Why is Gentrification a Bad thing?

sailor, I live in California. Landlord - tenant law here provides that a landlord may evict a tenat with a three day notice for nonpayment of rent. He may also evict a tenant with a 30 day notice for a number of reasons, including renovations, moving a relative into the unit, selling the property, creation of a nuisance, and others. Specific reasons allowed vary by community, according to local rent control rules.

As a further note, most multi-family income property is financed - only a few are paid for with all cash. Very few lenders will accept a building which has tenants with long term leases; the generally accepted maximum term is one year, with annual renewals offered, often with an increased rental rate.

I’ve worked in the real estate industry as an underwriter, loan officer, transactional paralegal, and currently as escrow officer for an extremely large RE developer and property manager. During those last 12 years, I have never seen a lease with the term you propose.

I’m afraid I do have my facts straight. Although my reference books are at my office, and I am not, please let me know if you need me to research and post the specific relevant law.

My apologies, Keeper0. I didn’t see your reply until after I posted. I’m afraid your scenario for renovation evictions is all to often the truth.

Plus, my employer manages several thousand units in the Bay Area - which means I work for the Dark Side. And for that, I apologize twice.

well, what it comes down to is that the rental market is tight and landlords have the upper hand and can pretty much set the conditions. Well, that’s life. That’s the market. When many people want the same thing, the price goes up. You can go live elsewhere. That will drive prices down. You can go live in West Undershirt (Indiana) for close to nothing. The reason it is cheap is few people want to live there. When the market is reversed and landlords cannot find tenants, nobody offers them relief. If you want to be where everybody else wants to be, you have to be ready to pay the price.

Okay, all you $12,000/year minimum wage workers and waitresses with a spouse and two kids…pack up. You have to walk to West Undershirt, Indiana (apparently from New York and LA and Chicago) and find an apartment and a new job. Although you need a job to even be considered for an apartment and you need an address to get a job.

But it’s okay…the gentry will appreciate your vacating of your present living arrangements and will wave nonchalantly as you trudge down the Interstate…

jayjay

If it makes you feel better perhaps someone will decry the “white flight” of our suburbs. Those in the city might be able to move housing in the suburbs. Wouldn’t that be grand?

For years mayors of various large cities have cried that we need to revitalize the inner cities. Now when someone starts to do that others cry foul? Just goes to show you that you can’t please everyone all the time.

Marc

jayjay, I am not saying people do not have economic and financial problems in their lives. It is not a matter of housing, it is a matter of money which affect every aspect of every person’s life. We each have to plan our lives as best we think we can. Housing, food, transportation, all are essential things we need. But I just do not see any reason the government should step in to assure anyone they can live somewhere or eat something or whatever.

If people are so down that they are absolutely broke, then I understand the government should help them. But helping people because they can’t afford to live in a specific place is just not the job of the government.

You say people with low income cannot afford to live in some areas. Well the market should take care of that nicely. If the businesses cannot find employees they will have to raise the salary until they do. That’s how the market works. I do not think the government should intervene here. If the businesses need the people, they’ll have to pay an adequate salary or the people will go elsewhere. If the government subsidizes the housing, they are indirectly subsidizing those businesses. That’s the way I see it.

I’ll admit that cases like this tend to polarize me…half of me thinks “this is what happens in a free market and we can’t guarantee everyone enough food and shelter for various reasons, both practical and political” and half of me thinks “we can’t let these people end up living in the park or under a bridge so how do we stop people from raising the rents beyond their means.” I think unbridled enterpreneurism can be a bad thing. But unfettered Nannyism is just as bad. So I’m standing here in the middle of the road getting hit by cars going both ways most of the time.

My apologies for sounding pretty biting and sarcastic in the post you quoted. I was reading your previous post as heartless "they’re not our problem"ism.

jayjay

Hmm… first of all…

The problem with gentrified neighborhoods isn’t that whites are there. It’s the fact that minority groups, especially blacks, aren’t- gentrified neighborhoods are simply too expensive to support significant populations of almost any minority groups. This becomes a problem when the gentrified neighborhoods are carved from minority or “ghetto” neighborhoods, displacing minority groups and forcing them into other urban neighborhoods that are not undergoing gentrification. Since these neighborhoods are increasingly difficult to find within the urban core, population (and, more importantly, population density)rises, sometimes dramatically, within these neighborhoods. With this influx of population, rents rise (often a substantial amount) and living quarters are further divided, making conditions more uncomfortable and unsafe. Crime rates, despair and all those other nasties tend to set in, as [\B] Container ** eloquently pointed out.

