Gentrification, or urban gentrification, is the change in an urban area associated with the movement of more affluent individuals into a lower-class area. The area experiences demographic shifts, including an increase in the median income, a decline in proportion of racial minorities, and a reduction in household size. More households with higher incomes result in increased real estate values with higher associated rent, home prices, and property taxes. Industrial land use can decline with redevelopment bringing more commercial and residential use. Such changes often result in transformation of the neighborhood's character and culture.
Gentrification can result from urban reinvestment efforts by local governments or neighborhood groups, which directs money to invest in deteriorating city infrastructure, offer incentives for redevelopment, improve access to housing loans for low-income mortgage seekers, assist lending to first-time home purchasers, and improve rental properties. These efforts have been linked to reductions in local property crime rates, increased property prices, increased revenue to local governments from property taxes and increased tolerance of homosexuals. Grassroots efforts for existing residents to guide or oppose gentrification generates community activism.
The process has a human cost to the neighborhood's lower-income residents. The increases in rent often result in the dispersal of communities whose members find that housing in the area is no longer affordable. Additionally, the increase in property taxes (due to increased property values) may sometimes force or give incentive for homeowners to sell their homes and move to less expensive neighborhoods. While those who view gentrification positively cite local reductions in a neighborhood's property crime rate, its critics argue that overall crime rates have not actually been reduced, but merely shifted to different lower-income neighborhoods.
The U.S. Centers for Disease Control and Prevention defines gentrification as "transformation of neighborhoods from low value to high value." Gentrification and neighborhood revitalization are often the same process.
Smith believed that the rent-gap theory was the fundamental explanation for the process of gentrification. He argued that when the rent-gap was wide enough, developers, landlords, and other people with a vested interest in the development of land would see the potential profit to be had in reinvesting in inner-city properties and redeveloping them for new inhabitants. Such redevelopment effectively closes the rent-gap and leads to higher rent, mortgage and lease rates.
The de-industrialization of the inner-city is seen as a prerequisite, precipitating a decline in the number of blue-collar jobs available for the urban working class and thus a loss of investment capital available to maintain the physical stock of urban neighborhoods. De-industrialization is often coupled with the growth of a divided white collar employment sector, one part of which is engaged in professional/managerial positions which follow the spatial centralization of capital. This is a product of corporations requiring spatial proximity to reduce decision-making time.
The consumption-side theory, on the other hand, has gained more force as an explanation for gentrification. Supporters of this argument generally view the characteristics of gentrifiers themselves to be of greater importance in the understanding of gentrification. The post-industrial city, as defined in the Dictionary of Human Geography, is one with an "employment profile focused on advanced services…, [with a] profile that is materialized in a downtown skyline of office towers, arts and leisure sites, and political institutions. Its middle-class ambiance may be reflected in a distinctive politics charged with a responsible social ethos…the demand for more amenities, for greater beauty and a better quality of life in the arrangement of our cities".
David Ley has been one of the foremost thinkers in purporting this idea of a city that is becoming more and more influenced by the emerging "new middle class". Ley defines as a subset of this sector a "cultural new class", made up of artists, cultural professionals, teachers, and other professionals outside of the private sector. And, although not particularly dwelt upon in Ley’s articles, these are the first stage gentrifiers who prepare the way for the embourgeoisment of the inner city (and, in effect, the more bourgeois politics) that often follows them—bourgeois politics which often lead to decreased funding for affordable housing, stricter laws dealing with the homeless and other people affected negatively by their original displacement by the creative class. This sentiment can also be found in Sharon Zukin’s "second-wave" observations in the artist’s lofts in Manhattan, who, when her building went "co-op" in 1979, "bade good-bye to the manufacturers, an artist, and several residents who could not afford the market prices at which our lofts were sold," residents who were replaced by lawyers and accountants, retailers and investment bankers. The process was repeated in Hell's Kitchen, in midtown New York and home to John Jay College, and is now taking place in Harlem, Washington Heights, Astoria and multiple areas of Brooklyn. This same process can be seen still today, as "artists move into otherwise undesirable buildings, usually make significant improvements to their spaces and their surrounding areas. Everyone benefits from these tenuous and uneasy…arrangements. Then landlords, becoming aware that they are sitting on gold mines, rush to cash in".
