America’s housing shortage, rooted in an acute building slowdown that began during the 2008 financial meltdown, has caused an alarming rise in the cost of owning or renting a place to live. Policymakers across the political spectrum have offered useful ideas to boost the construction of new homes. In some markets, the ambitious goal is to double the annual production of housing units.
Unexpectedly, however, fierce resistance to such ideas has come from an unlikely source: local housing advocates and allied politicians.
British sociologist Ruth Glass coined the term “gentrification” in 1964, after observing that working-class London neighborhoods were being “invaded” and transformed by middle-class residents. The monied newcomers, Glass said, bought modest places and then upgraded them, driving prices higher; many existing residents found themselves “displaced,” she argued. The term “displacement” became central to the concept of gentrification.
In America, however, this concern was hardly the biggest issue facing many cities, particularly in the Northeast and Midwest. Starting in the mid-1960s, as industrial jobs fled cities and crime rose, middle-class residents headed for the suburbs. Urban populations contracted significantly, resulting in the widespread abandonment of residential and commercial properties—a process accelerated by the race riots of the late 1960s in dozens of American cities. New York City’s population fell from 7.9 million in 1970 to 7 million a decade later; owners deserted tens of thousands of buildings. Devastated by riots in 1967, Newark saw its population plummet from 405,000 in 1960 to 329,000 in 1980, and the city kept shrinking for another decade. Detroit’s population peaked at 1.85 million in 1950.
Even Sunbelt metropolises like Salt Lake City witnessed a pause in their rapid growth, and then a population decline beginning in the late 1960s.
Federal and local policymakers responded with programs to bolster cities and neighborhoods, including tax credits for urban investment and direct building subsidies. But many of these efforts yielded little, overwhelmed by growing urban disorder. By the late 1980s, New York City still had in its possession properties with thousands of units of housing, left vacant and derelict for years.
Reversing Fortunes
Municipal fortunes began to improve only in the 1990s, when, with New York leading the way, cities started winning the war on crime and gaining back people and investment. Even so, it took years for many blighted areas just to replace what they had lost; displacement was hardly an issue.
The once-thriving blue-collar neighborhood of Bushwick in Brooklyn is a good example. It had endured an extended decline, starting in the mid-1960s, as crime exploded, arson became endemic, and riots tore it apart. Its population cratered from 138,000 in 1970 to just 93,000 in 1980.
Abandoned, uninhabitable buildings pockmarked its streets. It wasn’t until the late 1990s, as crime plunged, that developers, finding unused land to build on, old industrial buildings to repurpose, and young urbanites willing to move to the no-longer-so-dangerous neighborhood, began snapping up Bushwick properties. Annual production of housing rose sevenfold within a decade. Bushwick is transformed from how it looked a half-century ago, with a different, more diverse demographic makeup.
But such makeovers, even when they take place slowly and include little evidence of widespread dislodgment of residents [Bushwick’s population remains smaller than it was in the 1960s] spark anti-gentrification defiance. In Bushwick, community groups rallied against new construction; students of a mostly Hispanic school painted a mural depicting newcomers as vultures. Brooklyn’s overall revival, meantime, became an object lesson for community groups in other cities.
Protesters in Detroit, for example, battled efforts to renovate abandoned buildings and wore shirts emblazoned: “Don’t Brooklyn My Detroit”—a startling slogan, considering the Motor City’s long, sad deterioration.
Financial Crisis & COVID
Given the misperceptions around gentrification, it was inevitable that a sharp spike in housing prices, precipitated by a construction bust following the 2008 financial crisis, would bring louder cries of displacement. From a peak of nearly 2 million housing units completed by developers in 2006, annual output slumped to just 584,000 homes in 2011. Average annual new housing construction fell by more than half in the eight years after the 2008 crash, leaving the country with a shortfall of nearly 4 million housing units by 2020.
Restarting that market, even after demand rose, has proved difficult. Skilled tradesmen were harder to find after the post-2008 building slump pushed some laborers out of the industry. Later, Covid shutdowns hobbled construction, and worldwide supply-chain disruptions caused shortages of building materials. All these developments sent prices soaring. A growing thicket of local zoning and environmental requirements have also made building new housing harder and thus more expensive, in some areas.
Increasingly, when builders have built, they’ve focused on producing pricier housing, as their own costs have skyrocketed. Housing prices more than doubled between 2012 and 2022, squeezing affordability up and down the income scale. Many buyers then began “buying down,” looking for cheaper housing in poorer neighborhoods that they might not previously have considered.
Even so, many still blame gentrification for our current housing woes. A survey of California voters found that just 13 percent believed that the state’s housing crisis resulted from underbuilding. Voters were more likely to point to the proliferation of monied tech-industry workers and an influx of foreign buyers. They can be excused for thinking this way, given how the press handles the housing crisis.
Climate & Carbon
As if to harden opposition even further, community advocates and academics now identify new types of gentrification that they claim victimize poorer urban residents. “Climate gentrification” refers to how climate-related environmental changes, such as rising seas, may transform neighborhoods, resulting in winners and losers. For instance, press reports reflect worries that wealthy residents, who formerly sought prime beachfront locations in places like Florida, are now starting to migrate inland, potentially driving up prices in other areas. The process is playing out around Miami Beach, advocates say, as developers head to nearby higher ground to invest, raising fears in traditionally minority communities like Little Haiti, which is seeing new development, that its character will change irreversibly.
Closely related is “carbon gentrification,” when efforts to cut carbon emissions lead to changes that residents fear will drive them out. In this view, when tech firms like Amazon or Google expanded in Seattle’s city center, and many of their youthful employees decided to live downtown, where they could walk or bike to work, instead of using cars, carbon gentrification resulted. What many urbanists would see as a triumph of city life—greater density leading to lower emissions—was viewed locally as a threat. Critics say that the wealthier new residents consumed more than current inhabitants, raising the neighborhood’s total emissions, anyway. In other words, the densification of neighborhoods, once considered model urban planning, works only if a community attracts the right kind of new residents: not well-compensated tech workers, apparently.
