shopping exist in Baltimore with sites such as the perpetually delayed $1.5 billion redevelopment of the Maryland government's State Center into a commercial, residential and retail sector.

"Until you get a certain magnitude of investment, it's hard to effect change," said Jacob Green, a software developer who lives in the city.

In the blighted neighborhood of Sandtown-Winchester where Gray lived, the absence of nearby employers creates a dual curse: Few can find work. And most who do endure exhaustingly long commutes. The dynamic encourages residents to leave. As a result, around a third of the homes in the neighborhood are abandoned or boarded-up.

Nearly half of Sandtown-Winchester residents earn less than $25,000, according to a report released this spring by the Baltimore Neighborhood Indicators Alliance. And more than a third of those with a job must commute at least 45 minutes each way.

"It's really hard to argue with numbers," said Seema Iyer, a professor and director of the University of Baltimore's real estate and economic development program. "If we get to those much deeper problems, the crime will go away."

The challenge is finding ways to accelerate the turnaround in bringing back families so that those businesses and employers can open.

Just two weeks after the protests and violence following Gray's death, nearly 270 potential homebuyers registered to spend their Saturday morning at a high school in West Baltimore to tour the neighborhood.

More than 60 percent of them already lived in Baltimore. Many seemed unfazed by the recent violence. Some noted that living in Baltimore would shorten their commutes or allow them to achieve home ownership at a realistic price.

Matt and Bridget Mendrygal knew they wanted to buy after moving down from Boston in October. Unlike in many nearby cities along the Eastern Seaboard that have already gone through a cycle of revitalization, affordable home ownership remains a possibility in Baltimore.

"Actually buying is something you can do here," said Bridget, 29, a recruiter.

(Copyright 2015 by The Associated Press. All Rights Reserved.)

View CBS News In
CBS News App Open
Chrome Safari Continue
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.