The Cause and Effect of Gentrification in Developed US Cities

Abstract

This study will review the cause of gentrification and its positive and negative impact on urban development. In many developed cities in the US, the cost of home skyrocketed due to many reasons. One reason being the growth of high paying jobs from many conglomerate corporations. My approach will focus on the increase in property value and the displacement in major US cities. I will analyze the benefits of growth and development but also review the negative impact on social and income inequity. In this report, we will review the literature regarding the perspective on displacement due to gentrification in America. This paper is a conceptual analysis with the following purpose:

  • Analyze the positive impact of revitalization and the negative impact gentrification in states with rapid urban development.
  • Introduce and interpret “gentrification.”
  • Explain the public administration’s role in dealing with the negative impact of gentrification.
  • Conclude major findings in the literature and public administration overall.

 

Keywords: gentrification, displacement, urban development, revitalization, inequity in housing, social segregation, income gap

 

 

Urban development and revitalization bring benefits and advancement for many communities if done correctly. Retail development can revitalize corridors and service an attraction for further public and private development. The benefit of these developments also raises local and state tax revenues, with minimal expenditures (Chapple & Jacobus, 2018). Successful commercial development can make a low-income neighborhood more attractive and desirable for others, which will turn into a mixed-income neighborhood that introduces diversity. Furthermore, it can trigger an increase in property values, create jobs, and promote entrepreneurship.

Proponents of retail development programs cite a wide range of sometimes conflicting reasons as sometimes revitalization leads to the displacement of lower-income households. This happens most commonly in cities rather than the suburbs as most of the homes are rented, not owned. New middle and upper-income residents are able to afford a higher rent; landlords who see the opportunity, typically driving out lower-income renters. Segregation between home-renters and home-owners increased in most metropolitan areas (Owens, 2019).

Gentrification has many negative connotations with it; as a metaphor, the word serves as a synonym that comes with a sense of danger and allusion that undermines living security (Redfern, 2003). Social class plays a major role in gentrification; gentrifiers, those who come into an already inhabited place by turning it into a place of their own. Scholars have devoted volumes to analyzing neighborhood decline, subsequent revitalization, and gentrification as a result of government, market, and individual interventions

Incumbent upgrading for commercialization and urban development catalyzes existing residents to make improvements. They may stay and reap the benefits of neighborhood revitalization, whereas, in gentrification, they can be displaced as the social and economic environment shifts (Zuk, Bierbaum, Chapple, Gorska, & Loukaitou-Sideris, 2018). Income inequality has been increasing in the United States in recent decades. In the early 2000s, the income, after adjusted for inflation, of the bottom 20% Americans increased only by 12%, while that of the top 20% Americans grew by about 67% (Watson, 2007). As socioeconomic segregation increases, it contributes to the increase in advantages of the dominant group and disadvantages of the oppressed (Quillian & Lagrange, 2016).

Chiara Valli’s qualitative research study (2015) documents the displacement induced by gentrification. She believes exploring the experience of low-income and long-time resident of a gentrifying neighborhood, we can truly understand what displacement really is and the economic and social inequalities behind it. A result of gentrification is displacement. The word displacement, in addition to the act of losing space, comes with an emphasis from those who are losing a sense of security and options; it also highlights their anxiety (Redfern, 2003).

“When I say you can SEE the gentrification, I mean you can see it in the prices, the clothing people wear, the things people talk about,” one of the interviewees from Valli’s research (2015) said.

“I’m losing my home because I don’t make enough to live here, because there are people who have more money than me,” said another interviewee. “I don’t mean anything; my likes and what I think don’t have a place at the table anymore.”

There are over 50 metropolitan areas with a population of more than 1 million in the United States (Quilliam & Lagrange, 2016). Overall, there is substantially large statistical support of income segregation in American cities. Low-income neighborhoods are disproportionately located in cities, while, on average, suburbs are more affluent. Many gentrification studies have been most commonly conducted in New York, Chicago, Boston, and San Francisco (Chapple & Jacobus, 2018). Based on the Census data, the evidence of the extent of housing segregation can be seen by type and by cost at multiple geographic scales in large metropolitan areas in the United States. An article in GeoJournal has found a positive correlation between segregation and morality for the U.S. metropolitan area, and that income segregation could not be considered in isolation from income inequality; it is in fact, income inequality provides the propensity for segregation (Ross, Nobrega, & Dunn, 2001).

