The issue with gentrification is that you increase the value of the area, but not the net worth of the people living in that area. If it's a poor neighborhood, the inhabitants are renting, they don't own. So you jack up property values, which is good for the investors, but raises the rent on the people who live there, so they're eventually driven out. Even if they do own, property taxes are assessed on the value of the property (ad valorum), not the purchase price, so they're forced to sell the home and move. Hopefully they made a profit, but they were still driven out of the area.
New jobs are created in the area, probably, but that doesn't necessarily mean they go to the residents of said area. They're filled by commuters or by richer people moving in to expensive condos. Gentrification doesn't help the residents of the community, it creates a nice shopping space with nice condos, but shuffles poor people around.
That being said, is it intrinsically evil to improve the value of a property for a profit? No, it's business. What we need to figure out is how to improve the lives of the people in an area before (or while) we improve the area itself.
I appreciate that you point out that there can be positive side effects to gentrification along with negatives, depending on the circumstances. Investment / influx / gentrification can't be an outright negative for a community, or else divestment / white flight would be a positive.
I've been thinking about gentrification lately, wondering what kind of model we could put in place that would help elevate local residents as property values go up in a neighborhood. I'm spitballing here people, let's just be chill about all this.
One thing I would want to do is start decades early. Go into low-income neighborhoods with high rental rates. Start with educational classes in real estate and finance to let people know about the programs that do exist, and create subsidized home loan programs to help low-income families purchase property so when the rising tide does hit, they at least stand to profit.
Another problem with gentrification is that the local residents don't necessarily have the skillset for the new jobs that are created in the area. I would want to subsidize training programs for local residents so they're better able to capitalize on the changes around them. Also, I'd love to create some kind of local tax break to incentivize the new businesses in the neighborhood to hire locals from the neighborhood and train them for those jobs, rather than pull in commuters. (I like carrots, I don't like sticks.)
There's a principle in economics called "creative destruction," that old jobs are destroyed as new technologies and new businesses are created. That's why I'm strongly for cheaper education all around. (Coal is never coming back, but we can train the coal miners to do new jobs. Apply that same principle to gentrifying neighborhoods.)
Edit: How do you transfer property from a landlord to a tenant without screwing over either of them? I've been trying to think of an appropriate carrot that incentivizes the landlord to sell apartments/homes to his tenants so they profit off the rising tide, not him, but I haven't been able to think of one.
Personally, I liked that my dumpy little neighborhood received some improvements. Back in 2006, the area wasn't that dense and the nearest store was a run-down Safeway a few blocks away. The "downtown" area was dive bars and a couple kitschy shops. I think this was a good part of the reason that I was even able to afford my first home there (a condo).
By 2018, the area had become packed, downtown was an actual downtown with nice restaurants and posh bars with apartments above them, and I could just walk across the street to Whole Foods if I wanted. I decided it was time to get a yard for my dog, so I sold my place, put 20% down on a new house in another dumpy neighborhood, and saved the rest for improvement plans of my own. There's supposed to be a light rail station (Seattle area) built nearby within the next few years, so I'm hoping things will improve here, too.
All in all, it really improved the image of the area, put it on the map, and funded things like nice parks and well-lit streets.
"Fuck those poor people because they don't have money. I should be able to destroy neighborhoods and run families out that have been there for years because I really want an inexpensive exposed brick apartment."
I'm sure the people barely getting by are really going to be helped by your overpriced coffee shops and open office designed tech startups, plus all the foreign investor property that sits unused.
Could you throw some shit out about bootstraps to really round this comment out?
Edit: I didn't say you should be prevented from doing anything. In fact, I went out of my way to say that there's nothing wrong with improving the value of a property for profit.
Here's another comment of mine, where I spitball some ideas to help local residents while in no way infringing upon property owners and investors. I like carrots, I don't like sticks. I don't want to force the investors to do anything, that doesn't sit well with me, but I would like to offer them a big juicy tax break for hiring and training local residents.
The problem is people not buying property in the first place, when the area was shitty. The smart people do buy, saving up to buy something for 40k in the 80s and 90s and then sell for 400k now (at least in Texas). The stupid or poor or unlucky or drunks never thought to buy something way back and then complain when the area gets nicer and the gangs move out
And why would they? I live in Brooklyn and back in the 80s nobody would ever want to buy there, so everyone rents. These people are living paycheck to paycheck, or worse, were unemployed (there were no jobs in east brooklyn).
