Gentrification

‘Gentrification’ has become one of the more divisive terms associated with property development. Some see this as urban renewal, others as social cleansing. A study published this week should be of interest to those promoting large regeneration schemes, either as developer or local authority, as well as policy makers. The paper by the University of Chicago considers the impact of gentrification on the original residents of low-income inner-city neighbourhoods across the US over a period of 15 years. It finds that gentrification effects only a modest increase in outward-migration, with leavers falling largely into ‘uneducated’ or elderly renting segments. The study found this to be a small percentage, relative to an unexpectedly high baseline mobility in those areas regardless of gentrification. Further, there was no evidence to suggest that those who left moved to observably worse neighbourhoods or experienced negative changes to employment, income or commuting distance. Meanwhile, those who stayed benefitted from declining poverty exposure and (for homeowners) increased house values. Children who stayed were more likely to go to college and were exposed to other factors which are correlated with economic opportunity. The authors cite the findings as evidence against the need for ‘urban NIBMYism’ and rent controls. They advocate densification of gentrified neighbourhoods to increase the pool of those benefitting (including original residents), and to keep supply in balance with demand. The study acknowledges the unobserved costs of moving, such as proximity to friends and networks and suggests very targeted policy interventions for the relatively small affected groups.