Gentrification, It’s Complicated

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By DJ Nelson, Staff Writer

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Gentrification by the Merriam-Webster definition is “the process of repairing and rebuilding homes and businesses in a deteriorating area (such as urban neighborhood) accompanied by an influx of middle-class or affluent people and that often results in the displacement of earlier, usually poorer residents.” The term was first used in 1964 in the book London: Aspects of Change by Ruth Glass, a sociologist and urban planner, to describe the demographic changes that were occurring in London. “Urban renewal projects” were also heavily criticized in New York throughout the 1930s and into to the 1960s. The concept has been around for decades. It was and is still seen as an unpopular event to many, and is once again at the center of many new political policies, followed by grievances from communities in many of the larger U.S. cities.

In 1978, to promote factory conversion and attract developers to renovate old industrial buildings, the Federal Historic Preservation Tax Credit was passed by the United States Congress. The tax credit started at 10 percent of the cost of the building’s rehab, but increased to 25 percent a few years later. The New Markets Tax Credit is another program that started in 2000. Both tax credit programs have created incentives for revitalization projects weighing tens of billions of dollars each year. Another tax incentive for investors, named Opportunity Zones, was created in 2017 as part of the tax reform bill.

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The government may have implemented these laws to target geographic areas that may not be attractive to the real estate market otherwise. Gentrification can be attributed to market forces in desirable geographic areas. These places have views of oceans or beaches that many investors want their new tenants to obtain. Gentrification compelled by policy tax credits for investors can be attributed by the undesirable geographic areas. These locations hold old industrial buildings or possibly a retired railroad track. In both situations there are families and individuals that reside in these places. The possible outcomes from gentrification for these residents is displacement or social benefits.

One of the major concerns with the tax credit and incentive programs is that they do not benefit the low-income community members. Real estate and rent prices, that come after the developments, benefit the pockets of the investors more than they benefit the low-income families that have lived in their neighborhoods for years. It is generally felt that the community is valued less than the profits of the developers. These residents feel disempowered and vulnerable and need policies to be created for them to keep housing at an affordable cost. Being told to “just get used to change”, and muting the voices of elderly and other sensitive groups will create the same riots presented in gentrification’s historic past. Policy makers and investors need to protect not only the residents’ homes but the culture and social infrastructures that they contribute to. It can be easy to get lost in the examination of the numbers and academic articles.

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Is gentrification a destroyer of communities or is it their salvation? According to the academic research of Columbia’s Lance Freeman, he found that many of Harlem’s low-income tenants stayed through the developments and ended up benefiting from improved social infrastructure. Freeman writes in The Washington Post, “What distinguishes gentrification is not who moves out; it’s who moves in. In a gentrifying neighborhood, new residents are more likely to be well-off . As a result, the neighborhood’s poverty makeup can shift, even if no one leaves. In 2004, I found that a neighborhood’s poverty rate could drop from 30 percent to 12 percent in a decade with minimal displacement. That’s because gentrification often leads to new construction or to investment in once-vacant properties.”

These communities have often been suffering from disinvestment, so with gentrification comes new local amenities, such as grocery stores and restaurants, that were not there before. Neighborhood revitalization leads to an increase social stability, and brings in additional tax dollars to reinvest in the social infrastructures that continue cohesion and security.

 

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