How Gentrification Works

Why do certain neighborhoods become gentrified and others don't? There is no definitive answer, but experts agree that before an area can be gentrified, it must go through a period of disinvestment, during which older buildings are left to languish, median income levels decline steadily and businesses move out [source: Slater]. Some neighborhoods still maintain a vibrant social culture and sense of community, while others devolve into urban wastelands.

Then the "urban pioneers" arrive. Urban pioneers are usually young, educated, adventurous, predominately white, often artistically minded individuals who don't fit the traditional demographic of the neighborhood. They build artist lofts in abandoned industrial spaces, open underground music venues and begin to leave the imprint of their alternative tastes and bohemian lifestyle on the neighborhood [source: Hampson].

Once a few pioneers have staked their claim, the neighborhood begins to earn a new reputation in the minds of real-estate developers and upper middle-class folks who used to consider the area unsafe or unwelcoming. As home prices increase in the nicer parts of the city and the suburbs, more adventurous investors are attracted to the character of some of the buildings in the neighborhood (crumbling Victorian mansions, stately brownstones with stoops) and their low sales prices [source: Hampson]. They begin to snatch up bargain properties and make attractive, modern renovations. Developers follow suit, buying up old apartment buildings and converting them into luxury condos.

For a short period of time, there is an uneasy balance in the neighborhood. Long-time residents are nervous about the infusion of outsiders, but admit that the new playground makes the park a lot safer for the kids and all of the new restaurants and construction work mean better-paying jobs. But then the lease expires on the apartment and the new landlord wants to raise the rent by 50 percent. Long-time homeowners have sold off and left town and rumors abound that some developer bought five apartment buildings on one block and evicted everyone. And then the inevitable happens -- the first Starbucks opens.

At least this is the standard story of the gentrification process: invasion of the rich and displacement of the poor. However, recent research shows a more nuanced reality. Census data shows that low-income urban residents move out of gentrifying neighborhoods at the same rate that they move from non-gentrifying neighborhoods. The difference in a gentrifying neighborhood is that higher-income people move in to take their place. Instead of displacement, some experts are calling it succession [source: Kiviat].

All of this brings up a fair question: Is gentrification really that bad? After all, what's wrong with economic growth? We'll explore the pros and cons of gentrification next.

Gentrification is a sign of economic growth. As money begins to flow into a neighborhood, many aspects of everyday life are changed for the better. Buildings and parks are renovated and beautified. Jobs arrive with the increased construction activity and new retail and service businesses. Crime rates decline. As the property tax base increases, so does funding to local public schools. Formerly racially homogenous neighborhoods get an influx of diversity. There are many things to applaud about the power of gentrification.

But the questions posed by critics of gentrification are, "Are the benefits of economic growth shared equally by new and old residents alike?" and "What is the social cost of economic growth?" These two queries raise a host of others, such as: Do wealthier new arrivals reap the majority of the benefits of increased economic activity? How does the arrival of new tastes, expectations and demographics damage the social and cultural fabric of a neighborhood?

The standard picture of gentrification is that the new arrivals benefit greatly from gentrification at the expense of lower-income residents. The new arrivals get affordable, stylish housing and all of the expensive accoutrements of life in a trendy urban neighborhood (boutiques, bookstores, coffee shops, clubs and more). While long-time residents may benefit initially from cleaner, safer streets and better schools, they are eventually priced out of renting or buying. As the new arrivals impose their culture on the neighborhood, lower-income residents become economically and socially marginalized [source: Grant]. This can lead to resentment and community conflict that feeds racial and class tensions [source: Atkinson].

While this picture of gentrification is undeniably true in some cases, the data shows that the economic benefits of gentrification spread beyond the white interlopers. In 2008, researchers from University of Colorado at Boulder, University of Pittsburgh and Duke University used census data to measure the total income gain in gentrified neighborhoods over a select period of time. Interestingly, the demographic group that contributed the largest percentage to that income gain was black residents with high-school diplomas. That group contributed 33 percent of the total income gain, while college-educated whites only brought in 20 percent [source: Kiviat].

Even if the economic disparities aren't as stark as they may seem, a lingering complaint about gentrification is that it destroys the "soul" of a neighborhood [source: Coster]. The gritty character, ethnic diversity and eclectic spirit that attracted the initial urban pioneers is overtaken by chain stores, overpriced brunch menus, iPad-tapping hipsters and stroller parking at the corner bar. Those are the kind of palpable social effects that can't be quantified by statistics, but feed a growing disdain for gentrification and gentrifiers.

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I love a topic like this because it really has some meat on its bones. Gentrification is a highly controversial issue in economically booming cities across the country and the world. I used to live in San Francisco, where the gentrification of the traditionally Latino Mission District by white urban professionals was a real issue. I also have a lot of friends who have moved to trendy neighborhoods in Brooklyn that my mother, a Brooklyn native, still considers dangerous. What I loved about researching this article is that it gave me a new prospective on the controversy. I had always assumed that gentrification only benefited the interlopers, but I found some surprising new data that shows that the economic benefits of gentrification are spread more equally than most of us think.

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