Gentrification

What Is Gentrification?

Gentrification is a form of neighborhood change in which higher-income people move into a lower-income area. HUD’s definition adds that this can alter the neighborhood’s “cultural and financial landscape.” New residents bring demand for housing, shops, and services. Rents and property values rise, and over time the neighborhood’s income, racial, and cultural makeup can shift.

The term is contested. To some it signals reinvestment, lower crime, and new amenities. To others it means rising rents, evictions, and a neighborhood culture that no longer feels like their own. HUD’s 2018 review describes both views.

How Gentrification Works

Gentrification usually starts with demand. The HUD review notes that beginning in the 2000s, the young, college-educated population grew faster in urban neighborhoods than in suburban ones, raising demand for centrally located housing. As buyers and renters with more income arrive, landlords can raise rents and owners renovate older buildings for a higher-paying market.

Gentrification also spread and intensified. According to the HUD review, citing research by Ingrid Gould Ellen and Lei Ding, the share of initially low-income city census tracts that saw large rent gains relative to their metro area rose from 10% in the 1990s to 24% in the 2000s.

Gentrification vs. Displacement

Gentrification is a change in a place. Displacement is what happens to particular households forced to move. The research finds less overlap than the public debate often assumes. HUD’s review found that most quantitative studies show little evidence of direct displacement. In some, low-income residents of gentrifying neighborhoods were no more likely, or even less likely, to move than similar residents elsewhere.

A 2019 Federal Reserve Bank of Philadelphia working paper, using longitudinal census data, found that gentrification modestly increases out-migration. It found that movers were not observably worse off. Many original residents stayed and benefited from lower exposure to poverty and, for homeowners, rising home values.

Criticisms and Limitations

Researchers caution that displacement is hard to track. Studies often measure moves out of a housing unit rather than out of a neighborhood. They can miss people who left the city, doubled up with friends or relatives, or became homeless. Researchers also raise an exclusionary concern: as low-rent apartments turn over, they are more likely to be leased by higher-income households. That gradually shrinks the naturally occurring affordable housing that workers and lower-income families rely on.

HUD’s review recommended preserving existing affordable housing, encouraging more housing production overall, engaging long-time residents, and coordinating at the regional level. For more on keeping existing homes affordable, see naturally occurring affordable housing and preservation.