# Gentrification Explained: Key Causes and Pros & Cons

![Urban Downtown Miami Cityscape with Graffiti and Skyscrappers](https://www.investopedia.com/thmb/JfUhwX_qmr5Ti3ZSAr6rmvePaQs=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/GettyImages-108489277-b803664f7e5548e38b5d2846321e0dfe.jpg)

*Gentrification is a modern example of de facto segregation. — Boogich / Getty Images*

## What Is Gentrification?

Gentrification involves transforming neighborhoods from low to high value, often increasing property prices and living costs. While it brings improved infrastructure and services, it also leads to the displacement of long-time residents. As such, gentrification presents both opportunities and challenges for local communities, raising complex social and economic issues.

### Key Takeaways

*   Gentrification involves the transformation of urban neighborhoods from lower to higher value, often resulting in the displacement of existing residents.
*   Key drivers of gentrification include rapid job growth, tight housing markets, urban amenities, traffic challenges, and specific public policies.
*   While gentrification can enhance neighborhood safety and infrastructure, it often displaces original residents and erases cultural diversity.
*   The phenomenon is controversial, partly due to its history of discriminating against vulnerable groups like racial minorities and low-income families.
*   Some studies indicate that gentrification might not always harm the original inhabitants, as many remain and benefit from improved neighborhood conditions.

## The Historical and Social Context of Gentrification

Gentrification is derived from the word "gentry," which historically referred to people of an elevated social status. In the United Kingdom, the term "landed gentry" originally described landowners who could live off of the [rental income from their properties](https://www.investopedia.com/terms/i/income_property.asp).

In its current context, gentrification was first popularized by the British sociologist Ruth Glass in 1964, when she used the term to describe the influx of middle-class people into London's working-class neighborhoods, displacing the former residents of those localities.

Numerous cities around the world experience the phenomenon of gentrification, which can have a direct impact on [housing market dynamics](https://www.investopedia.com/articles/personal-finance/033015/top-us-housing-market-indicators.asp). In most major cities, some neighborhoods that were previously less than desirable have morphed into vibrant districts with plush condominiums and offices, new coffee shops and restaurants, expensive retail storefronts, and various entertainment choices.

## Key Social Challenges and Benefits of Gentrification

Gentrification is a complex social issue with both benefits and drawbacks. Young families enjoy buying affordable homes in safe areas with good [infrastructure](https://www.investopedia.com/terms/i/infrastructure.asp) and various amenities. Local municipalities and governments also benefit from collecting higher taxes on rising property values and increased economic activity.

However, the neighborhood's original inhabitants—also families, as well as singles of various ages—are often displaced by rising rents and a higher cost of living from the very community that they helped build.

## The Controversy and Impact of Gentrification on Communities

Gentrification is controversial because it often involves discrimination against racial minorities, women, the poor, and older adults.

Even as it may bring about a reversal in the decline of a city, displacement caused by gentrification can force prior residents into poorer and relatively unsafe areas, with limited access to affordable housing, healthy food choices, and social networks. In turn, this can trigger increased stress levels and decreased mental health.

According to the Centers for Disease Control and Prevention (CDC), vulnerable segments of the population are at increased risk for negative health effects of gentrification, such as shorter life expectancies and increased rates of cancer, diabetes, and cardiovascular disease.

Displacement often leads to the exclusion of the original residents, particularly people of color, and a lack of government support—for low-income housing assistance, for example—as well as weakened social and community ties.

> **Fast Fact**
>
> A 2019 study by the National Community Reinvestment Coalition found that between 2000 and 2013, seven of the biggest U.S. cities—New York City, Los Angeles, Washington, D.C., Philadelphia, Baltimore, San Diego, and Chicago—accounted for nearly half of the country's gentrification.

## Factors Driving Gentrification in Urban Areas

A study by the Brookings Institution highlights factors that contribute to gentrification.

