By Any Other Name: Gentrification or Economic Exclusion?

The subject of gentrification is inescapable in debates about urban development, demographics, and housing. Yet the word often sheds more heat than light, thanks to its negative connotations and lack of an agreed-upon meaning. Does it refer strictly to residential demographics? What about the commercial makeup of a neighborhood? Must it have a racial component? Does gentrification always imply new development or construction? Does it always mean displacement? Get twenty urbanists in a room and you'll get twenty answers.

“Though the discourse about gentrification is flawed, it is a huge mistake for urbanists, or those in related circles such as the growing YIMBY movement, to be dismissive of the topic of gentrification, or of the legitimate concerns of those who use the word in relation to their own neighborhoods.”

Despite a large body of academic research on the phenomenon, the word is used in political discourse and everyday conversation to mean very different things than what scholars mean by it, and often with huge unexamined assumptions. Strong Towns' Kea Wilson wrote an excellent rundown of the huge range of things people might mean when they invoke the word "gentrification."

"Gentrification" has become the new "sprawl"—a maddeningly vague term that should perhaps be retired from our discourse entirely, because introducing the word into conversation obfuscates more than it elucidates. I personally make an effort to avoid the "G word", instead challenging myself to be more precise in my language. (I do the same with "sprawl" and "density," something that Strong Towns has challenged readers to do.)

Yet though the discourse about gentrification is flawed, it is a huge mistake for urbanists, or those in related circles such as the growing YIMBY movement, to be dismissive of the topic of gentrification, or of the legitimate concerns of those who use the word in relation to their own neighborhoods. Unfortunately, I see this kind of dismissal from some of my urbanist allies, and in a way that is really harmful to the work of empathizing and coalition-building that these movements instead ought to be doing.

Call it the "smug style in American urbanism." I'm blatantly cribbing the label here from Emmett Rensin's Vox article “The smug style in American liberalism," which got a good deal of attention last year for calling out liberals whose understanding of the motivations of conservatives seems to begin and end with: "They're brainwashed rubes who vote against their own interests.” After the presidential election in 2016, Rensin's take and that of others like him looked prescient to many. There's a whole debate to be had there—about whether liberals truly are "smug" and whether that smugness turns people off who would otherwise support liberal politicians or causes—that I don't want to get into. But at the very least, Rensin surely hit on a fundamental truth: you will not win friends or converts to any cause by telling people they're ignorant and deluded and don't understand their own circumstances. And this is just as true when you're right as when you're wrong.

Yet smugness is exactly what many low-income communities, especially communities of color, hear when voices in the YIMBY and urbanist spheres say things like, "Gentrification isn't actually a problem in your city/neighborhood"; "Your real problem is a lack of investment"; "Don't you realize that more new housing would benefit you?"; "You just don't understand economics"; "All neighborhoods change" and so forth. It all blurs together and ends up sounding like, "You don't know your own experience, but I can tell you what's good for you because I read a blog post on Medium about it." This patronizing tone—skewered by Lisa Schweitzer's "The Smartest Boy Urbanist in the Room"—wins no friends.

A textbook image of gentrification: cheese shop in Willamsburg, Brooklyn. (Source: Wikimedia Commons)

And look, it's not that the practitioners of the smug style don't have a point. They may be right about a lot. There is a false and damaging narrative out there about gentrification. This narrative holds that there is a nationwide epidemic of low-income neighborhoods under siege by well-heeled newcomers, and that private-sector development in such neighborhoods is likely to lead to a domino effect that displaces established residents (and should thus be resisted). This narrative is heavily influenced by the experience of a few neighborhoods in high-cost coastal cities—places like San Francisco's Mission District or Brooklyn's Williamsburg—where demographic change has been rapid and dramatic, and displacement has indeed reached crisis levels. (These are, not coincidentally, the cities where most of the journalists writing about urban development issues for a national audience tend to live.)

Yet, there is considerable evidence that that narrative fails to express what's happening in most of the country. Our friends at City Observatory, among others, have done excellent work showing that, for every gentrifying neighborhood in America, there are several mired in persistent, concentrated poverty—and that, in fact, more people are displaced from their homes in persistently poor neighborhoods than in gentrifying ones. This is not a new observation: a 2004 study by Lance Freeman and Frank Draconi found the same thing. City Observatory puts the policy lesson bluntly: "Concentrated poverty is a bigger problem than gentrification."

