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What Does Gentrification Mean for Neighborhoods? – Benefits vs. Negative Effects

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Suppose you’re living in a cheap, somewhat run-down neighborhood in the city. After a while, you notice new people starting to move in: artists, students, same-sex couples, and young folks fresh out of college looking for historic charm at an affordable price. Over time, these newcomers gradually take over more and more of the neighborhood. New businesses catering to their interests – coffee shops, bookstores, and fancy little boutiques – start springing up, and before you know it, you’re living in a trendy neighborhood.

How do you feel about it?

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If you’re like many city residents, you’d see this kind of change, often referred to as “gentrification,” as an unmitigated evil. When many folks see hipsters moving into a neighborhood, they assume it’s about to lose all its character as newer, richer, and usually whiter residents start cracking down on noise and backyard grilling. Before too long, housing prices will rise out of control, and long-term residents – mostly people of color – will be forced out of a neighborhood some of them have lived in for generations.

However, other people in the same situation would look on gentrification with approval. They’d figure that as richer and more educated people move in, crime will fall and property values will rise. The new businesses will add interest to the area, and schools will improve with the influx of more privileged youngsters. The city government might even show more interest in developing the area, adding amenities such as parks and new transit stops.

These two sharply differing views of gentrification have been duking it out in the media over the past several years. In 2014, The Guardian offered a word-for-word transcript of an “amazing rant” against gentrification by filmmaker Spike Lee, who compared it to white settlers killing off Native Americans. Four years later, The Economist countered with a piece supporting gentrification, arguing that “Longtime residents reap the rewards of reduced crime and better amenities.”

The truth about gentrification is more complicated than either view. It can have both positive and negative effects for the people who already live in a neighborhood, and these effects are often different from what either side assumes. Here’s a closeup look at what gentrification can do to – or for – a neighborhood, including the good, the bad, and the ugly.

What Is Gentrification?

The term “gentrification” was coined in the 1960s by sociologist Ruth Glass. She was living in London at the time, where the middle classes were eagerly buying and renovating “shabby” homes in the low-income neighborhoods of Islington and Notting Hill. In the introduction to her 1964 book “London: Aspects of Change,” Glass described this trend as an “invasion” and argued that it was a self-reinforcing process. As more and more middle-class buyers fixed up the old houses, she wrote, the neighborhoods grew in social status “until all or most of the original working class occupiers are displaced, and the whole social character of the district is changed.”

Today, scientists use the term “gentrification” a bit differently. A 2005 paper published in Urban Affairs Review described it as “an influx of the ‘gentry’ or relatively affluent households” into a previously poor neighborhood. However, this isn’t quite the same thing as saying the new, rich arrivals are “displacing” the poor residents. As you’ll see, most modern social scientists think the process is more complicated than that.

Also, as the 2005 paper argues, gentrification isn’t just about money. The people moving into gentrifying neighborhoods aren’t always wealthy; many of them are young professionals with fairly low starting salaries. However, they’re usually more educated than the people already living there, and they tend to have different tastes. In short, they have all the hallmarks of the middle class or upper middle class, which sets them apart from their working-class neighbors.

Finally, at least in America, it’s impossible to talk about gentrification without talking about race. In American cities, the gentrifiers are often white or Asian-American people moving into historically African-American areas. They have different cultural backgrounds, so their presence inevitably changes the cultural character of the neighborhood.

Gentrification & Displacement

Gentrification And Displacement Building Family Kicked Out

Some people assume that gentrification and displacement are one and the same. If “the gentry” are moving into a neighborhood, then this must mean older residents are being forced out.

To some, this process seems natural, even inevitable; as richer (and usually whiter) folks move into a neighborhood, it becomes more desirable to other people of the same class. Landlords start raising rents, and eventually, the locals (usually poor people of color) either get evicted or can’t afford to renew their leases anymore. This was one of the problems Spike Lee complained about in his “rant,” saying that while rising property values may benefit homeowners, “What about the people who are renting? They can’t afford it anymore!”

