When I first moved to the northwest side of Chicago in 2009, Logan Square wasn’t exactly the kind of place you wanted to walk around alone after dark. I was in college (and broke), and the only thing that mattered to me at the time was living somewhere affordable – and affordable it was. I made my home in a large studio apartment where I lived comfortably until I graduated.
After spending several years exploring different neighborhoods and surviving a brief stint in the suburbs, I moved back to Logan Square in 2012. To say things had changed is an understatement. Luxury condo buildings sprouted up in empty lots, young families moved into the area, and a stretch of bars and coffee shops posted up in previously abandoned storefronts. Logan Square was now trendy – and expensive.
Logan Square is hardly the first or last neighborhood to undergo big changes by way of gentrification. Everyone has a tale about how the influx of middle- and upper-income families and individuals to urban areas has changed certain neighborhoods.
The impact of gentrification is easy to see: trendy cafés, art galleries, pricey boutiques, and upscale restaurants – not to mention a higher police presence and wealthier communities. But where does this change stem from? The process by which gentrification comes about can be explained in three stages: pseudo gentrification, inflation, and actual gentrification.
The cycle begins with the movement of artists and young professionals, and the associated business they bring to a particular neighborhood. This increases the neighborhood’s desirability. In turn, property owners and real estate developers invest in the area and compete for the incoming renters. These investments lead to an increase in real estate value, and landlords raise rental prices.
The value and rental increases don’t happen all at once, however. Lucky renters will hit the sweet spot, enjoying inexpensive rent while also taking advantage of the neighborhood’s higher quality amenities, lower crime rates, and new vibrancy before the cost of living increases. Inevitably, however, rental prices do go up, and those without means to pay more must find living arrangements in more affordable neighborhoods.
Despite its negative connotations, gentrification isn’t all bad. Homebuyers with tight budgets can cash in if they’re willing to purchase a home in a transitioning area. Doing so, however, comes with risks. Scoring a bargain on a home only becomes a good investment if the neighborhood continues to progress and home prices appreciate, which is exactly what happened in Williamsburg in Brooklyn, New York.
When Manhattanites grow tired of the hustle and bustle of the claustrophobic island they call home, many flee across the East River in search of elbow-room and more affordable housing. Williamsburg has completed the cycle of gentrification: it’s now unaffordable to most of the artists who used to live there. They’ve been pushed deeper along the L train to Bushwick, which is now undergoing the gentrification process as well. The median home price in Bushwick has roughly doubled since 2010. Many other parts of Brooklyn have experienced a similar fate. In fact, RealtyTrac has identified Brooklyn as the most unaffordable housing market in the U.S.
While some see gentrification as revitalization and progress due to the added stability and the boost it gives the local economy, others regard it as the disenfranchisement of lower-income and working-class residents. Whether you view it as positive or negative, there’s no doubt that gentrified areas are becoming important parts of the framework of growing communities worldwide.
This entry was originally published on December 17, 2015.
This guest post was contributed by Girls Guide to Real Estate.