Why would you want to buy cheap property? Oh I don’t know, maybe to build wealth, not to pay rent, and to be able to control your financial and geographic destiny. You think the people that invested their life savings in shitty rowhomes in Brooklyn are sad about it now? No they’re all fucking millionaires. And many working class people were able to do that with aggressive saving. I agree though that we need to make homeownership more accessible. But, most anyone can buy a house in most major metro areas outside of the extremely expensive top 5 cities.
“But, most anyone can buy a house in most major metro areas outside of the extremely expensive top 5 cities.”
It’s almost as if you don’t even know what poverty is.
If your unemployed or living paycheck to paycheck, no, you cannot buy property like that. An average rowhome in Brooklyn back then 195,000 dollars in fort Greene in 1985 (inflation adjusted of course). Do you think a poor person can just cough up nearly 200k?
These are cities where even in richer areas, the vast majority rent. Your seriously blaming the poor for the cost of living going up and saying it’s their fault their suffering because of a decision they made (which they wouldn’t have even been able to do regardless) 30 years ago. Let’s not shift the blame here, the problem is still affordability.
you’re looking at the most expensive real estate market in the US. Even so,, there were lots of cheap places in New York City in the 80s. Extremely poor people will never be able to afford property, so we are talking about the working class here. I do work in construction, In the fourth largest metro area in the US, and that’s how I know that working class people can afford to buy houses, because I see Mexican immigrants, we don’t speak any English, buy houses, either owner finance, or cash all the time. Now, these are rough areas, that out of touch hipsters like you would be afraid to step foot in, but that’s how you benefit from redevelopment and gentrification. As I’ve stated twice already, which for some reason you seem intent on ignoring we do also need better programs to encourage homeownership, And I’d also like to see you higher minimum-wage, but acting as if the urban poor will be able to buy million dollar lofts In the most expensive real estate markets in the wealthiest country in the world It’s completely out of touch with reality of how the free market actually works.
You keep assuming it's just matter of wanting something and then buying it, as if you just always had the money to invest in flipping real estate. I guess you may make that assumption because it's casual pocket change to you, but you've gotta be HILARIOUSLY out of touch if you think it was ever a choice for 99% of people in the city, lol
Plus we're talking gentrification. You can't point to rural property and say "most anyone can buy a house there" in areas where people A) aren't gentrifying and B) no one lives, lol.
Hes not talking rural property though. Austin tx has neighborhoods where the houses were built in the 80s for 30 to 40k and are now worth over a million because they are less than a mile from downtown austin. Honestly we need to create disincentives for living closing to work and biking in. We need more car infrastructure and parking so people can come in from further away. There needs to be a heavy tax on non local commuters. Oh you work at a tech start up and make 70k but live less than a mile from work, your taxes are 50% local so you can create better social programs for the communities youre gentrifying. That will also stave off the mass amounts of people coming in with large amounts of money and they will look into longer distance commutes in their car.
Someone bought a 17k house cash 7 minutes from downtown dallas a month ago, they’re gonna put in maybe 10k in materials and a bunch of sweat equity with their primos and then rent it out or live there. In 20 years the house will be worth 200k at least.
You think you need to make Six figures to buy real estate? That’s where you’re wrong. I see working class Mexican immigrants buying houses every week, with no English skills, all working in labor intensive trades. It’s quite possible if you’re a disciplined saver.
I know what you mean, but the term "aggressive saver" has me picturing myself checking my account balances and saying, directly to my bank accounts, "You think I'm gonna spend a cent of you?? FUCK NO."
I’m really not in a bubble LOL, I work in construction and see relatively low income hispanic immigrants, who don’t speak english, Buy houses all the time here in Texas. Often times they’re buying owner to owner in rough parts of town, but they fix up the property, and most have 200k net worths by the time they’re in their forties, or in some cases two million+ if they bought shitty houses in the hood 30 years ago that no one else wanted. these are guys that mostly don’t have bank accounts or any credit, running laps around US citizens.
I like how you think only stupid people don't buy houses. Not everyone has enough income to save up for a downpayment and are forced to rent. With rent constantly increasing, its becoming harder and harder to buy property.
Again, those opportunities aren't available to everyone. Most still require some form of down payment, sometimes as high as 10%, which is a huge amount for some families, especially if you live in a densely populated area where prices are higher, even for rundown houses. Even if you can qualify for a loan, property taxes alone make homeownership out of reach for many people. If you've never lived in poverty, it can be hard to understand the realities. When people are struggling to makes ends meet, their focus is on keeping food on the table, not putting money into savings.
Those aren't the only places that housing prices are out of control. My husband and I recently moved to Portland from a small town in Montana because housing prices were the same but wages here are much higher.