Displacement in New York

Lance Freeman, a professor of Urban Planning at Columbia University, recalls in an interview with Science Vs how he made much the same assumption when he first saw “more white people walking around” in Harlem. As this historically African-American neighborhood in New York City literally changed its complexion, Freeman thought he was seeing displacement at work, with longtime black residents being forced out due to rising rents.

So, with his colleague Frank Braconi, he set out to explore just how serious this problem was. They looked at data from a vast survey of thousands of NYC homes during the 1990s, a period of rapid economic growth in the city. They compared figures from different parts of the city to see how much more likely people were to move out of homes in gentrifying neighborhoods as compared with the rest of the city.

To Freeman’s surprise, the answer was “not at all.” In fact, their 2004 study on the subject, published in Journal of the American Planning Association (JAPA), found that “poor households residing in one of the seven gentrifying neighborhoods were found to be 19% less likely to move than poor households residing elsewhere.”

Displacement in Other Cities

Of course, New York is unusual, as cities go, because it places limits on how fast the rent for a given apartment can rise. A 2006 paper in Urban Studies argued that this type of rent regulation was one of “the main buffers against gentrification-induced displacement of the poor.”

However, several studies from other American cities, and from other countries, bear out the idea that the link between gentrification and displacement is, at most, a weak one. These include:

  • Vigdor, 2002. A 2002 paper by Jacob L. Vigdor of Duke University, published by the Brookings Institution Press, looked at gentrification in the Boston area between 1970 and 1998. Vigdor found that, in general, there was “no evidence to suggest that gentrification increases the probability that low-status households exit their housing unit.” Poor families were more likely to rise out of poverty than to be pushed aside by richer families.
  • Freeman, 2005. Following up on his earlier work, Freeman published a piece in Urban Affairs Review in 2005. This time, he looked at data for the nation as a whole and compared gentrifying neighborhoods to low-income neighborhoods that did not gentrify. He found that people in gentrifying neighborhoods were, at most, about 0.5% more likely to move than those in non-gentrifying neighborhoods.
  • NBER, 2008. In 2008, the National Bureau of Economic Research published a paper by three scientists working for the U.S. Census Bureau. Looking at nationwide data from the 1990 and 2000 Census, they found “no evidence of displacement of low-income non-white households in gentrifying neighborhoods.” (This paper later appeared in the Journal of Urban Economics.)
  • Ellen and O’Regan, 2011. In a 2011 piece in Regional Science and Urban Economics (RSUE), Ingrid Gould Ellen and Katherine M. O’Regan used data from the American Housing Survey to study “patterns of change in low-income neighborhoods in metropolitan areas.” They found “no evidence of heightened displacement” in these neighborhoods, even for “the most vulnerable, original residents.” In fact, they found, like Freeman in 2004, that “units located in large gain neighborhoods” – that is, areas with large increases in average income – “were slightly less likely to be vacated than units in non-gaining neighborhoods.”
  • Urban Studies, 2015. In 2015, three academics at Columbia, including Freeman, published a paper in Urban Studies looking at gentrification and displacement in England and Wales. Based on data from the British Household Panel Survey and the U.K. census, they found “no evidence that mobility rates are higher in gentrifying neighbourhoods or that low-income or working-class individuals are more susceptible to moving from gentrifying neighbourhoods.”
  • Urban Displacement Project, 2015. The Urban Displacement Project explores gentrification and displacement in the San Francisco Bay area. A 2015 Executive Summary of its work noted that while displacement was happening in nearly half the neighborhoods in the Bay Area, it was just as likely to happen in high-income areas as low-income ones. The authors note that “displacement is often taking place with gentrification nowhere in plain sight.”
  • Federal Reserve, 2016. Three scholars from Princeton University and the Federal Reserve Bank of Philadelphia looked at data for the city of Philadelphia during the years 2002 to 2014. They found that people in gentrifying neighborhoods were slightly more likely to move overall, but there was no evidence that “more vulnerable residents” – people with poor credit or no credit – were any more likely to move out of these neighborhoods than other residents.

