Wanna Help Me Gentrify My Hood?

Gentrification is a term often thrown about to describe communities undergoing a measure of displacement, meaning existing, lower-income residents are being pushed out by rising housing costs. It is my belief, as an urban planner, this term is misused more often than not. The gentrification process is welcomed by some as an organic, largely market-driven force leading to the improvement of communities. Others contend the process reduces affordability and doesn’t necessarily improve communities, but rather drains them of their cultural identity and “white washes” them. The goal of this piece is not to make a point that gentrification is either beneficial or detrimental to a community, but rather to improve the reader’s understanding of the process and promote discussion.

Definition of Gentrification

There are quite a few different definitions of gentrification; they vary depending upon the author’s views on the subject. Most who study the subject contend gentrification is a combination of both social and economic factors and has both positive and negative effects upon the community in which it is taking place. The Merriam-Webster dictionary defines gentrification as follows:

“The process of renewal and rebuilding accompanying the influx of middle-class or affluent people into deteriorating areas that often displaces earlier, usually poorer, residents.”

Causes

Rapid Job Growth

Job growth is a major contributor to the desirability level of a given community. Large numbers of new jobs in an area will spark interest in the residential real-estate market in that community, as many of the workers would prefer to live closer rather than further from their place of work.

Tight Housing Markets

The larger metropolitan area within which the gentrifying community is located must have an extremely competitive housing market in order to spark a true case of gentrification. This particular factor is based on simple economics, as the gentrifying community often stands out like a beacon of affordability within what is otherwise a sea of unaffordable housing. There are four main components to creating a tight housing market in a given metropolitan area:

• Constrained Supply: The metropolitan area must have an extremely limited supply of housing combined with high demand driving prices ever higher.

• Relative Affordability: The community that is gentrifying must be more affordable compared to the rest of the metro area, and located properly to provide the services needed by the wealthier clientele.

• Lucrative Investment Potential: Gentrifying neighborhoods allow investors or speculators to buy property at a cheap rate with a nearly guaranteed return on investment (should the community be actually gentrifying).

• Rent Gap: Supply constraints and speculative gains are further exacerbated when property owners and real estate interests disinvest from inner city neighborhoods creating a “rent gap.”

Location Preference

Certain demographic groups traditionally have preferred to live in urban neighborhoods with easy access to amenities, including vibrant culture and street life, ethnic and racial diversity, distinctive and often historic architectural styles, and close proximity to downtown entertainment and cultural venues. The presence of these amenities helps to identify which city neighborhoods are likely to gentrify. These demographic groups are less likely to have children and may be more able to cope with higher crime rates associated with cities. These populations serve as the first wave of gentrification within a neighborhood. Often, they are accompanied by some measure of revitalization and reductions in crime, which in essence prep the community for a wealthier class of residents to move in and ultimately displace the “creative class” which displaced the original residents.

Traffic Congestion

Centrally located neighborhoods are more likely to gentrify given they have better access to job centers through shorter commutes or access to public transit. This factor’s importance is growing in light of recent developments tied to the high cost, financially, physically, mentally, and emotionally tied to longer commutes and increasing awareness regarding the value of living closer to established job centers. As awareness of the benefits of shortening or eliminating commutes grows, demand for housing in cheaper communities located closer to jobs increases as well.

Public Sector Policies

The single most direct tool used by public agencies to drive (intentionally or not) gentrification is the use of redevelopment tools such as tax increment financing. Communities identified as “blighted” – a very loosely-interpreted term describing how “run down” an area is – qualify for the use of eminent domain to demolish or redevelop areas using loans paid off through assumed future increases in taxes from the community. These were used in downtown San Diego to fund streetscape and infrastructure improvements, which in turn drew upscale residents into areas previously inhabited almost entirely by low-income residents and the “creative class.”

Effects

Displacement

Displacement of low-income residents is one of the defining components of gentrification, and is also the most serious consequence of gentrification. The amount of and nature of displacement seems directly tied to the tightness of the local housing market. In tighter housing markets, displacement is a much larger concern as displaced residents have few options as far as places to live. Renters are more susceptible to displacement given rising property values often bring with them higher rents. Involuntary displacement is most likely to affect the poorest, most ill-equipped residents of a community.

Increasing Tax Revenues

An influx of wealthy residents into a gentrifying community spells increased tax revenue for the City in which the community is located. The City is then able to spend that money on increased services and infrastructure improvements for the community, though this is not guaranteed (unless the community lies within the control of a designated redevelopment agency using tax increment financing).

Changing Street Flavor and Cultural Fabric

Thriving communities need thriving commercial districts, and vice versa. Often, distressed communities vulnerable to gentrification are home to anemic business districts. An influx of higher income residents has a number of potential effects on the street life of a neighborhood. New residents and their purchasing power create potential customers for existing businesses. They stimulate the development of new businesses, which might better serve their own as well as the neighborhoods broader needs. In turn, increased competition for space and the market may lead to higher rents in the neighborhood, which may drive small, locally-owned but marginally profitable businesses out of the marketplace.