Social changes
Many of the social effects of gentrification have been based on extensive theories about how socioeconomic status of an individual's neighborhood will shape one's behavior and future. These studies have prompted "social mix policies" to be widely adopted by governments to promote the process and its positive effects, such as lessening the strain on public resources that are associated with de-concentrating poverty. However, more specific research has shown that gentrification does not necessarily correlate with "social mixing," and that the effects of the new composition of a gentrified neighborhood can both weaken as well as strengthen community cohesion.[14]
Housing confers social status, and the changing norms that accompany gentrification translate to a changing social hierarchy.[15] The process of gentrification mixes people of different socioeconomic strata, thereby congregating a variety of expectations and social norms. The change gentrification brings in class distinction also has been shown to contribute to residential polarization by income, education, household composition, and race.[15] It conveys a social rise that brings new standards in consumption, particularly in the form of excess and superfluity, to the area that were not held by the pre-existing residents.[15] These differing norms can lead to conflict, which potentially serves to divide changing communities.[14] Often this comes at a larger social cost to the original residents of the gentrified area whose displacement is met with little concern from the gentry or the government. Clashes that result in increased police surveillance, for example, would more adversely affect young minorities who are also more likely to be the original residents of the area.[14]
Economic shifts
The economic changes that occur as a community goes through gentrification are often favorable for local governments. Affluent gentrifiers expand the local tax base as well as support local shops and businesses, a large part of why the process is frequently alluded to in urban policies. The decrease in vacancy rates and increase in property value that accompany the process can work to stabilize a previously struggling community, restoring interest in inner-city life as a residential option alongside the suburbs.[16] These changes can create positive feedback as well, encouraging other forms of development of the area that promote general economic growth.
Home ownership is a significant variable when it comes to economic impacts of gentrification. People who own their homes are much more able to gain financial benefits of gentrification than those who rent their houses and can be displaced without much compensation.[17]
Economic pressure and market price changes relate to the speed of gentrification. English-speaking countries have a higher number of property owners and a higher mobility.
A 2017 study found that gentrification leads to job gains overall, but that there are job losses in proximate locations, but job gains further away.[18] A 2014 study found that gentrification led to job gains in the gentrifying neighborhood.[19]
A 2016 study found that residents who stay in gentrifying neighborhoods go onto obtain higher credit scores whereas residents who leave gentrifying neighborhoods obtain lower credit scores.[20]
Gentrification in the United States is commonly associated with an influx of higher-income movers into historically divested neighborhoods with existing, working-class residents, often resulting in increases in property prices and investment into new developments. Displacement and gentrification are also linked, with consequences of gentrification including displacement of pre-existing residents and cultural erasure of the historic community. In the United States, discussions surrounding gentrification require critical analysis of race and other demographic data in examining the inequalities and disparities between existing residents, the community, new buyers, and developers caused by gentrification
Changes
As an economic process
Two discrete sociological theories explain and justify gentrification: one as an economic process (production-side theory); the other and as a social process (consumption-side theory). Both occur when the suburban gentry tire of the automobile-dependent urban sprawl style of life. These professionals, empty nest aged parents, and recent university graduates perceive attractiveness in the city center earlier abandoned during white flight—especially if the poor community possesses a transport hub and its architecture sustains the pedestrian traffic that allows the proper human relations impeded by (sub)urban sprawl.[21]
Furthermore, proximity to urban amenities such as transit stops has been shown to drive up home prices over time. A survey of Northwest Chicago conducted between 1975 and 1991 showed that homes located directly in the vicinity Red Line and Brown Line stops of the "L" rail transit system saw a huge price jump during these years, compared to only modest increases for area outside the zone. Between 1985 and 1991 in particular, homes near transit stops nearly doubled in value.[22]
Professor Smith and Marxist sociologists explain gentrification as a structural economic process; Humanistic Geographer, David Ley explains gentrification as a natural outgrowth of increased professional employment in the central business district (CBD), and the creative sub-class's predilection for city living. Ley (1980) describes and deconstructs the TEAM committee's effort to rendering Vancouver, BC, Canada, a "livable city". The investigators Rose, Beauregard, Mullins, Moore et al., who base themselves upon Ley's ideas, posit that "gentrifiers and their social and cultural characteristics [are] of crucial importance for an understanding of gentrification"—theoretical work Chris Hamnett criticized as insufficiently comprehensive, for not incorporating the "supply of dwellings and the role of developers [and] speculators in the process".[23]
Production-side theory
The theory of urban gentrification derives from the work of human geographer Neil Smith, explaining gentrification as an economic process consequent to the fluctuating relationships among capital investments and the production of urban space. He asserts that restructuring of urban space is the visual component of a larger social, economic, and spatial restructuring of the contemporary capitalist economy.[24] Smith summarizes the causes of gentrification into five main processes: suburbanization and the emergence of rent gap, deindustrialization, spatial centralization and decentralization of capital, falling profit and cyclical movement of capital, and changes in demographics and consumption pattern.[24]
Gentrification often leads to increases in crime rates.
Gentrification is marked by changing demographics and, thus changing social order and norms. In some cases, when affluent households move into a working-class community of residents (often primarily Black or Latino communities), the new residents' different perceptions of acceptable neighborhood behavior and cultural activity of pre-existing residents may be in conflict with the established norms of the pre-existing community.[7] This may be associated with increased police calls and police presence in these areas, due to greater reports on issues such as loitering, noise, etc.[7] With increased policing and the greater clout of affluent residents, minority residents may be affected by racial profiling or have concerns about their safety.[7]
Displacement
Also see Community Displacement
A 2018 study found evidence that gentrification displaces renters, but not homeowners.[8] Despite that, homeowners still face negative consequences such as increased tax burden.[9] The displacement of low-income rental residents is commonly referenced as a negative aspect of gentrification by its opponents.[10]
Also, other research has shown that low-income families are less likely to be displaced in gentrifying neighborhoods than in non-gentrifying neighborhoods. A common theory has been that as affluent people move into a poorer neighborhood, housing prices increase as a result, causing poorer people to move out of the neighborhood. Although there is evidence showing gentrification may modestly raise real estate prices, other studies claim that lower crime and an improved local economy outweigh the increased housing costs—displacement tends to decrease in gentrifying areas such as these as a result.[11] A 2016 study found "that vulnerable residents, those with low credit scores and without mortgages, are generally no more likely to move from gentrifying neighborhoods compared with their counterparts in non-gentrifying neighborhoods."[12] A 2019 study which followed children from low-income families in New York City found no evidence that gentrification was associated with changes in mobility rates. The study also found "that children who start out in a gentrifying area experience larger improvements in some aspects of their residential environment than their counterparts who start out in persistently low-socioeconomic status areas."[13]