That isn’t to say that rent hikes are never a problem in gentrifying neighborhoods. For instance, a 2016 paper by the Furman Center at New York University found that the amount of affordable housing had declined sharply in gentrifying neighborhoods in New York, and the rent burden for low-income households in these areas had increased. And the Philadelphia Fed study noted that, while vulnerable people are no more likely to move out of gentrifying neighborhoods, they’re less likely to move in because there are few units they can afford. Still, there’s a big difference between poor people being unable to move into a neighborhood and longtime residents being forced out.

Gentrification & Cultural Change

Oakland California Chinatown Diversity

Despite all the studies showing gentrification doesn’t actually displace people from their homes, many people continue to assume it does. Freeman and other scholars believe the reason is that, while gentrification doesn’t force out specific individuals, it does change the overall makeup of a neighborhood.

In America, gentrifying neighborhoods tend to become younger, richer, and whiter over time. As a result, the older residents who remain – mostly lower-income people of color – often feel like their neighborhood is being taken away from them.

Population Shifts

According to Freeman, poor people are always more likely than middle-class or wealthy people to be forced to move. Sometimes, they’re evicted for failure to pay the rent; sometimes, they have to move because they can no longer afford their current apartment. This happens just as often in non-gentrifying neighborhoods as in gentrifying ones.

The difference is that, when a low-income family moves out of an apartment in a low-income neighborhood, it’s usually another low-income family that moves in. These new neighbors look and act like the people they replaced and like the other folks in the neighborhood. They have a similar level of income and similar tastes and, at least in the United States, they’re more likely to be people of color living among other people of color. So, even though people are always coming and going, the neighborhood as a whole looks and feels the same.

But in gentrifying neighborhoods, the story is different. If a low-income African-American family moves out of an apartment, the people who move in to take their place are likely to be higher-income whites. Thus, over time, the population of the neighborhood as a whole shifts. In their 2004 JAPA paper, Freeman and Braconi say that a New York neighborhood “could go from a 30% poverty population to 12% in as few as 10 years without any displacement whatsoever.”

In his Science Vs interview, Freeman uses the New York neighborhood of Bed-Stuy as an example: “30 years ago people were moving into Bed-Stuy, [and] people [were] moving out of Bed-Stuy. They were predominantly black and so it might not look like it was changing. Whereas now you see more whites moving into Bed-Stuy.”

In some cases, there can be an influx of new, middle-class neighbors even if no one is moving out. Freeman explains how in several New York neighborhoods, new apartments went up on vacant lots or in converted factories. These new apartments attracted more white residents to these areas, changing their status as historically African-American neighborhoods.

Increasing Diversity

The net result of all this in-migration is that the look and feel of the neighborhood starts to change. A 2009 paper Freeman published in Urban Studies found that gentrifying neighborhoods tend to be more diverse, both racially and economically. Some of these areas were more diverse than other neighborhoods to begin with, but others grew gradually more diverse as they gentrified.

An article at BlackPast.org by Professor Henry W. McGee, Jr. remarks on how this process played out in Seattle’s Central District. According to McGee, this area, “which took seven decades to achieve its racial identity as a predominately black area, has in the last two decades become much more racially diverse.” More white people have moved in, yet “many black residents who can, stubbornly remain,” and “other people of color, including substantial numbers of recent arrivals from Africa, Asia, and Latin America,” contribute to the mix.

To some, this kind of diversity sounds like a recipe for a great, lively neighborhood. However, for many older residents, it leads to a feeling that their neighborhood no longer belongs to them. A 2014 story in Mic quotes residents of South Boston – a historically working-class Irish neighborhood – complaining that “the yuppies have invaded” and “it’s not my neighborhood anymore.” Likewise, McGee notes that the buses he takes to work “have become whiter and whiter,” to the point where “[he is] often the only African American on board.”

Cultural Clashes

One reason longtime residents often look on new arrivals as “invaders” is that these newcomers have different cultural backgrounds. They don’t always understand or respect the traditions of the places they’re moving into.

