GRSJ224/Gentrification and Racial Stratification

Nils Maetzel - 60051356

Gentrification is the process whereby previously disinvested central-city neighborhoods "experience a reversal, reinvestment, and the in-migration of a relatively well-off middle- and upper middle-class population." The effects of gentrification are widespread and highly debated. Gentrification can bring reversal to low-income neighborhoods, but in many cases money is centralized in White neighborhoods. However, this article will focus on the effect gentrification has on the racial stratification of communities in the United States.

Urban Gentrification and Racial Stratification in the United States

Preferences Of Gentrification Towards White Neighborhoods

Race plays a large role in the formation of neighborhoods. All race groups show a substantial preference for integrated neighborhoods with greater weight placed on same-race neighbors. Whites have the strongest preference for same-race neighbors (approximately 25% of whites prefer no Blacks in their ideal neighborhood) and Blacks have the weakest. Latinos and Asians change their preferences depending on the incoming race. When the potential neighbors are Black they prefer integrated neighborhoods however for other out-groups they prefer co-ethnic neighbors over integration. These perceptions are highly influenced by the association of racial composition with poor socioeconomic standing, crime rates, and other objective measures. Especially White's out-group prejudice contributes to racial stratification. Therefore, White neighborhoods become the most appealing, Black neighborhoods the least, and Asian and Latino somewhere in the middle. Middle-income gentrifiers avoid poor neighborhoods with high minority populations. Specifically, gentrification tends to favor neighborhoods with a White population above 35%. As a consequence less investment reaches minority neighborhoods. Neighborhoods with high poverty rates in 1970 generally continued to be poor in 1990. Additionally, from 1970 to 2000 every neighborhood in Chicago with a proportion of Black residents above 40% increased their share of Black residents or kept their share constant. While residential mobility decisions of residents of all race and income groups tend to reproduce existing patterns of inequality, White gentrifiers show substantial resistance to moving into a neighborhood with even one black neighbor. Thus skewing the types of neighborhoods that receive investment.

Issues With Gentrification Within Minority Neighborhoods

Even when gentrification does reach minority neighborhoods they find their population transforming into a White majority. The two main theories on gentrification both hold that college educated White people moving to low-income minority neighborhoods contributes to racial stratification.

Place Stratification Theory

Place stratification theory holds that White gentrifiers give primacy to the racial composition of a neighborhood above all characteristics. Such that even though the likelihood of gentrification increases with school choice (up by maximum 22% if there is an expansion of school choice), White gentrifiers will be equally deterred from moving into low-income, minority neighborhoods. Self explanatory this further contributes to the racial stratification of a city. The significant link that place stratification theory places between gentrification and racial composition explains how reinvestment in central-city neighborhoods contributes to of racial discrimination. In this way gentrification is part of a new wave of segregation.

Space Assimilation Theory

Space assimilation theory holds that White gentrifiers give primacy to characteristics and residential amenities of a neighborhood. While the definition of space assimilation theory doesn't directly indicate an increase in racial stratification, the hidden biases of powerful groups towards a preferred neighborhood does result in racial stratification. Predatory lending practices, discriminatory behavior of real estate agents and landlords; governmental policies, such as zoning and renewal policies are all examples of powerful groups racially stratifying neighborhoods.

Minority homebuyers in gentrifying neighborhoods are much more likely to be turned away by real estate agents than their identically qualified White counterparts. On average Black applicants are 2.33 times more likely to be excluded than identically qualified white applicants. The number drops slightly to 2.28 for applicants classified as other, drops again to 1.44 for Hispanic, and rises to 2.09 for unknown. Exclusion is not equally distributed throughout the United States. In the North East exclusion is born most heavily by Black applicants whereas on the West coast the bias is directed towards Hispanic people.

Policy makers also contribute to racial stratification. In the United States these individuals are incentivized by tax revenues to support gentrification. As middle-income gentrifiers move into central-city neighborhoods new revenues can be collected from areas that previously offered small revenues: the poor tax bases and concentrations of poverty in inner cities. By moving into these neighborhoods middle-income groups gentrifiers create overwhelmingly negative effects. The displacement of low-income residents and the destruction of support networks are just some ways the quality of life for existing residents is worsened. Some conservative public officials in New Orleans use their public policy changes to lure middle-income families into central-city neighborhoods and purposefully displace or ‘culturally integrate’ existing low-income minority communities.

Benefits of Gentrification

While the above may seem a damning critique of gentrification there are benefits. Some of the positives include but are not limited to: stabilization of declining areas, increased tax revenues, increased property values, reduced vacancy rates, laying the foundation for future development, reduction of suburban sprawl, increased social mix, rehabilitation of property. However, the overwhelming effect of many of these benefits is of detriment to existing low-income families. Increased tax revenues favor higher income gentrifiers who are usually of a White ethnic background. As a result it becomes harder for minority families to move into gentrifying neighborhoods. Increased property values help homeowners however if housing costs rise faster than real income the city must subsidize housing or risk low-income residents losing housing. Reduced vacancy rates contribute to the safety of a neighborhood and can help low-income residents. However, the major effect is increased competition for housing along with rising housing costs. Both laying the foundation for future development and reduction of suburban sprawl are macro problems that benefit a city but have little overall benefit on low-income residents. Increased social mix is seen by many policy makers to be a benefit however the movement of middle-income gentrifiers into low income areas has overwhelmingly negative effects on low-income groups. Again the benefits are focused predominantly towards the White middle-income gentrifiers. Only stabilization of declining areas and rehabilitation of property have an equally distributed benefit towards all residents in a gentrifying area. While there are benefits to gentrification they are overwhelmingly focused on middle- upper-middle -income residents.