Research disproves gentrification's reputation

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Gentrification is often thought to harm a neighborhood's original residents who fear being economically evicted because they can't afford to live in a made-over community, but a researcher at the Federal Reserve Bank of Cleveland says data from 2001 to 2007 suggest the opposite is true.

Compared to residents in low-priced neighborhoods that were not gentrified, economist Daniel Hartley found those in neighborhoods that had been transformed to include upscale shops and homes saw an average 8 point increase in their credit scores and a decrease in credit delinquency rates. The share of those with an account 90 or more days past due fell by 2 percentage points in gentrifying neighborhoods relative to other low-priced neighborhoods.

"Homeowners in gentrified neighborhoods receive a more direct benefit of their home values increasing, which increases their overall net worth," Mr. Hartley said. "There are spillover benefits experienced by renters, too. Better schools and a decrease in crime would be side benefits for renters."

The study is part of the economist's ongoing research on inner-city neighborhoods and how changing home values affect residents. He looked at Census Bureau and Equifax credit data from 2001 to 2007.

And he might be on to something. Robin Ballard, a 43-year-old single mother of one, said gentrification has done wonders for her Garfield community.

She grew up in the Pittsburgh neighborhood, then moved away and came back five years ago after purchasing a $134,500 home with the help of a $40,000 loan from the city's Urban Redevelopment Authority, a $10,000 gift from Open Hand Ministries and a $15,000 gift from the charitable Bartko Foundation.

"The things that have happened in Garfield over the past five years as far as improved housing, parks and the diversity of new residents has been great for Garfield and me personally," Ms. Ballard said. "Property values have gone up and crime appears to be going down, although it still happens. But overall it's a much nicer neighborhood to live in."

The changes have been evident in a number of different ways, she said.

"Now you see white people riding bikes, walking dogs and jogging in Garfield," she said. "You didn't see that in this predominantly black neighborhood 10 years ago. Now there are people of all races -- Mexicans, Caucasians and Asians -- on Penn Avenue every Friday enjoying art, music, restaurants and having fun. I've been in this neighborhood my whole life, and this is new."

The Federal Reserve Bank of Cleveland study found 73 percent of neighborhoods in Pittsburgh could be candidates for gentrification, based on having a median home value that falls below the overall median for the Pittsburgh metropolitan statistical area. The median home price in the five-county region is $137,000, according to RealStats, a South Side-based real estate information service.

By comparison, 40 percent of neighborhoods in New York have home values that fall below the median price and Cleveland has 93 percent of its neighborhoods with home values below the median home price for its metropolitan statistical area.

Not everyone agrees that rising housing values in a neighborhood are good for established residents.

Ernie Hogan, executive director of the nonprofit Pittsburgh Community Reinvestment Group, said most low-income families' incomes do not rise in correlation to the increased rents and real estate taxes, so they end up having to leave because they can no longer afford to live there.

"Some individuals can benefit from gentrification if they own a house and can sell for a profit and move to another neighborhood," Mr. Hogan said. "But are they starting the cycle all over again?"

One example of gentrification working against residents, he said, is the Friendship neighborhood where most of the homes could have been bought for about $30,000 in the 1980s, but today would cost more than $300,000.

"Friendship is a perfect example of original residents being priced out and no allowances being made for low-income people," he said.

"But we learned from Friendship and applied best practices in East Liberty, Garfield, the Hill District and even Downtown in the Roosevelt and Century building on Seventh Street where there's been allowances for affordable housing."

Tim Grant: tgrant@post-gazette.com or 412-263-1591.


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