Gentrification is the process of improving or renovating a neighborhood, house, or district so that it conforms to a specific socioeconomic taste. Many communities attempt to gentrify areas where lower income levels are present as a way to build equity, encourage business development, and bring in people who have a higher net worth.
When you look at the process of gentrification in the United States, there is a racial component that must be considered. As Spike Lee said in 2014, “Why does it take an influx of white New Yorkers in the South Bronx, Harlem, Bed Stuy, and Crown Heights for the facilities to get better? What about the people who are renting? They can’t afford it anymore!”
The socio-economic structure of the United States is one where the average Caucasian family has more money than the average minority family. When the neighborhood begins to gentrify, white people typically move there and become the majority in the neighborhood. This typically causes a shift in wealth which is seen in property values, real estate development, and business opportunities.
The disadvantages are then experienced by the families who leave these neighborhoods during this process. That is why it is essential for everyone to review these gentrification pros and cons.
List of the Pros of Gentrification
1. You will experience the atmosphere of the community begin to lift.
The people who come into communities have a lot of energy thanks to the gentrification process. These are the folks who grab a cup of coffee on the way to work, film low-budget documentaries about their lives, and try to create experiences that are trendy and cool for everyone. You will find a conversation waiting for you on almost anything regarding current events in these neighborhoods.
2. It creates new options for food, retail outlets, and jobs.
When the gentrification process begins, you will find that new storefronts and buildings begin to pop up all over the neighborhood. This shift in perspective can provide new options for retail opportunities, restaurants, and new hangout spots. It can even be the foundation for new jobs in a community that has been lacking them in the past. As new people begin to come into the area, you will find that the local coffee shops, boutiques, and thrift stores all start to shift their product offerings to create the potential for more revenue.
3. Gentrification can create new housing opportunities.
When the processes of gentrification are emphasized for a community, then you will see buildings developers and contractors buying properties at a low price to improve them over time. This process creates a new environment for the neighborhood, which can attract wealthier buyers that shift the emphasis of the community. You will see new buildings begin to rise from the old, creating an upscale look that encourages recycling, reduces waste, and can even begin to encourage the crime rate to drop in some areas.
4. You will experience cleaner neighborhoods with gentrification.
Communities become attractive to those with higher levels of wealth when there is less rubbish lying around. The process of gentrification cleans the streets of a neighborhood to ensure that there is an appropriate level of cleanliness. Everyone benefits from this process because when trash is left to lie around, that is when pests can begin to start spreading disease.
That’s not to say that poor neighborhoods are filthy. Many are cleaner than what you may find in a typical Middle-Class community. Those who have more wealth can hire better, more effective services to take the available sanitation to the next level.
5. Gentrification creates new activities and events to try.
There are always new opportunities defined in areas that experience gentrification. These neighborhoods typically see an increase in the mixture of interest-centered clubs or events that are often family-friendly. There may be new literature or cycling clubs that can help you just start making new friends. It is an opportunity to try something that would normally be outside of your comfort zone. You even have the opportunity to create new projects that are 100% your own.
6. Public safety gets better thanks to the gentrification process.
When people invest in a new community, they want their streets to be safer. That desire benefits everyone because it creates a higher level of legal enforcement concerning local laws, mandates, and regulations. No one wants to be robbed when they are walking home from work. The same could be said of anyone in any neighborhood at any wealth level. The gentrification process encourages new resources to come into the community that can pay for additional police, neighborhood watch programs, and advanced security systems which protect everyone there very effectively.
7. It doesn’t force the people who live in a community to move away.
Many of the disadvantages that are discussed when looking at the process of gentrification involve the forced removal of households through rent increases or property values over time. A study by the Philadelphia Federal Reserve found that this is not always the case. People living in a low-income household are no more likely to move out of the neighborhood which is gentrifying then from one that is not.
That means there are some distinct advantages available to those who decide to stay. There may be more job opportunities, additional equity in home value, and even an increase in their credit score.
8. Gentrification creates growth opportunities.
People go to the places where the best jobs happen to be. That’s why North Dakota saw an influx in population growth during the years of high oil prices because that was a way for them to earn a better income. Gentrification provides a similar process. In the United States, the cities with the highest rates of neighborhoods that are gentrifying see the highest levels of home equity growth, new job opportunities, and population increase. Charleston saw a 77.5% increase from 2000-2015 in their median home value, rising from $152,100 to $270,000. This process brought in better living facilities, jobs that paid higher, and encouraged people with needed skills to move into the city.
9. It can reduce suburban sprawl within a community.
When communities begin to grow, there tends to be a landgrab that occurs which allows housing developments to start on vacant or underdeveloped properties. As each project begins, it stretches the boundaries of the community even further. That can eventually lead to high levels of sprawl that can become challenging to navigate for everyone. The process of gentrification reduces this issue because it encourages the current structures to improve through upgrades to support more people.
List of the Cons of Gentrification
1. It changes the cultural standards of the neighborhood.
Gentrification isn’t about what new folks can do to help a neighborhood. This process brings change to everyone who already lives in the area that is being gentrified. It would be like having a grocery store selling steaks and pork chops which then starts selling quinoa and kale because someone saw that those foods were healthier. Instead of trying to continue the culture which already exists, it overrides what is already there to cultivate a new standard of normalcy.
