The Cost of Gentrification

It is a sign of a thriving city to see regular reinvestment and renewal in residential and business districts. New construction and rehabilitation of existing buildings and neighborhoods can be effective in meeting changing demands of both residents and businesses. Such new investment can make a city an attractive place to live and visit. It can also strengthen the tax base, allowing government to be more effective in addressing the needs of all residents.  

However, reinvestment does not occur in a random pattern. At any one time it tends to be concentrated in particular neighborhoods—typically neighborhoods where private investment dollars are most likely to realize maximum return. Such investment can be encouraged by government policies and actions; examples of this are the creation of a Tax Increment Financing District, improvement of city streets or other public amenities, acceptance of tax breaks to attract large business that might anchor neighborhood business economies, and stricter enforcement of city building codes. Certainly the even larger factor are decisions by private developers, homebuyers, commercial property buyers to purchase and/or rehab property in a given city community. Both government and private sector actions can help to define “hot” neighborhoods. In talking with prospective homebuyers real estate agents can define a neighborhood as having a “good return on investment,” or as a place where first-time homebuyers can get “a good housing buy for their money.” Although typically following initial residential development in a community, new retail development can fuel or speed up the gentrification process.  

At the same time, the reinvestment process is often intertwined with displacement of existing residents or existing businesses. Existing low-income residents are forced out by increased rents, condominium conversions, and increased homeownership costs (particularly due to the real estate tax increases that accompany community reinvestment). The general pattern of displacement can include several phases, often predicated by a disinvestment process where minimal repairs are made to residential property and retail stores have disappeared. The stages can include: 1) displacement to make way for demolition or rehabbing of homes; 2) increased property value of these homes and related increases in property taxes in the entire area; 3) higher rents in the improved buildings, or simply because neighborhood property taxes are rising; and 4) displacement of low-income and/or fixed income renters and homeowners who cannot afford the higher rents or taxes.   Sometimes this displacement is something that began years earlier. For example, housing and business disinvestment took place over several decades on Grand Rapids-Southeast Side (primarily Black neighborhoods). The displacement of residents and the process of reinvestment are spread out during a longer period of time—measured in decades rather than single years. The “them versus us” conflicts between the gentrifiers and the displaced residents that happen when those being displaced literally see the gentrifiers moving into the neighborhood have been less apparent in the neighborhood. A cycle of population shifts, economic exclusion, and increased absentee ownership resulted in deterioration and eventual destruction of housing and businesses. Vacant lots became the visible indicators of displacement; they were effectively the placeholders for future development.  

Gentrification is a sign of economic growth. As money begins to flow into a neighborhood, many aspects of everyday life are changed for the better. Buildings and parks are renovated and beautified. Jobs arrive with the increased construction activity and new retail and service businesses. Crime rates decline. As the property tax base increases, so does funding to local public schools. Formerly racially homogenous neighborhoods get an influx of diversity. There are many things to applaud about the power of gentrification.  

But here are some things to consider, “Are the benefits of economic growth shared equitably by new and old residents alike?” and “What is the social cost of economic growth?” These two queries raise a host of others, such as: Do wealthier new arrivals reap the majority of the benefits of increased economic activity? How does the arrival of new “tastes”, expectations and demographics damage the social and cultural fabric of a neighborhood?   The standard picture of gentrification is that the new arrivals benefit greatly from gentrification at the expense of indigenous residents. The new arrivals get affordable, stylish housing and all of the expensive furnishings of life in a trendy urban neighborhood (boutiques, bookstores, coffee shops, clubs and more). While long-time residents may benefit initially from cleaner, safer streets and better schools, they are eventually priced out of renting or buying. As the new arrivals impose their culture on the neighborhood, lower-income residents become economically and socially marginalized. This can lead to resentment and community conflict that feeds racial and class tensions.  

LINC Community Revitalization practices zero displacement of residents when redeveloping neglected and blighted properties. LINC’s practice of zero displacement must become the standard we hold those looking to redevelop commercial and residential property in historically Black & Brown neighborhoods in Grand Rapids. Have you asked yourself why are there pockets of generational poverty, visual areas of disinvestments, high crime rates, low performing schools and high unemployment rates in primarily Black and Brown neighborhoods in Grand Rapids, Michigan. The answer is Systemic/Institutional Racism (Institutional Racism is any system of inequality based solely on race. It can occur in institutions such as public government bodies, private business corporations, as well as in public and private education. Another practice that helped to create the cycle in gentrification was Redlining. (Redlining is the practice of denying, or charging more for, services such as banking, insurance, access to health care, even supermarkets, or denying jobs to residents in particular, often based on race.) During the heyday of redlining, the areas most frequently discriminated against were black inner city neighborhoods. Without equitable and equal access to capital and services how can anyone say that people living in these neighborhoods don’t value their home and community when they never had equal opportunities to create and develop their neighborhoods.  

So those long time residents who were legally and now are illegally excluded from these economic opportunities are now expected not to resist or resent the gentrifiers that are aided by state and locally elected officials. Some would have you believe that the economic gains or benefits of gentrification is positive for all residents but we in the Black community know that any incoming tide has never raised our boat. Our boat has far too many leaks to be raised so our boat just remains at the bottom with a few pieces (individuals) of our are boat slowly make their way to the top. Grand Rapids will never be a sustainable world class city if it intentionally leaves a significant portion of it’s population behind.  

You don’t have to look far for examples of how historically Black neighborhoods will be impacted by gentrification. We can use Wealthy Street and Cherry Street as case studies. Those of you who have been living in Grand Rapids from the early 90’s to now can see how the area has changed and those that have benefited versus those who have not benefited from Gentrification. How will other area being targeted for “renewal” results be any different. Simply put it won’t be any different unless we (Black & long time residents ) begin to increase our percentage of ownership in our neighborhoods and clearly communicate to our currently elected representatives and those seeking office that unless more is done to facilitate reinvestments in Black & Brown neighborhoods (where tax dollars have always been collected but not returned equitably) without drastically displacing and changing the racial and cultural identity of those residing within them. We will no longer support your agendas or candidates that doesn’t have our interests as a priority.  

The impact of gentrification in any community is multifaceted. This is why private dollars looking at redeveloping and revitalizing a neglected district isn’t as simple as you might think. Economic and Social factors must be taken into consideration whenever people are considering widespread private investments in a geographic area effecting a large portion of a particular group of people. The cost of gentrification has been and will continue to be a price the Black community cannot afford and mustn’t accept.