what is the psychology of this. me personally, if the crime rate is steady, you know on par with the national average, l am skeptical. but if it is high or sky high, why would a normal well off person wanna put themselves in that demographic? thanks for your help.

It is their choice.

If we all had this attitude there would not be any such thing as urban regeneration would there?

Crime statistics r compiled on a city, metro area (or zipcode) basis - so if u build a gated community with CCTV & populate it with yuppies, or set up a lower-tax downtown area for loft conversions & living-over-the-store, they're not going to show up as being comparatively crime-free - even if they are, as they usually are.

Reasons:
- mortgage/rent is more affordable
- ur expectation of a higher return as ur valuation increases
- walk/ bike/ public transit to work/college, do not need car or garage. More environmental. (inner-city blight is kind of an American thing, this is the way it is always been done in Europe)
- for singles, walkable access to downtown, more social life, can not get DUIs
- from the city is point of view, mixed-use zoning reduces the crime rate, esp. burglaries of commercial/industrial areas. It reduces blight like dumping, graffiti, drug dealing. It increases tax revenues & valuations.

It would be fun to try ur hypotheses in Sim City, but crime is not localized.

perhaps it is near to work? Maybe they can get a nicer/bigger house in that area?
Perhaps they like to feel they are ''better'' than people around them.

New York in 1970. People accepted crime as just part of live in the big city..