Gentrification of Rural America

Summary:

Wealthy visitors and remote workers are moving from places like San Francisco to towns in the American west, radically changing communities and pushing locals out by raising the cost of living, particularly of housing.

Can anything be done about this? Should anything be done about this?

I’ve seen this firsthand up here in the northwoods of Wisconsin and it really bugs me. Most of us locals used to live on the lakes - there are very few locals with lakefront property now, it’s gotten too expensive. Mostly it’s people from Minneapolis area but they come up from Chicago and other cities as well. But - you live in a tourist trap, you get the tourists, and you smile for them because they make your living.

Why should anything be done about this?

We hear stories about how grandma lost her home because the area she lives in became too expensive. Except grandma gets to sell the home she bought for $30,000 for $900,000. She’s going to be fine.

If you want to say “it is the only place she has known” then get a mortgage on the house to pay her costs of living there.

ETA: I will add a caveat to this. I think “investment properties” where the rich (from around the world) buy properties but do not use that property (or barely ever use it) are a problem. We see it in cities like New York and Vancouver and San Francisco.

So where’s the debate? You raised the question; what’s your solution?

I live on the border of “Chicago is over there, corn and soybeans are over there”, and there is nobody trying to gentrify the rural areas near me. But I am reminded of a doormat that used to be sold on the Onion’s merch page. The doormat said: “Sometimes it feels like I’m the only one trying to gentrify this neighborhood.”

I read articles about this happening in Montana many years ago when a lot of wealthy people just started buying up land there. Montanans were eager to sell but pretty soon prices started going up and pushing long term residents out. The same thing has been happening to Colorado for a number of years now and I think it increased with the legalization of marijuana there.

What to do about it? Nothing I guess. That’s pretty much the same thing I said about urban gentrification as well. These things are a mixed bag. Rural areas have complained for years about brain drain and the loss of youth who leave for the economic opportunities found in the big city. But when those areas become trendy some of the locals lose out.

I agree. Gentrification is always portrayed by the left as an unmitigated evil, but it is hardly so. Like @Whack-a-Mole says, the people currently there get paid far more than they would have before the process started, the area becomes nicer, the city and state tax base goes up, etc… Lots of positive things. The only downside is that in a lot of cases between the tax increase due to higher property values, and the cost of living increases, the people living there have to move. But they get paid, and are set up to get another place elsewhere, potentially without even having to get a mortgage. That’s a positive thing, even if the neighborhood’s character changes, and people have to move.

Why would rural areas be any different?

Beyond that, how could you legally restrict who can buy houses, or what businesses can charge? I mean, if a bunch of wealthy-ish people want to move to Bozeman, MT, how would you stop that? I’m pretty sure any policies that explicitly favored locals would get slapped pretty hard in court, for one thing. Second, someone’s selling those houses and land for condos, and whatever, and making a big payday. It seems like some of these people, like that guy with the sign in the article seem to think that someone owes him a house, and that he can’t live in an apartment or move. That’s not how the world works.

Also, what’s happening in Bozeman strikes me as a very acute issue; when the article was published, the system hadn’t reached equilibrium yet, and there was a lot of chaos and disruption as a result. I mean, if Wal-Mart is paying $20.50, then something’s out of kilter. But that won’t stay that way forever; it’ll eventually even out to something reasonable.

Unless the people living there live in apartments, not houses they own. In that case the apartment get sold out from under them, or their rents go up to the level the people moving in can afford. In either case the current residents get booted out, and due to gentrification they may not be able to afford anyplace new.

For houses the problem isn’t the people there already, unless their property taxes soar, but their kids, who can no longer afford to buy a house in their hometown. Not as big a problem as people losing their homes, but still a problem.

Is it better if property values drop?

Gentrification is plainly good for the area.

Whether it’s good for the people who currently live in the area is the debate.

The best solution for gentrification is sensible building regulations so that rising demand and higher housing prices are met by rising supply which mitigates the price rise. Beyond that, if there are poor families who are negatively affected, some additional income support for them should be possible since gentrification will increase the tax base.

There are probably intangible problems like losing the “feel of the neighborhood” which are impossible to solve and just have to be accepted as part of progress. It’s not as if the “feel” you grew up with has been around for eternity.

This is definitely an issue in many US communities.

If it isn’t the rather ‘direct’ regulations, then it’s often parcel size minimums, building size minimums (so much for tiny houses), and artificial scarcity driven by those oh-so-fabulous parks and ‘open spaces’ that so many love in their area, but that serve to throttle potential supply (I think this is more a feature than a bug).

The rising tide of housing isn’t lifting all ships.

