Gentrification​

If we are to better understand gentrification, we can't just stop at an understanding that changing economies drives a greater percentage of our nation's most educated and affluent to cities.  We have to understand the path of gentrification - and what drives people to inhabit neighborhoods filled with relatively lower-class, vulnerable residents.

​

So if it’s primarily rent increases that cause displacement, and rent prices are linked to the economic value of real estate properties within neighborhoods, what has to happen to neighborhoods themselves for them to become gentrified?  In short, demand for rental properties in the neighborhood has to increase.  There has to be some force or combination of forces that increase people’s willingness to move to gentrifying neighborhoods.  In many cases, this process starts slowly but accelerates quite quickly as compounding forces, which increase demand for neighborhoods begin to reinforce each other. 

 

The process is typically thought to be set in motion by artists and creative types who can’t afford living in desirable, central city neighborhoods moving to more affordable apartments or homes in less desirable locations synonymous with lower class inhabitants. 

 

In New York City and across the country, most gentrified or gentrifying neighborhoods either once housed or currently do house immigrants and minorities.  These neighborhoods, however, do have a strategic purpose for artists and creative types – who could also find cheap real estate in more rural parts of the country: they are within cities and are often located in close proximity to downtown creative centers (if they aren't creative centers in and of themselves). 

 

In the case of New York City, gentrification cannot be explained without reference to the impact the subway has had on changing city districts, which further explains the impact proximity to downtown has on gentrification.  A key feature of current gentrification, and of urban migration in general, is the increasing popularity of having both space and an urban life. Gentrifying neighborhoods in places like Brooklyn offer those prospects to residents, as more affluent ones can command more space in relatively inexpensive Brooklyn than they can in places like Manhattan. This, of course, eventually comes at the expense of lower income residents who likely lived there first.

​

The map below, created by New York University’s Furman Center, highlights collections of neighborhoods and shows which are gentrifying (some of the higher income areas highlighted have already gentrified).  First, notice immediately how areas currently gentrifying are those in the closest proximity to midtown and downtown Manhattan.

 

​

​

​

​

​

​

​

​

​

​

​

​

​

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

​

​

Initially, the earnings gap between the types who move to inexpensive neighborhoods and the native residents is small or doesn’t exist at all.  After all, from the perspective of housing affordability, a struggling artist who can’t afford rent in the city center isn’t all that different from lower class working people who also can’t afford to pay that rent.  However, where they may differ is in educational attainment, social practices, and even appearance.  While they may not directly put very much upward pressure on rent prices, they can create noticeable changes in the demographics of neighborhoods.  This change compounds as more and more of these types of people find out about the lower rent and move to inexpensive districts, in many cases accompanying their friends and coworkers. 

​

In addition to lower prices, demand for gentrifying neighborhoods is driven less tangibly by cultural factors.  Brooklyn's mixed-income and multi-racial neighborhoods are indeed unique - and feature desirable ethnic markets, local shop keepers, family businesses, and a variety of families.  Many more liberal college graduates moving to places like New York City admire the unique sense of diversity found in the city and its boroughs.  This makes sense, too, as many young people from my generation complain of the homogeneity of the people, food, shops, and schools found in their suburban towns.  They find it refreshing to see Italian restaurant owners occupying space next to Halal Butchers - the diversity makes the city feel authentic, an attribute of culture and life that feels lost outside of cities in America. Paradoxically, millennials' demand to reside in diverse neighborhoods has the unfortunate effect of actually making them less diverse.  In the picture below, we see the gentrification-led changes which forced a Jewish deli in a once-Yiddish part of the East Village to move.  In its place is a bank.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In a simple sense, as the influx of new residents seeking inexpensive housing gains traction, entrepreneurial-minded people start opening businesses to cater to the new residents – who in many cases have different tastes than their native neighbors.  These businesses are also easy to finance due to the low costs of commercial real estate in inexpensive districts, and soon multiply.  As more and more people become aware of the changing dynamics of previously undesirable city districts, they become more interested in moving to save money on rent - or to get more space than they could afford downtown.  Before long, young professionals begin moving to neighborhoods that don’t look at all like they did just years before.  This is exactly what happened in Williamsburg, Brooklyn, and many other changing neighborhoods in New York City.  The Chase Bank pictured above didn't cause gentrification, it just took advantage of it to service its affluent clients.  Still, many people who moved to the East Village for local spots like the deli aren't happy Chase is there.  

 

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Pictured above: A Brownstone, which has become a popular housing option for more affluent Brooklyn residents.  It features beautiful architecture and sits on a quite, tree-lined street

​

In the case of Brooklyn, the neighborhood level changes which have occurred often change the motivation of people who want to move there.  Initially, "rugged" neighborhoods were more of outposts for creative types than they were desirable neighborhoods for educated college grads and young families.  Gentrification changes that.  In particular, Brooklyn business activity has gone beyond opening new restaurants and bars to cater to new demographics and tastes.  New types of industry exist there now, and that industry in and of itself attracts new people.  While for professionals and some creatives Brooklyn was once a strategic living location which provided relatively easy access to Manhattan, it is now a self reinforcing economic ecosystem.  It is quite feasible that college grads pursuing careers in marketing, journalism, technology, and even financial services need not leave the borough!  While Brooklyn was once a distinct borough from Manhattan - with different types of people and work opportunities - it has become an extension of it.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pictured above: Vice media's Williamsburg Office - high tech, high skill, journalism and technology jobs are now in the same warehouse building that was once used for more industrial purposes. 

​

As more professional types move into areas once inhabited by lower class working people and artists, the rents begin to rise rapidly, and the industry changes away from what it once was.  The housing is only affordable to the more affluent newcomers, and when paired with decreasing employment opportunities for unskilled workers, gentrification accelerates the pace of displacement and change.

​

While Williamsburg is still cheaper than Manhattan, it is a lot closer in rent price to downtown Manhattan than it is to old Williamsburg - a further reflection of Manhattan's extension across boroughs.  At this point, even the struggling artists can’t afford to live there – and they move further out into Brooklyn or onto other cities.  This is why gentrification is such a large topic: it is self-reinforcing, and is driven by changes in cities and how they impact affordability. 

 

Opponents of gentrification need not go on a witch hunt targeting struggling artists and bohemians so they don’t move further into Brooklyn, and they need not get angry at college grads following jobs; such emotional responses that put individuals and their decisions at the center of a narrative which describe macro changes to cities miss many other critical explanatory factors.  Instead, they need to be able to acknowledge the critical impact that the dynamics of fast changing cities, rapidly evolving economies, real estate trends, and public policy play on neighborhoods.

​

Having developed an understanding of gentrification's trajectory, we will look to the motivations of real estate developers and policy makers to see how these unique stakeholders play a role in the changing processes described.

​

​

​

​

​

​