1.  **Rapid job growth** in both a city's downtown core and along its periphery can foster gentrification.
2.  **Tight housing market** **dynamics** play a critical role in causing gentrification and can vary from one location to the next. In the gentrification wave of the 1980s, for example, constrained housing supply was a feature of the San Francisco Bay Area, and relative home affordability was an issue in Washington, D.C.
3.  **Preference for city amenities** can play a factor because certain demographic groups have traditionally preferred to live in urban neighborhoods because of attractions like cultural venues, a plethora of appealing restaurants and shops, vibrant street life, and population diversity. The presence of such features can help city planners to identify which neighborhoods would tend to gentrify.
4.  **Increased traffic congestion** can contribute because as metropolitan populations rise and infrastructure ages, the resultant increase in traffic congestion and commute times, along with the consequent decline in quality of life, can contribute to gentrification.
6.  **Targeted public-sector policies** play a role because many cities pursue [revitalization policies](https://www.investopedia.com/terms/u/urban-development-act-of-1970.asp)—including [tax incentives](https://www.investopedia.com/terms/t/tax-break.asp), public housing plans, and local economic development tools—that offer incentives for middle- and high-income families to move into distressed communities, or for original residents to upgrade their homes.

> **Fast Fact**
>
> One way to combat pricing people out of affordable housing, a form of housing discrimination, is a community land trust (CLT). These are private, non-profit organizations that own land on behalf of a community, promoting housing affordability and sustainable development and mitigating historical inequities in homeownership and wealth-building. 

## Re-Examining Common Misconceptions About Gentrification

Some research challenges certain long-held views about the negative effects of gentrification. In a July 2019 paper, researchers at the [Federal Reserve Bank of Philadelphia](https://www.investopedia.com/terms/f/federal-reserve-bank-of-philadelphia.asp) and the U.S. Census Bureau found that gentrification can create some important benefits for original residents, and few observable harms.

*   The study found no evidence that original residents who moved out—including the most disadvantaged residents—relocated to observably worse neighborhoods or experienced negative changes in employment, income, or commuting distance.
*   Many adult original residents stayed in their gentrifying neighborhoods and benefited from declining exposure to poverty and rising home values. Children also benefited from increased economic opportunity; some were more apt to attend and complete college.
*   The quantity and composition of people moving into the neighborhood, not the direct displacement of previous residents, drove the most visible changes associated with gentrification.

## Why Is Gentrification a Problem?

Gentrification can be seen as a problem because it negatively impacts a community's history, residents, culture, and social capital. It is a housing, economic, and health issue that displaces a group of people through urban renewal programs, typically benefiting higher-income people, as they move into affordable neighborhoods and alter that neighborhood's dynamics.

## What Are the Disadvantages of Gentrification?

The disadvantages of gentrification include the loss of small businesses, the displacement of long-term residents, the loss of affordable housing, increases in the cost of living, cultural erasure, and the loss of diversity.

## Who Is to Blame for Gentrification?

The blame for gentrification can be attributed to private investment, public policy, and public investment. Without controlling these factors for the benefit of all, gentrification can take place.  

## The Bottom Line

Gentrification, a complex urban development process, transforms neighborhoods and poses significant economic and social challenges. Although it can lead to reduced crime and revitalized areas, it often displaces long-term residents due to rising costs. The key causes include rapid job growth, tight housing markets, and targeted public policies.

Addressing these issues requires thoughtful management by local governments to balance urban renewal with affordable housing initiatives. Community land trusts, for instance, can help sustain housing affordability and support diverse communities. Effective management enables cities to harness the benefits while minimizing adverse impacts on existing residents.

> **Article Sources**
>
> 1.  Ruth Glass. "Introduction to London: Aspects of Change." University College, Centre for Urban Studies, London, 1964.
>     
> 2.  Centers for Disease Control and Prevention. "[Health Effects of Gentrification](https://www.cdc.gov/healthyplaces/healthtopics/gentrification.htm)."
>     
> 3.  National Community Reinvestment Coalition. "[Shifting Neighborhoods](https://ncrc.org/gentrification/)."
>     
> 4.  The Brookings Institution Center on Urban and Metropolitan Policy. "[Dealing with Neighborhood Change: A Primer on Gentrification and Policy Choices](https://www.brookings.edu/wp-content/uploads/2016/06/gentrification.pdf)," Pages 10-14.
>     
> 5.  Federal Reserve Bank of Philadelphia. "[The Effects of Gentrification on the Well-Being and Opportunity of Original Resident Adults and Children](https://cdn.theatlantic.com/assets/media/files/gentrification_final.pdf)," Pages 4, 18, 23.