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Gentrification: Don't Believe the Hype
Alex Steffen, 9 May 05

One of the supposed problems with smart growth approaches to creating more urban density is thought to be that smart growth drives gentrification, and that gentrification, in turn, destroys low-income communities, with a wave of affluent newcomers displacing the original residents. Everyone's heard it, so it must be true, right?

Wrong, says Lance Freeman, who found, in a nationwide study of U.S. neighborhoods, that gentrification drives comparatively few low-income residents from their homes:

Freeman and Vigdor say gentrification has gotten a bad rap. When they studied New York City and Boston, respectively, they found that poor and less educated residents of gentrifying neighborhoods actually moved less often than people in other neighborhoods — 20% less in New York.

For his national study published this year, Freeman found only a slight connection between gentrification and displacement. A poor resident's chances of being forced to move out of a gentrifying neighborhood are only 0.5% greater than in a non-gentrifying one.

Housing affordability is still a problem. Local (and regional) governments should still insist on fair housing policies and mandate the creation of low-income and affordable units (such mixed-income developments are critical for building good neighborhoods as well). But gentrification may be less of the crisis we've imagined.

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Comments

I've never understood the arguments against improving neighborhoods.


Posted by: Joseph Willemssen on 9 May 05

The conclusions presented from this survey are just plain wrong. As the authors themselves said, "Rising housing costs in gentrifying districts may ensure that poor residents who do move leave the neighborhood, rather than settle elsewhere in it."

This was my personal experience, and that of many friends, in San Francisco. In the face of low vacancy rates, and a housing shortage in Silicon Valley, there are huge pressures in San Francisco. Rent control (coupled with just cause eviction law) is the only protection most renters have. And many people have been evicted in spite of that via loopholes in the just cause laws.

This study, unfortunately, is presented as simply saying that gentrification is not a problem. You could just as easily conclude that strong rent control can be a successful means of preventing much of the forced displacement caused by gentrification. Unfortunately expanding families are still stuck with overcrowding or leaving the neighborhood. And in gentrifying neighborhoods those with a little more money will do what they can do must take advantage of loopholes in those laws, forcing others out in order to eke out a little stability for themselves.

The solutions all have to do with building more housing while eliminating sprawl and suburbanization. But in the current econimic, regulatory & cultural climates the real estate industry finds subdivisions easier and perceived them as more profitable.


Posted by: Hank on 9 May 05

Hank,

I'm a little confused about what you are suggesting. You say that "strong rent control can be a successful means of preventing much of the forced displacement caused by gentrification." yet later you say that "the solutions all have to do with building more housing while eliminating sprawl and suburbanization." What I don't get is how these things can reasonably be considered together. Rent control has a tendency to reduce housing supply, as developers no longer have an economic incentive to build new housing, and have increased incentive to convert existing housing to more profitible uses. Rent control benefits the few who are lucky enough to get housing at below market rates, but it hurts both landlords and renters who would like to rent in the city, but can't because of a shortage of housing. It can also be argued that it hurts the environment, by "forcing" excess development of rural and suburban areas at the expense of increased urban development. I agree that housing affordibility is a problem, but I think that direct subsidized housing for low income people, is probably a better solution than rent control.

-Dylan


Posted by: Dylan on 9 May 05

Dylan-
For good or for bad, gentrification causes displacement. That is what's wrong with how this study has been presented We could argue for days about what the best thing to do is, and I have my opinions. But I don't like misleading or false data being used to justify things.

Given all that, I actually agree with you somewhat. Rent control is a band-aid, not a long-term solution. As I said at the end, the biggest problems have to do with real estate politics and NIMBYism. In the Bay Area, wealthy suburban areas are creating jobs, but don't want to build urban areas or much more housing at all.

In the San Francisco region, the areas with the biggest job growth are not only not building enough housing, what they do build is mostly sprawl, with almost no new denser neighborhoods. Those areas do not have rent control, so that's not a factor there. This causes housing pressure throughout the region. Is it any surprise that the residents of the more urbanized cities organize to do what they can to defend themselves?

-Hank


Posted by: Hank on 9 May 05

In a given area, there's a ratio of rent (or mortgage) to median wage. People are forced from an area when the rent rises faster than the wage. That's not confined to cities - here in coastal Maine, home values are rising much faster than wages - real estate is bid up by mainly retirees cashing in their real estate in Boston, New York , D.C. and elsewhere. Improving a neighborhood requires more than upgrading the architecture - it requires upgrading the financial prospects of the residents. Rent control doesn't work in the long run, because it discourages investment sufficient to offset depreciation. Coops can invest in neighborhood improvement, minus the short-term-profit motive. This is done in Scandinavia.


Posted by: David Foley on 11 May 05



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