By Mary Wisniewski

CHICAGO (Reuters) - Predominantly African-American neighborhoods in Chicago have seen poverty rise and services diminish even as the nation's third largest city has become less racially segregated, according to a study released on Wednesday.

While Chicago has become more racially balanced over the decades with more neighborhoods showing no majority populations, black areas are seeing economic stagnation or decline, according to the study by the Chicago Urban League, which promotes progress for blacks.

"This is not a situation that's getting better. This is a situation that's getting worse," said Stephanie Bechteler, director of research and evaluation for the Chicago Urban League. "We must put forth time and effort to make a change."

Despite the progress on racial integration, Bechteler said the city has a long way to go. She noted that the Brookings Institution late last year found that Chicago remained the third most segregated city in the United States behind Milwaukee and New York City.

Chicago saw protests following the release last November of a video showing a white police officer shooting and killing a black teenager. The officer was fired and charged with murder, but this incident and other police shootings have raised tensions in the city's black community.

In the first two months of 2016, Chicago has had 95 murders, mostly in black neighborhoods, Chicago Police said. That is the highest rate since 1997, the Chicago Tribune found.

The Chicago Urban League found that mostly black areas have lost health clinics, social service agencies and other areas of support in recent years.

The study, which relied on findings and interviews from more than two dozen Chicago housing and transportation advocacy groups, found that predominantly black parts of the city were harder hit by the housing market collapse and slower to recover.

While home sale prices in Chicago overall lost 5 percent of their value between 2005 and 2013, homes in primarily African-American neighborhoods lost 25 percent to 71 percent of their value.

The study also found a lack of affordable housing in mainly black areas. For example, about three-quarters of renters in the troubled mostly black neighborhood of West Englewood spend 30 percent or more of their income on rent. In the city overall, only slightly more than half spend that much.

Northern U.S. cities became segregated following the migration of black workers from the south to get manufacturing jobs in the early 20th century. Restrictive covenants that prohibited property owners from selling or renting to blacks, government policies and other forms of discrimination created segregation patterns that still persist, the study said.





(Reporting by Mary Wisniewski, Editing by Ben Klayman and David Gregorio)