Gentrification is a process of neighborhood change that includes economic change in a historically disinvested neighborhood by means of real estate investment and new higher-income residents moving in. Demographic change also occurs in terms of income, education level and racial make-up of residents. This socio-technical issue arises from urban renewal and its effects on preceding residents. This chapter will examine historic conditions that contribute to gentrification and look at its impacts in the United States through two case studies in the cities of San Francisco and Washington, D.C.
Neighborhoods have fallen susceptible to gentrification from a variety of historic conditions which include:
- The systematic denial of various services by federal government agencies, local governments, or the private sector to disadvantaged poor and minority communities. This occurs directly or through the selective raising of prices.
- The phenomenon of white people moving out of urban areas, particularly those with significant minority populations, and into suburban areas. Along with them left their capital.
Urban Renewal & Highway System Expansion
- Left behind in central city neighborhoods, low-income households and communities of color bore the brunt of highway system expansion and urban renewal programs. This resulted in the mass clearance of homes, businesses, and neighborhood institutions, and set the stage for widespread disinvestment.
Central City Investment & Disinvestment Patterns
- People and capital flood back into historically disinvested neighborhoods due to relative affordability given the increasingly expensive housing costs, the appeal of older and historic housing stock, proximity to city centers and the improvement of transit access and infrastructure.
- The foreclosure crisis contributed to making places vulnerable to gentrification. In low-income communities of color, disproportionate levels of subprime lending resulted in mass foreclosures, leaving those neighborhoods vulnerable to investors seeking to purchase and flip homes. Of foreclosures completed in 2007-2009 there were: 790 foreclosures for African-Americans, 769 foreclosures for Latinos, and 452 for Non-Hispanic Whites per 10,000 loans.
The culmination of these historical trends highlights the importance of housing as a source of capital. Gentrification can act to prevent minority communities from maintaining their homes. These marginalized communities then lack the opportunity to reap the benefits from investments and continue to be held at a disadvantage.
The changes neighborhoods go through include improved transit options, better infrastructure, and an increase in parks. However, long time residents face displacement pressures and seldom enjoy these new investments. As wealthier tenants move in, costs of living go up driving low-income citizens out. This trend can cause a cultural erasure of the generations that previously inhabited a neighborhood. Those that remain in their neighborhood may lose their sense of belonging with their neighbors, customers, and friends having to move somewhere more affordable.
With technological advancements, local governments can now facilitate more affordable improvements to previously disinvested neighborhoods. The allure of this investment appeals to all participants. However, left unchecked and unregulated, communities face continued marginalization.
Gentrification in American CitiesEdit
The Mission District of San Francisco, California has become known as the “poster child of gentrification”. It is a Latino enclave just outside of Silicon Valley. . A contributing factor was the Dot-com bubble which was a period between 1995 and 2004 with a rapid rise in U.S. technology stock equity valuations fueled by investments in internet-based companies.  This led to an influx of higher income tech employees, in Silicon Valley, moving into the Mission District with the lower income Latino residents. In response to the influx, one long time resident stated, “This block will never be the same.” The Latino population decreased by 6% and the White population increased by 7% during this time. Family households in the district decreased from 52% in 1980 to 38% in 2013. The district's educational attainment also shifted: 34% more of the population had a bachelor's degree and 24% less of the population did not have a high school diploma. Median income increased from $41,739 in 1980 to $76,762 in 2013. 
The tech influx led to commercial and residential displacement. Between 1990 and 1999, 925 households were evicted and the vacancy rate rose from 3% in 2000 to 7.6% in 2013. The cost of a one bedroom apartment was $2,850 in 2013 which made it difficult for lower income residents to stay in the area. For businesses, there was no desire to move into the district because of the real estate market crash and redevelopment was eliminated as a funding source for affordable housing. People who were evicted struggled to find affordable housing because of vacancy decontrol, the ability for landlords to raise rent when a tenant moves out. With many higher-end retail stores in the area and higher vacancy decontrol, landlords began appealing to the wealthier tenants. Tenant buyouts allowed the landlords to also give cash to get the tenants out so that they could get a new wealthier tenant.
The social and cultural complexity of gentrification was highlighted by a proposed ten story luxury apartment complex for the district. This complex, called Plaza 16, would cause the removal of a Walgreens, Burger King, Chinese restaurants and other businesses where many of the locals were making a living. The local Latino population felt neglected because their lives would be significantly impacted to make room for more rich tech employees. Along with this, the luxury condos were predicted to impact traffic, schools and housing prices in the area.
Since 2000, Washington, D.C. has experienced the strongest gentrification and displacement of anywhere in the country. The population in poverty has dropped by 28% and the Black population has dropped by 23%. In these same neighborhoods, the population has grown overall by 19% and the White population has grown by 202%.
The specific case of the neighborhood of Shaw in D.C. serves as an example of what is happening in many neighborhoods throughout the city. In 1980, the Black population in Shaw was 78%, but in 2010, this number had declined to 44%. Additionally, the median home price rose from $147,000 in 1995 to $781,000 in 2017 . During this time, newcomers and prior residents clashed, as many felt that the culture and community of the neighborhood was changing or being destroyed. Community infrastructure improvements were occurring while old residents felt an increasing sense of cultural and political alienation.
One of the participant groups involved in this case is the low-income residents who were displaced. Virginia Lee, a longtime resident of Shaw, said that, “all the goodness that has come with the gentrification…all that has come has been material in nature and very little has been done to preserve the human aspect of a city that’s being transformed.”  Virginia Lee’s statement highlights how these residents are not only fighting to retain access to affordable housing, but also struggling to preserve the cultural and historical heritage of their neighborhoods. Another participant group is the newcomers to the community, whom are often of a different race, educational background, and socioeconomic status. This group has also been referred to as the creative class. The city government is another participant group. Some activists argue that the city is purposely crafting zoning laws and policies trying to attract the creative class to increase tax revenue and become more prosperous . Lastly, the housing developers that seek to buy low-price properties, renovate them, and sell them for profit are participants as well .
Like many other socio-technical issues, gentrification cannot be classified as a phenomenon that is completely detrimental or beneficial. The conflict between using the words “gentrification” or “urban renewal” to describe this process illustrates how there are multiple ways to consider this issue. As newer, more affluent residents enter a community, the tax base increases and the area can fund more public resources. However, the newer and older residents often do not benefit equally from community improvements as older residents are increasingly displaced. The result is a prioritization of an increase in capital rather than the accommodation all people.
While additional research on other cases of gentrification in the United States and beyond is needed, the cases examined in this chapter suggest that any solution for gentrification has to be comprehensive and intersectional in nature. Cultural uprooting can be traumatizing, so any kind of policy solution has to address the primary issue of affordable housing while also addressing transit equity and cultural preservation. Further work is also needed to investigate the effectiveness of solutions that are currently being implemented.
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