Gentrification, or the refurbishment and revitalization of an area that often results in original residents being priced out of their neighborhoods, is typically viewed as a controversial yet beneficial development. For those looking to invest ahead of the curve, it pays to know the signs. Businesses looking to get ahead of development or prepare for the increased expenses should keep an eye on the signs of gentrification: improvement to public transportation, an increase in realtor activity, the arrival of boutique coffee and retail shops, and the growing presence of inauthentic, corporate-driven ethnic eateries. For more on this continue reading the following article from The Street.
Hipster is the new yuppie.
Once, whenever a neighborhood’s demographics shifted and housing costs ticked upward, it was "yuppies" in the firing line of vitriol. Now, it is "hipsters" and the much-derided, parent-funded "trustafarians" who take the hit. Their stereotype Buddy Holly glasses, flannel shirts and taste for all things organic and free-trade are mocked and take the blame for low-income residents being squeezed out of their neighborhood.
The debate rages on, chicken-or-the-egg style, over whether these stereotyped folks are to blame for gentrification, or a side effect. There are similar arguments over whether gentrification is a good thing — bringing new life and a stronger economy to poor, crime-plagued areas — or a disaster that uproots long-time residents and waters down any culture and diversity that once flourished.
Across the country a multitude of once affordable, diverse neighborhoods, albeit troubled in many cases, have undergone a gentrification makeover: the Williamsburg and Park Slope sections of Brooklyn; Portland’s Pearl District; Toledo’s Old West End, San Francisco’s Haight-Ashbury and Tenderloin districts; Federal Hill in Baltimore; Boston’s South End and Jamaica Plain. The list goes coast to coast.
No matter what side of the debates one might take, there are nevertheless omens that precede neighborhood gentrification and trends to spot as the change in character progresses.
Let’s say you are a developer, real estate speculator looking to flip houses, a real estate agent or even a politician who sees benefit and profit in a neighborhood’s "revitalization." What would your blueprint be to gentrify an area, step by step? And if you’re a resident of a targeted area, what are the warning signs you might wind up priced — and pushed — out?
Step 1: Improve public transportation
The first step toward gentrification is often both unintentional and well-meaning.
It might seem as though an investment in public transportation would be a good thing for all involved. But the expansion of a local system’s rail and bus service can often be responsible for attracting newcomers and boosting housing prices.
A study last year by Northeastern University’s Kitty and Michael Dukakis Center for Urban and Regional Policy found that public transit investments can "sometimes lead to gentrification that prices out renters and low-income households — people considered core public-transportation users — working against the public goal of boosting transit ridership."
The study urged planners and policymakers to "consider the unintended consequences of neighborhood gentrification when expanding or improving public transit."
"In the neighborhoods around the country where new light rail stations were built, almost every aspect of neighborhood change was magnified," said Barry Bluestone, director of the Dukakis Center and co-author of Maintaining Diversity In America’s Transit-Rich Neighborhoods: Tools for Equitable Neighborhood Change. "Rents rose faster; owner-occupied units became more prevalent. Before transit was built, these neighborhoods had been dominated by low-income, renter households."
The study analyzed socioeconomic changes in 42 neighborhoods in a dozen metropolitan areas across the U.S. first served by rail transit between 1990 and 2000. Seventy-four percent of neighborhoods with new rail stations had rents that increased faster than the rest of the metro area; 88% had an increase in median housing values. Fifty percent of the neighborhoods showed an increase in the proportion of white (non-Hispanic) households.
Step 2: Market the neighborhood
When local real estate agents are spotted with greater frequency, it may be time to worry about soaring rent.
Step one on the road to gentrification is to change how people think about a neighborhood.
Realtors have long used creative language to gloss over a problem property. If a house is "cozy," "starter home" or a "handyman’s delight," be prepared for a tiny house that needs a ton of work.
Be alert when the agents or local media start tossing around descriptions of a neighborhood as "up-and-coming," "quaint," "colorful" and "perfect for young people starting a family." Another sure sign of gentrification is when what were once apartments are increasingly re-packaged as condos.
If a neighborhood finds itself being rebranded — turned into a cute acronym or referred to by an ancient name no one has used in decades — it may already be further along the path of gentrification than you realized.
Much of New York City has been carved up this way. Among the names — some stuck, others scoffed at — created by real estate pros to upsell neighborhoods (including those once seen as less desirable) are: SoHo, NoHo, NoLita, SoLita (an acronym of an acronym, as in "South of NoLita," or the area near Little Italy); BoCoCa, SoHa, SpaHa, Dumbo and NoMad (a stab at "North of Madison" that never really caught on).
Step 3: Bring on the coffee shops
A bellwether of gentrification is coffee shops. Not old-fashioned greasy spoons or Dunkin’ Donuts(DNKN) so much as places that hire baristas and foam up high-priced, artistic lattes.