This is an important discussion, but that simple formulation—like every simple formulation of a basic truth—leaves out crucial realities. This is not to fault the City Observatory folks, who, if you read their work, are very attuned to the nuances and the limitations of what their data do and do not say.

I think the average urbanist is less attuned to nuance, though, and I’ve seen sweeping conclusions drawn based on this kind of work that are simply not accurate, and end up being dismissive of real problems. A Slate article from a couple years ago exemplifies the problem: the research it summarizes is real and important, but its headline—"The Myth of Gentrification"—is misleading and alienating to many who might otherwise have seriously engaged with the ideas therein.

Those conclusions are, I will argue, rooted in a basic misunderstanding of what poor communities in the other 90% of the country—that is, places that are not San Francisco, not New York, not DC, not hyper-wealthy, booming global knowledge industry capitals—actually mean when they talk about “gentrification.”

What Does “Gentrification” Mean to Residents in a Typical City?

Here’s the crucial thing you need to understand: people in neighborhoods that are persistently poor and show few signs of becoming less poor still experience the effects of concentrated wealth and economic power on their neighborhoods. And they experience it in a way that, from the inside, doesn’t look all that different from what you might experience as a poor renter in the Mission, or Bed-Stuy (New York), or Columbia Heights (Washington, DC), et cetera. Basically, it looks like gentrification.

Poor people in persistently poor neighborhoods experience high rates of eviction, involuntary displacement and chronic housing insecurity. They are forced to move for various reasons and one of the most common causes is a rent increase. They see this happening to others in their social circles.

Anti-gentrification protest in Los Angeles. (Source: Umberto Brayj via Flickr. Creative Commons License.)

As the backdrop for all of this, they see regular, concrete evidence that their neighborhoods are being exploited for profit: those who own local real estate often don't live in the community and may well extract a good deal of wealth from it—wealth that doesn't benefit those who do live there. Definitions of gentrification that emphasize the demographics of the residents of a neighborhood but are agnostic to the demographics of the property owners are going to miss a lot of crucial information about what's really going on in a place.

Perhaps people in Cleveland, Minneapolis, Milwaukee, Detroit, St. Louis, and so forth are incorrect to use the label “gentrification” to describe what’s happening to their communities. Often they use it to describe phenomena that have more to do with the effects of concentrated poverty and growing inequality. Those who have studied academic definitions of gentrification are likely to cry foul and say, “But what you’re describing isn’t gentrification at all!’ Put aside the Smug Style, though, and listen. Economic exclusion by any other name is still a problem worthy of our thoughtful attention.

A longstanding academic debate around this subject in Minneapolis illustrates the pitfalls of relying on academic definitions to tell someone how they should interpret their lived experience. I find the controversy revealing about how semantic choices can color our understanding of a situation and our ideas about what policies might improve it.

In one corner of the ring, we have the University of Minnesota's Center for Urban and Regional Affairs (CURA), which is conducting ongoing research on the prevalence and nature of gentrification in Minneapolis neighborhoods. Preliminary findings published last year show compelling and worrisome evidence of a "shrinking city" of Minneapolis for people of color: In 2000, the median Hispanic or Latino renter household could afford to rent the median apartment in most Minneapolis neighborhoods, and the median African-American household could do so in several. By 2014, only a handful of neighborhoods remained where the median Hispanic household could rent the median apartment, and in literally not a single neighborhood was this true for black residents.

In the other corner (and writing from literally the other side of the train tracks, at the University of Minnesota Law School) we have Dr. Myron Orfield at the Institute for Metropolitan Opportunity (IMO), a tireless advocate for desegregating the Twin Cities suburbs and decentralizing affordable housing away from neighborhoods of concentrated poverty. Orfield's camp shot back after CURA published its initial findings, with an op-ed arguing that "gentrification" is the wrong label for what's happening to affordability in Minneapolis, and that virtually all of the loss of affordability in the wake of the Great Recession can be explained by falling incomes, not rising rents.

