New York City’s Gentrification Creates Islands of Exclusion
By: Hannah Hightman
Tags: Housing

Photo by Matt Cooper

By Serena Saxena

The New York metropolitan area has seen tremendous economic growth, but several residents are struggling to afford being able to live and work in the 31-county, tri-state region, rapidly gentrifying neighborhoods. Although some of the city’s low-income areas are steady, according to the University of California Berkeley, approximately one in five neighborhoods in the New York area is undergoing gentrification or displacement.

Small retail businesses have been closing their doors in New York this year.

“Businesses are being pushed out at a rate that I haven’t seen in my life before. I am lucky that I still have my job,” said Mario Jensen, a worker at a retail store in Chinatown.

With certain caveats like time lag of census data when capturing population shifts and the obstacles centered around data reliability, a Berkeley team of graduate students worked with New York University’s Center for Urban Science and Progress (CUSP), and the Local Initiatives Support Corporation’s (LISC) New York City office (LISC NYC) to create an interactive Urban Displacement Project map, published in April.

In 2016, more than one-third of low-income households lived in low-income neighborhoods at risk of or already experiencing displacement and gentrification pressures, composing 24 percent of the New York metro area’s census tracts.

Sixty-six-year-old Samuel Gluck, a shop owner in the Lower East part of New York, believes the gentrification of Chinatown could further endanger his business.

“If I didn’t own the building, they would have already kicked me out,” he said.

Landlords sometimes jack up the rent not because they have a chain tenant in the wings, but because they hope to snare one. The landlords call them “credit tenants.”

Gluck has sold suits on the Lower East Side for 35 years, since the days when people flocked to the famed enclave for discounted goods and one-on-one customer service. But now the neighborhood is populated by trendy bars and art galleries, and older merchants like Gluck are a rarity.

“I see it every year, different cafés, different stores, it’s just different,” he said.

Millennials tend to stay away from higher-end retail stores, and would rather buy clothes from new, well-known brands, he said. He also said the Lower East Side has endured significantly less foot traffic in recent years, which caused many fellow merchants to relocate or close.

“It is acceptable to wear normal clothes to work now!” he said. “Suits are no longer required and fewer people want to wear them. They are missing out, though.”

Gluck’s father brought him into the business of clothing, and Gluck has loved it ever since.

“If you don’t like your job, it’s pointless,” he remarked.

Nevertheless, he believes that the fashion business is not meant for everyone and that “no one wants to work here” because the new generation is too busy with “more impressive” jobs that are entering the Lower East Side due to gentrification.

The attractiveness of New York’s gentrified neighborhoods has lifted commercial rents to the point where many small-scale tenants — even those operating at a profit — can no longer afford to pay them. Prosperous residents were originally drawn to these charming neighborhoods because of the mom-and-pop businesses that are, ironically, being pushed away because of the high rent that resulted.

In 2018, 515 census tracts (statistical subdivisions) in the region were designated as Opportunity Zones under a program that provides tax incentives for private investment in low-income urban areas. Twenty-three percent of the tracts are located in gentrifying neighborhoods, and an additional 30 percent are in neighborhoods at risk of gentrification.

Twelve percent of low-income neighborhoods are experiencing ongoing or advanced gentrification, while nine percent are experiencing displacement, meaning that residents are forced to leave. When residents and businesses become displaced, they are forced to contend with the hardships, as New York City has few options to offer. A majority of suburbs have gentrified and grown increasingly exclusionary towards not only lower-income residents but also small-business owners.

In contrast, proponents of the process of gentrification argue that it leads to more property ownership through existing properties and construction of new developments.

The economic boost does not only help the private sector. Gentrification increases the tax base of a community. The population grows, but the property values are also eventually driven up, which creates two benefits from the government. As wealthier people move into a previously poor neighborhood, the median area income increases. This increases cash flow for local businesses and makes local business investment more desirable. Over a period of time, more businesses are built, new jobs are created, and wages increase. For example, in Milwaukee, Wisconsin, the city was becoming increasingly segregated and abandoned as wealthy residents and jobs left to the suburbs post-industrial age. In the early 2000s, new bars, restaurants, and waterfronts renewed the area through a revitalized nightlife and reversed the downward spiral of the city.

Some have noted that the benefits of gentrification extend beyond the private sector. Gentrification provides a fiscal windfall for the city government. More affluent residents contribute more income tax to city coffers, and appreciating home values beget higher property taxes. These increased tax revenues allow the local government to increase investment in infrastructure, public transportation, public schools, law enforcement, and other citizen services. In Milwaukee, for instance, gentrification provided the revenue required to fund a mass transit project that contributed to urban revival.

Today, a ravine separates those who fear an excess of prosperity coming into their neighborhood from those who worry about the return of affliction. Economic flows can be shifted with remarkable speeds. Gentrification can bump a neighborhood up the slope towards wealth, or down the hill to poverty.