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August 2019

Researchers find gentrification yields some important benefits

August 5, 2019

Gentrification creates "some important benefits for original resident adults and children and few observable harms," was one somewhat surprising conclusion in a first-of-its-kind report from the Federal Reserve Bank of Philadelphia.

Authors of the just-released report found the process of gentrification reduces children's exposure to poverty while increasing exposure to college-educated adults, which "could provide role models, information or networks." Additionally, children gain more experience of better education and employment conditions, "all of which have been shown to be correlated with greater economic opportunity," stated co-authors Quentin Brummet and Davin Reed, whose research spanned three years.

Based on their research, the authors concluded that gentrification had no discernible effect on income, employment or commuting distance for lower-income original residents, both those who were displaced and those who remained.

Some questions remain unresolved, the researchers note; nonetheless, they said their results "have important implications for how policymakers should respond to concerns about gentrification." In their report they write, "Our results suggest that accommodative policies, such as increasing the supply of housing in high-demand urban areas, could increase the opportunity benefits we find, reduce out-migration pressure, and promote long-term affordability."

Despite the upsides revealed by the research, some housing advocates remained skeptical.

Sarah Treuhaft, managing director at PolicyLink, a national research and action institute advancing racial and economic equity, called the report's longitudinal data "novel," and something her organization and other researchers have been anxious to obtain, yet she seemed reluctant to laud the findings. (Editor's note: PolicyLink participates in campaigns around anti-displacement and rent control policies.)

Even though the study concludes the outmigration effects of gentrification are smaller than what might have been assumed, Treuhaft said "it confirms that gentrification does cause some displacement, especially for low-income people." She also stated, "We cannot think of gentrification as good when we know it leads to increased displacement of lower-wealth residents and the erosion of cultural diversity and vitality."

Brummet and Reed analyzed central city neighborhoods in the 100 largest U.S. metropolitan areas between the 200 Census and the American Community Survey of 2010-2014. In their 57-page working paper titled "The Effects of Gentrification on the Well-Being and Opportunity of Original Resident Adults and Children," they defined gentrification as the process of college-educated individuals moving into low-income central city neighborhoods that previously housed few residents with advanced degrees.

Davin Reed is community development economic adviser at the Philadelphia Fed. Brummet is senior research methodologist in the Statistics and Methodology department at NORC (National Opinion Research Center) at the University of Chicago.