However, that’s not the most insidious part of the story. Within these neighborhoods, poverty becomes concentrated. The effects of poverty on urban areas have been found to be basically exponential- poverty has the effect of magnifying surrounding poverty, creating substantially worse conditions. In these conditions (more poor people paying more for less), minorities (especially blacks) cannot accumulate the financial resources needed to escape the ghetto, or even give their children the opportunities they would need to escape said poverty cycle. The result? The American underclass. Go figure.

Or, that’s the way the story goes if you believe the modern sociological perspective on race relations. (Actually, there is a fair claim to be made that most sociological data is faulty on methodological grounds, but most of this stuff is pretty valid however you slice it.) BTW, I have a fair number of sources available for the info if anybody cares, but really all you need to read is “American Apartheid” by Douglas Massey and somebody-or-other Denton, and a book called “Black Wealth, White Wealth”, by somebody who my tired brain just can’t remember right now.

Another cheery example of why this society sickens me…
M.

I guess my view is that I can accept the government setting some very general rules and helping people who meet the criteria in a way which does not distort the market.

There are two very different things here. One is that I would limit government help to the bare minimum because I do not believe it is healthy for people to learn to rely on government help. People who have houses by the beach on the Atlantic coast should have hurricane insurance. If they cannot afford it, it means they cannot afford a house there. The feds should not be asked to bail these people out every hurricane. I do not care how rich or poor they are. That should not be a criteria. You should have private insurance if you want to be covered. If you cannot get insurance that is telling you right there you should go live somewhere else. The same for flood insurance in other parts of the country. The Mississipi is going to flood now and then. get insurance and don’t make the rest of the country pay. Insurance is part of the cost of living ther and doing business there. So, point one is that i would limit government help to the most extreme cases of hardship and let people make their own provisions for a rainy day.

A different issue is, when the government does give help, how should it do it? I believe it should not help you with specific needs like housing or food or whatever, but rather let you decide your needs.

If the government says “i’ll give you food stamps” so you can only buy food, that is distorting the market. Food is a commodity which can be bought and sold. here in DC you see all the time people buying food with food stamps and selling it at a discount. Those people have decided they don’t need food, they need money.

My neighbor is an 85 year old woman and she lives on government help. Her utilities are paid for so in the winter her house is a sauna even though she is short of money for other things and continually asks to borrow from me. If she could sell the heat she would, but since she can’t she merely wastes it and gives it no value.

If she was given an allowance of money to spend, she could use it much better. By telling her how she has to spend the money, you are just creating waste and making energy more expensive for other people.

I am not doing a very good job of explaining myself but the main point I am trying to make is that it is not good for the government to get involved in the particulars. If the government makes general rules which affect everyone equally, then that is OK, but if the government tries to obtain certain results, that distorts the market and is prejudicial.

Subsidizing the people in a particular neighborhood is a bad idea because it just distorts the economy there. If people can count on a subsidy there, then they will count on it, they will take a job which pays less than it should, the employer is paying less than he should, his product or service is, in effect, being subsidized. This subsidy attracts more tenants and more businesses when you would want the contrary, for them to move to other places.

Many businesses have moved from California to Arizona where costs are cheaper. That is what market forces do.

But if you take the kind hearted approach of immediately helping people who seem to need it, you are creating a much bigger problem in the longer run. Europe is a good example of good intentions gone bad. There the policy is to protect the workers and subsidize companies which lose money so they can stay in business. That is what they have done for decades. The problem is that it is a well intentioned short term patch with huge negative long term consequences. They have had to move away from this because they just could not affor it. Unemployment is high and the incentive to be productive just isn’t there if you know the government will bail you out.

Just a few days ago I saw a segment in the news here about farmers planting crops they knew would fail with the sole intention of collecting insurance. The scam was huge, millions of dollars. the original intention was good but the results were not. The insurance companies would not sell this insurance because it was obviously too risky so the feds would undersign them. Now both the farmer and the insurance company have an interest in insuring the crop they know will fail because they both make money off it.

