Gentrification Is More Widespread Than You Think

Gentrification Is More Widespread Than You Think

By: Josh Ishimatsu, Director of Research and Capacity Building at National CAPACD
Reposted From: Rooflines
Date: November 17, 2015

In Miriam Axel-Lute’s recent post here, “Place Matters But Place Changes,” she references “a study done by Governing magazine that found a 20 percent gentrification rate for census tracts in the past decade in the largest 50 cities in the country, a greatly accelerated rate from the previous decade.” She goes on to note that, while an increase over past rates of gentrification, a 20 percent gentrification rate still means that 4 of 5 low-income neighborhoods are not gentrifying.

These are basic, straightforward conclusions to draw from the Governing study.  However, there are a few huge, inter-related problems with the underlying study in being able to adequately describe our current round of gentrification.

The Current Round of Gentrification Is Driven by Rental Housing

The Governing study, and most quantitative studies of gentrification, use rising home prices as the primary indicator of gentrification. This is fairly standard practice and therefore not a problem unique to the Governing study. But the current round of gentrification is driven by the rental housing market, not the homeownership market.

The Joint Center for Housing Studies of Harvard University’s “The State of the Nation’s Housing 2015” report talks about the current decade as being “on track to be the strongest decade for renter growth in history.” The foreclosure crisis turned many homeowners into renters and made buying a home more difficult, and the share of people looking to rent housing is at a 20-year high. Rental housing construction, while strong, is not keeping up with demand, and new units are primarily being constructed for the high end of the market. Vacancy rates are down for all segments of the rental housing market, but especially for units renting at $800 or less per month. And, per the JCHS, “falling vacancy rates have lifted rents, improving the financial performance of rental properties, but straining the budgets of millions of households unable to find units they can afford.”

So, to be relevant, metrics of gentrification (at least for the current round of gentrification) need to reflect changes in the rental market.

Gentrification Is Happening Faster Than our Ability to Track It With Census Data

Not that I want to call out the study authors, per se, as this is not so much a problem of their analysis but with the limitations of the data (and about how we understand/talk about recently released studies which are based on old data). The study shows 1 in 5 low-income census tracts gentrifying in 2013 (actually it’s worse than that–the Governing study uses fiver-year ACS data, which means the numbers skew slightly more toward 2009 through 2013–an appropriate data set to use when conducting census tract-level analysis but not the best for measuring for trends that happen quickly. My ears-to-the-ground, anecdotal sense is that gentrification and displacement have intensified over the past year, even over the past several months, such that 2013 is a more accurate starting point to measure the current round of gentrification, not the ending point. The authors used the most recent data available from a reputable, public source–if I had designed the Governingstudy, I don’t know if I would have done it much differently. But the study doesn’t represent what is happening in low-income neighborhoods right now. And we shouldn’t mistake it for such.

And the past year has been a doozy in terms of rising rents. Looking at rental data from proprietary websites, which scour online rental listings to calculate regional rental rates, has its own methodological questions, but at least provides us with more up-to-the-month data. And this more recent data is dramatic. For example, over the time period October 2014 to October 2015, Zumper.com shows double digit percentage increases in median rents for 18 of the 50 cities that it tracks, with several more cities showing annual increases on the order of 9 percent. In contrast, from 2005 to 2014, the average annual increase in U.S. median rent was on the order of 3 percent per year. Per the table below, recent and dramatic run-ups in rents look to be widespread–in far many more places than as indicated by the Governing study.

Sources: https://www.zumper.com/blog/uploads/2015/11/November-2015-Rent-Report1.pdf; 2005 to 2014 1-year American Community Survey


 

The above chart is not straight apples to apples, but it at least shows that something more is happening than what can be seen within the Governing study time period–a real reason why right now, gentrification is, as Miriam says, “on everyone’s tongue… from Sacramento to Nashville to Lexington…”

Gentrification Isn’t Only a Problem for Low-Income Neighborhoods

This point probably deserves a blog post in and of itself. In looking for gentrification, theGoverning study authors define a baseline universe of census tracts that were eligible for being gentrified. Per their definition, all of these census tracts were low-income in 2000. That is, in seeking to define gentrification rates, the study tracks only low-income neighborhoods (or more precisely, neighborhoods that were low-income in 2000). As an example, the city of San Francisco has 196 census tracts of which only 16 were “eligible to gentrify” per the Governing study, and thus only 3 of these 16 showed evidence of gentrification. (A side observation here is that San Francisco was already so gentrified in 2000 that less than 10 percent of its neighborhoods were low-income in the context of the five-county San Francisco MSA!) The point here is that gentrification doesn’t only happen to low-income neighborhoods–it is also a problem in its impact on middle-income and mixed-income neighborhoods.