Whereas Smith and other Marxists often take a structural approach in their explanations of gentrification, Ley’s work instead frames gentrification as a natural outgrowth of the rise of professional employment in the central business district (CBD) and the predilection of the creative class to an urbane urban lifestyle. Ley, when studying this class through case studies of Canadian cities, concentrates instead on the diversity of this class, especially the liberal ideas that often find voice in its politic. Ley’s 1980 article "Liberal Ideology and the Post-Industrial City" describes and deconstructs the TEAM committee’s strive to make Vancouver a "livable city". Ley’s work, and that of Rose, Beauregard, Mullins, Moore, and others who have built upon Ley’s theories arguing that "gentrifiers and their social and cultural characteristics was of crucial importance for an understanding of gentrification," has been criticized by Chris Hamnett as not going far enough, and not incorporating the "supply of dwellings and the role of developers/speculators in the process".
Gentrification cannot be separated from the economic climate in which it occurs. The advent of the new economy outlined above has led to substantial growth and centralization of high-level work in producer services: a "new urban economic core of banking and service activities that comes to replace the older, typically manufacturing oriented, core". This new core sees older, middle-class retailers "replaced by upmarket boutiques and restaurants catering to new high-income urban elites".
The emergence of a "service sector" class, that is, a group of people—generally between the ages of 25 and 45—with a high disposable income and post-graduate education with professions in fields such as law, medicine, finance, media and the arts in the urban core that they want to be close to, is one of the primary tenets of the consumption-side theory of gentrification. This is not to be confused, however, with service jobs such as being a janitor, day-laborer, housekeeper, nanny, or working in a fast food business, which are also technically services, but require few skills and little education, and get paid low wages. This emergence is partly a manifestation of the shift in much of the Western world from a manufacturing-based economy to a post-industrial, service-based economy.
Demographically speaking, Western cities are seeing a growing percentage of 25–45 year-olds in the inner-city (urban) core. Other demographic shifts are occurring as well; there is a lessening of gendered divisions of labour, and people are waiting longer to get married and have children (c.f., the Double Income No Kids syndrome). Additionally, urban researchers are seeing an increase in the number of single women professionals living alone in gentrified areas.
This also leads to the lack of affordable housing in these areas for residents who are not in a high-income bracket, and leads to several generations of a low-income family living in the same dwelling because youths, who would have moved out upon graduating high-school, can't afford to live on their own because the market only offers luxury condominiums. See the Freeter phenomena.
Gentrification, as an aspect of gender studies discourse, has not been studied extensively, but researchers have discovered that women and gay men have had at least some impact on the gentrifying process in older, inner-city neighborhoods. Moreover, women are seen to be gentrifying in response to different patriarchal structures; they are seen as being potentially forced by oppressive class relations related to their gender into moving into the inner-city, as opposed to deciding on moving there as a result of locational preference. The breakdown of traditional gender roles as higher education becomes more accessible to women has also contributed to the movement of single women into the inner-city.
Gentrification usually increases property value in an area. This is a positive development for city officials (by raising tax revenue, which is often dependent on property values) and existing resident owner-occupiers.
Property owners can, however, feel the effects of gentrification through increases in property taxes. Property taxes are typically based on a percentage of a property's assessed value. As property values increase in a given neighborhood, municipalities will typically reassess the values of properties within gentrifying communities resulting in higher property taxes for the neighborhood's long-term owners. Owners who do not wish to pay the tax increases often sell or pass the increases on to tenants in the form of higher rent.