The bulk of Spike Lee’s tirade against gentrification focused on the many ways newcomers in New York neighborhoods were interfering with neighborhood traditions. For instance, they complained about the noise of people playing African drums in Mount Morris Park – a practice that had been going on for decades – and objected to a proposed party honoring the life of Michael Jackson on the grounds that it would produce too much garbage.

Lee isn’t the only one to observe this problem. Both Science Vs and BuzzFeed News talked to residents of gentrifying neighborhoods who said their new, wealthier neighbors had been calling the police to complain about things that they’d been doing for years before the newcomers arrived. The “problems” they reported included a nightly game of dominoes between Hispanic residents in Harlem, an 8-year-old girl in Harlem selling bottles of water on the street without a permit, and two African-American men having a barbecue in a park in Oakland, California.

To see whether “nuisance” complaints like these are really more common in gentrifying neighborhoods, Meryl Horn of Science Vs ran an analysis of calls to 311, a non-emergency police line in New York City. After sifting through data for more than 600,000 calls over a six-year period, Horn found that noise complaints rose 70% faster in gentrifying than in non-gentrifying neighborhoods.

Calls to police often create tension between newcomers and longtime residents. Rory Kramer, a sociology professor interviewed by Science Vs, explains that “traditionally working-class” people tend to see police as “aggressive” toward people like them, sometimes with good reason. Several people of color interviewed for the BuzzFeed story said they felt harassed and frustrated by the constant police presence.

New Construction Sold Homes Gentrification Abandoned Tear Downs

Some people argue that the money gentrification brings into a neighborhood is a good thing for long-term residents. They point out that gentrification raises property values, attracts new businesses and new development, creates jobs, and raises incomes.

But others counter that most of these so-called benefits actually go to newcomers in gentrifying neighborhoods and don’t really help the people already living there. Once again, there’s some truth to both sides of the story.

Property Values

The question that initially set off Spike Lee’s anti-gentrification rant came from an audience member at a Black History Month event in Brooklyn, who pointed out that gentrification can raise property values in historically black neighborhoods. This person claimed a family that had bought a home in Bed-Stuy years ago for $40,000 would now be sitting on an asset worth $3.5 million to $4 million. In this way, gentrification could be a means of “wealth creation in the African-American community.”

There’s no doubt that gentrification pumps up property values. However, this doesn’t help most long-term residents in gentrifying neighborhoods because they don’t own their homes.

A 2007 study in Urban Affairs Review looked at two neighborhoods in Portland, Oregon that experienced “skyrocketing housing prices” due to gentrification. It found that, before gentrification started, only 41% of the units in one neighborhood and 25% of the units in the other were owner-occupied. Thus, less than half the residents in one neighborhood, and only a quarter of the residents in the other, had a chance to cash in on the increased prices.

Even for homeowners, exploding property values can have a downside. As property values go up, so do property taxes, making it more expensive for low-income homeowners to keep the homes they’ve owned for years. However, according to a 2016 study in Urban Affairs Review, it’s pretty rare for homeowners to be forced out of a neighborhood by rising property taxes. It can occur in areas where property taxes are especially high, but the authors found no evidence that it’s more likely to happen in gentrifying neighborhoods.

Local Businesses

Another potential upside of gentrification is that it can bring new businesses to an area, boosting the local economy. However, some critics of gentrification argue that these are mostly trendy, hipster-friendly businesses such as dog groomers, yoga studios, and pricey boutiques, which aren’t useful to older, working-class residents. Meanwhile, they claim, existing local businesses are being forced out because their owners can’t afford higher rents.

Several studies have found that gentrifying neighborhoods do indeed attract new businesses at a higher rate than non-gentrifying areas. These include a 2011 article in Economic Development Quarterly, a 2012 piece in RSUE, and a 2017 report from the office of the New York City Comptroller, which found that “of the ten New York neighborhoods experiencing the fastest business growth between 2000 and 2015, all but one was a gentrifying neighborhood.”

Moreover, these new businesses aren’t all chichi little boutiques. A 2016 piece in Cityscape found that in New York City, gentrifying neighborhoods were more likely to gain new grocery stores, drugstores, full-service restaurants, and doctor’s offices than non-gentrifying areas. The report also found that existing local businesses were no more likely to close in gentrifying areas than in other places.

