Positive and Negative Impact of Gentrification

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The majority of the overall population will grow in cities. This is a thought that may not cross one’s mind, however, as an individual who studies Real Estate Development, it is without a doubt, an imperative factor to consider. Growth in cities has grown increasingly, as there are 57 megacities (a large city with over ten million people) of 10 million people or more. Specifically, the U.S. Census Bureau mentions in an article, a list of the “fastest-growing large cities” (U.S. Census Bureau, 2018). In this case, the largest population gains were seen in the South.

San Antonio reached the top of the list at accumulating an average of more than sixty people per day. Although one may question the relevance of this topic, and why cities are important to think about, this is imperative because not only do most people live in cities, but where you live determines your opportunities. These opportunities may arise from changing the world for the better, which in turn, implies changing cities for the better. However, changes in cities can often times, lead to a complicated dynamic that brings up the question of ethics. As a result, there are consequences of revitalizing and pricing low-income families out of affordable housing in a way that is highly localized through physical improvements, more amenities, and increased housing prices.

Gentrification is a topic that is frequently brought up in the real estate world, particularly in urban planning. Specifically, one that occurs when residents in a neighborhood of lower socio-economic status receives investments and an influx of higher socio-economic residents. In an area that is dense, a market for unique developments is likely to occur. This revitalization of an area is an upside because everybody’s demands can be met. However, some may argue that instead this changes neighborhoods in ways that may not benefit existing residents.

My position on this debate is that gentrification is almost unavoidable in order to build upon a city that is in dire need of improvements and opportunities; thus, my take is that gentrification as a whole is a positive impact, yet it is crucial to acknowledge the cons that come with the controversial topic. In general, the importance of density in understanding cities is crucial. For instance, the greater the density, the greater the land value. In a case study performed by Northwestern University, they conclude that, “More recently gentrification has been occurring in census tracts closer to the center of the city, where densities are higher” (Travel and Transportation Impacts of Urban Gentrification, 8). Once again, the question of ethics is brought up, as low-income cities have not been able to keep up with infrastructure.

As a developer, once you begin to build infrastructure, this creates a foundation to build upon. Infrastructures are huge investments, as they are apart of a geographical agglomeration of people and activities in a city. Although a huge investment, Todd Briddell at UPenn exclaims in an interview, “Like real estate, infrastructure is a long-duration asset that produces economic rent, provides diversification, and generates yield” (UPenn, 2015). For instance, cities are geographically compact social networks. As infrastructure is built, this provides a network to construct upon. This contributes to my take on gentrification, as it is apparent that it is unavoidable and creates a positive yield, over time.

While people, the economy, and technology alter, new demands of physical infrastructure arise. Evidently, the physicality of an environment is difficult to change, thus, a developer may build new properties next to older ones. This building of new developments in ancient centers creates revitalization in a certain area, or city. In an article on development, the factor that incites economic revitalization is specifically mentioned as “Building new commercial spaces that attract local businesses or community centers that provide services create jobs/not just for the community…” (Community-Wealth, 2). This revitalization of a neighborhood or city as a whole, is associated with the term, gentrification.

As mentioned previously, the positive impacts outweigh the negative in the long run, but the cons are more in number that target the actual residents in a community. Transportation is a crucial sector, as it is essential to social well-being and economy. It is important to consider one’s ability to travel because the capacity to travel determines the opportunities we have for finding a job, having access to fresh fruits and vegetables, interaction with others, having access to medical services, and more. The study conducted by Northwestern University pointed out that “Gentrification was associated with changes in transportation characteristics such as mode choice to work, and work place location but not vehicle ownership” (Travel and Transportation Impacts of Urban Gentrification, 8). Thus, the capacity to travel is imperative for human health. Face to face communication, in particular, is an interaction that is not replaceable by technology and virtual communication may lead to isolation and mental health issues.

In general, higher income is associated and correlated to more car ownership and more housing consumption, as a result. There has been a decline in non-motorized modes and the use of transit. According to a report by Northeastern University, “New public transit investments can, in some cases, lead to gentrification” (Dukakis Center for Urban and Regional Policy, 2). Public transit is directed towards those who are of lower economic status, therefore, this particular group “get priced out of the neighborhood and, once again, away from easy access to the very system that’s thought to serve them the most” (Dukakis Center for Urban and Regional Policy, 4).

This takes away from people’s reason of traveling. Specifically, people travel in order to engage in activities and attain possessions at certain locations. These activities, in particular, are results of revitalization that come with the addition of amenities. In this case, it is primarily the lower-income families who travel through the use of transit that are exposed to gentrification in ways unavoidable. It is unfortunate that this is a consequence of their way of traveling in a way that is accessible to them, whether for goods, services, or activities.

