What exactly is gentrification and how do neighborhoods become susceptible?

It’s happening in cities across the country: white residents and businesses moving into traditionally non-white neighborhoods (usually near downtown centers), changing those communities at their core.

Since 2000, according to a 2019 New York Times report on gentrification, the phenomenon is affecting about one in six predominantly African American Census tracts in the U.S.

It has become particularly prevalent in recent years in Raleigh and Durham.

A new report in The News & Observer uses one block of one downtown Raleigh neighborhood — the 1500 block of East Jones Street in College Park — to show the effects of gentrification there.

Here’s a closer look at gentrification and the historical factors that have made many neighborhoods susceptible.

What is gentrification?

The Urban Displacement Project defines gentrification as “a process of neighborhood change that includes economic change in a historically disinvested neighborhood — by means of real estate investment and new higher-income residents moving in — as well as demographic change — not only in terms of income level, but also in terms of changes in the education level or racial make-up of residents.”

In other words, gentrification is what happens when wealthier (and usually white) people and businesses move into a lower-income neighborhood, making improvements but also making it too expensive for longtime residents and businesses to stay.

How do neighborhoods become susceptible to gentrification?

Many neighborhoods that are susceptible have been historically disadvantaged because of practices carried out by government entities and banks.

Then, after decades of disinvestment, low property values prompt new investment by cities and developers because of affordability and higher demand.

Here are some factors that can cause neighborhoods to become susceptible to gentrification.

▪ Redlining. This practice popular in the 1930s through the late 1960s happened when lenders refused loans to people based on discriminatory practices, reinforcing segregation.

Redlined neighborhoods were neighborhoods occupied predominantly by people of color and were deemed “risky” by banks. The term is said to come from the practice of drawing red lines around neighborhoods on a map, to delineate the “good” neighborhoods from the “bad” neighborhoods.

A 2018 study by the North Carolina Poverty Research Fund used redlined maps of Durham from the 1930s to show that those exact neighborhoods have been the object of “land grabs” by developers in recent years.

The Fair Housing Act of 1968, which prohibits discriminating against borrowers, buyers or renters based on their race, color, religion, sex, origin, disability or other differences, helped stop the overt practice of redlining, though discrimination still exists.

(In fact, just this summer, an investigation by The News & Observer and Charlotte Observer found that Black applicants in eight metro areas in North and South Carolina were more likely to be denied home loans than white applicants with similar financial profiles.)

▪ No GI Bill: The legislation, which helped white families accumulate property and wealth in postwar America through educational and loan programs, was structured in such a way that it effectively excluded Black veterans. For example, even though the Veterans Administration co-signed low-interest mortgages for veterans, the banks continued to keep Black families out of American suburbs. In fact, the disparities in the GI Bill’s implementation helped fuel huge gaps in education and wealth between white and Black Americans.

▪ White flight. This happened in the mid-20th century, when white people left cities for suburbs, shifting economic interests away from urban neighborhoods and reinforcing segregation.

When Black people fled the oppression of the Jim Crow South in the second half of the Great Migration, they moved to northern and western U.S. cities, prompting many white people in those cities to leave. Princeton economics professor Leah Boustan wrote in The New York Times in 2017 that for every Black resident who moved into a northern or western city from 1940 to 1970, two white residents left for the suburbs.

▪ Urban renewal. Federal urban renewal programs (which started with the Housing Act of 1949 and lasted through the 1960s) resulted in the tearing down of homes, businesses and neighborhood institutions, displacing more than a million people. A fascinating project out of the University of Richmond’s Digital Scholarship Lab, called Renewing Equality, used data about displaced families and data about race and redlining to show the racial inequalities of urban renewal.

▪ Highway system. The expansion of the highway system, a result of the Federal Aid Highway Act of 1956, more often than not routed highways through Black towns and neighborhoods (often intentionally), destroying homes and businesses and leaving neighborhoods forever compromised. In Durham, for example, the construction of the Durham Freeway contributed to the demise of thriving Black commerce in the city.

Is gentrification bad?

Gentrification displaces longtime residents and businesses due to the higher cost to live or operate in that area.

Very often, there is a racial or ethnic composition lost in the neighborhood.

Even for longtime residents who are able to stay in newly gentrifying areas, changes in the makeup and character of a neighborhood can lead to a reduced sense of belonging, or feeling out of place in one’s own home.

Can gentrification be positive?

The argument for gentrification being “bad” is very similar to the argument that it’s “good” — it all depends on your perspective.

For many, gentrification is seen simply as “improving” a neighborhood — having renovated or newer homes in the place of rundown homes or vacant lots, perhaps.

But while improving properties and neighborhoods is a positive thing, it’s important to remember that the people who originally lived in those neighborhoods often can’t afford to stay and benefit from the improvements for very long.

And in the end, altering the character and spirit of a neighborhood is a factor that can’t be quantified by data.