California’s housing market is so large that it now accounts for a third of the nation’s housing market value. However, not all existing residents can keep up with the market increase. In San Mateo County, tenants report abuse and harassment from landlords prior to being evicted and priced out by market forces. Approximately a third of the displaced households reported homelessness or marginal housing in neighborhoods with fewer job opportunities and longer commute in the next two years (Marcus & Zuk, 2017). Orange county itself accounts for over 5,000 homeless people.

In 1981, National Institute of Advanced Studies published a survey on current and former residents at a rapidly revitalized neighborhood in San Francisco; researchers find that “from 1975 to 1979, the displaced population was more likely to be African American, less educated, poor, renters, elderly or with disability, and living alone in comparison to in-movers and residents who stay.”

Ann Owen, associate professor of Sociology, finds that similar situations can be seen in New York, the Empire State, as well. New York metropolitan areas have among the highest levels of housing segregation by type, three to five times higher than in the least segregated metropolitan areas, At the border of Queens lies a neighborhood called Bushwick, where one third of the population lives below poverty level with an overwhelming percentage of minorities and only 17% whites (Valli, 2016). This is due to the increase in housing prices at the end of the 1990s, and the nearby neighborhoods went through gentrification, where people with higher income took over and low-income residents were displaced to Bushwick.

Nevertheless, gentrification is happening again in New York, according to Valli (2015). In the early 2000s and more noticeability around 2016, the gentrification started with the opening of businesses and restaurants attracted people who seek in the latest trends. To accommodate them, warehouses were converted into apartments and new condos, even luxury ones, were built (Valli, 2016). To put it in perspective, a studio in Bushwick was $1,700 in 2013 and has increased to $2,300 in 2014. Even the veteran real estate agents deemed the price increase as abnormal. Valli identifies the displacements from the trend in the housing market, which creates pressures on long-time residents.

Policymakers in economically distressed metropolitan areas should be concerned about the effects of over revitalization and segregation due to income equality, including but not limited to the decline of older cities and perpetuation of poverty. Policies that reduce income inequality can help reduce overbuilding and income segregation in distressed areas (Watson, 2007). Moreover, growing disparities between the rich and the poor skew political influences, where the rich and the dominant group can be heard while voice for the public support and advocacy for low and moderate-income people diminishes. This results in inadequate and skewed investment in human capital, and declining affordability of housing for poor and middle-income households.

Researchers have examined “how zoning laws contribute to income segregation. Income segregation is lower in areas with higher population density and high-density development patterns, suggesting that zoning laws that facilitate these patterns reduce segregation” (Owens, 2019). In addition, the office of policy and development research from the U.S. Department of Housing and Urban Development has listed a few ways in their January 2017 report. Table 1 is divided into four sections that give context to these solutions: Table 1

Insights into Housing and Community Development Policy

Key Strategies Description of Policy Tools
Preserve existing affordable housing Rental Assistance Demonstration (RAD), approved by Congress in 2013, could help the private market invest in decent, safe, and affordable housing. The goal is to give public housing agencies a tool to preserve and improve public housing properties by moving units from the public housing program to a more stable funding platform, such as long-term project-based Section 8 contracts like project-based vouchers or project-based rental assistance.
Encourage greater housing development and affordable housing Issues of affordability are widespread and reach beyond the “hottest” coastal markets and gentrifying neighborhoods. Federal and local policies that incentivize greater development of housing can ease pressures on overall housing affordability.
Engage existing community residents As neighborhood change can often take place without regard for the concerns and requests of existing residents, recognizing that housing affordability and residential displacement are not the only concerns and seeking the active participation of residents could capture the buy-in of residents and ensure that other coping strategies are successful.
Take a broader look and using regional, rather than localized, strategies Effective tools will focus on regional coordination, looking above the neighborhood level and beyond housing. The federal government could be particularly helpful in encouraging regional cooperation and coordinating with multiple agencies on issues such as transportation and education.

Note. From “Insights into Housing & Community Development Policy” (pp. 1-2). by the Office of Policy Development and Research. Copyright 2017 by the U.S. Department of Housing and Urban Development.

