WHAT IS Ghetto

A ghetto is an urban area with low property values and little public or private investment. Ghettos may be characterized by high unemployment, high rates of crime, inadequate municipal services, and high drop-out rates from schools. Real estate values in ghetto communities are generally much lower than in other parts of the same city. 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., 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 and other resources.

Redlining, mortgage lending discrimination, Jim Crow laws and income inequality contributed to the creation of many ghettos in the United States. Some ghettos 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.


Ghettos are defined by the U.S. Census as extreme poverty areas, or neighborhoods where 40 percent or more of the population are poor. They may be identified by physical characteristics, such as large numbers of poorly maintained buildings, unkept 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 or simply 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 government will create policies to entice real estate developers to purchase a large amount of property in an area considered a ghetto 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 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."