The Real Gentrifiers

Gentrification has become a catch-all word for the way urban neighborhoods have changed in the past few years. Mostly it means that affluent white people are moving into areas long home to blue collar workers and/or people of color.

While gentrifiers often renovate homes and start new businesses, activating commercial corridors and bringing new investments to neighborhoods, gentrification is often criticized for raising property values, rents and displacing long-time residents and businesses. In London businesses perceived as contributing to gentrification have been attacked and here in Boston perceptions of gentrification have driven NIMBY activism and resulted in a marked hostility towards newcomers and new ideas in neighborhoods.

Gentrification is also regarded as increasing inequality. As affluent white people snap up apartments in neighborhoods closest to transit, it is said they push the poor and people of color into areas with worse transit options (or even into suburbs), not only raising their rent but making it harder for them to get to their jobs, with longer commute times being one of the main things preventing low-income families from moving up.

Do anti-gentrification activists have a point? Not really. London, Boston, New York and San Francisco are all cities where building new housing, especially dense and walkable housing, is notoriously difficult. When the supply of a good in demand like housing is kept artificially low, the result is that the price rises.

The people really driving gentrification are the people who already own urban property and now fight tooth and nail for policies to protect its value by preventing new housing from being built. California recently discovered that communities adding more housing experienced less displacement and that’s also been the case in Miami.

As the name implies, the real gentry are much like the old gentry: a class of landowners benefitting from their monopoly on land.

As David Scleicher as written,

Not only have land use restrictions limited growth, but they also play a central role in problems of inequality. In his review of Thomas Piketty’s work, Matthew Rognile showed that almost all of the gains to capital over the last seventy years have accrued to house and land ownership.The holders of scarce assets that play such a big role Piketty’s work are not like the landed aristocracy of yore, but are, in fact, the landed rich. But, rather than choice farmland, they own access to rich labor and consumption markets in the form of houses and apartments.

Meet the new boss, same as the old boss.

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One thought on “The Real Gentrifiers

  1. Thanks for this blog post regarding gentrification; I really enjoyed it and am definitely recommending this blog to my friends and family. I’m a 15 year old with a blog on finance and economics at shreysfinanceblog.com, and would really appreciate it if you could follow, read and comment on some of my articles, and perhaps follow, reblog and share some of my posts on social media. Thanks again for this fantastic post.

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