Jobs

In theory, new businesses in an area should bring new jobs, and several studies confirm that this happens in gentrifying neighborhoods. The 2012 RSUE study found that when the average income in an area is rising, retail jobs increase. A 2014 paper published in RSUE also found “a small, yet uneven amount of employment growth” in gentrifying areas, with restaurant and service jobs increasing while manufacturing and wholesale jobs declined.

A 2017 paper in RSUE looked at this question in more detail, trying to find out whether gentrification actually creates jobs in the immediate neighborhood. It found that the neighborhoods where income was on the rise actually lost jobs at an average of nine jobs per year, or about 10% of all the jobs in a typical neighborhood. However, areas within one to two miles of the gentrifying neighborhood gained 10 to 21 times as many jobs as the immediate neighborhood lost.

Of course, the fact that new jobs are being created doesn’t necessarily mean these new jobs are going to local residents. So far, there hasn’t been much research to find out whether locals are more or less likely to keep their jobs when an area gentrifies. However, the 2017 paper found that areas close to a gentrifying neighborhood tended to gain “goods-producing and low-wage jobs,” which are the kind of jobs that are easiest for less-educated people to get.

Income

Naturally, as wealthier people move into an area, the average income in the area goes up. However, there’s some evidence that the people already living in gentrifying neighborhoods can see a boost in their income as well. The 2011 RSUE study by Ellen and O’Regan found that about 21% of the rise in average income in gentrifying neighborhoods came from income gains for people who already lived there.

However, this doesn’t necessarily mean that gentrification is behind these income gains. In theory, gentrification could be creating better jobs and more income for residents. However, it could also work the other way around: Because gentrification tends to lead to higher rents, only the people whose incomes were already rising could afford to stay in the neighborhood.

Gentrification & Schools

Young Boy Going To School Backpack

Some people, including Isabel Gomez of Columbia University, have suggested that gentrification should be good for neighborhood schools. In theory, it could help local schools in several ways. First of all, as property values rise, so will property taxes, which means more money will be available to support these schools.

Second, it could mean more higher-income families sending their kids to these schools. These higher-income students are likely to do better on tests than their lower-income neighbors, bringing up scores for the school as a whole. Also, the other children in the school could get a boost from being exposed to wealthier students and the social and cultural capital they enjoy. And finally, wealthier parents will have more money available to donate to their kids’ schools, providing them with much-needed resources.

Families Opting Out of Local Schools

However, as Gomez points out, all of this will only happen if the gentrifiers actually send their kids to local schools. In many cities, including New York, school choice programs allow parents to send their children to public schools other than the one in their neighborhood. And in places where that’s not an option, these wealthier parents can afford to choose private schools for their kids.

Several studies have shown that families in gentrifying neighborhoods are more likely to opt out of local public schools for their kids. This result has shown up in multiple cities, including:

  • New York City. A 2018 paper from the Center for New York City Affairs at the New School in New York found that more than half of all parents in gentrifying neighborhoods chose to send their kids to an out-of-district school. Some schools in Harlem, Bedford-Stuyvesant, Fort Greene, and Crown Heights had less than 25% of the children living in the school zone actually attending them. As a result, these schools did not reflect “the racial and economic diversity of the neighborhood.”
  • Washington, D.C. A 2017 study by The Civil Rights Project at UCLA found that schools in gentrifying areas remained highly segregated by race. Although 17% of school-aged children in these neighborhoods were white, only 8% of the students in local schools were, suggesting that many gentrifiers were opting out of neighborhood schools. However, the study also pointed out that even though white enrollment in these schools remained low, it had increased more than tenfold between 2000 and 2014.
  • Chicago. A team 2013 paper in City & Community looked at enrollment figures and test scores for Chicago schools between 1993 and 2004. It found that public schools in gentrifying areas saw no improvement in test scores compared with schools in other areas. In fact, in some cases, scores actually rose less than average. The authors speculated that gentrifiers might be reducing enrollment at public schools – either by having no children or by sending their kids to private and out-of-district schools – and thus reducing funding for those schools.
  • Charlotte, North Carolina. A 2017 study in the Review of Economics and Statistics tackled the problem from the other direction. It looked specifically at districts in Charlotte with failing schools and what happens when these districts adopt school choice programs. The authors found that when this happens, not only do more children opt out of the local school, but higher-income families are more likely to move into the neighborhood and housing prices are more likely to rise. In other words, school choice can spur gentrification in these areas.
  • Nationwide. A 2017 paper in Sociology of Education also showed that school choice is a factor in whether an area gentrifies. The authors found that, in states or cities with limited school choice, low-income neighborhoods with a large white population are the most likely to gentrify. However, when there are more school choice options, neighborhoods with more people of color are most likely to gentrify. In the “most racially isolated neighborhoods of color,” expanding school choice increases the chance the neighborhood will gentrify by up to 22%.