Unfortunately this same rise in property value can be devastating to those in lower income groups, who are more likely to rent and thus have little benefit in rising property values. In areas without strong rent control, they are often forced out. Furthermore children of such residents can no longer afford to live in certain neighborhoods. As a result, there tend to be very strongly opposed views on gentrification, with some seeing it leading to healthier, more vibrant cities, and others seeing it as destroying poor communities.
Recent research has also pointed to the negative effects that gentrification can have on political participation. For example, a drop in voter turnout has been observed in areas of American and Canadian cities which have experienced gentrification.
As the number of "trend-setters" grows, they create amenities valued by the bourgeoisie, particularly service establishments such as new bars, restaurants, and art galleries that serve the gentrifying group's demographic. Residents with a similar outlook and greater amounts of capital may then follow. This group, in turn, further adds amenities and investment to the area, increases local property values, and paves the way for more risk-averse investors and residents. The first newcomers, priced out of their newly fashionable neighborhood, move on to adjacent areas, where the process often begins anew. In this theory, the classic sector model of urban residential succession—essentially that neighborhoods "trickle down" from one socioeconomic group to another, with the wealthiest residents moving linearly outward from the central business district—works in reverse, but the "invasion-succession" process proceeds in a remarkably similar fashion.
Gentrification does not require these intermediary steps, but such a succession greatly facilitates the process. In other instances, as with the London Docklands and other CBD-adjacent urban renewal projects, or in instances of comprehensive public housing redevelopment (as at Cabrini-Green in Chicago), government and large developers can invade the area with sufficient capital to attempt to skip the steps entirely. In still other recent instances, a Community Development Corporation has been so successful at stabilizing an urban neighborhood that it becomes desirable for the middle class; examples include Roxbury, Massachusetts; Near South Side, Chicago; and Harlem, New York City, and, in Europe Prenzlauer Berg, Berlin; Altona, Hamburg; Ferencváros, Budapest; Islington, London.
The method by which an urban "artist colony" is transformed into an affluent neighborhood has been well documented for many years. Artists and subcultural students (more recently nicknamed "hipsters", but also including the hippies of earlier years) often seek out devaluated urban neighborhoods for their low prices, central location and for their sense of authenticity or "grit". As the bohemian character of the area grows, it appeals "not only to committed participants but also to sporadic consumers"; eventually, those "sporadic" consumers edge out the earlier arrivals. Christopher Mele described the process with hippies in New York City's East Village in the 1960s:
Through the 1960s and 1970s, lofts in SoHo were converted en masse to housing for artists, hippies, (and their followers, the hipsters) and others. As those neighborhoods continued to escalate in price and social status, the artists moved on to Park Slope, Brooklyn and Hoboken, New Jersey, and today to Williamsburg, Brooklyn. Emerging areas where hipsters are being displaced to run along the BMT Canarsie Line and IND Crosstown Line of the New York City Subway system due in large part to their proximity to Williamsburg. Similar gentrification patterns have been evident through the 1990s and 2000s in the East Village and now the Lower East Side of New York City, driving out dozens of theaters and performance art spaces such as , Surf Reality, House of Candles, Piano's (Theater), The Present Company.
Similar examples can be found in many cities around the world with large numbers of jobs in media, fashion, and other creative trades.
The PBS documentary Flag Wars outlined the tension between an urban African-American community in the old silk stocking district of Columbus, Ohio, and the mainly white gays and lesbians moving in, who were accused of gentrification and racism. The new residents, in turn, accused the existing community residents of homophobia.
Real estate trends can push out poorer gay people, as in San Francisco's Polk District; radical queer activists saw the value of an impoverished neighborhood as a refuge for the economically, sexually and socially marginalized, while others saw renovations and increased real estate values as signs of improvement in the neighborhood.