Offering incentives for entrepreneurs to open coffee shops is a way the powers that be can both speed the pace of gentrification and, over time, possibly reduce the crime rate.
In a recent research paper — More Coffee, Less Crime? — Andrew Papachristos, Chris Smith, Mary Scherer and Melissa A. Fugiero of the Department of Sociology at the University of Massachusetts at Amherst looked at the connection between coffeehouses, gentrification and crime rates.
"Coffee sellers use specific marketing language to recreate high-culture ideas tied to art and philosophy for its customers, targeting an ideal bourgeois patron," they wrote. "Not dealing in a necessary comestible product, such as milk or bread, but rather a status product, coffee shops are integral to the leisure and lifestyle amenities package so attractive to urban gentrifiers. In a post-need economy, coffee shops meet the urban consumer’s demands for a space to meet friends or use the Internet, demands which were mostly absent from the neighborhood’s prior population."
As such, "measuring the number of coffee shops located in a neighborhood each year provides an almost real-time measure" of gentrification, they wrote.
Tracking a census of coffee shops and tracking them to neighborhood crime rates in Chicago from 1991 to 2005 revealed a seeming contradiction.
"An increasing number of coffee shops in a neighborhood is associated with declining homicide rates for white, Hispanic and black neighborhoods; however, an increasing number of coffee shops is associated with increasing street robberies in black gentrifying neighborhoods," the researchers found. "In some studies, gentrification is found to increase crime; in others, gentrification is linked to decreases in crime."
Their conclusion is that crime rates evolve over time as gentrification takes hold.
"The in-migration of wealth into poorer areas may create new and more lucrative opportunities for particular types of crimes, especially property and economic crimes," they wrote, adding that "gentrifying neighborhoods might experience an increase in crime rates as the neighborhood social structures undergo a period of flux. [As the] community continues to gentrify and population changes stabilize, disorder should decline and social organization should increase."
Step 4: Co-opt the ethnic character
An article from the humor newspaper and website The Onion, headlined Sometimes I Feel Like I’m The Only One Trying To Gentrify This Neighborhood, presented itself as the work of a young, new resident to a changing lower-income neighborhood.
"When I moved into this neighborhood, I fell in love right away," he wrote. "Not with the actual neighborhood, but with its potential … this area has got a great authentic feel and, with a little work, it could be even more authentic … I’m trying to convince the owners of that taqueria on the corner to change their decor to incorporate some more of that funky Day of the Dead motif I really like. But they insist on bland white walls. Ugh! I can barely pronounce the name, let alone enjoy its delicious, reasonably priced meals. Plus, you could take all the cool stuff from the five thrift stores and make one really great vintage shop. They’d make a fortune!"
That column comically illustrates a big complaint about post-gentrification residents. Once attracted by diversity and ethnicity, they nevertheless set in motion an erosion of that character as they try to mold it to their own desires.
As a result, businesses are sometimes reduced to blandness, irony or artificiality.
A particular tell-tale sign of gentrification is the rise of faux dive bars. They may look like a dingy bucket of blood where old men once sipped Manhattans, but they are no more than a simulation once Pabst Blue Ribbon is served alongside appletinis and Weezer gets added to the jukebox.
Another warning sign is when visitors — who once went out of their way to drive past a section of town — start attending local ethnic parades and festivals, turning culture and tradition into a tourist attraction.
Step 5: Bring on the yoga and gelato
The businesses accompanying gentrification are not typically of the mechanic or hardware variety. Instead, niche shops and specialty boutiques will start dotting the landscape.
Just as attracting coffee shops is a gateway to gentrification, so is building a base of these small, independent businesses.
When Chinese takeout and bodegas start being replaced by yoga studios, wine bars, gelato shops and gastropubs there may be no turning back. The more specialized and narrow the focus of a new business, the greater the chance it is riding the wave of gentrification.
When a neighborhood starts seeing more art galleries, food trucks and cupcake-focused bakeries, residents should be prepared to say hello to their new neighbors.
The atomic bombs of gentrification are Starbucks(SBUX) and Whole Foods(WFMI). Whenever either of those big-name chains are enticed to take up residence, the war between pro- and anti-gentrification forces escalates.
In Boston’s Jamaica Plain neighborhood, the announcement a Whole Foods would replace a closing supermarket in a largely Latino area was met by nearly constant protests by anti-gentrification advocates.
Among their demands have been that the supermarket contribute to an affordable-housing fund, carry specific products and, in one of the more radical demands, scrap the project and turn the space into a community garden instead. In what Whole Foods supporters have gleefully pointed out, many of those protesting are young, white newcomers to the area who are arguably just as much a potential catalyst for gentrification.
This article was republished with permission from The Street.