What Is a Ghetto?

A ghetto is an offensive term for a stereotype of an urban area with low property values and relatively little public or private investment. A neighborhood that is referred to as a ghetto may be characterized by high unemployment, high rates of crime, inadequate municipal services, and high drop-out rates from schools. Real estate values in these communities are generally much lower than in other parts of the same city. Urban neighborhoods classified as ghettos may be severely underpopulated with many abandoned homes, or they may be densely populated with large families living in small spaces.

Statistically, in the U.S., places referred to as ghettos tend to be racially segregated. This reflects a history of segregation in the country as well as a history of inequality in terms of access to wealth, property rights, and other resources.

Redlining, mortgage lending discrimination, Jim Crow laws, and income inequality contributed to the creation of many low-income, minority neighborhoods in the United States. Some were formed after the Civil War, while some were created in the late 20th century. Some of these areas have since changed, while others have remained overwhelmingly poor.

Key Takeaways

  • A ghetto is an offensive term for an urban area with low property values and relatively little public or private investment.
  • Urban areas in the United States tend to be racially segregated as a result of a history of redlining, mortgage lending discrimination, and Jim Crow laws.
  • In recent years, urban renewal policies and gentrification have rapidly revamped low-income neighborhoods and have been controversial for their effect of displacing minority and low-income residents.

Understanding Low-Income Neighborhoods

Areas of extreme poverty are defined by the U.S. Census as neighborhoods where 40% or more of the population are earn low incomes. Offensively, some people identify these neighborhoods by physical characteristics, such as large numbers of poorly maintained buildings, unkempt lots, and trash or debris accumulated in the street or on properties.

Today, many neighborhoods formerly considered ghettos have been transformed through urban renewal policies, shifting racial demographics, or through gentrification. In both cases, large amounts of investment, generally private, comes to these areas as a part of city or state policy. Generally, local governments will create policies to entice real estate developers to purchase a large amount of property in an area considered of extreme poverty and to build new homes and commercial space in the neighborhood. Incentives for the developers generally include tax breaks and loose zoning laws.

Through this process, a neighborhood can be transformed very quickly, with new residents moving into the newly created homes and commercial spaces. New residents tend to come from different ethnic groups than the previous minority inhabitants and to have significantly higher incomes. Urban renewal as a policy has been controversial for its effect of displacing minority and low-income residents who generally struggle to find affordable housing in a market with increasingly high property values.

Origins of Ghettos

The term ghetto comes from 13th century Europe when cities in Spain, Germany, Italy, and Portugal sought to segregate Jewish populations into one area upon the suggestion of Pope Pius V. The word itself could come from several sources. Jews settled into an area of an old iron foundry, or ghetto, in Venice, Italy, in the 14th century. The word could also come from the Greek word "ghetonia," which means "neighborhood," or the Italian "borghetto," which means "small neighborhood."