So, it is not that I don’t care for the poor farmers, but the solution just creates more problems than it solves. I say if they cannot afford the insurance they should not be in that business. That is true of any business. If the only way to afford the cost of doing business is a government subsidy, you should get out of the business.

I know I am not too good at explaining it… but it’s the best I can do.

>> Another cheery example of why this society sickens me

Well, if you find a better one go ahead and buy it.

This is a no win situation. If a neighborhood remains poor that is bad because it remains poor… and if it starts going to better it is bad because it causes some problems for some of those who live there. You can’t win can you?

Of course you can win. It’s just a matter of how hard you’re willing to fight. There are (at least) two ways of turning a poor neighborhood around. The first is to throw out the poor and start over again, which mainly has the effect of displacing the poor and making Starbucks open another coffee shack. The second is to foster enough economic independence among the neighborhood’s residents for them to be able to fix up their own homes (or, at the very least, buy them and start gaining equity). This would also, it should be noted, solve quite a number of ancilliary problems in “ghetto” communities, among them crime, poverty (duh…), and (I’d be happy to wager) the apathy that sustained hopelessness can cause.

The central problem with race relations in this country is not power, or political representation, or attitudes (although we do have a serious attitude problem in this country). It’s like Puff Daddy said- “It’s all about the Benjamins”. Quite simply, minorities, and especially blacks, don’t possess financial resources. For instance, black home equity is a small fraction of white equity, and a much higher percentage of whites than blacks own their own homes. Additionally, the average net financial assets (stocks, bonds, anything liquid that’s valuable, basically) among blacks, even middle-class blacks is zero. Zip. Nada. This is compared to hundreds/thousands of dollars, even for working class whites. The effects of this are profound- minorities are forced to perpetually rent, depriving them of home equity and assets to pass onto their children. The effects continue- zero plus zero is still zero, whereas even a small intergenerational investment grows fairly large over the span of decades/centuries. Or, that’s my feeling. Again, go read “Black Wealth, White Wealth”, by the same guy I couldn’t remember before. It’s hideously depressing, and lays out fairly well how blacks are getting dicked by unequal resources.

I think your point about buying a better society is more right-on than you think. As far as I see, the only way to get a better society is to invest in it. Sadly, though, I can’t get 6% compounded annually on my fairness, equality, justice or any of that hippy-dippy stuff, which is why none of this matters one whit anyway. Sad, sad.
M.

My last lease was for 1 year, but it did state that “either party may terminate this contract for any reason with 30-day notice…”

This was in Missouri, FWIW.

First off I don’t understand all of this talk about landlords holding all the cards and tenants getting screwed at the landlords whim.

It may be different where you live but in Chicago tenants have specific rights. My father is an attorney who helped a landlord evict a tenant for non-payment but due to various tenant laws it took 6 months to get the guy out. In the meantime the landlord was paying a mortgage with no income from that residence. Tough luck for the landlord.

The second thing evolves from the first. Sailor mentioned it earlier but I think it got lost in the shuffle. Renting comes with advantages and disadvantages both for the tenant and the landlord. A water pipe may break and cause $20,000 of damage to the property. Is that the tenants problem? Nope…the landlord has to suck that up and is unlikely to be able to recoup that loss in the near or maybe even distant future. By renting you avoid these sorts of hassles with the tradeoff being your rent may get raised and you might have to move. Those are the breaks…you can’t have it both ways (unless you lived in New York City with rent control which was pretty much an unmitigated disaster except for the lucky tenant who was living in a $2000/month apartment for $200/month). In short both parties assume some risk in this arrangement. Trying to fob all of the risk towards the landlord is unfair and counterproductive. If you did manage to pass laws doing this you would see rental properties dwindle to nothing since no one would be willing to assume that sort of risk. Then where would the poor who can’t get a mortgage be?

I agree with sailor. It’s not a perfect world and sometimes a market economy can suck…especially for those people living at the margins. Nevertheless any legislation looking to move risk around and protect the poor are wrongheaded and ultimately unworkable (as mentioned in the previous paragraph).

