The Pundit: A Cure for Gentrification?

(February 2016)

What’s at Stake
In my region, gentrification had a profound impact on the daily lives of a large portion of the residents during the last 18 years, most of it a negative impact. The impact is most severe for involuntarily low income people and those who don’t prioritize obtaining the highest possible income and/or wealth. With severe gentrification (as seen in San Francisco) the first group includes the lower half of the middle class. That second group includes stay-at-home parents, artists, musicians, activists, workers for non-profit or governmental employers and many others.

Gentrification happens when an excessive quantity of significantly wealthier people begin doing business or residing in a low income neighborhood. It is a problem when it involves displacing and/or harming the quality of life of the residents of a low income neighborhood. A small quantity of wealthier people is not necessarily harmful to a low income neighborhood and may be mostly beneficial. It is the sudden and excessive influx of wealthy people that causes the greatest harm.

In a gentrified neighborhood the cost of all goods and services increase as wealthier customers begin competing for local merchants and landlord’s attention. The harm to the original residents includes higher rental and housing costs and the loss of businesses and non-profit groups serving their low income community. The victims are forced to choose between sacrificing a significantly larger portion of their income towards more expensive housing and other necessities in an effort to remain in their original neighborhood or relocating.

In many cases a neighborhood’s loss of its original businesses, non-profits and people creates a major cultural loss for the remaining low income people. In some cases, those cultural activities were an attraction for the wealthier people, so they also experience the loss and the greater community, city or region becomes less diverse and interesting.

For the lower income people that relocate there is usually a significant financial and quality of life cost to the move. Moving itself is disruptive and expensive and there is likely to be a significant personal and cultural loss. Often displaced workers permanently lose a large portion of their time and income due to a much longer daily commute.

Whether a low-income person is displaced due to gentrification they are nearly certain to suffer a significant financial loss. With gentrification, the poor get poorer regardless of whether they choose to stay or leave their original neighborhood.

In the SF Bay Area and many other regions, lower income people are being displaced to the outer margins of the region, which are the last remaining areas with affordable housing. Living in the margins geographically makes this personal, cultural and loss of time to commuting more severe than ever for low income people.

Despite some of the sounds coming out of politician’s mouths, the wealthy elites do not care about gentrification, they mostly benefit from it. Politicians love having more money to play with from increased property tax revenues. The only impacts of gentrification the elites care about are the loss of ethnic restaurants and maintaining a sufficient supply of cheap laborers to meet their needs. That is why I don’t trust any proposed solution to the problem that comes from the top. Gentrification requires a grass roots solution and resistance from the elites should be expected. Almost by definition, an effective solution to gentrification is contrary to the interests of the elite.

Building more market rate housing is now proven to make gentrification worse, not better. (Please contact me if you know of any situations that indicate otherwise) As long as the planet’s population level continues to increase, funds for subsidized housing will always be limited and insufficient to meet demand.

The Cure
The method I am advocating involves capping the market’s influence on building and housing costs in low income neighborhoods so that they do not rise excessively. The tool is zoning.

Zoning and other laws have been used to exclude low income people from wealthier communities since zoning began. Now it is time to turn the tables. Gentrification in low income neighborhoods can be limited by using zoning laws to make the neighborhoods less desirable for wealthier people. This does not require a class-based, or maliciousness motive since gentrification ultimately harms everyone in the community culturally and financially, even the rich. We aren’t trying to harm the wealthy, we are trying to protect them from their own worst tendencies.

Examples
For existing buildings in a low income neighborhood there can be prohibitions on the following: