Friday, March 21, 2014

The gentrification conundrum (II)

(Artist Theora Kvitka lives in Chicago.
Used by permission.)

My last few posts have wrestled with issues of economic opportunity and diversity in America. One strategy for achieving both is to attract businesses and middle-class residents into areas, like central cities and older suburbs, that have long suffered from disinvestment and "white" flight. When things work out, it means life in the ol' municipal tax base, as well as connection and opportunity for poorer residents.

Often, however, the downside of gentrification is that increasing demand for real estate raises the price of housing (not to mention business rents), putting the squeeze on current occupants. San Francisco, where this is happening to an unusual degree because of the technology boom, got some attention last winter, but the issues are more widespread than just the new home of Google.

Denver's Five Points neighborhood, recently profiled in WeCreateHere by local media star Ben Kaplan, is an example of a gentrifying neighborhood. Through the middle of the 20th century, it was a vibrant music center and Denver's most prominent black neighborhood. Through the last half of the century, it went into a dramatic death spiral familiar to many cities with similar stories to tell of working class neighborhoods with no work. More recently, with a combination of federal government, city and private investment, the neighborhood is rebuilding. Population growth has inspired new real estate development, and retailers have cautiously followed, including the formation of a Five Points Business District about five years ago. Statistics for the neighborhood published by the Piton Foundation tell an interesting story, though: Non-Latino white births went from 26 in 2000 to 70 in 2010, while Latino births declined from 125 to 36, and black births declined from 53 to 25. The neighborhood, which is now majority white, seems to have offloaded a good bit of its non-white residents. Where did they go? Gentrification does little for poor residents if it means they have to move to a different neighborhood.

(Note: Ben Kaplan reports the specific development he profiled, Benedict Park Place, consists of rental housing with eligibility capped by income. That may be part of the solution to not chasing the poor away from gentrifying neighborhoods.)

Some cities are trying to mitigate the negative effects of gentrification through public policy. Earlier this month the New York Times reported on such attempts in Philadelphia, where a middle class influx has caused a surge in property values. One man's $45,000 house is now assessed at $250,000; another woman whose house was assessed at $90,000 is now assessed at $281,000. City Council president Darrell L. Clarke said, "We feel the people who toughed it out should be rewarded. And we feel it is incumbent upon us to protect them." Boston city council member Stephen J. Murphy presented a similar perspective: "Property values are increasing exponentially, and longtime homeowners are victims of the success story" (quotes from Williams, cited below).

So Philadelphia is limiting property tax increases for longtime residents. (There is an application process; the eligibility of the two homeowners in the previous paragraph was uncertain at press time.) Boston will allow 10-year residents whose property taxes have dramatically risen to defer payments until they sell their homes. Pittsburgh and Washington face similar issues, and according to the Times article may be considering similar policies.

It's a tricky business, this. For one thing, the targeted nature of the policies seems practically to beg you to look for loopholes. (The whole San Francisco thing blew up because owners were tearing rent-controlled buildings down so they could build new, uncontrolled residences. Loophole.) For another, the story of central cities in the last 50-75 years has been their abandonment by people with money. As Andres Duany and colleagues argue (Suburban Nation (2000), p. 173):
[T]he challenge faced by most center cities today is not to provide affordable housing--which they typically supply at alarming ratios, thanks to public subsidies--but to create a market for middle-class housing. Cities, after all, cannot flourish without taxpaying residents. For this reason, city planners charged with the task of revitalizing a downtown have little choice but to encourage gentrification...
They worry that limiting the rise in tax assessments, as Philadelphia and Boston are currently pondering, "can prevent home and business owners from obtaining building improvement loans."

For the older neighborhoods in Cedar Rapids, such as Wellington Heights and the Taylor Area, I've advocated "gentle gentrification," of which I'll admit I have only the very vaguest concept. But this much is certain: We don't build diverse communities by pricing people out of the homes they own. It's difficult enough to overcome habits of class prejudice and segregation without adding a financial hit.

There's got to be a solution to this. Some possibilities: (1) A metro region-wide tax sharing agreement means towns wouldn't have a financial incentive to pursue only well-off residents and poach each other's businesses; (2) Putting neighborhoods in charge of zoning would enable residents to feel more in control of the process and less like they were being pushed out by external forces; (3) Where possible, allowing more housing construction would ease upward pressure on rental prices (see Philadelphia example cited below).