Many low-income residents complained for years about the decline of city parks in their neighborhoods. Over time, cities sought to address those concerns, restoring old parks and adding new ones in low-income areas. That strategy has been enormously successful, providing people with better recreation and helping to attract new residents. But now comes the charge: “green gentrification.” Community activists have tried to block some new parks, or put severe restrictions on the revitalization of existing parks, seeking to stave off another purported threat to current residents.
Renovation
One strategy of anti-gentrifiers is to admonish entrepreneurs for “enabling” gentrification. In Indianapolis, a mother-daughter team that restores old, often-abandoned homes under the name Two Chicks and a Hammer have fixed up and resold some 100 residential properties over the past 15 years. Hosts of a popular HGTV remodeling show, Good Bones, the pair caught flak from activists for reviving properties in the Fountain Square section of Indianapolis—a formerly working-class community that now shows signs of upscaling. The renovators defend themselves by pointing out that they revive properties that no one wants in a city short of housing.
Progressives in many industries, some only tangentially connected with housing, are now told to examine their consciences to see how they might have abetted gentrification. A San Francisco restaurant critic attended a workshop held by a “progressive culinary think tank,” which asked participants to discuss gentrification. Afterward, she published a Cultural Revolution–style self-examination, titled “Am I Fueling Gentrification in the Bay Area?” She described how the arrival of the kind of trendy restaurants that she reviews is often an early signal of a neighborhood’s upswing and how activists increasingly worry about things like “food gentrification.”
Land Trusts & Profit
The consequences of the anti-gentrification philosophy are evident in misguided policies that seek to stem gentrification, but at the cost of a productive, efficient housing market. Land trusts controlled by community groups and governments are multiplying, wielding millions of dollars to buy up property to limit market-rate housing and stall neighborhood change. By some estimates, more than 300 land trusts now operate in America. Their numbers are likely to grow rapidly.
Chicago, meantime, has created a Housing Trust division to buy and manage properties in potential gentrification areas, at least in the government’s estimation. New York City formed an initiative linking 14 land trusts in East Harlem and other areas of the city. New York legislators have proposed a bill that would give the trusts first rights to land when an owner lists a property for sale.
Most of the trust-owned properties get developed into subsidized rentals or owner-occupied homes—but with a twist. An owner seeking to sell a land-trust property will be restricted in the profits he can make. A Minneapolis land trust keeps 75 percent of any gain when an owner sells. A Houston land trust lets an owner sell for a profit, but only up to an amount that equals a 1.5 percent increase annually in value. Someone purchasing such a property ten years ago for $100,000, in other words, would be able to sell it today for only about $116,000. With the average rise in housing prices around the country during that period, the house’s true market value might be more than $200,000.
Eventually, the value of trust properties will fall well below the cost of similar housing valued at market rates. That makes these houses desirable to tenants who want to stay in them and gives the trust operators enormous power, as they get to decide who lives in them. But one thing residents buying into trust properties won’t be able do is build significant equity, and therefore wealth, in their homes.
Conservation Districts
Gentrification fear is so intense that politicians can work at cross-purposes on housing. Even as they pour money into government-subsidized housing, they’re also using anti-gentrification tools to restrict or slow housing construction. Consider the proliferation of so-called conservation districts. These emerged from the historic-preservation movement, which saw New York and other cities, starting in the 1960s, declare certain neighborhoods worth preserving architecturally and curb building or rebuilding there. Though originally meant to protect distinctive historical architectural features of neighborhoods, these districts often expanded into a mechanism to thwart all change.
Now, cities have created a new kind of preservation district, where local residents get to determine how to manage their neighborhoods’ construction, often resulting in yet more tight limits on new development.
Cities are also designating cultural districts that activists want to shield from gentrification. San Francisco, suffering one of the nation’s worst housing shortages, has ten such districts based on demographics and sexual orientation, including Japantown, the African American and Pacific Island districts, the Transgender Cultural District in the Tenderloin, and the Leather and LGBTQ Cultural District in the South of Market neighborhood. To qualify, an area must have many residents belonging to “a specific cultural, community or ethnic group.”
Once upon a time, trying to protect a community’s current racial or ethnic makeup might have been deemed illegal housing discrimination; today, it amounts to government-approved anti-gentrification policy.
All this effort seeks to disrupt a process that rarely causes the harm to current residents that critics claim and, in fact, often helps them. A recent study by New York University researchers tracked children from Medicaid-eligible homes living in gentrifying areas. They found no greater levels of movement out of those neighborhoods by these families, compared with the movement of similar families in non-gentrifying places. The study found, too, that those who remained as areas gentrified saw higher growth in income and lower poverty levels than similar families in neighborhoods that weren’t changing. Previous research had found comparable benefits for lower-income residents in gentrifying zones, including reduced crime, better schools, and less inequality.
Yes, over time, the population of any community changes—but this is normal turnover that occurs everywhere. Politicians, community activists, and the press, however, often mistake or mislabel that turnover as forced dislodgment. Often, when activists and politicians protest such change, what they’re really objecting to is a new dynamic that might see a neighborhood’s politics and power structure change, along with its population. Much of the current movement against gentrification, in other words, isn’t really about displacement. It’s a struggle for control. The losers are the residents of these places, who come to believe that their community getting better will somehow turn out worse for them.
Usually, the opposite is true.
Steven Malanga is the senior editor of City Journal and a senior fellow at the Manhattan Institute. A version of this article appeared in City Journal; it is adapted with permission.
