The older residential parts of every city deteriorate physically as the buildings get old and outdated. Houses and apartments that were once fine become less attractive over the years, and many people who can afford to move to newer and better neighborhoods do so. Sometimes it is the younger generation, not the older folks, who move and who establish their homes in other communities. "As the higher-income groups move out or are replaced, the housing comes to be used by successively lower-income groups. Often the older properties are not well maintained, and in order for the lower-income groups to afford this housing, they must crowd up much more than the structures were originally designed to accommodate," According to historian Marion Clawson.

Over the years, residential communities tend to be settled according to the economic class and income levels of their occupants. The process of sorting out urban residential areas by income class is complicated by racial consideration. "All major American cities now have a largely Black (and/or Hispanic) core, with largely or wholly white suburbs." (Clawson) The end result in this neighborhood life cycle is slums. People who can afford to move out of rundown neighborhoods do so, and lower income people increase in deteriorating housing areas. Clawson argues that a vicious cycle is set up, a process that feeds upon itself and creates the slum.