The Perils of Degentrification

A lot can go wrong when people flee cities with their wealth and wits.

America’s superstar cities lost a bit of their shine this year. The pandemic and recession hit metropolises like New York City and San Francisco hard. Many of New York City’s wealthiest neighborhoods saw upwards of half their residents pack up in search of social distance. Rents plummeted. As fear drove people out of the city, it seemed like we had potentially reached the end of a decades-long urban renaissance.  

Yet, even as the damage that this flight caused became apparent, many hoped that the pandemic would lead to an urban reset. “A few years of flight might flush out some of the suburban attitudes and global wealth that have drained its flavor,” wrote urbanist Thomas Dyja in his new book about New York City. “Fewer Karens and cheaper rents would be positive things.” Degentrifying the “luxury city”—what could go wrong? 

A lot can go wrong when people flee cities with their wealth and wits. Degentrification is simply “de-growth” by another name: A city’s population shrinks and its economy falters. This is what happened during mid-century America’s urban decline, and we should fear that the same is happening today. 

Skepticism of urban development is a relatively recent phenomenon. Ruth Glass, a British sociologist, coined the term “gentrification” in 1964 as a warning that “the working class quarters of London have been invaded by the middle classes.” Channeling Karl Marx, she described the gentry moving in and the proletariat moving out of neighborhoods until “the original working-class occupiers are displaced and the whole social character of the district is changed.” The term caught on. By 1988, rioters in New York’s Tompkins Square Park were screaming that “gentrification is class war.” A year later, Spike Lee’s film “Do the Right Thing embedded race into the gentrification conversation going forward.  

But most urban neighborhoods in America, even by the late 1980s, were not experiencing the sort of gentrification the protestors feared—quite the opposite, in fact. Every major city in America except Los Angeles lost population between 1950 and 1990. Manufacturing jobs started leaving urban centers in the 1960s, and city-dwellers followed. Riots and a rise in crime didn’t help: Robberies nearly quintupled from 1960 to 1970 in cities with more than a million people, and murders rose by similarly astonishing amounts. Tax receipts flowed out with this migratory tide and revealed decades of fiscal mismanagement, poor governance, and underperforming schools. 

It was only toward the end of the 20th century, when city leaders chose to address these urban ills and to encourage growth, that gentrification became something more than a sociologist’s slur. Since then, cities like New York, San Francisco, and Seattle have ridden waves of economic success and seen falling crime rates. As cities became better places to live, new residents flooded back downtown and into once-blighted areas. Chic neighborhoods, like Williamsburg in Brooklyn, often held up as the exemplar of gentrification, thrived in a new economy that valued knowledge workers and consumers. 

One might think that this urban development and growth would be hailed as a triumph. Not so. To its critics, urban growth is just gentrification by another name, and to some critical race theorists, it is nothing short of ethnic cleansing. Last year in Seattle, protesters demanded the “degentrification of Seattle, starting with rent control.” There’s even a church in Minneapolis that “preaches a gospel of degentrification,” describing such demographic change as “an intrinsic death-dealing blow.” New migrants are depicted as prosperous interlopers overpowering and displacing their poorer, minority neighbors. Whole Foods arrives and, well, there goes the neighborhood. 

In reality, gentrification can be a sign of growth and opportunity for even the poorest city-dwellers. Research by Lance Freeman, a professor of Urban Planning at Columbia, found that poorer households in gentrifying neighborhoods were less likely to move than their peers in non-gentrifying areas, all while the area around them becomes more diverse in race, income, and education. Investment and growth bring new amenities, boost the well-being of current residents, and reduce crime, the research found. 

Reportedly, in neighborhoods that experience gentrification, homeowners come out richer, renters get more choices in where to live and work, and children face less poverty and more opportunity. Indeed, despite the common claim that new housing brings rising rents and displacement, research shows the opposite: A recent analysis of San Francisco finds that in neighborhoods near new residential developments, housing costs fall by 2% and displacement drops by 17%. Yet another study shows that the construction of luxury housing eases the demand for other, more affordable units in a neighborhood, allowing low and middle-income earners to remain in their community. 

The real risk isn’t gentrification, but degentrification—the reversal of urban progress and the decline of once-thriving neighborhoods. There are three great degentrifiers: rising crime, a lack of jobs, and poor governance. And there are signs that each of these is present in our cities today.

Perhaps the most worrying of the three degentrifiers is the recent spike in crime. Preliminary federal data suggest that, over the last year, America saw its largest single-year increase in murders in recorded history—a rise of at least 25%. In Minneapolis, murders jumped by 72% last year, and in Milwaukee by a shocking 95%. It’s not just homicides that are on the rise: many American cities suffered a spike in other forms of violent crime last year from robberies to aggravated assaults. And Americans are clearly afraid: Nearly 80% say they view violent crime as a major problem. 

The lack of jobs in cities today is also a worrying sign of degrowth. Generations of Americans of all backgrounds used to move to the big city for opportunity, but with fewer manufacturing jobs and a higher cost of living, many cities have become a rotten deal for lower-skilled workers, and so many of them have left. During the pandemic, younger, more educated workers fled the city as well. The fact that Americans across the income spectrum are willing to up and leave urban centers is a sign that degrowth could be on the horizon.

Poor governance, the last great degentrifier, is also a growing threat to cities. Because local politics is heavily influenced by special interests that represent something like an anti-growth machine—from historical preservationists to public sector unions to “not in my backyard” activists—politicians often enforce restrictions that hinder economic development and population growth. Want to start a food truck or build a granny flat in your backyard? Get ready for a fight. Want to see an affordable apartment building in your neighborhood? Good luck finding a developer willing to endure a years-long fight and layers of red tape. And the problems of urban governance aren’t limited to restricting population growth. Local politicians seem either unable or unwilling to fix any number of critical problems: underperforming schools, crumbling infrastructure, traffic, and public transit among them. It won’t be surprising if many city-dwellers decide that the costs of urban life are just too high, and decide to move out. 

For too long we have oversold the costs of gentrification and undersold the dangers of urban stagnation and decline. “The opposite of gentrification is not a quirky and charming enclave that stays affordable forever,” wrote Kelefa Sanneh in The New Yorker. “The opposite of gentrification is a decline in prices that reflects the transformation of a once desirable neighborhood into one that is looking more like a ghetto every day.” 

Coming out of the pandemic, America’s cities can no longer take growth for granted. They will have to compete for new residents both here and abroad. Cities will have to embrace more safety, more jobs, more housing, and more people. A gentrifying city is a growing city, and growth can benefit everyone.

Michael Hendrix is the director of state and local policy at the Manhattan Institute.