You can read CURA's Ed Goetz's response to Orfield's op-ed here, if you're the type who gets a kick out of academic rivalries.

So who gets to claim the mantle of truth here? In the IMO's defense, there is clearly no massive or accelerating influx of wealth into North Minneapolis, which has long been the poorest quadrant of the city and the area that suffered the worst effects of mid-century white flight and urban renewal. The gentrifying demographic trend CURA finds is modest in the places they find it, and there are countervailing indicators.

In fact the most obvious trend in Minneapolis neighborhood demographics is polarization: poor neighborhoods getting poorer, while rich neighborhoods get richer.

Below on the left is a map of the median household income by census tract in Minneapolis. On the right is how that income changed over the period from 2010 to 2015. You can see that poor neighborhoods, with some exceptions, got poorer, while many rich neighborhoods got richer.

(Data source: 2010 and 2015 American Community Survey, 5-year estimates)

A similar trend has occurred with the change in average property values (EMV, Estimated Market Value according to the county assessor's office). The wealthiest quadrant of the city, its southwestern neighborhoods which surround several large lakes, saw property values rise from 2012 to 2015, as well as over the longer period from 2003 to 2015 (including the Great Recession). The poorest quadrant of the city, the northwest, saw them fall.

The overriding trend is one of diverging outcomes, not of a city that is getting wealthier as a whole, or whose poor neighborhoods are seeing an influx of wealth.

Yet CURA’s finding of a “shrinking city” is powerful and pretty incontrovertible. It's impossible to gloss over the fact that there’s a growing affordability problem in the city's low-income neighborhoods, and it poses a threat to the ability of many Minneapolis residents to remain in their communities.

We argue about semantics—is it gentrification or not?—because of the policy implications: Where should we encourage subsidized housing? Where should we encourage private-sector development? What are the root causes of unaffordability and what levers do we have to address them?

Would it be better to avoid the semantic argument altogether by not touching the G word? It's difficult to do so when prominent community voices—activists, nonprofits, and elected officials—regularly raise it as a concern. By any other name, what gets labeled “gentrification” refers to a set of real, meaningful, widely held concerns, and the choice of label should never be an excuse to dismiss those concerns.

West Broadway Ave., the gateway to North Minneapolis. (Source: Google)

The Experience of Economic Exclusion

The truth is that the experience on the ground in poor neighborhoods is similar to that of gentrification. People don’t see their world in terms of demographic data. They see economic insecurity, housing insecurity, and ever-more-visible wealth in the city that they’re not benefiting from, and they want to benefit.

For an example of the contrast between what an academic sees and what a community member sees, let's revisit Orfield's claim that rents are barely rising in Minneapolis in real terms, while incomes are falling in real terms. "Real terms" here means adjusted for inflation. But laypeople don't adjust for inflation in their heads. To a layperson, what’s visible is that rents are rising—by an average of several hundred dollars a month since 2000—while incomes are stagnant.

Rising rents can occur in a persistently poor neighborhood without any significant redevelopment, in one without any significant influx of new residents, and even in one that's losing population. This is because housing scarcity is a regional issue. The Twin Cities, like many metros, have seen several years of low rental vacancy rates. The share of households renting their homes (versus owning) is rising among all income groups, but the steepest increases are among high-income households. A recent MinnPost article documents the pronounced trend, and argues that this promotes upward price pressure on the rental market at all levels. Is this related to textbook "gentrification" in poor neighborhoods? No. Does it affect renters in those neighborhoods in a way that's highly visible to them? Absolutely.

The shift from ownership to renting is pronounced in chronically-poor neighborhoods where foreclosures wreaked havoc after the Great Recession. This is borne out in data from Minneapolis, where the already low homeownership rates of Black and Hispanic residents took the biggest hit.

This map shows the overall proportion of renters as a share of all neighborhood residents—again, it is higher in North Minneapolis neighborhoods than in most of the city:

From 2012 to 2015, North Side neighborhoods lost a greater number of owner-occupied units than any other part of the city. And not only are homes shifting from owner-occupancy to rental, there has also been a big shift, nationwide and locally, in the ownership of rental homes in poor neighborhoods since the recession: from mom-and-pop landlords to massive investment firms such as Blackstone, which have bought up staggering numbers of foreclosed homes in some areas, in a sort of economic colonization.