If we are focused on the impact of gentrification on low-income people, we should be concerned about gentrification in all neighborhoods. A typical census tract may have anywhere from 1,000 to 3,000 housing units. In most places, but especially in dense urban settings, a neighborhood of 1,000 to 3,000 housing units will contain many units that are above and below whatever the median home price or monthly rent is; this is the very definition of “median.” In gentrifying places, there is not only upward price pressure on all housing units, but particular pressure on the segments of the market that were "informally" affordable housing (i.e., cheaper housing but not formally covenanted as affordable), as whole buildings, for example, are flipped (emptied, fixed-up then re-marketed) to target a higher market segment. The median moves up as all prices rise–but also as the cheaper options disappear. Part of gentrification is that mixed-income places–regardless of whether the neighborhood started as a low-income neighborhood–become less mixed-income as low-income people are priced out.

Gentrification, therefore, is not just about what happens to low-income neighborhoods. It is the story of the loss of mixed-income neighborhoods, a phenomenon not completely registered within the Governing study. If we listen to Raj Chetty about mixed-income places producing greater economic mobility for low-income people, we should all care about the loss of these mixed-income neighborhoods too.

We need better measures of gentrification. Metrics that track rental data, that are more current, and that recognize that gentrification affects more than low-income neighborhoods. If we had such metrics, I think a much more widespread and insidious problem would be much more visible.

Museum Square Tenants Rally & March to Declare Their Right to Stay

                          FOR IMMEDIATE RELEASE                                          

Jenny Tang (Tenant Leader, Museum Square): (202) 271-2939
Julie Becker (Lawyer, Legal Aid): (202) 661-5946
Sam Jewler (Community Organizer): (202) 210-9362
Michael Kane (Exec. Director, Nat’l Alliance of HUD Tenants): (617) 233-1885
Norman Fong (Exec. Director, SF Chinatown Community Development Center & National CAPACD): (415) 867-4297

On Eve of Displacement Threat, Museum Square Tenants Rally and March to Declare Their Right to Stay 

Hundreds turn out to support longtime African-American & Chinese immigrant residents,
Push Bush Companies, DC government & HUD to act to save 302 homes

On September 30, the evening before their site-based Section 8 contract was set to expire, hundreds of Museum Square tenants and supporters from around the country rallied to declare that the longtime Chinatown residents will not be displaced from their homes.

Approximately half of Chinatown’s remaining Chinese immigrant population lives in the 302-unit Museum Square building. The Chinese immigrant and African-American residents have been working together across language and cultural barries to save their homes.

“The most important reason I want to stay here is the community,” said Tenant Association President Vera Watson, who has lived in the building for 34 years, raising her children and grandchildren there. “The doctors, the restaurants, the stores, the churches – it’s convenient. And I have lots of memories here. I’ve seen it at its worst and I’ve seen it at its best.”

The building’s site-based Section 8 contract was set to expire on Thursday, October 1, but the tenants are receiving individual Enhanced Housing Choice Vouchers. Under HUD rules, tenants who want to use the vouchers to stay in Museum Square can do so, paying the same rent as before unless their incomes change, and the owner of the building is legally required to accept them. However, Bush Companies was refusing to accept vouchers up until September 30, causing panic throughout the building, and staff were telling families to move somewhere else.

“Just because the owner says ‘you have to move’ does not mean you have to move. Right now in my heart it means ‘work as a team and fight,’” said Jasmine Tang, a 10 year old who lives in Museum Square. “The owner does not know how many people and children he can hurt by just demolishing the building.”

“As the city experiences unprecedented economic growth, we must not turn a blind eye to those who have lived here when things were not as good,” said Andy Shallal, owner of Busboys & Poets, which hosted a rally with the Museum Square tenants at its 5th and K St NW location this summer. “This is the moment that we will be judged by. This is the moment where a community can rise to its highest ideal and pledge that displacement is not an option and look for solutions that are not only cost effective but human effective.”

