Gentrification marks the revival of urban areas by a set of interrelated demographic, economic, and spatial changes: new investment in housing, an influx of highly educated, culturally aware residents and consumers, and the shift from an industrial to a service economy with jobs in the center city for professionals and artists. First observed in London during the 1950s but gradually spreading through North American, Australian, and European cities, the movement of middle-class households into old working-class neighborhoods took most observers by surprise because it contradicts the much greater flow of people and capital outward to new suburbs and the presumed decline of urban life. But gentrifiers reject the social class and ethnic homogeneity of most suburban housing developments. They are attracted to the social diversity of city life, the aesthetic qualities of old buildings, and the cultural vitality of the streets. The low cost of housing in centrally located but derelict and often crime-ridden neighborhoods also appeals to them. Although they take a risk by investing in and moving to these areas, they benefit from the cultural amenities they help to develop and from steadily rising property values.
Because gentrification raises housing prices and brings a different sort of commercial culture to older neighborhoods, gentrifiers are nearly always suspected of displacing low-income residents. In many cities where high-level business services and high-tech sectors have expanded and redevelopment plans focus on the downtown, rising rents and sale prices do increase the housing burden for a large part of the urban population. Higher rents also threaten the cheap stores and local services that cater to low-income residents; landlords prefer to end their leases and replace them with boutiques, cafes, and bars that will draw middle-class customers. The types of services these consumers want—and the atmosphere they prefer—are often seen as alien by their poorer, older, and less educated neighbors and tend to make these earlier residents feel culturally as well as economically displaced. But precise data on displacement are difficult to find, and some local residents may choose to move either to a cheaper location in the same area or to a different place entirely. Older home owners in particular may take the opportunity to move away if their children do not want to live in their house and they can make a large profit by selling it.
City governments and the media downplay displacement in order to encourage new investment and develop attractions for tourists and residents. Along with new residents, they describe the existing area as a "wilderness" and the gentrifiers as "pioneers." These metaphors thinly veil a continuous pressure to upgrade the city by replacing low-income groups, who often depend on public services, with more affluent taxpayers and to replace low-rent, low-status manufacturers with residential tenants. Because gen-trification in the form of loft living became widespread during the 1970s due to the residential conversion of manufacturing space, it is difficult to say whether gentrifiers contribute to or simply follow industrial dislocations and factory shutdowns. By the same token, gentrifiers often move into neighborhoods that have already lost residents because of property owners’ disinvestment and abandonment as well as a decline in public services.
The media actively promote the sense of style that gentrification evokes. While loft living is associated with open spaces, high ceilings, and stark modern decor and the rehabilitation of town houses with small rooms and original, Victorian architectural detail, each suggests a cultural transformation of the inner city from physical dilapidation and social disadvantage to an attractive consumers’ zone. Because of new residents’ higher salaries, dual income households, and cultural capital, gentrified areas of the city soon sprout ambitious restaurants, art galleries, performance spaces, and unusual designer boutiques. The high degree of self-employment among gentrifiers who work in cultural fields provides them with both a daytime and a nighttime clientele. Moreover new shops and cafes are featured in going-out guides and style magazines, bringing more visitors from other areas of the city as well as from suburbs and overseas. In this way the lifestyle elements of gentrification repair damage to the city’s image from post-World War II disinvestment and the flight of many middle-class residents. Together with housing prices, gentrifiers’ cultural tastes act as agents of change, reducing the number of working-class, middle-income, and "minority" neighborhoods.
Although gentrification is viewed as a market-based alternative to state-sponsored urban renewal, it cannot succeed without active state intervention. Local government condones years of disinvestment and capital flight from older areas, creating a "rent gap" between the profit to be gained at current housing prices and the likely profit from reinvestment in the future. Zoning laws prohibit the expansion of manufacturing, encourage historic preservation, and create special cultural districts. Vigilant policing makes gentrified neighborhoods safer. In some cases elected officials, business leaders, and old social elites plan the gentrification of a center city neighborhood to stall further decline of property values.
If it raises a neighborhood’s profile, gentrification may lead to rezoning for new construction, and successive waves of gentrification replace middle-class home buyers with even richer residents. Over time the character of these neighborhoods changes, although not enough to eliminate social inequality in the city as a whole.
