Oak Cliff, pictured here in 2018, where new development is colliding with old. (Photo by Creagh Cross)

Urbanism

New Study Shows Gentrification May Not Be the Boogeyman Many Fear

It is not easy to answer the question of who wins and who loses when urban neighborhoods rapidly redevelop.

Earlier this week, I was sitting in the offices of the Jim Lake Company talking with Amanda Moreno-Lake when the subject of Oak Cliff development inevitably came up.

Moreno-Lake has been a key figure in the Oak Cliff boom, and Jim Lake is one of the original investors in the Bishop Arts District. In 2008, when a stretch of Davis St. was rezoned to allow for dense development in and around the district, Moreno-Lake was on the neighborhood committee overseeing the changes. That rezoning opened the floodgates for a tremendous amount of development that has rapidly transformed Oak Cliff. The development has split the neighborhood. It has brought jobs, amenities, shops, and restaurants, but it has also driven up taxes and the cost of living, leading to displacement and a shift in the character of the neighborhood. In 2008 Oak Cliff residents were desperate for more investment in their neighborhood. These days, when they have the opportunity, Oak Cliff residents have attempted to tap the brakes on the surge.

Moreno-Lake bristles at the sentiment that the new development has been bad for the neighborhood. She argues that gentrification and displacement are terms that are too broad to describe what is going on in Oak Cliff. For example, she says, what if someone purchased a house on 7th St. a few decades ago for $35,000 or $40,000. Now, with their family grown, they can sell that house and earn hundreds of thousands of dollars in profit. Perhaps they choose to find a quiet place out of the city on a little patch of land and live on the earnings for the rest of their lives. Is that displacement, Moreno-Lake asks, or the best investment decision of their lives?

What Moreno-Lake is getting at is that it can be difficult to sort out who wins and who loses when neighborhoods experience gentrification. A new study backs up that observation, demonstrating that, despite the common fears of gentrification and its visible impact on the character of neighborhoods, original residents stand to gain more than what conventional wisdom is willing to admit. In fact, the study shows that whether residents choose to stay in their neighborhoods or they choose to move, they are often better off than they were before reinvestment occurred.

The study comes from Federal Reserve Bank of Philadelphia and and the United States Census Bureau (via CityLab), and it says it is the first “comprehensive longitudinal study on the long-term effects of gentrification on original residents.” One of the things it confirms is that “gentrification” may be an overly broad term that carries too much baggage that can cloud our understanding of the dynamic nature of neighborhood change:

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.

The paper’s research shows that residents who are displaced by gentrification “do not experience worse changes in observable outcomes than movers from non-gentrifying neighborhoods.” They don’t end up in higher-poverty neighborhoods, they don’t become unemployed, and their commutes do not become longer. For residents who stick it out in gentrifying neighborhoods, the research shows their exposure to poverty is reduced and their rents may not actually be impacted:

“[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. . . . 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.

For people living in changing neighborhoods like Oak Cliff, it can be difficult to reconcile this research with experience. As someone who first moved into the neighborhood in 2004, I can attest that the change has been dramatic both in terms of affordability and that ineffable quality of cultural feel. The paper acknowledges this, pointing to higher property taxes as one clear challenge of gentrification. And the impacts of gentrification extend beyond mere economics. Even though residents may not end up at an economic disadvantage because of gentrification, both displaced residents and those who stay experience psychological impacts:

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.

The paper also finds that the benefits that come with gentrification—higher salaries, better job opportunities, shorter commutes—are inequitably dispersed, with a greater positive impact on those who already have income and educational advantages. But perhaps the paper’s best observation is that it is important to refine the metrics that are usually used to study gentrification. Not all development is created equal, and not all neighborhoods and residents are impacted by urban reinvestment in the same way. And, interestingly, the study finds that Dallas has one of the lowest occurrences of gentrification among the nation’s 10 most populous cities. It finds 5.9 percent of the city is gentrifying under the study’s definition, locating 12 “gentrifying tracts” and 205 “gentrifiable tracts.” When you set that next to Austin, which has 23.4 percent of the city gentrifying across 25 tracts but with almost 400,000 fewer residents, you start to see that this is not as widespread here as anecdotal evidence may indicate.

Gentrification is a term that is used to described a complex and dynamic process, and so fears of gentrification—from displacement to increased property taxes to deepening poverty—should not be used as a crude NIMBY tool to oppose any and all urban growth.

This is significant because, as I argued on Wednesday, the future success of cities like Dallas lie in their ability to re-energize and redevelop the urban core. That is going to require new development. As in Oak Cliff, any new flood of development will produce both positive and negative outcomes. The trick, as always, is striking the right balance.

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