Fewer Students, Lower Funds

Even if gentrifying families don’t send their children to the local schools, it would seem that the schools should still benefit from rising property values and the tax dollars they bring. But unfortunately, because of the way schools in many cities are funded, this isn’t the case.

A 2015 article in Grist uses New York City schools as an example. The taxes the city collects for public schools are doled out to individual schools based on how many students they have – a system called per-pupil funding. That means that when parents move into a gentrifying neighborhood but choose not to send their kids to school there, the school loses students and therefore loses money. So, even if the city collects more taxes as a result of rising property values, less of that money goes to the local school.

A 2005 story in The Chicago Reporter explains how this scenario played out in three Chicago neighborhoods: West Town, Lincoln Park, and the Near South Side. It found that as these areas developed, the number of children attending public elementary schools there fell by 18%, even as the number of students city-wide was rising. Many of the new arrivals in these neighborhoods were young professionals with no children, and many families with children moved out once their kids were old enough to start school. Because of the falling enrollment, several schools lost funding and were forced to lay off teachers.

A few public schools in gentrifying areas manage to prosper by becoming “magnet” schools with special curricula or adding gifted-and-talented programs. For instance, School Stories relates how P.S. 8 in Brooklyn went from being a failing school to a highly sought-after magnet school for the arts. That’s good news for these schools, but bad news for other public schools in the area. Every dollar that goes toward funding fancy programs in magnet schools is a dollar that can’t be allocated to other public schools in need.

Gentrification & Crime

Home Burglary Theft Crime

A final argument some people offer in favor of gentrification is that it can reduce crime in a neighborhood. Social scientists have generally found that crime rates, on the whole, tend to be higher in low-income areas. For instance, a 1993 meta-analysis published in Criminal Justice Review of 34 earlier studies found that most of them showed a strong link between poverty and violent crime. A 2014 paper in The British Journal of Sociology said the connection between the two was “well-established,” pointing to several newer studies that reached the same conclusion.

This suggests that as a neighborhood grows wealthier, the crime rate should go down. However, there’s a catch: Many studies also show a link between crime and income inequality. And income inequality is especially visible in gentrifying neighborhoods, where wealthier and poorer people are living side by side. Based on this fact, it could make sense for crime to be higher, rather than lower, in these areas.

There’s no doubt that since the early 1990s, crime rates have fallen sharply in the United States. It’s also true that a lot of gentrification was happening during this period. However, this doesn’t necessarily mean that gentrification was behind the decline in crime. In fact, another 2016 paper from the Furman Center found some evidence that it could be just the opposite: Because of falling crime rates, more educated and higher-income families were willing to move into the cities, resulting in gentrification.

Several studies have dug into the question of whether gentrification can reduce crime, but their findings have been mixed. Some found that crime declined as a result of gentrification, while others found that it rose, at least in the short term. Still others found that some types of crime declined, but others increased.