2. Gentrification can sometimes make a community poorer.
Although the process of gentrification intends to improve the economic conditions of the community, the opposite can sometimes occur. This change takes a negative form when the new members of the neighborhood have a preference for franchise stores, brand names, and overall convenience. The mom-and-pop shops that typically dominate these areas before they gentrify struggle to stay in business because they cannot compete on the same economy of scale.
You might be able to see a net job increase from this process over time, but it isn’t going to come from local business owners. The new positions will usually pay lower wages than what the mom and pop shops were earning or paying as well.
3. It raises the cost of rent when it happens.
The boroughs of New York City are an excellent example of this disadvantage when gentrification occurs. The current median rent in Brooklyn is over $6000 per month. That is not an entry-level price that the average household can afford in the city. Unless their rent controls placed on the new dwellings that rise when a community is being gentrified, the families that may have lived in the area for generations are suddenly forced to find a new place to live. The newcomers are not trying to merge themselves into the existing community. They want to make it their own.
4. Gentrification replaces the people who built the community.
The primary reason that gentrification becomes a disadvantage for many communities is that it typically replaces the people who built them in the first place. When these people leave, you lose the soul of the neighborhood. Although there are retail benefits to consider, along with extra job opportunities, there is a different experience provided when you replace a mom-and-pop coffee shop with a Starbucks. You are effectively replacing community landmarks with corporate branding.
5. It causes the rich to get richer, while the poor may or may not benefit.
When low-income households leave their neighborhoods, it could be because they received a premium offer for their property, or could also be because their property taxes became too expensive for them due to rising land values. The community which was once close becomes scattered as they relocate. In some cases where the former resident relocated due to rising costs and taxes, they may end up with a longer commute to work or school.
6. Gentrification is a process run by the private sector.
Although there are occasional gentrification processes which are sponsored by local governments, even the situations end up becoming a public-private partnership. The work of gentrifying is almost always run by the private sector. That means the only community outreach programs or low-income household growth that occurs during the process are the efforts that can lead to future profits.
Even companies that have a robust focus on social welfare programs must make a profit in the private sector to stay in business. That means neighbors are constantly changing in these neighborhoods as wealth rises, making it a challenge to hold on to the feeling that this place is a home.
7. It doesn’t offer safety benefits to everyone in the neighborhood.
MIT studied the process of gentrification what it occurred in Cambridge, Massachusetts beginning in 1995. When neighborhoods were gentrified after rent-controlled housing abruptly ended that year, researchers found that there was a 16% drop in crime that offered measurable economic gains. The only problem is that most crime in Cambridge wasn’t caused by the people who lived there – which is a trend that stretches to other communities as well.
Some think that the way that crime reduction gains are achieved often comes at the expense of African-American and Latino households in the United States. They think that the stop-and-frisk policies of the NYPD are an example of this process, and that Caucasians are less often subject to this policy.
8. Gentrification creates a high turnover rate for neighborhoods.
The process of gentrification creates a high turnover rate for households moving into and out of the neighborhoods in question. It is not just the families that are lower and middle-class or below in wealth that followed this trend. The Philadelphia Federal Reserve discovered that when neighborhoods gentrified in the city, it was the people with the highest credit scores, and those with the highest levels of income, that moved out more frequently and at a faster pace. They moved to the wealthier parts of the city or the suburbs. Then the households who couldn’t afford the change moved away as well.
9. It often causes low-income households to move to poorer neighborhoods.
In another example of the rich becoming richer and the poor not so much, the low-income residents of a neighborhood going through gentrification will often find themselves relocating to a poorer neighborhood to find their next home. Those with higher incomes typically go to the community with a better HHI. It’s also more challenging for people with lower paychecks to move into neighborhoods experiencing gentrification in the first place.
10. Gentrification doesn’t always take the history of the community into account.
Using Charleston as an example, when the city’s property values began to rise, the older buildings in the city began to be snatched up on the real estate market. Investors wanted to covert these structures into properties that could offer modern amenities for the people who would eventually move to each neighborhood. Although some restored and upgraded the historical structures to maintain their presence in the city, there were others that were torn down to make way for “something better.”
11. It can lead to higher levels of community conflict.
When new arrivals (often called transplants) come into a neighborhood that is going through gentrification, the marginalization of either group can lead to higher levels of community conflict. There will always be a certain level of resentment that occurs when change happens in a community. Nothing will change that. The issue with gentrifying is that it often feeds class or racial tensions that may eventually move toward violence. That process is then used as a justification to remove the “offenders” from the community, which is almost always those with lower income levels.
12. Gentrification can sometimes happen in reverse.
We often look at the gentrification process as a way for communities with low-income levels to begin receiving additional wealth. What we learned from Detroit is that this process works in reverse with great severity at times. Income levels go down dramatically when businesses leave a community. Families decide to leave after spending multiple generations in the same home because there are no more opportunities. When neighborhoods begin to experience high levels of brokenness, they start to fade from memory. That can rob it of its soul just as a higher turnover of households does.
These gentrification pros and cons must be more than a description where muggings are down in a neighborhood while coffee shops are on the rise. It should include numerous other factors, including an appreciation of our heritage and the souls of our cities.
Blog Post Author Credentials
Louise Gaille is the author of this post. She received her B.A. in Economics from the University of Washington. In addition to being a seasoned writer, Louise has almost a decade of experience in Banking and Finance. If you have any suggestions on how to make this post better, then go here to contact our team.