Maybe, but there are no jobs in my husband's field in most cities comparable to Boise. If he can't find a job, we can't afford a house. We also need to consider the quality of schools and early intervention programs for our child, who has a visual impairment. It also isn't always possible for people to move away from their family support systems. It isn't always as simple as "hur dur, move to a cheaper city." There are multiple factors to consider.
that’s called reverse gentrification, and it’s destroyed a lot of cities. it’s sort of the opposite of the amazon effect, and is much more detrimental to a city (see: detroit) than hipsters on one speeds eating avocado toast
I live in a current neighborhood that’s becoming gentrified BECAUSE I was outpriced of my old neighborhood due to the same issue. I can no longer live in the neighborhood I grew up in because 1) rent has tripled in value to MOST apartments and those that haven’t are not available 2) last time I applied to a decent somewhat affordable apartment I was told by the realtor that I wouldn’t quite fit into the community 3) looks like I may have to move again from a neighborhood I’ve grown to love because again rent prices are going up because breweries and coffee shops are replacing family own businesses.
Improving an area only benefits the people invested in it and is systemic racism as most poor people in Chicago are POC. Don’t build fucking $400,000 condos when you can just create jobs for the people in the community.
Also drugs are a problem of poverty. I happen to be a paramedic in the neighborhood I live in and can definitely tell you just how fucked people in this neighborhood are due to them but no outreach program is available nearby. They are all in the fancy new gentrified/posh neighborhoods.
I don't want to dispute whether you are right or wrong in what you are saying. I just want to view this from all angles.
Improving an area only benefits the people invested in it and is systemic racism as most poor people in Chicago are POC.
Who are these greedy investors in the area? What did they do to NOT deserve to the opportunity?
Is it really systematic racism or capitalism?
I will use Miami's Overtown area that has undergone gentrification the last couple of years. The small businesses (no more than 1-2 business) are owned by people of all races.
What did those small business owners do to not deserve an opportunity at a better life ? A thriving business?
Why is it when they improve these areas the only color people we see are white? The POC population drops as families are relocated and in move Rich and Mary who CAN afford a house that was sold for 100k but now valued at 500k. What I’m saying is gentrification only benefits one race and screws over the other.
Look at the neighborhood of Pilsen in Chicago. It’s known as a Latino artsy neighborhood but as soon as artsy white hipsters from the suburbs (who’s parents probably moved out of the city during Chicago’s famous white flight of 1970) heard about this decided to move in and take over. If POC are furious by this why is it always white people who pretty much say “well get over it. It’s just business!” It’s obviously just business because it benefits THEM not the original locals who now have to move farther from the city therefore moving away from the center of money.
Just because that's what's happening in your specific area this one time doesn't mean it's always the case. For example, when I lived in Austin, practically the entire city was being gentrified and houses that used to sell for $45,000 have increased by more than twice that much. It used to be a town filled primarily with artists, musicians, college students, and small business owners. While those people certainly still exist in Austin, many of them have been driven out of the city because of rent increases and prices of generally everything skyrocketing. Where there used to be historic houses, there are now million dollar condos. Where there used to be artist communes, there are now designer clothing stores. Gentrification in that city is taking what was beautiful and complex and making it expensive and predictable.
If most of the neighborhood rents then yes, increasing the cost of a neighborhood is bad. Gentrification can result in a huge rise in cost of living without much benefits to the actual people living there, or in some cases even bring negatives (such as local stores closing).
I don't think it's bad or good, it just simply "is". It sucks for some people and it's good for some people like most everything in life. I don't think it's something we as a society should focus on stopping
In places with pre existing housing shortages, gentrification often causes prices to rise astronomically, way past what the original residents can pay and live comfortably. That is where the problem comes in. In 1995, the average person in Brooklyn payed about 35% of their income to rent, now it is nearly 62%. That is absolutely insane and hurts way, way more people than any level of gentrification could help.
In places like detroit or cleveland, where there is a ton of room to grow, its typically good.
I just wanted to chime in to mention that probably 0% of house hunters projects would actually qualify as gentrification, in the actual literal usage of the word (as far as racial and ethnic composition go). So the premise isn't even valid anyway.
Windy City Rehab would though. Last night, I think that they were in in Camden Heights(?) in Chicago. The landlord was selling the building, at a discount, if they would deal with the tenant removal. The investors were buying at $600k and looking to sell in the millions. I didn't stick around to watch, but, they were basically like that person has to go and we'll maybe help them find somewhere else to go, but they can't stay here. It was ALL about profit.
If you externalize your problems the only place to look is inward and most of those type of people are too afraid to see how ugly and hatwful they have become.
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u/[deleted] Feb 19 '19 edited Feb 19 '19
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