A photo of anti-gentrification graffiti in Washington, D.C.
Sign of the times: Anti-gentrification graffiti in Washington, D.C., where tensions over economic change in neighborhoods have been on the rise. Alex Brandon/AP

A new study claims the effects of neighborhood change on original lower-income residents are largely positive, despite fears of spiking rents and displacement.

Anyone can see the changes at work in a gentrifying neighborhood. Rents rise, crime drops, wine bars bloom in vacant storefronts. But it’s harder to see what’s happening inside people’s homes and lives. For all the handwringing that accompanies gentrification—from how common it is to the meaning of the word to what people should do to stop it—there are rarely robust efforts to tease out the impact of a neighborhood’s economic upswing on its original residents. Few resources exist to show how change really affects residents, for good or bad.

Instead, the conventional wisdom about gentrification is practically set in cement. Often it goes without saying that the drawbacks of neighborhood change—above all the displacement of existing lower-income residents, but also increases in rents and upticks in cultural conflicts—greatly outweigh any benefits. Anxiety over gentrification is such a powerful force that it stopped Amazon in its tracks when the company tried to open a second headquarters in New York.

But without data to explain the changes happening underneath the very visible signs of gentrification—lofts, e-scooters, farmers’ markets—it isn’t easy to describe the costs, or who bears them. According to one just-released study, original residents gain more from gentrification than the traditional neighborhood narrative lets on. And the harms of gentrification, while hard to fully gauge, may not be so severe for original residents, especially for those who stay but even for those who choose to leave. What if the conventional wisdom about gentrification is kind of wrong?

Neighborhoods, whether gentrifying or not, are more dynamic than people realize, according to new research from the Federal Reserve Bank of Philadelphia and the U.S. Census Bureau.* This paper purports to be the first comprehensive longitudinal study on the long-term effects of gentrification on original residents. It shows that gentrification does drive out-migration to other neighborhoods—by far the most controversial outcome of neighborhood status change—but not by very much compared to baseline neighborhood changes.

The study looks at original residents of low-income, central-city neighborhoods of the 100 largest metro areas using census data from 2000 and American Community Survey data from 2010 to 2014. Using the earlier data as a control, researchers Quentin Brummet and Davin Reed tracked changes in educational achievement and household status among less-educated renters and homeowners as well as more-educated renters and homeowners. While some of these neighborhoods saw gentrification, not all did, providing a basis for comparison.

Cities with the highest share of gentrifiable neighborhoods that indeed gentrified between 2000 and 2010–14. (Federal Reserve Bank of Philadelphia/University of Chicago)

For less-educated renters, who are among a neighborhood’s more vulnerable demographic groups, gentrification drives out-migration by 6 percentage points. Migration among renters is high whether a neighborhood becomes fancy or not: The research finds that 68 percent of less-educated renters and 79 percent of of more-educated renters move over the course of a decade. So, on average, gentrification spurs around 10 percent of moves for less-educated renters (and much less so for renters with more education).  

Given the high rate of change within neighborhoods, the data suggest that gentrification itself is overdetermined as a direct cause of displacement. “This effectively places a limit on the potential for gentrification to cause displacement and makes it possible for neighborhoods to change quickly even without strong displacement effects,” the paper reads.

No doubt, there are unobservable costs associated with moving, which the paper acknowledges. Moving is pretty awful under the best of circumstances, and “displacement” usually summons a worst-case scenario. But leaving a neighborhood can lead to a perfectly neutral outcome. The research shows that “for all types of individuals, movers from gentrifying neighborhoods do not experience worse changes in observable outcomes than movers from nongentrifying neighborhoods.” The paper continues, “That is, they are not more likely to end up in a higher-poverty neighborhood, to become unemployed, or to commute farther than individuals moving from nongentrifying neighborhoods.”

For those original renters and homeowners who stick around, the benefits of improving neighborhood conditions are several. Gentrification reduces the exposure of original residents to poverty, which is tied especially to healthy outcomes for children. For less-educated renters, gentrification appears to be absolutely responsible for reduced exposure to poverty: The baseline change for poverty exposure within this group was zero.

While any traditional narrative about gentrification involves rents spiking for poor residents, the Philly Fed paper upends that expectation. “[S]omewhat surprisingly, gentrification has no effect on reported monthly rents paid by original resident less-educated renters,” the paper finds. Instead, it’s the more-educated renters that shoulder higher rents. The researchers can rule out renter subsidies as a way of explaining this divide in rent increases. (Housing vouchers aren’t increasing, that’s for sure.) Rental-market segmentation may be the best explanation here: Higher earners are paying more to stay in neighborhoods with better amenities, while lower-income households pay the same for low-quality housing.

“These results caution against using simple neighborhood median rents when studying gentrification, as is almost always done,” the researchers warn.

Another way to think about displacement is to consider the share of original residents who stay. Less-educated renters and less-educated homeowners each make up 25 percent of the population of neighborhoods in the study. Of these groups, 30 percent of the renters and 60 percent of the homeowners stick around in gentrifying neighborhoods. Both less-educated and more-educated homeowners who stayed in place saw increases in home values (with greater gains going to the better educated). There is no effect for homeowners who leave.

Not all the changes wrought by gentrification count as improvement! The paper acknowledges that rising property taxes can be difficult for existing homeowners to afford, for example—although the researchers still put higher values in the win category for homeowners. While moving from a gentrifying neighborhood may not lead to observably worse outcomes, the act of displacement itself, leaving behind family and community, packs negative social and psychological effects, as the researchers recognize. Culturally, gentrification involves neighborhood changes that can lead original residents to feel that they don’t belong.

Nor are all the bonafide positives distributed evenly. The Philly Fed Reserve paper finds that gentrification has no effect on employment, income, or improvement distance—except for more-educated homeowners, “for whom gentrification increases their income by around $3,000 for the average original resident and by $5,000 for those . . . choosing to stay.” So, like so many things in American life, gentrification is an unambiguous win for people who already have certain advantages. But to say that it’s also necessarily a loss for those less well off assumes a zero sum that isn’t the case.

Change in urban areas is more the result of in-migration than out-migration. Over generations of decline and disinvestment, some neighborhoods became so depopulated that any signs of new development and economic revival seem starkly transformational. And frequently the cultural signifiers of gentrification are hard to stomach: Witness the owners of a bookstore on Frenchmen Street in New Orleans calling the police on a brass band or the a luxury apartment resident in D.C. complaining about go-go.

Yet displacement is often invoked in battles over development decisions as an unavoidable byproduct of growth that cannot be mitigated, like heat or entropy. In these development dustups, displacement is a NIMBY trump card that can put a stop to building transit opportunities or affordable housing. Nobody wants displacement, after all.

But what if direct displacement is less common than all the hyper-visible changes to a neighborhood’s fabric might appear to indicate? And also, less severe? That might reorient the debate around policies that are truly harmful to low-income residents and vulnerable households. And also the fights over how to solve those problems.

“Overall, we find that many original residents, including the most disadvantaged, are able to remain in gentrifying neighborhoods and share in any neighborhood improvements,” the paper reads. “Perhaps most importantly, low-income neighborhoods that gentrify appear to improve along a number of dimensions known to be correlated with opportunity, and many children are able to remain in these neighborhoods.”

CORRECTION: This article originally attributed the study to researchers at the Federal Reserve Bank of Philadelphia and NORC at the University of Chicago. At the time when the study was conducted, Quentin Brummet, who is now an employee at NORC, was working at the U.S. Census Bureau.

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