Yep.

For many families, children who were born and raised in a town that’s becoming gentrified, literally, can’t afford to stay there … unless the family sells the home, nets enough profit, and decides to use that profit to fund exorbitant down payments for their kids.

But people renting from total strangers net no benefit when the landlord sells and takes those impressive profits, booting the tenants to the curb.

And a lot of the mountain communities – famously, playgrounds for the rich and famous – have been struggling to find service workers. They’re simply priced out of the market and uninterested/unwilling/unable to drive an hour to work, particularly in an area with harsh winters.

The passengers in the first class cabin are branching out, and leaving fewer and fewer seats – at geometrically higher prices – in coach.

I don’t know the answer, but the problem is all too real:

https://www.longtermtrends.net/home-price-median-annual-income-ratio

As this creeps farther and farther into rural America, as it famously has in areas like Pennsylvania Dutch country, I wonder what impact it will have on our food supply (among other issues).

Which “left”? The ones living in converted Brooklyn lofts trying to decide which new coffee shop, craft beer bar or pan-Asian restaurant to go to?

Why are the parents funding their kids buying a house and why does it have to be “exorbitant”?

Shouldn’t that sort itself out?

Some of them choose to do so.

The whole thread is about rapidly escalating housing prices because of gentrification. When a modest home in one of these areas is 800 square feet and costs $750,000, a down payment – let’s just say a rather common 20% – is a big old pile of money.

In a lot of these areas, it is.

Many are seeing significant increases in homelessness, people living in cars, trucks, vans, RVs, tents, shipping containers, etc.

The spreadsheet (or economic theory) belies the humanity.

One other ‘regulation’ that exacerbates the problem is in towns that have enacted ordinances that say that no more than X number of unrelated persons may live in the same dwelling.

While it seeks to prevent Animal House from opening in your neighborhood, it has the effect of increasing housing demand → price.

If a parent can do this then they are very wealthy and are the people who gentrify areas.

Well…if the rich people want services they will need to pay more for them. If the rich people do not want to pay then they go without those services and rich people will not buy in the area because it does not have the services they want.

Sorts itself out.

They’re wealthier than some, but it isn’t that simple.

When some of these markets go white-hot, and the income:housing cost multiples soar, inflationary effects hit everything. Those with a source of cash for a down payment may not be able to afford either to own/maintain (ie, pay all the costs associated with ownership) the house or to survive in these inflationary markets.

Cash not being equal to income, they often simply get priced out of their own home towns in many cases.

As many in these areas will tell you, when you sell your house at an enormous profit, your only recourse is often to leave; otherwise, you’re subject to trying to buy a home in the same overheated market in which you sold.

That is the theory.

But – as I said:

The market doesn’t always behave as expected, and it doesn’t always respond quickly. In either of those cases, we see collateral damage like homelessness, living in vehicles, etc.

Well, that all depends on who gets to define “good,” right?

I’ve seen plenty of neighborhoods here in my native New York City that were not improved, on the whole, by gentrification.

Although the people doing the gentrification will, of course, see it differently.

And around here the houses are often effectively coming off the housing market entirely, resulting in fewer places for anyone at all to live: because they’re being bought by people or businesses based elsewhere, not even for second houses, but for short-term rentals through Air B&B etc.

– The destruction of communities caused by expecting everyone to think of every place as interchangeable with any other, as in ‘who cares if you’ve got to leave, you’ve got enough money to buy somewhere else’, is destructive not only of the individual lives of those people who do bond with particular places, but also of human support systems, and also of care for local ecologies and therefore of the ecology in general.

“Home” and “house” are not the same thing; and only the latter is exchangeable for money.

I guess that’s what an economics textbook would say.

Here, what happens is that the working poor, the ones who serve up the fast-food meals and deliver your DoorDash and Instacart food, get pushed further and further out to the outskirts of the city, parts of the city ill-served by public transportation, and end up having to commute two hours or more each way for a shitty, low-paying job.

And then middle-class blue-collar people start facing the same squeeze. But they’ll make the brutal commute because they have to.

I’m actually staring down that barrel myself. One option we’re considering as a family is a house outside the city, where my wife can work from home, where there are decent public schools (and a good public school almost instantly makes a neighborhood unaffordable here in NYC), and where child care is affordable, not the $2,000 and more a month it currently costs us. And I’ll get a shithole apartment in a horrible neighborhood with a couple of other guys I know, all in the same boat, and crash there Tuesday through Thursday nights. And then take the train three hours back to our home.

That’s one aspect of gentrification. Is that “good”? Not for me, that’s for sure.