Gentrification. A buzzword in real estate circles and city planning boards for the past decade, primarily in urban environments, has led to a housing crisis that is revealing economic inequality in the real estate market. From San Francisco to Chicago to Atlanta to New York City to Boston, gentrification is changing the physical landscape of ethnic communities and neighborhoods across the United States.
But what exactly is gentrification and what is the impact, especially on people of color, immigrants, and the elderly?
There are many ways to define gentrification that are relative to industry, zoning outcomes, and municipal investments. To keep it simple, the most basic “catch-all” definition of gentrification is this:
Gentrification is the “process of repairing and rebuilding homes and businesses in a deteriorating area (such as an urban neighborhood) accompanied by an influx of middle-class or affluent people and that often results in the displacement of earlier, usually poorer residents…”. Gentrification is, by its very nature, the practice by which under-resourced neighborhoods undergo urban revitalization as a result of a sudden increase in property values and municipal investment in infrastructure improvements. (Stacey Sutton, professor at Columbia University, gives an excellent Ted Talk on the meaning of gentrification.)
As highly educated, job-seeking professionals are relocating to major cities, gentrification may sound like a positive step in urban development and growth, however, it is important to consider that the process of gentrification is often rooted in systemic racial practices that benefit the white majority and further marginalize African-Americans, Hispanics, and immigrant populations.
Gentrification often occurs in neighborhoods with historically low property values — neighborhoods established by a history of redlining practices in which banks zoned specific sections of cities, with lower perceived investment value for rental and homebuying opportunities, to people of color while encouraging white residents to leave the same areas in favor of “up and coming neighborhoods”. The exodus of white middle-class families out of urban environments became known as “white flight” which left a host of detrimental effects on urban communities such as declining property values, and lack of investment in infrastructure or incentives for business growth, to name a few. As a result of the financial sector’s intentional redlining practices, communities in redline-zones became economically depressed neighborhoods that developed into enclaves for people of color and immigrants.
When gentrification occurs, affluent homebuyers (primarily white middle-class professionals) are intentionally moving into communities with traditionally low property values to capitalize on real estate investments in such neighborhoods. White middle-class professionals bring with them characteristics that banking institutions and local politicians enjoy: white-collar career paths that serve to increase the median household income, higher education levels, and capital improvements and renovations to purchased property.
The side-effect is the immediate increase in property values in formerly under-resourced neighborhoods, which then leads to an influx of municipal investment funds to develop infrastructure, business growth, and retail opportunities. As property values continue to rise, people of color, immigrants, and the elderly are priced out of the neighborhood – neighborhoods they lived in for years if not decades — because they can no longer afford the spike in rent or the significant jump in property taxes.
In addition to redlining, another systemic race-based practice that supports gentrification and perpetuates the marginalization of POC communities is that of loan discrimination. Though illegal, in gentrifying areas banks will favor white applicants while requiring more rigorous background checks for people of color. Loan officers will also offer lower interest rates to white-majority applicants and higher interest rates to African-American and Hispanic homebuyers. This increases the approval rates for affluent whites and reduces the approval rates for people of color which has led to significant disparities in the number of minority-based homeowners vs. their white counterparts.
While there are many political, social, racial, and financial components to the impact of gentrification, a clear example of the confluence of factors can be seen in the San Francisco area, which is undergoing gentrification fueled by commercialism in the tech industry.
The Mission district, a once thriving and ethnically diverse community comprised of Hispanic, African-American, immigrant, and refugee populations is being replaced by white middle-class professionals flocking to the area’s many mega-companies, such as Google, Facebook, and Amazon. The increase in tech companies has led to the rapid displacement of ethnic communities as landlords have tripled the cost of rent, often giving tenants less than 60-days’ notice prior to eviction.
Thousands of long-term residents of the Mission district, like Kai, have been forced to move out of their homes due to the impact of gentrification and are left wondering where they belong and how they will recover from the racial and economic inequalities that are rooted in the process of gentrification.
Thoroughly explained. Thank you!