“Museum Square is an important part of a great neighborhood that is only getting better, and that's exactly why we have to keep fighting to preserve this affordable housing,” said Ward 6 Councilmember Charles Allen, whose jurisdiction includes Museum Square, in a statement released this week. “Let’s keep working together to find ways to preserve crucial affordable housing like Museum Square so residents can continue to call this great neighborhood home.”

"The struggle of Museum Square tenants has been key for raising the issues faced by Section 8 tenants around the District. Justice First is committed to fighting for their rights, as part of a broader struggle to make sure everyone who needs housing has housing," said Eugene Puryear, of Justice First, who helped lead a march through the neighborhood after the rally.

Despite their legal right to remain in their homes, misdirection has plagued the tenants, many of whom do not speak English. Bush Companies sent the tenants a letter in June, misleadingly stating that starting October 1, “You will be required to bear the entire cost of monthly rent.” The letter severely understated the fact that tenants are due vouchers and the vouchers can be used to stay at Museum Square at affordable rents.

Some tenants also reported hearing from DC Housing Authority (DCHA) officials that they should take their vouchers and move elsewhere, which forced DCHA staff to later come to the building to explain the tenants’ rights in full at a tenant meeting. Additionally, volunteer canvassers attempting to distribute tenants’ rights information in the building on September 19 were prevented from entering, in violation of HUD protections for tenant organizing. 

The tenants’ march stopped at the old site of Temple Courts, formerly owned by Bush, which is now a parking lot, after Bush decided to opt out of Section 8 and the city government bungled its redevelopment.  Many African-American families were displaced with the promise of new housing that was never rebuilt.  The march also stopped at Wah Luck House, the only other affordable housing building in Chinatown, which has a Section 8 contract expiring November 30, 2015 and is also under threat of displacement..

“As a child in San Francisco’s Chinatown, my family and I were almost made homeless by an eviction,” said Rev. Norman Fong, executive director of Chinatown Community Development Center, in San Francisco, and Board Member of the National Coalition for Asian Pacific American Community Development, who participated in the action in solidarity with the tenants. “Chinatowns from coast to coast are under attack, and it’s vital that cities protect their vulnerable communities, like the people of DC are doing tonight.”  Members of the National Alliance of HUD Tenants from all across the country from Chicago, Texas, Florida and Massachusetts also flew into DC for the rally, because of this case's national implications.

“There are seniors that have lived here for many years, and they love their homes. If you make their home not affordable where are they going to live?” said Jessica Lin, an 11-year-old resident of Museum Square. “Also, if you were one of those people, how would you feel?”

At the rally, Legislative Director for At-Large Councilmember Anita Bonds (Chair of the Housing & Community Development Committee) Barry Weise announced that their office will be introducing permanent legislation for an amendment to DC's Tenant Opportunity to Purchase Act to define a bona fide offer by current rather than projected value, which was one of the demands of the rally. The emergency legislation that Bonds passed in June expired in August. It was also reported at the rally that HUD is now having discussions with the City, DCHA, and the Bush Companies to come to a resolution on the matter, after the weeks of advocacy leading up to the rally. 

# # #

 

Survey: Diversity of Asian America Hides Wealth Gap

Survey: Diversity of Asian America Hides Wealth Gap

By: Emil Guillermo
From: NBC News
Date: April 1, 2015

National numbers for the financial health of the Asian American Pacific Islander [AAPI] community may look good in aggregate. But a closer look, and a new study, reveals that subgroups are much more financially vulnerable than they're widely believed to be.

A new survey by the National Coalition for Asian Pacific American Community pulls apart the national numbers to show how generational gaps, ethnicity, and language proficiency influence the fastest-growing population in America's financial well being.

Despite growing AAPI income levels, the report finds "a decline in overall net worth, growing sub-populations of poverty, and overall increase in the wealth gap between segments of the population." But the report's key warning sign is that respondents may not be able to help themselves out of money crises due to a lack of financial knowledge.

Eighty-nine percent of respondents reported having a checking and/or savings account, but 25 percent say they didn't know who to turn to for financial advice. Generational difference was also a factor, with US-born members of the community twice as likely to have employer-sponsored retirement accounts. Physical bank locations were found to be "critical" for AAPI communities, especially for recent immigrants and those with limited English proficiency.

