What is gentrification?

A few years ago, someone asked me to explain what gentrification was and why it was a problem. The following was my response, and I am sharing it now in the hope that it is helpful for others and sparks productive conversation.

A dictionary definition of gentrification is "the buying and renovation of houses and stores in deteriorated urban neighborhoods by upper- or middle-income families or individuals, raising property values but often displacing low-income families and small businesses."

So it is the process/phenomenon of a neighborhood that generally has high poverty being converted bit by bit into a neighborhood with higher income--middle-class or higher. That conversion does not come about by raising the standard of living or incomes of the people who are living in the neighborhood, but by displacing them and replacing them with new residents who already are wealthier.

On the surface, gentrification looks good to a lot of people. Abandoned storefronts become coffee shops and yoga studios, corner liquor stores and payday lenders are replaced by vegan restaurants and float spas. Litter is picked up more often. Broken windows are replaced and repaired, flowers are planted, homes are fixed up, etc. But there is a lot going on below the surface that isn't good. As an economically distressed neighborhood is "discovered" (this sort of colonial language is common and very problematic) and bought up by people with more money, it raises the property and rental values in the neighborhood. That would be great news for the residents if they owned their homes and the commercial properties. Unfortunately, they generally don't.

Many are renters who have been living there in the worse conditions because it was the best place they could afford. The reasons they don't own the properties are manifold. Often, the cycle of poverty has prevented them from ever having enough capital on hand to purchase a home, not to mention the impact of poor credit (a result of poverty) and job instability on the ability to secure a mortgage. Very often, the impacted neighborhoods have large proportions of people of color, and especially black Americans. There are a host of reasons that black Americans are much less likely to own property (e.g. the lack of reparations from centuries of slavery and Jim Crow have meant a major disadvantage in accumulated and inherited wealth from one generation to the next, federal housing policies such as redlining made it effectively impossible for black Americans to buy homes until 1977, black veterans were not given the housing loan benefits in the GI bill for decades, "urban renewal" programs in the 20th century demolished black neighborhoods and built government "projects" that were by their nature rentals; during the build-up to the 2007 Housing Crisis, banks were specifically targeting families of color for misleadingly marketed balloon-mortgages that ended up destroying accumulated wealth in foreclosure, etc.)

When property values begin to rise in a community of renters, the long-time poorer residents of the neighborhood suddenly find that their rapidly rising rents more and more difficult to afford. They can try to stay and pay the higher rent, but this means that they are now in worse financial shape than before as they are losing more of their income to housing costs. Many will find themselves being notified that they need to move out as their homes are put up for sale by their landlords who see an opportunity to cash in on their investments. The low-income residents have very little chance at being able to buy these properties as they go up for sale.

Aside from the problems I mentioned in being able to buy a home at all, the home prices also start shooting up. The homes that are in bad shape through years of slumlord neglect seem affordable as fixer-uppers (although they will take a lot of money in repairs), but those are some of the least accessible for low-income buyers because they tend not to qualify for mortgages and will go to new investors with cash on hand. Once those distressed properties are cleaned up a bit by the new investors, they go back on the rental market at a much higher price than before or are flipped and sold at a high price.

And so, even as the neighborhood gets a lot of improvements, the long-term low-income residents don't get to enjoy any of the benefits. They are, instead, pushed out into a new neighborhood wherever they might be able to afford something. This also destroys the fabric of the communities that has been woven by long-term residents who have survived by leaning on one another for assistance. So the low-income residents end up worse off because of the neighborhood "improvements".

None of this even touches on the impact on businesses or overt new racism or on the schools in the neighborhood, but those all matter, too. And as I mentioned briefly, gentrification largely means the displacement of people of color by white people, so there are very real racial components to it that actually help reinforce patterns of segregation.

Interestingly, a great deal of data suggests that people in general are better off when communities are made up of people with diverse incomes and wealth. It is good for poor people and middle-class people and rich people to live near one another if they actually interact (there are many ways of living in geographical proximity without ever interacting, though). People at all levels of wealth benefit from neighborhood improvements and investment if they are able to remain in the neighborhood to enjoy those improvements. Because of unchecked market forces and the misguided view of housing as an investment instead of as homes, the only direct method--at present--to preserve or produce economic diversity is to institute actual policies that ensure the availability of low-income housing.