How Gun Violence Destroys the Economics of a City

How does violent crime affect community level economic health? What’s the cost of gun violence on neighborhoods?

Gun violence contributes to losing economic opportunity. In return, it foster conditions that bring about an increase in gun violence again. This is a very broad social problem that includes not just the cost of police, healthcare providers, and medical costs, but the entire economy including home value and business growth and stability.

In 2010, the national cost of medical care for gunshot victims was $630 million. Recently, a comprehensive study was conducted to look beyond the medical cost and attempt to measure housing value, economic activity and opportunities when gun violence ravages a neighborhood.

As expected, the findings conclude violent crime can negatively affect housing value with the most hard hit being the low income and more ethnically heterogeneous neighborhoods. High crime levels including violent crime can increase the number of home sales in the next year due to increased fear levels when people want out and sell their homes. Home values decrease which contribute to a general process of decline in community experiences. Economic activity is suppressed as there’s a reduction in the viability of businesses, less business expansion, and a decrease in the number of jobs in a neighborhood.

In a new study that tries to measure the economic impact down to the neighborhood level, they found that in

• Minneapolis, one less gun

homicide in the target

census tract in a given year

eliminated 80 jobs and an

additional $9.4 million dollars sales across all business

establishments the next


• In Oakland, every additional gun homicide in a census

tract in a given year resulted

in 5 few job opportunities

the next year.

• In Washington DC, every

additional gun homicide in

a census tract resulted in

2 fewer retail and service

businesses the next year.

Although different in each city, gun violence has some effect of business growth and stability.

Many studies of this type have always focused on homicide rates. This new study also accounted for the impact of gunshots on a community. Several cities have a thing called Shot Spotter which listens for and records the sound of gunshots which is what was used to register the gun shots for this study.

In D.C., 10 fewer gun fire incidents in a census tract significantly associated with 20 jobs in new establishments, one new business opening, 1 going out of business, and $1.3 million more sales at new establishments.

Of course, there are many more gun shots than gun homicides. Homicides cover a very small percentage of gun fire injuries and fortunately not every gunshot results in an injury or death. However, gun shots themselves are a very important factor in counting the fear of residents, business owners, and visitors to a particular neighborhood.

In general, both gun homicides and increased gunshot activity in neighborhoods reduce the growth rate of new retail and service establishments by 4%. Even in neighborhoods that have a baseline level of gun violence, if you have a very sudden unusual increase, these neighborhoods were impacted more than the very similar neighborhoods that didn’t experience the spike in gun violence.

With gun violence we often get stuck in discussions of gun control, or what the police should do. This is a very broad social problem that brings in not just police, hospitals and medical costs, but the entire economy and how it’s affected at the bottom level – retail and service businesses that generate a lot of the jobs in our economy.

To escape this cycle, it’s critical to promote business development, strengthen economic resilience’s of communities and reduce gun violence. Strong efforts must come from residents and business owners to recognize their strong incentive to cooperate with local government particular to the needs of the community.

Most information in the article is from a podcast interview with Dr. Yasemin Irvin-Erickson of the Urban Institute Justice Policy Center.