"Access to knowledge is influenced by ethnicity and language, income and education," the report said.

The report's top recommendations include increasing investments in language-appropriate resources to reach the AAPI community, especially around credit awareness and protection.

U.S. Congresswoman Maxine Waters, (D-CA), ranking member of the House Committee on Financial Services, will address the inclusion and capability of AAPI on matters of personal finance in a media conference scheduled for Wednesday.

The survey, out today, is part of the report, "Scrimping + Saving," funded by the National Council of La Raza and Citi.

Community Development and Hot Markets

Community Development and Hot Markets

By: Josh Ishimatsu, Director of Research and Capacity Building at National CAPACD 
Reposted From: Rooflines
Date: March 31, 2015

At the People and Places Conference earlier this month, we organized a mini-track around “Community Control and Hot Markets.” On the kick-off panel, Malcolm Yeung from Chinatown Community Development Center in San Francisco cited a mind-blowing number–SRO residential hotel units in San Francisco are seeing rents on the order of $1,300 per month.

Translated on a per square foot basis, this would be over $15,000 per month for a 1,000 square foot apartment. And these are not gussied-up SRO buildings with cucumber infused water in the lobby. These are your typical SRO units, with a single room less than 100 square feet, shared bath rooms, etc. The residential market in San Francisco is such that young professionals now see SROs as viable places to live. This means massive eviction/displacement pressure on the low income folks who have historically lived in SROs as landlords clamor for new tech worker and hipster tenants.

For example, as documented in a recent San Francisco Chronicle article, a new landlord for a Chinatown SRO is right now trying to mass evict two dozen families for violations such as putting up Chinese New Year decorations and hanging laundry up to dry (a very on-trend, environmentally friendly practice, by the way). This is a crisis for the families facing eviction, the low-income residents of Chinatown, and for the San Francisco Bay Area region. And it represents a larger crisis for community development as a whole.

The Presumption of Cold Markets

Community development was born in a time of white flight and disinvestment. Our programs, underlying assumptions, and many of our basic operating tactics are still fighting the old wars of cold markets and urban “blight.” But while inner city disinvestment is still a huge problem in many places, lots of urban areas now suffer for too much of the wrong kinds of investment.

Jane Jacobs, among others, has said that a little bit of gentrification can be constructive.  But a little can very quickly become too much. All across the country, tipping points are being crossed and neighborhoods are flipping from being funky/eclectic to elite/unaffordable.

There is a body of research that correlates mixed-income neighborhoods with the likelihood that low-income families will experience economic mobility. But the rampant gentrification that we are seeing in many of our urban centers is not creating mixed income neighborhoods. It is obliterating them.

Community development, as it is currently constituted, isn’t set up to deal with what is happening.  So much of what we tried to do in the past was to get private investment flowing into our neighborhoods, and now the spigot is turned on so high that decades of hard work are being washed away.

So What Next?

Much of what we’ve been doing in hot markets more recently–organizing around community benefits agreements, pushing for inclusionary housing, etc.–while valuable, has felt a little too ad hoc. Community development needs a bigger, better, more cohesive set of programs and practices that can happen concurrently at local, regional, state, and national levels. Some quick bullet points/thoughts/questions on this, mostly pulled from side conversations at People and Places:

• Is there a way that the new Affirmatively Furthering Fair Housing rule can be applied to encourage local jurisdictions to make deeper affordable housing investments in hot neighborhoods or to encourage new affordable housing developments to have stronger preferences for local residents?

• Can there be something from HUD like Promise/Choice Neighborhoods but specifically geared towards hot markets where low-income people already live in order to create truly, permanently mixed income neighborhoods?

• There needs to be more directed, strategic investment in acquisition/rehab of small site affordable housing – the types of projects that are not typically financially efficient/competitive within most LIHTC regulatory structures;

• What about gentrification vouchers?

• Ways to make development fights less project-by-project like mandatory community impact reports assessments, inclusionary zoning–other land use/entitlement process controls;

• The displacement of low-income residents is a huge issue, of course, but we should also be paying attention to the displacement of small businesses and arts/cultural/community nonprofit institutions.

