What People Don’t Know About Gentrification

The National Community Reinvestment Coalition focuses a lot on gentrification. In December 2016, the NCRC published a report on how communities can “prevent displacement in gentrifying neighborhoods.” In March 2018, it issued findings that showed how housing discrimination in the 1930s shaped gentrification. And over the course of the last two years, it has highlighted how gentrification has impacted specific parts of the United States, like Philadelphia.

That’s why it was interesting when the NCRC issued a report on Tuesday showing that, in most places, gentrification isn’t a problem. According to the group’s findings, moderate levels of gentrification were present in just eight percent of cities and towns. Intensive gentrification occurred in only three percent. Just seven cities accounted for nearly half of the gentrification found nationwide. All but one of them is located on the coasts.

Jesse Van Tol, the chief executive of the NCRC, told the Washington Post he was surprised to find that gentrification was rare in small and medium cities in the country’s interior. But he shouldn’t have been. There’s a mountain of evidence demonstrating how America’s richest metropolitan areas have, economically speaking, pulled away from their peers. In 1978, for example, the per capita income in metro Detroit was almost the same as that of greater New York. But today, greater New York’s per capita income is 38 percent higher. It therefore makes sense that super cities like New York are experiencing lots of gentrification, while most other metros are not.

The NCRC study acknowledges as much. “The study lends weight to what critics say is a concentration not only of wealth, but of wealth-building investment, in just a handful of the nation’s biggest metropolises,” its authors write. But the report is still largely spent highlighting places either undergoing intense gentrification or at risk of doing so. Its proposals, like community land trusts and better zoning laws, are almost all local in nature and tailored to cities where this process is highly prevalent.

This is understandable. The report, after all, is about gentrification. And the NCRC did find that gentrification “is often accompanied by extreme and unnecessary cultural displacement.” Neighborhood rents rise, making life less affordable for existing tenants.

But it’s also indicative of the selective ways that liberals think about housing problems. We tend to emphasize the challenges facing very wealthy, dynamic cities and neglect the problems experienced everywhere else. One NCRC member living in an impoverished, high-crime Baltimore neighborhood had a different interest in gentrification. “When can we get some of that in my community?” she asked. (Ironically, the NCRC report found that Baltimore was experiencing some of the highest levels of gentrification in the country.)

It’s a question that might baffle progressives, who often regard gentrification as presumptively bad. That was evident in parts the NCRC report. “Most low- to moderate-income neighborhoods did not gentrify or revitalize during the period of our study,” the authors wrote. “They remained impoverished, untouched by investments and building booms.” Nevertheless, the authors were still worried about how gentrification might impact these neighborhoods. Their takeaway from this finding was that these places are “vulnerable to future gentrification and displacement.”

That’s unfortunate, because many American cities, like heartland metros with chronically high vacancy, could benefit from the influx of educated professionals currently directed towards the coasts. Indeed, their struggles are the flip side of rising rents in super cities. Both reflect the same issue: the clustering of talent and opportunity in a select few metros (and in both places, it’s minority communities that pay the heaviest price for this problem). But to solve both sets of problems and restore geographic equality, it’s not enough to have better zoning laws in neighborhoods like Brooklyn’s Bushwick and Washington’s Shaw. We need to get a handle on this nationwide problem.

Thankfully, history provides an answer: strong competition policies. During the 20th century, the federal government used powerful antitrust laws to prevent large corporations headquartered in a handful of metros from snatching capital and talent away from the rest of the country. Meanwhile, the Civil Aeronautics Board kept the price of flying from one city to another the same on a per-mile basis, ensuring that people and businesses in midsize cities could affordably access bigger markets. As a result, the per-capita income of different U.S. regions and cities converged.

But in the 1970s and 80s, politicians and judges began unraveling these regulations, convinced by laissez-faire economists that the free market would keep the playing field even. Ever since, money has flowed out of interior metros and toward a small collection of largely costal cities with a high degree of political and economic power. These are the cities that now struggle most with rising rents. (I wrote at greater length about this inequality—and its political ramifications—in my story for the current issue of the Monthly.)

To reverse course, policymakers should resurrect the same laws and rules that helped generate relative equality between America’s metro areas. That means blocking mega-mergers that increase the concentration of wealth in already wealthy cities. It means breaking up companies that dominate markets, as Elizabeth Warren’s tech proposal would do. And it means re-regulating the airline industry to provide midsize metro areas with more affordable flights.

These measures will help prevent already wealthy cities from being flooded with even more white-collar workers—thereby, limiting further displacement. They will also distribute more economic opportunity to heartland cities where there isn’t enough.

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Daniel Block

Daniel Block is an editor at the Washington Monthly.