Many low-income whites in East Coast cities have moved to working-class suburbs or other, more heavily white neighborhoods within the same city. This often leaves senior citizens who have often lived in a particular community for a very long time as the only white residents in neighborhoods that have otherwise seen complete "white flight". When these seniors die or move to retirement communities, the process of white flight is complete.
In New York City and the surrounding counties, rent regulation protects over 1 million units and tenants from rapidly increasing rents. There are two kinds of rent regulation: rent controlled housing and rent stabilized housing. Rent increases for rent stabilized housing are set annually by the Rent Guidelines Board, and tenants protections include the right to renewal leases, the right to essential services and repairs, and the right to pass on their apartments to close family members.
In New York, rent stabilized units can be deregulated by "vacancy decontrol"- when the legal rent of an apartment is $2000 or more and it becomes vacant, the owner can de-regulate the apartment and charge market rents. This has resulted in harassment of tenants in regulated housing by unscrupulous landlords. Recently the New York City Council gave tenants the right to take landlords who are harassing them to housing court. A citywide coalition of tenant leaders and housing advocates is mobilizing around the repeal of vacancy decontrol, to reduce the incentive to harass tenants and preserve New York's affordable housing stock.
In the US, municipal governments tend to use tax incentives such as "tax increment financing" (TIF), or – such as in the Paducah Artist Relocation Program of Paducah, Kentucky – municipal governments will partner with non-profit organizations and public-private partnership to offer to artists subsidized home loans at a discounted interest rate if they move into gentrifying neighborhoods. Under a TIF program, economic activity in a target blighted area will be jump started with government spending, usually on physical infrastructure. Property values, and therefore property tax revenues, are then expected to rise. Under TIFs, all increased tax revenues, for a set number of years, go to the TIF administration entity, and can only be spent on additional improvements within the TIF district. Often TIF funds will be provided as direct subsidies to private sector developers. Infrastructure improvements, subsidies, and rising property values all combine to encourage additional private sector investment.
Darien Street is a small alley street in Bella Vista, a densely populated neighborhood in Philadelphia, Pennsylvania. Most of the houses on the street date back to 1885 and were built for artisans, or craftsmen, that lived in the area. Darien Street was considered a “back street,” because it did not (and still does not) connect to any main streets in the city, and it was not even paved for most of its existence.
In its early days, Darien Street housed only Italian families. After World War II however, there was talk of a crosstown expressway, and the Italian families moved out. These low-rent homes then were inhabited by poor African American families. By the early 1970s, Darien Street was at its lowest point, and the houses were worth hardly anything. Many of the houses were abandoned, because of broken heaters and caved-in roofs. The houses on Darien Street were very small—about wide and deep. Each home was three stories tall, with one room on each floor. The largest yard is deep. Even with its decay, Darien Street held a unique charm with European echoes. The houses all had some different features to give the street more character. The street was also safe for children to play on, since there were no passing cars. The nearness of all the homes made for a potentially close-knit atmosphere. Darien Street was located just south of the center of the city, giving it great location; it was also inexpensive and would not have been hard to renovate.
Thus, the first home was rehabilitated in 1977; it was a corner home and was sold to a school teacher. He completely redid the home and moved in. In the next few years, mostly white middle-class men began to move into the abandoned houses. In 1979, the first displacement occurred. Two years later, five of seven families had been displaced. The two remaining families were renting their homes, and they expected to be displaced soon.
Gentrification Amid Urban Decline went in to great detail about Darien Street, but it was published in 1982, so that is where Darien Street’s story ends. Lang gives statistics to show his final findings on Darien Street: in five years, the street changed from seven black households and one white household to two black households and eleven white households. The average rent increased 488%—from $85 to $500 a month. Homes previously sold for $5,000 were sold in 1981 for $35,000. Of the five black households displaced, Lang informs his readers that three families found better houses within two blocks, one family left the state, and one family moved five blocks away into a public-housing project.
The benefits of the gentrification of Darien Street include increased tax flow and improved housing. The drawbacks of gentrification were the worry of the displaced.