Finally, I also don’t understand the talk of the poor who get displaced forming ever more concentrated pockets of hell to live in. A neighborhood gets gentrified…the poor move to some other neighborhood and over ‘there’ property values drop and rents become cheaper. Sooner or later that neighborhood gets gentrified and the poor move again and the cycle continues ad nauseum. There are a finite number of people living in a given metro area…it can’t all become gleaming houses with a pocket or two of supercondensed crap unless 90% get wealthy and 10% stay destitute.

That brings me full circle to my original point of gentrification being a good thing overall. This ebb and flow of money moving around the city acts like a sweeper cleaning up run down areas and giving them a longer life. The alternative, in my view, would be for everyone to stay put making the crap areas crappy beyond belief as they slide ever deeper into shit with never a facelift to be had.

Also, I have a problem with peopke not accepting their own responsibility in how things are. I bought a house in a neighborhood which I thought would get better. It is not bad but it is not the best. Just a mixed neighborhood. Many people at the neighborhood meetings seem to only have complaints about all the things the local government should be doing for us. Bur wait a minute, Who is littering my front yard every day? Who is committing all the petty crimes? We had a nice Chinese corner store until some kid decided to hold it up and the thing went bad and he killed the owner. It has never opened since. The neighborhood is being run down by its own people. To say the government should come in to reverse this I just cannot see how. Before you ask others for help you need to be doing everything that is in your hands.

Some people have good habits and whereever they go things get better. Some people have bad habits and whereever they go things get worse. Generally the people who remain in poverty do not need government money as much as to learn good habits. For decades now the governments are throwing money at the problem and the situation does not improve.

Some people with bad habits, where ever they may go, they will drives prices down. It is not a matter of money but of what you do. Some people, no matter where they go, things get better and prices go up. People want to live next door to nice people with good habits, not necessarily rich people. But nobody wants to live next door to lowlives and bums.

The big housing projects have been a resounding failure. 60 minutes did a segment about some city which had a program which put poor people in well to do neighborhoods.

Of course there was opposition from the neighbors. They paid good money to live here and now the government is doing something which drives the values down.

They followed a woman who had been relocated for a year. She was a bum before she was relocated and a year later she was still a lazy bum. what she needed was not to be given a nice house for free. What she needed is to learn good habits. I am not sure the government can do that.

I think we expect too much from the government. Life has its problems but sometimes the government is just not the answer.

What a silly idea.

Are they going to give money to people who buy houses in an area that then goes down in value ?

The poor should just move.

If you can’t afford it, you can’t have it.

Well, here’s the deal with ghettoization- generally (and this is by no means the only option), most areas in the urban core are already closed to the poor, either because they don’t contain housing, or are already wealthy neighborhoods. Minorities in urban areas tend to hold jobs that exist only in that urban area, such as jobs in postal service centers and janitorial work (BTW, the Postal Service is the largest employer of blacks in the US, IIRC). So taking into account the lack of transportation, minorities, especially blacks, are tied to the urban area in which they reside- they have no option to move to the suburbs, even if they could afford it. Gentrification tends to decrease the available affordable housing stock, for somewhat obvious reasons. In cities without corresponding areas of white flight or abandonment of working-class neighborhoods within the city (many/most of which have already been abandoned as the whites left for the 'burbs), minorities just don’t have anywhere to go but the pre-existing ghettos, raising population density, etcetera, etcetera.

The reason why minorities (A side note: most of this argument is based on research centered on the black urban experience. Other minorities have slightly different experiences, but I guarantee you that this pattern holds generally for minorites.) live in the neighborhood in the first place generally has to do with the previously-mentioned white flight. Many predominantly minority neighborhoods are those that were taken over when white working-class and ethnic groups took off for the suburbs. The biggest problem is that nobody is left to chase out- anyone who could escape the urban core pretty much already has, and those who still live there are trapped in a poverty spiral that precludes them from being able to leave. There aren’t many/any neighborhoods left to fall from working-class to ghetto, and gentrification makes these formerly affordable neighborhoods basically uninhabitable for blacks for at least 50 years, until property values fall and minorities can gain enough of a foothold to cause another white flight.

