Gentrification – an urban demographic shift in the USA

One of the first definitions of gentrification was put on paper in 1964 by Ruth Glass in London: Aspects of Change. She explained how the middle class “takes over” the housing in working class areas “one by one”.

Glass concludes that “Once this process of ‘gentrification’ starts in a district it goes on rapidly until all or most of the original working-class occupiers are displaced and the whole social character of the district is changed.” Sounds ominous, but is gentrification always so bad? The following looks at the US market for some answers.

Our cities, our future – Urbanization, a trend which shows no signs of abating, will remarkably change the way we live, work, and interact in our communities.

Published on 19.05.2016

The background

Gentrification is generally when a working-class or poor urban area becomes popular for certain middle-class groups, who increasingly take over the area and displace the previous residents.

In recent history, the trend was accelerated when millennials (those born between 1980-2000) started gaining employment and apparently seemed to prefer the engaging cities to suburbs.

There are also financial causes, such as the sub-prime crisis which led many younger, college-educated people to seek less expensive housing in a place they could live without a car.

However, with more urban beautification initiatives and community-led development projects, cities have also become safer and more livable. The flip side, however, is that now that cities are “cool”, they’re becoming too expensive for the lower classes. In fact, suburban poverty now outnumbers urban poverty in the US. *Note: In the US, the laws that protect tenants can vary in different areas. This means that, in some places, it is possible for landlords to raise the rent to an unpayable level, or to evict tenants directly when they see property value increasing.


The good and the bad of gentrification

Positive Negative
Higher incentive for property owners to increase/improve housing Displacement through rent/price increases
Reduction in crime Loss of affordable housing
Stabilization of declining areas Commercial/industrial displacement
Increased property values Unsustainable property prices
Increased consumer purchasing power at local businesses Displacement and housing demand pressures on surrounding poor areas
Reduced vacancy rates Community resentment and conflict
Increased local fiscal revenues Homelessness
Encouragement and increased viability of further development Secondary psychological costs of displacement
Reduced strain on local infrastructure and services Increased cost and charges to local services
Increased social mix Loss of social diversity (from socially disparate to rich ghettos)
Rehabilitation of property both with and without state sponsorship Under occupancy and population loss to gentrified areas

Source: https://en.wikipedia.org/wiki/Gentrification

Positive side of gentrification

Still, gentrification is not necessarily a pejorative. Some communities are making gentrification work by using mixed-income housing and working hard not to displace the original communities, but to integrate the newcomers in a way that benefits everyone.

For the East Lake neighborhood of Atlanta, Georgia, USA, the developers wanted to do something new and make a difference for a formerly dangerous neighborhood. They replaced public housing with mixed-income housing and set up a non-profit organization that would help improve schools and provide services like job counseling and child care.

Revenue for the program comes from what might seem out of place for the neighborhood: a golf course that’s now a PGA destination.

Listen to a short National Public Radio program on how a neighborhood in Atlanta, Georgia, is making gentrification work.

Will millennials eventually leave cities?

Millennials will soon “leave cities in droves”, according to a recent article in Fortune. It is suggested this is due to a large number of them starting to earn better and, as they establish families, they will choose to move to the suburbs. Nevertheless, it is implied that if cities become more proactive in retaining their residents, the current mixed-income demographic situation could be maintained.

Reaping the benefits

As with all trends, there are positive and negative aspects to gentrification and, while it is a very important challenge to urban equality, it is also an opportunity.

On a positive note, the Federal Reserve of Philadelphia found that poor people in a gentrifying neighborhood are not more likely to move away than those living in a non-affected area. In fact, those who stay in gentrifying neighborhoods reap several benefits like improved credit scores, new job opportunities, and a safer living situation. The Federal Reserve of Cleveland also found that the financial health of residents improves when they remain within the area.

Sources like the Economist, CNN, NPR and The Telegraph are increasingly reporting that, on the whole, gentrification is a positive demographic change: many cities have become safer, more diverse, and it is becoming less common to find poverty segregated off into “bad neighborhoods”.

Gentrification is just one aspect of our urbanizing world: an increasing number of us are living in cities, and cooperation is required to make them great places to be.

In this short report, NPR discusses how recent research is increasingly showing how the good side of gentrification actually outweighs the bad.