Gentrification: Improvement or displacement?

By Tyson McMann

When tasked with redeveloping community neighbourhoods and revitalizing downtown centres, economic developers can face concerns about gentrification. As Richard Florida explains, gentrification is either the “colonization of poor, minority neighborhoods by affluent whites” or is nothing more than the “natural process of neighborhood transformation and change”. However, as a new study from the Federal Reserve Bank of Philadelphia highlights, the effects of gentrification are more complicated than we generally think.

The study, Gentrification and Residential Mobility in Philadelphia, uses detailed new data on the economic condition of residents to provide a closer look at the overall effects of gentrification on neighborhoods and residents. The study found that gentrification didn’t result in a higher rate of residents moving out compared to other neighbourhoods. But, gentrification was found to divide cities into areas of concentrated advantage and disadvantage as median household incomes would increase in gentrifying neighbourhoods but decline in non-gentrifying neighbourhoods.

Ultimately, the study finds that gentrification hits the least advantaged and most economically vulnerable hardest. Although residents who are the most vulnerable are not more likely to leave their gentrifying neighbourhood, they are much more likely to end up in lower-income neighbourhoods with more crime and schools with fewer resources when they do move.

For economic developers, it’s important to recognize all of the potential impacts of downtown revitalization and neighbourhood redevelopment. This means working with local governments and stakeholders to improve the living conditions and economic opportunities for those that are most vulnerable.

This post first appeared in TINAN 75. Subscribe to TINAN for the latest economic development news and resources.