Effects of Gentrification

[Sean McAndrews]

http://money.cnn.com/2015/11/12/news/economy/gentrification-may-hel...

Gentrification has become an issue in recent years that produces animosity towards the free market and capitalistic urban developers. CNN’s show, United Shades of America comes to mind. The show’s host, Kamau Bell, did a special on the gentrification of Portland in 2016. The show discusses gentrification while following a strong, unoriginal narrative that goes something like this: a greedy developer comes into a tight-knit community that is close to the city center and begins to buy property. Next, the developer renovates the run down property and continues to buy more along with other entrepreneurs. Soon, the once low-income community begins to look completely different as new lofts go up and houses that have been inhabited by multiple generations of families are forced to leave. The end result is displacement and homelessness of the residents.

Two years ago, Patrick Gillespie at CNN Money (ironically) discusses the positive effects of gentrification on the low-income households in gentrified neighborhoods. Gillespie used Philadelphia an example for the effects of gentrification—a city that is still undergoing intense gentrification in traditionally low-income, high-crime areas. A study done by the Philadelphia Federal Reserve Bank found surprising results.

 

Some of the positives that were discovered was that there were new job opportunities that previously did not exist in those communities prior to development. Naturally, home-owners that have lived there for years found their property values spike like never before and home-owners would be able to sell with a profit. The research also revealed a decrease in crime. Interestingly, the residents of the communities would see an increase in their credit scores.  Residents in these neighborhoods would see an average of 11+ points to their credit scores, while residents facing “intense gentrification” would see an increase of 22+ points. The most notable research find though, was that they discovered that the poor are not more likely to move out of their gentrifying neighborhoods than residents of non-gentrifying neighborhoods. In fact, the research found that it is more likely for households with higher credit scores and more disposable income to move out of gentrifying neighborhoods than low-income residents—people that move are the ones who can afford it, which makes this narrative collapse on itself.

 

On the other hand, this narrative did not arise out of thin air. The effects of gentrification are visible and there are countless negatives that come with it. The main negative point being that the poor that do move out (these are people on the margins of the community that are elderly, unable to work, etc.) move to poor neighborhoods and do not experience upward mobility. Another cause of gentrification is an economic outcome—with increased demand, rent rates and property taxes increase. Though a large percentage of the community can experience the positives of gentrification, the marginal community members are the ones that are feeling the adverse effects.

 

Gentrification is a serious issue. Destroying a multi-generational house and forcing people to leave their homes is a serious issue. However, the conversation has not been set in the correct framework. It seems that people accept the narrative without even looking to see if there is another side. I think the way to look at this issue—if as a society we truly care for the poor—is we must look at the upward mobility and the improvement of low-income households’ well-being. If there is no improvement, then gentrification is unacceptable. However, from the research that has been done, it seems that there is improvement and that the commmon narrative is focused on the negatives while disregarding the positive effects to low-income households.