The real value in your city likely isn't where you think it is. Specifically, it isn't all concentrated where the bulk of your city's well-to-do people live.

I've written about the fallacy of believing that wherever residents make a lot of money and live in nice houses, local government is going to have no trouble funding the promises it's made. The reality is quite different: if that private wealth is paired with extravagant, debt-financed public infrastructure, is spread thin on the landscape, and is producing endlessly growing maintenance obligations, a lot of places that appear to be doing great are actually on the road to insolvency.

This article deals with the flip side of that story. Places that don't appear to be doing anywhere close to fine might have a rosier future than you think—if our cities get their priorities straight and put the wealth that these poor neighborhoods generate back into their streets."

Our grand suburban experiment (which is a symptom of our infatuation with the shiny and new) means that we as a nation have left some of our poorest people behind in some of our best-designed neighborhoods. These places often have no shortage of problems stemming from poverty—deteriorating buildings; vacant spaces due to lack of demand; the vicious cycle of decline and neglect. But they have advantages, too, and those advantages show up when you run the numbers.

When Strong Towns and geoanalytics firm Urban3 visited Lafayette, LA, we were able to produce a detailed quantitative analysis showing that poor neighborhoods were in many cases subsidizing affluent ones. By this we mean that those neighborhoods were delivering more net revenue to the local government, after subtracting the costs of the public infrastructure serving them, than many wealthier areas.

Still, it's one thing to grasp this as an abstract fact; it's another entirely to understand what it means on the ground, and why it's so often true. I took a walk on a Saturday through the poorest neighborhood in my city of Sarasota, FL—not intending to write about this; it was just a nice day for a walk—and ended up thinking about the things the place has going for it.

A Typical Low-Income Neighborhood