The Economics of Gentrification and some other Thoughts

Dear econo-missed,

Can you explain some of the economics behind gentrification? How can I reconcile being a middle-class young person living in a historically working-class neighborhood with my progressive values? How much of gentrification is driven by individual decisions and how much is driven by the developers and land-use decisions by politicians and city planners?

Guilty in Petworth


Dear Guilty in Petworth,

I’m not an expert on gentrification, either as someone organizing on the frontlines or in an academic sense. That being said, I have some thoughts that come from struggling with similar questions, and I am happy to share where I’m at.

To start, it’s important that you’re asking this. A lot of people never take action because they don’t think that they know enough or feel held back by self-doubt. Guilt is a real emotion that can contribute to that, and I encourage you to try to find ways to move beyond it. (Personally, I’ve found this piece really helpful.) While guilt can make people interested in an issue, many find it hard to be a part of groups organizing towards solutions if the desire to do so comes from a place of guilt. I try to ground actions in my need to live in world without oppression and a sense of responsibility to fight for justice. It’s helpful to remember that while coming to terms with guilt is hard, it’s much tougher to be pushed out of a neighborhood that you’ve been a part of for years.

While an analysis of gentrification in a neighborhood should ground itself at the intersections of local economics, history, social relationships, and politics, it’s possible to note a few common economic causes. First, gentrification usually occurs in neighborhoods that local governments have historically neglected. Neil Smith argues that “rent gaps” drive gentrification. A rent gap opens up when there’s a difference between the potential value of land and its current profitability for its owners. Property owners have an incentive to earn larger returns even if the process of doing so leads to displacement due to unaffordable rents and the increasing cost of goods and services. In my mind, the big problem with gentrification is not change per se, but the economic disruption that often comes with it.

Some argue that another cause of gentrification is that cities’ job markets change, often away from manufacturing jobs and towards white-collar jobs. Tied to this deindustrialization, local businesses shift to meet the demands of the changing workforce. Others point out the increasing role of local and state governments in encouraging gentrification to boost tax revenue.

In contrast to the idea that gentrification causes displacement, some policy analysts have found surprising results suggesting that gentrification helps prior residents on average, which is probably in part due to new jobs and government funding. First, there is no average prior resident. Some residents will get better jobs and others will be displaced. Even if certain economic comparisons look better after a period of gentrification, this does not mean that cities should abandon displaced residents. Instead, local governments should recognize and support residents’ basic housing rights. The argument that prior residents of gentrifying neighborhoods are more successful also relies on comparing them to residents in neighborhoods that local governments have historically neglected. This comparison doesn’t make much sense because gentrifying neighborhoods tend to receive more local funding.

You’re also trying to come to terms with your role in this process, and like many, you want to know if it is reasonable to blame the economy instead of your own personal decisions. My general instinct is that both you and economic forces are partially responsible because neither would succeed in gentrification without the other. While your decision is not individually causing long-term residents to leave their homes, the choice to not live in gentrifying neighborhoods can be an important symbolic action (although this piece makes an interesting argument otherwise). The world is complicated enough that making value-based decisions is usually good even if you don’t see exactly how they will lead to structural change. Furthermore, while unorganized consumer activism cannot create real change on its own, it can be quite effective if pared with other forms of action.

Recognizing the need to organize for structural change questions the premise of what you wrote. Instead of asking who’s to blame for gentrification, it’s more helpful to ask how to support long-term residents who face displacement. The blame game that many of us are used to is part of a larger problem among people with progressive politics. Many of us worry so much about messing up or appearing to not have it all figured out, that we never take action. It’s pretty surprising that such smart and fun people haven’t yet internalized Wayne Gretzky’s famous quote about missing 100 percent of the shots you don’t take.

A progressive politics demands that cities recognize people’s basic housing rights. In order to live in a better city that takes care of all of its residents, you can find ways to support local groups fighting against gentrification and the underinvestment in poor communities regardless of where you live. That might be easier to do if you’re not gentrifying, but at the end of the day, it’s much more important to find ways to support local groups organizing for structural change. It’s one way to be a good neighbor, which is essential if you’re moving into a gentrifying neighborhood.


in solidarity,

ben wolcott


Note: Thanks a bunch to Alexa Ross for her insightful comments during my writing process.

One comment

  1. It’s not often that I’m left for a lack of words when it comes to urbanism and gentrification, but this just about did. Extremely well written, thoughtful post. Kudos Ben.

    The only thing I’d question is the need to “fight” gentrification. I feel a better formulation given the structural forces surrounding newly prosperous urban economies is how can we make gentrification work better for current or displaced residents? That’s a really thorny question that deserves a nuanced and equally thoughtful answer.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s