Gentrification can benefit poorer residents as well as wealthier neighbors

Homes like these on Spruce Street in University City have seen a rapid increase in rents and property taxes. (WHYY, file)

Homes like these on Spruce Street in University City have seen a rapid increase in rents and property taxes. (WHYY, file)

Many Philadelphia neighborhoods are rapidly changing, leaving some wondering if the current wave of gentrification is a blessing or a curse for low-income residents.

The answer is complicated, but a new analysis from the Federal Reserve Bank of Philadelphia finds one thing is clear: if vulnerable residents are able to weather the changes, they’re poised for better lives.

But it’s not a case of a rising tide lifting all boats. It’s more complex than that.

“Big picture, the takeaway from the study is that there are benefits and risks associated with gentrification,” said Eileen Divringi of the Federal Reserve.

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She and her colleagues examined gentrifying neighborhoods in Philly over 13 years to learn more about the impact on residents.

Higher-income people moving in does indeed mean positive changes — improving public schools, ebbing violent crime, creating locally owned businesses.

The flip side, though, is that when housing costs shoot up too quickly, vulnerable residents are pushed out and often end up in poorer neighborhoods.

Then there are the people who seemingly get caught in the middle.

“For individuals who could absorb those housing-cost increases, they might be more motivated to stay in those neighborhoods because they see neighborhood conditions improving,” she said.

Changes add up to ‘multiplier effect’

The report found that if people can ride out the gentrification, even if they are just scraping by, the results can be very good.

“Now that is because there is a multiplier effect happening,” said Villanova University economist David Fiorenza, who has served as a consultant for cities on mitigating the negative effects of gentrification.

“So if you renew an area — and you renew it with jobs that have been created that are better than the jobs that were there before — then that means wages are up, benefits are up,” he said.

Angel Rodriguez, who works with the Latino-based economic development organization Asociación Puertorriqueños en Marcha, said change is inevitable and growth is a good thing, but quality of life needs to be maintained for everyone.

“Do they want a safe environment? Yes. Do they want quality housing? Yes. Do they want great schools? Yes. Do I wanna eat, you know, fairly priced nutrient-rich food? Yes.

“And I don’t think you’ll find anyone who says they don’t want that,” he said.

His organization is one of a slate of services the city sponsors to help people on the cusp avoid foreclosure, improve their credit score, or even chip in on rent.

What tips the balance in deciding whether a family can stay, or is forced to leave, often comes down to chance, Rodriguez said.  A health emergency. A cut in hours. A layoff. All those things can make or break a family sorting through the ramifications of gentrification.

“It is rent. It’s food prices, depending on family size, can you actually feed your family?” he said.

Focusing on West Philly

Ground zero for change, according to the Fed study, is West Philadelphia. In the area surrounding the University of Pennsylvania, one in five black residents have moved out since 2000. The average home value jumped from $78,000 to $184,000.

So if you already own your home, the boom might be welcome.

“Landscape is changing. It’s beautifying itself here,” said West Philly native John Wilson, who has seen  the value of his home climb in recent years. 

“My property taxes have raised by about $100, but it’s making it a better neighborhood to tell you the truth. So I really don’t have any discrepancies with it. It’s kind of worth it,” said Wilson, who has a good truck-driving job and has been able to build some savings.

But for every John Wilson, there’s a Khadijah Newsome.

“First of all, the rent is like $900 for a one-bedroom apartment,” she said. “That’s too much money. They’re snatching our houses, this is kind of like the ghetto, basically charging college student rent. Look how it looks down here.”

Newsome, who is apartment hunting, said she’s being pushed further west in search of affordable digs.

She’s not alone; the Fed study found that median rent in West Philly went from $580 a month in 2000 to $989 a month in 2013.

The Fed’s report also found that vulnerable residents of poor areas move just as often as those in highly gentrifying ones.

Eviction, foreclosures and not being able to cover housing costs — those things affect people everywhere, regardless of how “up and coming” their block is.

“Which is, I think, potentially surprising if your idea of displacement is the rapid residential destabilization of low-income folks,” said Divringi.

In other words, young professionals move in, force working-class people to move. That’s not the trend.

It does happen, Divringi said, but just as often, affluent people move out of gentrifying neighborhoods and into even nicer ZIP codes.

What does this all mean for working-class residents facing gentrification?

The study is hopeful. When disadvantaged residents stay in developing neighborhoods, they end up better off. Figuring out how to get more of them to stay, however, is a huge challenge.

It should come as no surprise that researchers found that well-off people in gentrifying areas tend to benefit the most.

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