You are right in suggesting that gentrification can clean up neighborhoods, but the main problem now is that minorities who are tied to the urban core just don’t have a place to go, unlike the '60s and '70s when they could inhabit the formerly white working-class neighborhoods.

Basically, this is all a no-win situation. With gentrification, minority groups get screwed. Without it, they still get screwed. It’s just picking your poison, I suppose.

Gentrification 101:

  1. Gentrified enighborhoods are usually a pedestrian-oriented urban neighborhood, typically pre-WWII, with interesting architecture and larger than average houses. There’s only a few places where suburbs are gentrifying – East Aurora, New York outside of Buffalo (due to a renewed interest in the Arts and Crafts movement), Lakewood, Ohio (a suburb of Cleveland with a large gay population) and the railroad 'burbs of Philadelphia and Chicago, and formerly all-black neighborhoods in Winter Park outside of Orlando are some examples.

  2. Gentrified areas are offer some locational advantage that leads to their “discovery” – they’re close to downtown (Lincoln Park in Chicago, College Park in Orlando, Highlands and Berkeley in Denver), near a transit station, next to an existing affluent neighborhood or upscale shopping center (Cherry Creek in Denver), or close to several major employers (Montrose in Houston).

  3. Gentrification usually takes place in metropolitan areas with high housing prices and/or large metros with long commute times. Almost all of Denver and ORlando’s pre-WWII housing stock is unaffordable to the masses, except that lcoated near industrial areas. In Denver, neighborhoods that were once black are now “bleaching” – North Park Hill, Curtis Park, and Five Points. Buffalo has a ton of neighborhoods where gentrification stalled in the mid-1980s – Allentown, West Village, and the D’Youville area – due to a faltering economy that never picked up. Why risk the bucks on restoring a Queen Anne house in Allentown, when you can get a 3,000 square foot Craftsman bungalow in the stable North Buffalo or Parkside neighborhoods for just $100K?

  4. There’s usually a pattern to gentrification – it’s not always where the yuppies come along and push out migrant labor, but rather, something along the lines of …

  • Discovery by artists looking for cheap housing with character in a funky neihgborhood.
  • Gays follow the artists.
  • Middle class, young single and married professionals follow the gays.
  • Yuppies follow the middle class.

The process typically takes about 10 to 20 years, but it’s accelerated in hot housing markets like Denver.

Gentrified neighborhoods usually stay quite affordable until they’re “discovered” by the yuppies. Berkeley, they neighborhood I lived in in northwest Denver, is a perfect example. It was a predominantly Hispanic neighborhood; driving down 38th street, it still feels like the barrio with all the Mexican restaurants and “send cash to Mexico” outlets. Berkeley was discovered by artists in the early '90s; and a small but significant lesbian community followed a few years later. Middle class young professionals who preferred urban neighborhoods (that’s where I come in) bought in 'round '97 and '98. Now, the yuppies are there – there’s teardowns (small bungalows are being town down, to be replaced by McMansions), new subdivisions (Highlands Garden Village, a “New Urbanism” development built on the site of an old amusement park, where you can’t even buy a townhouse for under $250K), and “pop-tops,” where someone will add a second floor to n old bungalow. The owner of my old house is planning to both “pop the top” and add out the back. 800 square foot bungalows sell for 'round $220,000 – five years earlier, they went for about $80K or $90K.

Despite the gentrification in Berkeley, though, there’s still a lot of artists, and you still hear a lot of Spanish in the stores. The migrant workers are gone, but the working class homeowners (which make up a karge part of the population) are making out quite well. My old next door neighborhood, a janitor at a local church, is looking at cashing out and buying a much larger house in a new Brighton subdivison. The folks who lived on the other side of me, a young couple who bought their house in the early '90s, are looking at tract mansions in Louisville.

Ultimately, poor folks have to live somewhere. The migrant workers who lived in Berkeley are now settling down in older, 1960s era apartments in north Aurora. They’ll have longer commutes to their jobs – the majority have cars, but they’re often not very fuel efficient or environmentally friendly. The town where I work as an urban planner now is relatively affluent, but there’s a six block ghetto – shotgun shacks smack in the middle of neo-Florida Cracker estates. I’m not pushing for gentrification – the folks living there have been there for generations, and they’d be hard pressed to find someplace else they can afford.