At the same time, the Twin Cities area is losing, year over year, what housing policy wonks call "naturally occurring affordable housing," or NOAH. Some of the most dramatic losses have been in the suburbs, in some pretty textbook cases of gentrification: a developer buys an older apartment complex with many low-income residents, renovates it, raises the rents, and changes eligibility standards (credit requirements, whether Section 8 vouchers are accepted, etc.) in a way that results in the displacement of many or most of the previous residents. A thorough report entitled "Sold Out" by the Minnesota Housing Partnership examines this issue in the Twin Cities. From the report:

From 2010 to 2014, the number of renter households earning above $50,000 annually increased by 29 percent... while the total number of renters with incomes below $50,000 increased by only one percent. The growth in higher income renters drives the market for amenity-rich apartments that rent for amounts above what the typical renter can afford to pay. Investors are acquiring and “upscaling” older apartment properties to serve this expanding population.

None of the high-profile sales described in "Sold Out" occurred in North Minneapolis, which has few large apartment buildings to begin with. But housing markets are regional, and all of those displaced residents have to go somewhere. It's easy to conclude that a neighborhood must not be experiencing destabilizing change because it has seen little or no physical redevelopment, but that conclusion is premature.

Because of regional market forces, the fallout of the Great Recession, and a persistent lack of living-wage jobs, many North Minneapolis residents are in deeply economically precarious situations. This has resulted in a staggering rate of evictions: a recent study found nearly 50% of all North side renter households received an eviction notice within a three-year period. Most were for nonpayment of rent (mostly due to inability to pay).

To an academic or policy analyst, this may not look like the same situation faced by renters in San Francisco's Mission District, where market rents have risen so high they far outstrip the ability of even fairly affluent households to pay. But to the family on the receiving end of the eviction notice, how different does it feel?

The North Loop, Minneapolis. Source: Google.

Rising rents, deteriorating homes, the constant looming threat of eviction: all of this, for residents of North Minneapolis, coincides with the increased visibility of concentrated wealth in the city. Minneapolis's richest neighborhoods have grown steadily richer over the last 15 years and are on a par, socioeconomically, with the region's toniest suburbs. Dramatic amounts of new development have transformed downtown and the North Loop (a former warehouse district with very few residential buildings as recently as 2000) with gleaming high-end condos.

It’s telling that the neighborhoods most often associated with gentrification in the public discourse are these downtown ones, despite the fact that they had no residential population to speak of prior to their current era, and thus there were basically no low-income people there to displace. Nonetheless, it's downtown that people think of, and it's the city council member representing these areas, Jacob Frey, whom I've heard mocked as "Gentri-Frey" by political opponents for his vocal support of downtown's residential building boom. There's no real case to be made that Frey's district is the epicenter of gentrification in Minneapolis. But what downtown is is a symbol of growing inequality and conspicuous wealth in the city that is not being shared equitably.

A movement like Strong Towns has a lot to offer to this conversation. We've written about the distortions built into land-use regulation that privilege large-scale development and shut out small-scale, incremental growth. We've written about the way the system is stacked against mom-and-pop businesses bootstraping their way to success. We are admiring of Jane Jacobs and her wariness of the effect of "cataclysmic money" on neighborhood stability and vitality. We've demonstrated that it's often low-income, "blighted" neighborhoods, not the wealthy ones, that are actually the cash cows for a city's finances.

In my next article at the end of the month, I'll write more about how an incrementalist, Strong Towns approach to low-income urban neighborhoods can address concerns of economic exclusion, wealth inequality, and lack of agency—the things people are often really talking about when they say "gentrification"—in a more thoughtful way than either the standard YIMBY/urbanist discourse or anti-development activists often do.

But that conversation, to be effective in influencing local politics anywhere, needs to start from a place of empathy and a place of listening to communities' concerns, not marching in with the answers. My challenge to you, if you're a local activist, journalist, planner, developer, or elected official is: the next time someone uses the "G" word, ask them specific follow-up questions and find out what they really mean by it.

Read the next article in this series: "Who Benefits from Neighborhood Improvements?"

(Top photo source: Sara Kelly)

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