Gentrification is good, study says

Gentrification is often derided for forcing out original residents and eroding the character of a neighbourhood. But a research paper providing the first comprehensive national evidence of the effects of gentrification in the US has found significant benefits.

The paper released by the Federal Reserve Bank of Philadelphia this month says fear of gentrification has been a prominent theme in the rise of “urban NIMBYism” and rent control in many US cities.

But the paper found while gentrification can cause some residents to move out of their neighbourhood, that doesn’t mean they become “observably worse off”, and many original residents stay and benefit, especially children who are provided with more education and job opportunities.

“Overall, we find that many original residents, including the most disadvantaged, are able to remain in gentrifying neighbourhoods and share in any neighbourhood improvements,” researchers Quentin Brummet and Davin Reed write.

They say gentrification can reverse decades of urban decline while bringing “broad new benefits” via a widened tax base, more socioeconomic integration and improved amenities.

“Gentrification thus has the potential to dramatically reshape the geography of opportunity in American cities,” they conclude.

Gentrification in Australia

Professor Heather MacDonald, an expert in community revitalisation and head of the School of Built Environment at UTS, says the paper contains an important message for Australian cities, many of which experienced pockets of rapid gentrification over the last twenty years.

Professor Heather MacDonald

She says the paper is academically sound and demonstrates the ability of gentrification to break down economic segregation, while countering the “knee-jerk reaction” that all gentrification is bad.

“I think it’s a very interesting result and I think what it demonstrates is the importance of integration,” she told Government News.

“So many people use the word gentrification as though it’s automatically negative. This paper unpacks the positive consequences of having more economically integrated neighbourhoods, such as educational aspirations of children and an increased likelihood of employment.

“Gentrification has happened over a couple of decades now (in Australia) in the sense of people with higher incomes moving into what were lower income neighbourhoods and upgrading the housing stock, with rising house prices as a result.

But as well as higher house prices, affluent residents also bring with them an an appetite for “everything ranging from dry cleaning to cafes and other consumer businesses, which provide accessible and reasonable job opportunities to people who might find it more difficult to be in the labour market,” she says.

Professor MacDonald says Australian policy makers should ensure that the economic integration fostered by gentrification is supported and maintained by providing housing opportunities across a range of income spectrums to encourage original residents to stay and reap the benefits.

Inclusionary zoning and build to rent housing are both worthy policy considerations, she says, as well as tax incentives for investors to provide rent-limited housing.

“As prices rise it becomes easier to fund things like inclusionary zoning and it becomes more attractive for investors to invest in rent capped housing because they’ve got the prospect that their long term capital gain is going to be positive,” she said.

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