Ignore the Data on Gentrification

Gentrification isn’t just about higher rents, mortgages, and taxes. It’s also about culture, history, and a sense of place. That’s what makes the Economist’s recent article professing its love for gentrification so damning. The magazine’s usual sensitivity to cultural issues was replaced with arguments in paternalism and the chiding of anti-gentrification activists for making a simple economic issue much too complex.

As the Economist notes, some studies do show that wealthier entrants into poorer neighborhoods help reduce crime while minimally displacing lower-income residents. Solely using this data to declare the problem solved, or to debunk the idea that gentrification is even a problem, is a disrespectful way of showing almost no interest in the issue.

The economic argument seemingly relies on everyone acting as the “rational economic person” whose decisions are solely motivated by financial arithmetic. We know that’s not how people work. Residents want their neighborhoods to reflect and support their individual and group identities, both culturally and economically. Fostering neighborhoods that achieve this delicate balance requires, at the very least, acknowledging that people’s actions aren’t solely driven by economic thoughts.

The Economic Argument is Plagued With Caveats

But even if we ignore the cultural aspects of gentrification and just focus on the data, the Economist’s arguments are full of significant caveats. For instance, low-income individuals who own homes in gentrifying neighborhoods are in store for huge economic rewards as property values increase. This surely is the case for some homeowners, but as values increase, so do taxes. Without tax breaks for low-income individuals, equity is only partially realized as the homeowner may be forced to quickly sell.

Renters may be excluded from gentrifying neighborhoods through a combination of rent increases due to market demands and increased property taxes. But renters need not worry, as the magazine states, because the government often has rent-control policies or other affordable housing mechanisms in place. Not only is this argument much too significant to gloss over in one sentence, but in most places, it simply isn’t true. Without this significant support structure, both renters and owners may be excluded from the neighborhood.

When the Economist finally addresses cultural issues, they’re seemingly dismissed using economic data. Detroit residents are rejected for not knowing what they actually want when they hold up signs detesting the Brooklynization of their neighborhoods. Look how many great stores they have in Brooklyn, why would you not want that in your neighborhood? There’s likely a host of reasons, but you won’t know those reasons unless you ask and listen.

Perhaps the greatest mistake is equating opposition to wealthy, white NIMBYs with opposition to gentrification. Supposedly, if you want more housing and economic diversity then you should oppose NIMBYs while also supporting gentrification. Since anti-gentrification activists tend to oppose efforts by wealthier residents to restrict housing diversity, they’re clearly being inconsistent since gentrification would create housing diversity.

This argument ignores decades of systematic discrimination imposed on many who have long lived in gentrifying neighborhoods. It’s perfectly reasonable to believe that we need more housing and economic diversity while also believing that the distribution of affordable housing costs should skew towards those who have long had privileges that were actively denied to others.

We Have More On Their Minds Than Just Financial Data

While the Economist largely ignored the complexities of gentrification, Next City took a deep dive into the actual problem. As it turns out, people have more on their mind than just financial housing data. The preservation of existing culture and the weight of historical discrimination heavily influence people’s thoughts and feelings.

The Germantown neighborhood of Philadelphia has generally avoided the negative impacts of gentrification, but luck has played a significant role. For one thing, while many wealthier, white residents were leaving cities in droves during the latter part of the 20th Century, many of those in Germantown stayed. This established some basic level of economic integration for the neighborhood to build on as demographics changed.

Germantown Avenue. Photo Credit: Smallbones via Wikipedia

To mitigate the loss of culture and economic participation that often comes with gentrification, it’s essential to recognize that places must be for everyone. Businesses must be attractive to people of different races and ethnicities, but also to those of different incomes.

That’s likely easier to do when gentrification doesn’t suddenly happen all at once. While home prices in Germantown have increased at relatively the same rate as the citywide average, the rate is far below those of surrounding neighborhoods. This gradual gentrification is perhaps another bit of luck. Creating businesses that are not only welcoming of many, but that cater to many is largely dependent on the decisions of individual business owners. The likelihood that new business owners will make decisions based on inclusion may be greater when gentrification doesn’t happen overnight.

People Need Ownership in Their Communities

Everyone needs to have a stake in their community. The Economist isn’t wrong when it says that economic segregation and the concentration of poverty are bad. It isn’t wrong to point out that gentrification can potentially solve or ameliorate those problems. But the solution is dependent on people having ownership in their community, not just a place to live.

The infusion of wealth into a neighborhood must raise and support the voices of existing residents. Mitigating the problems and maximizing the benefits of gentrification is more than just providing reasonably priced living quarters. It’s more than just shuffling people around housing units to make all the pieces fit. It’s about translating the incoming wealth into businesses and organizations owned and supported by existing residents. It’s great if affordable housing still exists, but the community must reflect the character and culture of all its inhabitants. Ownership by new and existing residents in restaurants, retail, and development companies helps achieve this goal. 

That is, of course, more difficult to do than crunching numbers to show that technically gentrification can allow longtime residents to sleep somewhere. You can only begin to solve the problem once you’ve made the effort to learn why there is a problem. So don’t completely ignore the data, but realize it’s only part of the issue.

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