Over the next several months, National CAPACD plans to collect and expand upon many more of these ideas. We will work with our members and with our People and Places partners and their members to form a practitioner’s working group on community development and community control in hot markets. From this working group we want to build and advance an advocacy agenda and a set of programmatic practices that can be tried in different hot markets across the country. More on this as more develops.

 

Community Development and Hot Markets

Community Development and Hot Markets

By: Josh Ishimatsu, Director of Research and Capacity Building at National CAPACD
From: Rooflines
Posted: March 31. 2015

 

At the People and Places Conference earlier this month, we organized a mini-track around “Community Control and Hot Markets.” On the kick-off panel, Malcolm Yeung from Chinatown Community Development Center in San Francisco cited a mind-blowing number–SRO residential hotel units in San Francisco are seeing rents on the order of $1,300 per month.

448

Translated on a per square foot basis, this would be over $15,000 per month for a 1,000 square foot apartment. And these are not gussied-up SRO buildings with cucumber infused water in the lobby. These are your typical SRO units, with a single room less than 100 square feet, shared bath rooms, etc. The residential market in San Francisco is such that young professionals now see SROs as viable places to live. This means massive eviction/displacement pressure on the low income folks who have historically lived in SROs as landlords clamor for new tech worker and hipster tenants.

For example, as documented in a recent San Francisco Chronicle article, a new landlord for a Chinatown SRO is right now trying to mass evict two dozen families for violations such as putting up Chinese New Year decorations and hanging laundry up to dry (a very on-trend, environmentally friendly practice, by the way). This is a crisis for the families facing eviction, the low-income residents of Chinatown, and for the San Francisco Bay Area region. And it represents a larger crisis for community development as a whole.

The Presumption of Cold Markets

Community development was born in a time of white flight and disinvestment. Our programs, underlying assumptions, and many of our basic operating tactics are still fighting the old wars of cold markets and urban “blight.” But while inner city disinvestment is still a huge problem in many places, lots of urban areas now suffer for too much of the wrong kinds of investment.

Jane Jacobs, among others, has said that a little bit of gentrification can be constructive.  But a little can very quickly become too much. All across the country, tipping points are being crossed and neighborhoods are flipping from being funky/eclectic to elite/unaffordable.

There is a body of research that correlates mixed-income neighborhoods with the likelihood that low-income families will experience economic mobility. But the rampant gentrification that we are seeing in many of our urban centers is not creating mixed income neighborhoods. It is obliterating them.

Community development, as it is currently constituted, isn’t set up to deal with what is happening.  So much of what we tried to do in the past was to get private investment flowing into our neighborhoods, and now the spigot is turned on so high that decades of hard work are being washed away.

So What Next?

Much of what we’ve been doing in hot markets more recently–organizing around community benefits agreements, pushing for inclusionary housing, etc.–while valuable, has felt a little too ad hoc. Community development needs a bigger, better, more cohesive set of programs and practices that can happen concurrently at local, regional, state, and national levels. Some quick bullet points/thoughts/questions on this, mostly pulled from side conversations at People and Places:

• Is there a way that the new Affirmatively Furthering Fair Housing rule can be applied to encourage local jurisdictions to make deeper affordable housing investments in hot neighborhoods or to encourage new affordable housing developments to have stronger preferences for local residents?

• Can there be something from HUD like Promise/Choice Neighborhoods but specifically geared towards hot markets where low-income people already live in order to create truly, permanently mixed income neighborhoods?

• There needs to be more directed, strategic investment in acquisition/rehab of small site affordable housing – the types of projects that are not typically financially efficient/competitive within most LIHTC regulatory structures;

• What about gentrification vouchers?

• Ways to make development fights less project-by-project like mandatory community impact reports assessments, inclusionary zoning–other land use/entitlement process controls;

• The displacement of low-income residents is a huge issue, of course, but we should also be paying attention to the displacement of small businesses and arts/cultural/community nonprofit institutions.

Over the next several months, National CAPACD plans to collect and expand upon many more of these ideas. We will work with our members and with our People and Places partners and their members to form a practitioner’s working group on community development and community control in hot markets. From this working group we want to build and advance an advocacy agenda and a set of programmatic practices that can be tried in different hot markets across the country. More on this as more develops.