 

To summarize, revitalizing a neighborhood can bring an increase in market value and promote businesses, but excessively, it can lead to gentrification. Although the displacement discussion in the United States began with the role of the public sector and now has returned to the same focus as most studies agree that gentrification at a minimum leads to exclusionary displacement (Zuk et. al., 2018). Table 2 contains suggested questions that will better address the needs of policymakers, community activists for researchers. It is important to improve the body of research related to public investments, gentrification, and displacement. In some cases, this will need both new data sets and scientific methods, such as Owen’s study; whereas in other cases, it will involve more qualitative methods and measures, such as Valli’s study.

Table 2.

Future Research Questions for the Role of Public Investment on Gentrification and Displacement

1.     How do different types of public investments influence not only neighborhood change but also residential and commercial displacement?

a.     Does the type or quantity of investment matter?

b.     What are the displacement impacts of different forms of public investment and action, not only fixed-rail transit but also streetscape improvements and rezoning, among others?

c.     How does timing matter from early planning phases to investment and implementation?

d.     What is the impact of market-rate versus subsidized housing production at the neighborhood and regional scale?

2.       How do public investments impact commercial change, specifically related to small businesses, employment patterns, affordability of goods and services, and change in clientele? How does this relate to residential change?
3.       What are the social, economic, and health impacts of gentrification and residential displacement?
4.       What can planners and policymakers do to mitigate residential displacement? Which types of anti-displacement strategies are most effective?

Note. From “Gentrification, Displacement, and the Role of Public Investment” (p. 44), by M. Zuk et. al. Copyright 2017 by the Journal of Planning Literature.

Until the methodological challenges and these additional research questions are addressed, these researches on gentrification and displacement will prompt no actions from policymakers and only have limited application in proper revitalization and stabilization of neighborhoods to prevent gentrification. Although perhaps not a silver bullet, research addressing those questions can shed light on reducing housing segregation and developing adequate housing policy.

 

 

References

Chapple, K., & Jacobus, R. (2008). Retail Trade as a Route to Neighborhood Revitalization. In M. Turner, H. Wial, & Wolman, H. (Eds.), Urban and Regional Policy and Its Effects. Washington, DC: Brookings Institution Press.

Marcus, J. & Zuk, M. (2017). Displacement in San Mateo County, California: Consequences for Housing, Neighborhoods, Quality of Life, and Health. Institute of Government Studies: Research Briefs. Retrieved from https://escholarship.org/

National Institute for Advanced Studies. (1981). Market Generated Displacement: A Single City Case Study. Washington, DC: Arthur.

Owens, A. (2019). Building Inequality: Housing Segregation and Income Segregation. Society for Sociological Science, 6, 497-525. http://dx.doi.org/10.15195/v6.a19

Quillian, L. & Lagrange, H. (2016). Socioeconomic Segregation in Large Cities in France and the United States. Springer Nature B.V., 53(4), 1051-1084. https://doi.org/10.1007/s13524-016-0491-9

Redfern, P. A. (2003). What Makes Gentrification ‘Gentrification’? Urban Studies, 40(12), 2351–2366. https://doi.org/10.1080/0042098032000136101

Ross, N., Nobrega, K., & Dunn, J. (2001). Income segregation, income inequality and mortality in North American metropolitan areas. GeoJournal, 53 (2), 117-124. Retrieved from https://www.jstor.org/stable/41147593

U.S. Department of Housing and Urban Development. (2017). Insights into housing and community development policy. Retrieved from https://www.huduser.gov/portal/sites/default/files/pdf/Insights-Ensuring-Equitable-Growth.pdf

Valli, C. (2015). A sense of displacement: Long-time residents’ feelings of displacement in gentrifying Bushwick, New York. International Journal of Urban and Regional Research, 39(6), 1191-1208. doi:10.1111/1468-2427.12340

Watson, T. (2007). New housing, income inequality, and distressed metropolitan areas. The Brookings Institution. Retrieved from https://www.brookings.edu/research/new-housing-income-inequality-and-distressed-metropolitan-areas/

Zuk, M., Bierbaum, A., Chapple, K., Gorska, K., & Loukaitou-Sideris, A. (2018). Gentrification, Displacement, and the Role of Public Investment. Journal of Planning Literature, 33(1), 31-44. doi:10.1177/0885412217716439

 

 

 


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