Cities covered by these studies included:

  • Baltimore. A 1985 report in Urban Affairs Quarterly examined rates of robbery and larceny in Baltimore during the 1970s. The authors found that during this period, gentrifying neighborhoods saw larger increases in robberies than other parts of the city. The authors speculated that the “patchwork” nature of these areas, with low-priced and high-priced housing side by side, could have encouraged theft.
  • Seattle. Many areas in downtown Seattle became gentrified between 1982 and 2000. A 2011 study published by the National Institutes of Health found that in these areas, crime increased slightly in the early stages of gentrification in the 1980s but then fell off during “consolidated” gentrification in the 1990s. Over the long term, crime rates in the gentrified areas fell more than in other parts of the city.
  • Chicago. Three sociologists from the University of Massachusetts Amherst used an interesting approach to figure out which neighborhoods in Chicago were gentrifying. They looked at the increase in the number of coffee shops between 1991 and 2005. They then compared these counts to crime statistics for homicide and street robbery. Their study, published in City & Community in 2011, found that as the number of coffee shops increased, homicide rates fell in all types of neighborhoods. Street robberies also fell as the number of coffee shops rose in mostly white and Hispanic neighborhoods, but in predominantly African-American neighborhoods, they increased.
  • Los Angeles. In 1994, the Northridge earthquake shook the city of Los Angeles, destroying many homes. To help restore the city, the government-sponsored home financing programs that encouraged middle-class and wealthy households to buy homes in lower-income areas. A 2010 study in the Journal of Urban Affairs looked at crime rates in the wake of this program and found that, in the short term, several types of crime increased in the affected areas. Assaults, robberies, auto thefts, and snatch-and-grab thefts from cars all became more common. However, the study didn’t look at what happened to crime rates in the long term.
  • Cambridge, Massachusetts. In 1995, the city of Cambridge abruptly ended its rent-control policies, resulting in a sharp uptick in gentrification. A 2017 paper from MIT Sloan found that in the wake of this gentrification, crime rates in Cambridge fell by 16%. This drop in crime saved the city an estimated $10 to $15 million per year.

As these studies show, the relationship between gentrification and crime is complicated. In general, it looks like it’s not uncommon for crime to rise in a neighborhood when it first starts to gentrify. But over the long term, crime rates typically end up lower than they were before gentrification started.

What’s Worse Than Gentrification?

Abandoned City Poor Destroyed Streets

So far, we’ve looked at how gentrification can both help and hurt a neighborhood. But there’s one more side of the picture to consider: what happens to low-income neighborhoods if they don’t gentrify. Many scholars argue that the problems residents face in these areas are far worse than what those in gentrifying neighborhoods have to deal with.

Consider this: What people hate most about gentrification is the way it drives up rental prices and displaces people from their homes. But according to the Furman Center, displacement is a problem that happens a lot more often in non-gentrifying neighborhoods. Because these neighborhoods are home to the poorest of the poor, people living in them are much more likely to face eviction because they can’t pay their rent. And even though rental costs are lower in these areas, people living there pay a larger share of their income in rent and are more likely to crowd in more than one person for each room.

These neighborhoods have other problems, as well. Studies in Economic Development Quarterly, RSUE, and Cityscape all found that these neighborhoods offer fewer shopping choices: fewer stores overall, less variety, fewer supermarkets and banks, and a smaller proportion of restaurants offering healthy options. A 2015 CityLab piece notes that the poorest areas tend to have worse schools, fewer parks, and fewer public transportation options. And, as noted above, crime rates in these areas tend to be higher.

In fact, the 2016 paper from the Philadelphia Fed argues that this is the biggest problem with displacement from gentrifying neighborhoods. Though people aren’t more likely to be displaced from these neighborhoods compared to other areas, when they are, they’re more likely to end up in worse neighborhoods with poor schools and high crime rates. Of course, that doesn’t make them any worse off than the people who have been living in these areas all along. In other words, while gentrification can cause some problems, the alternative – neglected neighborhoods with concentrated poverty – is a lot worse.

Uneven Investment

CityLab argues that the main reason some neighborhoods gentrify, while others remain poor and run-down, is uneven public investment. City governments can determine which areas gentrify based on where they invest public dollars.

