Quit Screeching About Gentrification
People who screech about gentrification as a terrible thing should take a peek at some findings about it. Kriston Capps writes in a July 2019 piece at City Lab:
For those original renters and homeowners who stick around, the benefits of improving neighborhood conditions are several. Gentrification reduces the exposure of original residents to poverty, which is tied especially to healthy outcomes for children. For less-educated renters, gentrification appears to be absolutely responsible for reduced exposure to poverty: The baseline change for poverty exposure within this group was zero.While any traditional narrative about gentrification involves rents spiking for poor residents, the Philly Fed paper upends that expectation. "[S]omewhat surprisingly, gentrification has no effect on reported monthly rents paid by original resident less-educated renters," the paper finds. Instead, it's the more-educated renters that shoulder higher rents. The researchers can rule out renter subsidies as a way of explaining this divide in rent increases. (Housing vouchers aren't increasing, that's for sure.) Rental-market segmentation may be the best explanation here: Higher earners are paying more to stay in neighborhoods with better amenities, while lower-income households pay the same for low-quality housing.
"These results caution against using simple neighborhood median rents when studying gentrification, as is almost always done," the researchers warn.
Another way to think about displacement is to consider the share of original residents who stay. Less-educated renters and less-educated homeowners each make up 25 percent of the population of neighborhoods in the study. Of these groups, 30 percent of the renters and 60 percent of the homeowners stick around in gentrifying neighborhoods. Both less-educated and more-educated homeowners who stayed in place saw increases in home values (with greater gains going to the better educated). There is no effect for homeowners who leave.
Not all the changes wrought by gentrification count as improvement! The paper acknowledges that rising property taxes can be difficult for existing homeowners to afford, for example--although the researchers still put higher values in the win category for homeowners. While moving from a gentrifying neighborhood may not lead to observably worse outcomes, the act of displacement itself, leaving behind family and community, packs negative social and psychological effects, as the researchers recognize. Culturally, gentrification involves neighborhood changes that can lead original residents to feel that they don't belong.
Oh, and by the way:
Change in urban areas is more the result of in-migration than out-migration. Over generations of decline and disinvestment, some neighborhoods became so depopulated that any signs of new development and economic revival seem starkly transformational....But what if direct displacement is less common than all the hyper-visible changes to a neighborhood's fabric might appear to indicate? And also, less severe? That might reorient the debate around policies that are truly harmful to low-income residents and vulnerable households. And also the fights over how to solve those problems.
"Overall, we find that many original residents, including the most disadvantaged, are able to remain in gentrifying neighborhoods and share in any neighborhood improvements," the paper reads. "Perhaps most importantly, low-income neighborhoods that gentrify appear to improve along a number of dimensions known to be correlated with opportunity, and many children are able to remain in these neighborhoods."
A few years ago, we took a bus tour of Manhattan. The tour guide was a guy who grew up in Harlem. Part of the bus route went up into the area around Columbia University, which is redeveloping. Someone asked the tour guide what he though of the gentrification. "I'm all for it", he said. "My uncle lived here all his life. When the neighborhood redeveloped, he sold his house and made out like a bandit. He's got a nice place in Queens now."
Cousin Dave at January 7, 2020 6:01 AM
In Chicago if you head west on Division street from I94, you pass a recently gentrified neighborhood that is bustling with activity. Upscale restaurants and shops. This means jobs. About 2 miles farther you come to a rundown area. half the store fronts are boarded up and those that remain are low-profit businesses. There are few people out and those that are hang on the corner drinking. Few jobs exist there. Any time you have a neighborhood with more business and thus more jobs, rents will go up. The complaint about gentrification seems to want poor neighborhoods to continue to deteriorate until they are 100% boarded up.
cc at January 7, 2020 9:11 AM
I moved into an town at the tail end of the gentrification process. To me the little old Italians that were still here when I moved in seemed real happy that their modest investments from 50 years ago had turned into a perfect retirement nest egg.
Shtetl G at January 7, 2020 10:24 AM
Is the next generation able to move in, though?
My neighborhood in my home town of Newton, MA was aristocracized. It was already a posh town of doctors, professors, and lawyers. But now the only people who can move in are investment bankers and the like. Most of my friends who stayed in the Boston area do not live there, even though they have jobs comparable to their parents jobs. They got bumped down a notch and live in towns that were middle middle class and are now upper middle class.
This wealth has not made Newton a more interesting place.... Newton Center used to boast a movie theatre, hardware store, grocery store, in addition to all the cute little boutiques and restaurants. Now it is mostly banks because other shops can't afford the rent. There are still restaurants and boutiques, but less than before.
So yeah, everyone's parents are still there, but the generation that grew up there for the most part can't afford it (with exceptions of course).
Is something similar happening in the poor neighborhoods?
NicoleK at January 7, 2020 10:25 PM
Nicole, it sounds like you're talking about a working-class neighborhood that gentrified. Of the examples of gentrification that I'm familiar with (here, Atlanta, a few other places), that isn't what I've seen happen. The neighborhoods that I've seen were ones that had fallen to complete-slum status, with lots of abandoned houses and buildings, and no stores of any kind except liquor and tobacco stores. Some people who grew up in those neighborhoods were nostalgic, but the things that they were nostalgic for had ceased to exist long before the urban pioneers showed up.
Cousin Dave at January 8, 2020 6:20 AM
No one I went to school with live in the same neighborhood as they grew up. Most of them do live near each other, but they moved to a different area to do that. The old neighborhood did gentrify a bit. People knocking down two houses to build a McMansion and such. But it really isn't much more than when people were kids. Just the usual inflation effect.
As for the old stores, yes they are all gone. Replaced with new stores. The truth is companies and businesses don't last that long. They die and new ones come to take their place all the time. That is just how life goes.
Ben at January 8, 2020 9:07 AM
I feel sorry for the gentrification troops stationed in San Francisco. They sometimes can see the working-class people they've displaced living in tents under the freeway.
So unsightly.
Gog_Magog_Carpet_Reclaimers at January 8, 2020 9:52 AM
Are you from Newton, Ben?
Because the house my parents bought in '83 is estimated at 12x the price (based on similar properties in the neighborhood)... that's not normal inflation. I don't see how this can continue, people's salaries haven't gone up 12x.
And I'm not talking the people who left for New York or San Francisco... the people who stayed and WANTED to live in the same town, for the most part, couldn't.
And the nearby towns that were considered working class are now where the professional class goes. And so on down the income ladder.
I don't know what the bottom people are doing.
NicoleK at January 8, 2020 10:31 AM
I was talking about Richardson, TX. It's a suburb of Dallas. But it isn't anything special. You'll find the same story most anywhere. As for the bottom people, they are doing the same thing they've been doing. This isn't anything new.
Ben at January 8, 2020 1:47 PM
To be clear my point was that my old neighborhood didn't gentrify. Without gentrification the same thing happened there.
Ben at January 8, 2020 4:07 PM
"For those original renters and homeowners who stick around"
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How many do that - how many stick around when interested parties purposely let an area decay?
- When banks "redline" an area, no longer issuing loans, to starve small businesses and home renovations.
- When corrupt officials let criminal elements take over.
This is how many neighborhoods are cleared for gentrification. My mom fought redlining in the Bronx and other areas of New York City. We saw it close up.
Most original residents see their communities and lifetime investments destroyed, and then are forced to walk away.
Ben David at January 9, 2020 9:56 AM
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