The above represents everything that is wrong and evil about America. It is the ugly social darwinism that is our unfortunate hand-me-down from colonial Europe. They outgrew it. We didn’t. It is this kind of attitude that justified Newgate, perhaps the most notorious debtor’s prison in 19th century England.

If you were poor, hungry, or in debt, clearly it was your fault. For the Victorians, only worthless individuals were poor and thus deserved a prison sentence. What sailor* and others propose, the exile of the poor to the ghetto, is even more barbaric and pointless. But I suppose the alternative is to move to a cheaper area. Without liquid assets. Without equity. Without a car. Without a guaranteed job elsewhere. And with a family.

But that’s the market for you. Deus vult.

This is not, as sailor would have us believe. This does not require targeted government action only for the poor, as if social action on their behalf somehow leaves “all the non-poor screwed” in some perverse, zero-sum equation.

Here are some not-so-novel ideas.

You want a tax cut? Cut everyone’s goddamn payroll taxes. That might just give the middle class black family next door with no equity the chance to make a down payment on a car. Or it might give my Mexican neighbors enough cash to leave town and set up somewhere cheaper, like Scrotum, Indiana.

You think only yuppie crackers can invigorate a stagnating neighborhood? I think not. How 'bout government-subsidized small business loans in traditionally depressed areas? Banks which guarantee the loans benefit from the myriad externalities of social improvement, they reap the benefits of loan repayment, and it doesn’t take a massive, abuse-ridden governmental bureaucracy to subsidize loans. A risk analyst or three and a few secretaries could perform this task admirably.

So, sailor*, do you not want to do anything to help the poor because of the potential for abuse or because they deserve to be poor?

MR

First off Sailor…I am assuming that you do help this woman out when you can, in which case, I applaud you. Although I sense republican here, (correct me if I am wrong)I am happy to leave out the usual “asshole” that I tend to apply to the word, because I think you have some very good points. I too see the people selling the food they get from their food stamps because they need the cash more than they need the extra food. The government is well meaning in the food stamps program, as well as the utility aid programs. The thought of an elderly couple freezing to death in their apt because they cannot afford their heating bill is simply awful. But it does them very little good if they end up starving to death in their nice warm apartment. There simply has to be a middle ground here somewhere. I am dead set against forms of aid which assist the employable in doing nothing.

I do think gentrification on the whole is not always a bad thing. For some it can be a boon, for others it can be devestating. There has to be a solution here. Aid and assistance to those who are forced out because of the practice is essential. Of course, the government cannot buy these people a new home to live in. But I see nothing wrong with helping them out in a move to a place they can more readily afford. In the attempt to beautify our cities we do tend to forget that people do live in those less than attractive areas. Some live there out of choice, some out of necessity. You cannot start a long term plan that you know will force these people out and not have a plan to assist them in relocating. If you are going to just ignore them, then you may as well just move in and tear down their house one day. It would amount to the same thing, but at least it would be an honest and upfront eviction. Not an eviction in the guise of “for the good of the city”.

Good grief…did that make any sense at all? Its not even noon yet and its been a long day. Not even sure what I am saying.

Siren

Maeglin:

I don’t think sailor was suggesting that the poor are a “lesser class” of people so much as that the poor actually have a different culture than the mainstream. I don’t know much about you, so don’t be insulted that I mention this if you already know about it, but are you aware of “the culture of poverty”?

Families who have, in all of living memory, lived in poverty tend to develop a distinct “present-oriented” lifestyle. Saving money, working to improve your work experience, good work habits are not done in the culture of poverty, because these things present benefits in the future, and in the c of p there is no future.

It goes against both the liberal and conservative views of how to deal with poverty, because it basically says that there’s no solution that will work to “end” poverty. But it also goes against both the liberal and conservative views because it doesn’t paint the poor as either saints beleaguered by the evils of modern capitalist society or as evil leeches sucking the life out of virtuous modern capitalist society. The poor are victims, trapped in a culture that doesn’t encourage excellence or the qualities that make one a good professional of any stripe. But there’s nothing that any government or private program can do to radically change this, short of removing every newborn from poverty-level households, sterilizing the parents, and fostering those newborns out to middle-class families. And I don’t think either side of the aisle will agree with that…

jayjay