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April 2016: You Asked.

What are the costs of gentrification?

I am trying to get some information on the cost of gentrification such as the loss of affordable housing, the displacement of long term residents, and any info on collateral issues, such as the increase in property taxes.

We Answered.

Quantifying the personal or social costs of gentrification is not an easy task. In the most simplistic discussions of gentrification, lower income residents are either burdened by increased rents or property taxes or displaced by rising property values. Furthermore, displaced residents are then more likely to resettle in poorer neighborhoods with a lower quality-of-life. Meanwhile, gentrifiers, property developers/investors, and the local government benefit as property values increase, which generates more tax revenue, leads to higher quality public services, and spurs business investment. However, there is relatively little research attempting to quantify the personal and social costs of gentrification, and the existing literature doesn’t consistently support the ideas above.

Nearly everyone agrees that gentrification processes displace some existing residents and create housing cost burdens for others who stay. However, the extent of displacement and housing cost burden, and the severity of negative effects on the displaced, is a matter of much debate. The problem is that there is no way to observe what would have happened in a given neighborhood had it not gentrified. This makes it very difficult to disentangle the effects of gentrification from the effects of neighborhood succession more generally.

The loss of affordable housing is less ambiguous (though not necessarily well quantified or universally understood to be attributable to gentrification processes). By definition gentrification leads to higher property values and housing costs. Absent corollary wage increases, housing will, by definition, be less affordable. What is up for debate is the extent to which gentrification processes should be blamed for the lack of affordable housing. Some commentators point out that housing is affordable in neighborhoods facing disinvestment and decline, but that this is not a desirable alternative to gentrification.

There is also some research looking at the displacement of social services from gentrifying neighborhoods. However, there is no clear indication that displacement is more likely than not. Furthermore, there is also the risk that social services may stay in place while the people who need those services are displaced.

Beyond direct costs associated with displacement, there are also some indications that gentrification processes affect neighborhood crime rates. However, like the literature on displacement, the nature of these effects is not always clear. There is some research that indicates that gentrification leads to increases in property crime and some research that indicates that gentrification leads to decreases in violent crimes.

One corollary to both displacement and crime is the effect that gentrification processes may have on social capital or civic engagement. Here, there are some indications that the potential for gentrification creates a disincentive for vulnerable residents to engage in civic processes and some conventional wisdom that displacement itself decreases social capital among the displaced. Furthermore, there are also some indications that gentrification processes trend toward re-segregation (i.e., gentrifiers attract other similar gentrifiers). However, it doesn’t seem like either premise has been well studied. There is a notable gap in the literature in terms of tracking outcomes of displaced residents. Meanwhile, there are other indications that gentrification improves a wide variety of social and health outcomes for residents not displaced.

Finally, there is some research looking at the effects of gentrification on neighborhood jobs. Here the common perception is that gentrification may facilitate displacement of industrial jobs. However, as with affordable housing, there are other potential factors. That is, gentrification processes may simply be taking advantage of economic restructuring and not actually causing that restructuring.

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