Gentrification is defined by Wikipedia as “A process of renovation and revival of deteriorated urban neighborhoods by means of influx of more affluent residents, which results in increased property values and the displacing of lower-income families and small businesses.” Typically, in the United States, the term gentrification is generally negative as it has racial implications, seeing minority communities forced out of the community as redevelopment occurs. In Canada, gentrification doesn’t carry the same racial connotations, but can be seen as a form of class-ism with affluent purchasers pushing out affordable housing in an area that has become more popular.
Typically the result of increased interest in a certain area, early “gentrifiers” may belong to low-income artists or unique/start-up businesses which increases the attractiveness and eclectic character of an area. Gentrification is a symptom of renewal in an established community, and is an important part of the life cycle of a healthy community reflecting revitalization and often, increased population for an area that may be seeing declining populations as families mature and the demographics of an area change. Without revitalization, an area can age into undesirable economic and social conditions.
When neighbourhoods reach a maturation point, they either experience decline, stabilize or begin to enjoy revitalization and re-population. As one neighbourhood gentrifies, the artists and small businesses that began the rejuvenation move to another lower-priced neighbourhood and begin the cycle there bringing renewed interest and rebirth to the new location.
An Alternative: Filtering
As the demand for an area increases, and the higher-income earners come into the area, gentrification can be off-set by allowing redevelopment that outpaces demand to accommodate the new, more affluent population.
New, more expensive units, at greater densities let other areas be protected and leaves an inventory of more affordable units (often older homes) to remain.
This is counter-intuitive to the typical approach of blocking redevelopment, however without new inventory, higher-income earners will simply buy and redevelop individual lots, reducing the inventory of affordable units.
People want to live here… the only question left is: Where will they live? –> This is answered through planning and policy.
As demand in a community is met with development (supply), the role of the community can be challenging. Through early policy work with the governing body (the City), communities can affect the outcome of redevelopment by choosing where that development is most effective and appropriate for their community (often directed by transportation access and traffic volume (Transit Oriented Development) and centered around shopping districts/main commercial streets for multi-family developments and new commercial mixed-use developments. The alternative to directed redevelopment through policy is often painful: the loss of character buildings in a community through ‘monster house’ builds on single-family lots, the loss of affordable houses through extensive renovation by new buyers and the erosion of land supply for effective multi-family by under-utilizing development (i.e. duplexes where larger multi-family is appropriate).
Further, again, through policy, redevelopment can be coupled with public realm and public service upgrades through levies and community amenity funding by corporate developers. With significantly increased density, often 10-15 times the existing single family home density, the local economic impact can be extensive.
Impact on the Local Economy and Small Businesses
There have been several of studies on the impact to small businesses in areas that become gentrified or redeveloped.
On one hand, lease rates increase, often significantly, while the inventory of affordable commercial spaces is reduced by redevelopment. On the other hand, hundreds, sometimes thousands of new, affluent residents move into the area providing a larger customer base. New buildings provide opportunities for improved quality of spaces and services.
The trade-offs are complex. Many studies have noted that turnover in gentrified neighbourhoods does not increase. Businesses that can pivot and adapt thrive. Policies can also assist with small business retention and incentives.
Redevelopment is often policy mandated by the City to support balanced growth against urban sprawl. Redevelopment of established communities is necessary to support the local economy and support needed public realm improvements. Policies and long-term perspectives on growth and directing increasing density to appropriate locations can minimize the impact the community and preserve the character of the area.
Policy-making is a positive use of energy and concern, especially participating in the Planning Committee and City engagement opportunities.