MORE ON GENTRIFICATION

General Sources
  1. Benjamin Grant, "What is Gentrification?", POV, n.d. but probably around 2003, http://www.pbs.org/pov/flagwars/special_gentrification.php. Basic introduction to the concept and issues surrounding it.
  2. Daniel Hartley, "Gentrification and Financial Health," Federal Reserve Bank of Cleveland, 6 November 2013, http://www.clevelandfed.org/research/trends/2013/1113/01regeco.cfm. Hartley points out the benefits to long-term residents, including rising home values and credit scores, lower crime and better schools. Of course homeowners have to be able to afford the taxes, and renters have to be able to afford the rent.
  3. Ray Sanchez and Steve Almasy, "Spike Lee Explains Expletive-Filled Gentrification Rant," CNN, 27 February 2014, http://www.cnn.com/2014/02/26/us/new-york-spike-lee-gentrification/. Lee, a film director in New York City, is principally concerned with cultural clashes resulting from gentrification, which I don't address here.
Philadelphia
  1. Jon Geeting, "The Apartment Boom Continues, But Is Philadelphia Building Enough Housing?" This Old City, 21 March 2014, http://thisoldcity.com/policy/apartment-boom-continues-philadelphia-building-enough-housing#.Uy7k9_ldWSo
  2. Timothy Williams, "Cities Helping Residents Resist the New Gentry," New York Times, 4 March 2014, A1, A11. Datelined Philadelphia, discusses policy options and what's driving them.
Denver
  1. "Denver's Five Points Neighborhood: 5 Things You Don't Know About the 'Harlem of the West,'" BlackVoices, 25 August 2013, http://www.huffingtonpost.com/2013/08/25/denver-five-points_n_3792436.html. History of the Five Points area.
  2. Alison Gregor, "In Denver, Beat Starts to Pick Up in a Once-Thriving Hub for Jazz," New York Times, 21 August 2013, http://www.nytimes.com/2013/08/21/realestate/commercial/ready-to-pick-up-the-beat-on-welton-street.html?_r=1&. Positive view of gentrification's benefits, mainly real estate development but some retail is starting.
  3. Ben Kaplan, "Is This Denver Development A Model for Housing in New Bohemia?" WeCreateHere, 14 March 2014, http://www.wecreatehere.net/2014/03/14/model-housing-for-new-bohemia/. Photo essay on the Benedict Park Place development.
Pittsburgh
  1. Tim Grant, "Research Disproves Gentrification's Reputation," Pittsburgh Post-Gazette, 12 November 2013, http://www.post-gazette.com/business/2013/11/13/Research-disproves-gentrification-s-reputation/stories/201311130059. Positive view of gentrification's benefits.
  2. Andy Sheehan, "Some Older Lawrenceville Residents Not Happy With Re-Urbanization," CBS Pittsburgh, 14 November 2013, http://pittsburgh.cbslocal.com/2013/11/14/some-older-lawrenceville-residents-not-happy-with-re-urbanization/. Long-time residents' negative view.
Washington
  1. Marc Fisher, "Most in D.C. Say Neighborhoods are Better, But Many Say Gentrification Helps the Rich More," Washington Post, 18 January 2014. Positives and negatives of the Washington experience with gentrification.
  2. Garance Franke-Ruta, "The Politics of the Urban Comeback: Gentrification and Culture in D.C.," The Atlantic, 10 August 2012, http://www.theatlantic.com/politics/archive/2012/08/the-politics-of-the-urban-comeback-gentrification-and-culture-in-dc/260741/. Washington resident describing benefits of gentrification she's observed.
  3. John Muller, "Gentrification a Matter of Economics, Not Ethnicity," Greater Greater Washington, 28 June 2011, http://greatergreaterwashington.org/post/11097/gentrification-a-matter-of-economics-not-ethnicity/. Class-oriented critique of gentrification.
My earlier posts dealing with gentrification:

"Gentrification in the Mission District," December 4, 2013
"Taylor Area Neighborhood," August 14, 2013

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