Does Gentrification Cause Displacement?

Gentrification is a heated word. It hangs ominously over every conversation on the return of investment and residents to the urban cores of many of our metropolitan areas over the past decades. Ominous because it represents the reverse of the coin of prosperity. The downside. The negative impacts. It’s dark and something vilified. A candidate for mayor of San Francisco in 1999 went so far as to declare “war on any and all gentrification.”

But why is it so often and easily criticized? Gentrification is a scapegoat for numerous processes, some recent and others decades-old, that better deserve the ire of the urban poor and their allies. Indeed, anger towards gentrification itself is often misplaced and obscures these real concerns. Perhaps none is greater than “displacement”. That gentrification causes displacement is commonly believed, yet beyond anecdotal evidence, is it true?

A number of others have explored this question in detail so I’ll just highlight some of the key research findings:

  • A 2002 study by Jacob Vigdor of Duke University looking at gentrification in Boston found that poor households in gentrifying neighborhoods were more likely to move out of poverty than to be displaced, poor households are not necessarily more likely than others to move out of gentrifying neighborhoods, and almost all households that stayed saw incomes rise at least as fast as their housing costs.
  • A 2004 study of gentrification in New York City found that “rather than speeding up the departure of low-income residents through displacement, neighborhood gentrification in New York City was actually associated with a lower propensity of disadvantaged households to move.” This holds true despite a higher proportion of residents’ income devoted to rent.
  • A 2010 study looking at gentrification nationwide found no evidence “consistent with displacement and harm to minority households.” Instead, they found evidence that “gentrification of predominantly black neighborhoods creates neighborhoods that are attractive to middle-class black households”
  • A 2011 study from NYU’s Furman Center, also looking at gentrification nationally found evidence that when relocation occurs in gentrifying neighborhoods, it is more often a selective choice than one forced by economic pressure; households that remained in gentrifying neighborhoods saw larger increases in income than ones in non-gentrifying neighborhoods; and there is little evidence that gentrifying neighborhoods grew less diverse.
  • A 2016 initiative UC Berkley and UCLA looking at Los Angeles found an opposite conclusion: gentrifying neighborhoods near transit saw greater losses in “disadvantaged” residents relative to non-gentrifying neighborhoods.

There is limited empirical evidence of residential displacement caused by gentrification and, from an economic perspective, the majority of existing residents may benefit from it. Of course not finding strong evidence of displacement is not the same as gentrification having no impact on the finances of existing residents.

While there is some evidence (see above) that gentrification positively impacts the incomes of low-income residents and a 2013 study from the Cleveland Fed even found that gentrification improves existing residents’ financial health, the aforementioned studies note that existing residents typically typically need to pay a greater share of income towards rent after gentrification.  Some researchers theorized that residents generally accept these higher costs in exchange for improved services but it’s plausible that some residents resent these changes and do not consider moving a “fair” alternative choice. In addition, the somewhat woolly concept of “exclusionary displacement”, defined as when residents “cannot access housing as it has been gentrified/abandoned,” may be common, although this is hard to measure.

However, setting opposition to “gentrification” (and by extension “gentrifiers”), creates an antagonistic discourse which alienates neighbors, fails to capitalize on the benefits that these processes can bring, and obscures the real issues.Yet the passionate reactions that “gentrification” engenders, particularly among long-time low-income residents and their allies, ensures this issue (and the term) isn’t going anywhere. This may be fueled by more cultural and socio-political concerns, for instance, resentment at feeling powerless over the loss of one’s neighborhood identity.

At the end of the day, resolving these issues is part of a larger discussion on building inclusionary communities. The individual neighborhood level, where gentrification is felt and seen most clearly, is an important front line in this effort. Integration between new and existing populations requires open dialogue and years of trust building on both sides. This is difficult, if not impossible, to achieve by government fiat and it does not happen in a vacuum. And yet, one cannot help but be optimistic considering the resiliency our cities and communities have already shown.

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