In terms of accessibility and gentrification, there are positive impacts that come with gentrification in contributing to economic growth, revitalizing neighborhoods, and increasing amenities. Through the process of changing an area for the better, new jobs arise. This is an immense factor that one should recognize and care about because without jobs, there is not a sufficient or stable income available. Overall, this helps move the jobs to the people through local economic development, in a way that is beneficial to residents in the area. According to CNN and a study conducted by Philadelphia Federal Reserve, “Poor people are no more likely to move out of a gentrifying neighborhood than from a non-gentrifying one” (Philadelphia Federal Reserve, 4). This does not mean that residents are not being driven out, but instead, the consequences of revitalization appear to have positive outcomes. This comes from evolving job opportunities as amenities increase, which leads to stores to open and thus, creating emerging opportunities.

Although residents may be exposed to jobs, as a growing number of neighborhoods have gentrified, this brings change in affordable housing. It was intriguing to learn about gentrification in Downtown, in particular, as USC is located in southern Los Angeles, where downtown gentrification has strengthened, according to researchers, Jackelyn Hwang and Jeffrey Lin. Specifically, “Since the 1970s, and especially since 2000, Downtown gentrification has strengthened/ characterized not by population growth but by large shifts in the composition of households” (Hwang and Lin, 12). This is important to bring up due to the affordable housing problem, as there is both a demand and supply side to this issue.

The demand of affordable housing is referred to population and household formation, as well as household income and the way in which income is distributed. On the other hand, the supply side includes costs such as land and construction, amongst other factors. As new units are constructed through revitalization, older units are passed on and older units become less attractive. Smaller and less modern units become more attractive to lower income buyers and renters. This is a positive impact to the overall aesthetic of a neighborhood, however, when demand is greater than supply, prices are offered at a higher rate, and all housing supply get more expensive.

Although one may not question the positive improvements and amenities in an area, there are hidden downsides to this. Gentrification also accounts for a few negative factors that contribute to ethical questions to arise. Although taking advantage of historical buildings in revitalizing an area contributes to economic growth, there are consequences of revitalization. Physical improvements lead to overcrowding and consequences to low-income families who may be displaced from their existing home. Overcrowding is likely to occur because multiple families will live in a single unit, and there will be more people than allowed by code. In addition, as a result of the affordable housing problem and gentrification as a whole, there is housing uncertainty among low-income households causing repeated moves, loss of attachment to a community, moving in and out of homelessness, inability to find or maintain employment, and more.

One may ask themselves whether the issue of gentrification consists of a manual or set of rules in order to eradicate the obstacles that come with the negative implications of it, but a code of ethics can contribute to a clear set of expectations that come from a professional in the real estate field. Specifically, the debate of revitalization in a neighborhood is not directly mentioned in the “2018 Code of Ethics & Standard of Practice,” for realtors, but the ethics mentioned are associated with the topic.

The preamble acknowledges and states, “They [realtors] require the creation of adequate housing, the building of functioning cities, the development of productive industries and farms, and the preservation of a healthful environment” (National Association of Realtors). In retrospect, the following can be considered as an outcome of revitalization, without seeing the cons, thus making the topic that much more debatable. Additionally, the code of ethics primarily focuses on serving the best interest of the client, cooperating with other brokers, modification of compensation and confidentiality.

Though, the statement that caught my attention stated in the code of ethics indicates, “…To eliminate practices which may damage the public or which might discredit or bring dishonor to the real estate profession” (National Association of Realtors). On the other hand, this statement can be targeted and related to the topic of gentrification, as some of the affects may “damage” a certain sector or group, while helping others. As a result, it is imperative to understand the implications that may come with a certain development because the future of cities will affect your future and most of the growth will take place in cities.

Overall, the consequences of revitalization, although good and bad, bring up ethical questions. The good contributes to economic growth, revitalizes neighborhoods, takes advantage of historical buildings and other resources, and increases amenities. On the downside, it may relocate existing residences and change neighborhoods in ways that may not benefit existing residents. As a result, gentrification can occur anywhere, however, it is likely to occur in places where affluent neighborhoods are near or used to be present.

Often times, it is a chicken and egg issue, where people do not know who or what came first. For instance, whether a trendy coffee shop triggered an influx of people, or whether the people triggered the coffee shop. This supports my stance on the topic, as I believe gentrification is both unavoidable and controversial. Gentrification is a topic of discussion that is recurring and is evolving with technology and demographics—as millennials are now more comfortable living in central cities.

Cite this paper

Positive and Negative Impact of Gentrification. (2022, Feb 11). Retrieved from https://samploon.com/positive-and-negative-impact-of-gentrification/



How does gentrification negatively impact neighborhoods?
Gentrification can cause long-term residents of a neighborhood to be priced out of their homes, as property values and rents increase. This can lead to the displacement of low-income residents, as well as a loss of community and cultural character.
Is gentrification more of a positive or a negative force?
Gentrification can be seen as a positive force because it can lead to the revitalization of a neighborhood. However, it can also be seen as a negative force because it can lead to the displacement of residents who cannot afford to live in the gentrified area.
What are the positive impacts of gentrification?
The positive impacts of gentrification are that it can lead to the revitalization of a neighborhood and the increase in property values.
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