Public projects that can drive gentrification include:

  • Mass Transit. Studies show that people are willing to pay more to live in a transit-friendly area where they don’t need a car to get around. A 2014 piece by Richard Florida of CityLab shows that city dwellers with higher income and education levels tend to “cluster” around transit hubs. It’s not surprising that people are willing to pay a premium for access to transit; research indicates that those who have shorter commute times and spend less time in traffic tend to be happier. The problem is that in many cities, there simply aren’t enough transit stations to serve everyone’s needs. Homes close to these stations are a scarce asset, which drives up their price.
  • Public Schools. A 2015 study from the Federal Reserve Bank of San Francisco notes that a major factor driving housing prices is the quality of the neighborhood schools. The student-to-teacher ratio, the amount of experience the average teacher has, and the test scores for grades 3 and 5 are all closely linked to property values. The 2015 CityLab article notes that wealthy suburbanites flocking back to the cities often create political pressure for city governments to invest more in the schools close to them.
  • Green Space. The Fed study also points to parks and other types of open space as a factor that can raise property values. When a city builds a new park or invests in fixing up an old one, it attracts wealthier residents to the neighborhood. The 2014 CityLab article notes that waterfront developments are particularly likely to attract “advantaged knowledge workers.”

When towns invest in projects like these in an area, it attracts more wealthy people to that area. The money and influence they wield then encourages the town to invest still more in this area while neglecting poorer neighborhoods. Spike Lee remarked on this phenomenon in his anti-gentrification speech, asking, “Why does it take an influx of white New Yorkers in the south Bronx, in Harlem, in Bed-Stuy, in Crown Heights, for the facilities to get better?”

Addressing the Problem

Florida argues that if city governments invested more money in the poorest neighborhoods, it would kill two birds with one stone. First, it would help raise these areas out of the persistent poverty that plagues them. And second, it would attract more middle-class and wealthy residents to these neighborhoods, instead of funneling them all into a few gentrifying areas and driving up rents there.

However, he cautions that this solution isn’t a quick or easy one. Building a little affordable housing here or there can be helpful, but it won’t be enough to fix the problem. Instead, it will take “a different and far more extensive set of public investments,” which in turn will require higher taxes that most residents probably won’t be willing to pay. So, in the end, our cities will probably remain divided, with gentrification jacking up the rent in some areas while others remain sadly underdeveloped.

Final Word

Clearly, gentrification can bring some problems to an area. While it doesn’t displace all that many people, those who do get displaced end up in much worse circumstances, while those who stay are likely to pay higher rent and clash with new residents over cultural differences. Yet for those who can handle these problems, living in a gentrifying neighborhood also has its perks. Residents are likely to gain more shopping options, more nearby jobs, and possibly lower crime rates.

One thing gentrification definitely does, in the words of Science Vs’ Wendy Zukerman, is “force tough realities into the spotlight.” Having low-income people living side by side with the middle-class and wealthy creates more tension than having rich and poor segregated into their own neighborhoods, invisible to each other. For people living in these neighborhoods, this can be a challenge but also an opportunity. If the new, wealthier arrivals and the lower-income locals can be open to each other, both groups can learn from each other.

For newcomers moving into a gentrifying neighborhood, probably the most important thing is to learn about and respect local traditions, such as the drumming in Mount Morris Park or the nightly domino games in Harlem. For people used to a quieter neighborhood, this can take some getting used to. But, after all, it’s this kind of local color that gives a neighborhood its character.

As for older residents, they can smooth the transition by trying not to see new residents as “invaders” simply because they look different or have different tastes. If a new bagel shop moves in next to a local bodega, that just means more places in the neighborhood to grab a bite to eat. Having more options doesn’t destroy the culture of the neighborhood; it enhances it.

Have you had any experiences with gentrification? Do you see it as a positive or a negative thing for a neighborhood?

Amy Livingston
Amy Livingston is a freelance writer who can actually answer yes to the question, "And from that you make a living?" She has written about personal finance and shopping strategies for a variety of publications, including ConsumerSearch.com, ShopSmart.com, and the Dollar Stretcher newsletter. She also maintains a personal blog, Ecofrugal Living, on ways to save money and live green at the same time.

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