A plain, one-story, 1890s wood house of little distinction, barely large enough for a couple and their two children in Seattle’s Ballard neighborhood, now brings daily offers of $1 million to its owners. It is not for sale. But enormous wealth accumulation in the once-affordable city has opened up a growing gulf between the tech class—whose high earners can spend $1 million on an 1890s box—and middle- and lower-class earners, who are living in the same economy of stagnant wages as the rest of America.
A recent McKinsey report on Seattle homelessness found that the supply of housing for those earning around the median income had halved just since 2011. Bill Rumpf, the president of affordable-housing developer Mercy Housing Northwest, describes the low-end rental market as “brutal,” with many people just a health crisis or costly car repair away from eviction.
For decades, cities sought investment to revive blighted streets and bring economic activity back to decimated neighborhoods. Now many urban neighborhoods fear that new public investment or catalytic development will draw real-estate developers, and they will get pushed out—victims of gentrification, not its beneficiaries. Where cities have prospered and real-estate values soared, designers and policymakers are looking for ways to attract needed investment without displacing longtime lower-income residents.
“We find the questions around gentrification very challenging,” says Brian Phillips, partner at Philadelphia’s Interface Studio Architects (ISA). The firm’s efforts to bring affordable new development to the Fishtown neighborhood turned out to attract “hipster interest"—and that drove up prices. The architects’ 100K Houses, designed for developer Postgreen Homes, were meant to demonstrate that inventive architecture and construction could deliver a 1,000-square-foot house for $100,000. “Within months of completion, others advertised homes ‘near the 100K Houses’ at higher prices,” says Phillips, making replication of the model impossible. “We’ve thought about doing quieter buildings, rather than a design piece that says a new market is around the corner.”
How did gentrification turn into a losing proposition for low-income neighborhoods?
Though gentrification is often discussed as developers buying housing low to sell high, it does not operate in a vacuum but reacts to larger market forces: more people who desire walkable neighborhoods, with charm and character, close to jobs. Such urban neighborhoods appeal to money-strapped younger people as well as empty-nesters who enjoy city life and don’t want to depend on a car. And dense neighborhoods work for low-income earners if jobs are accessible by mass transit.
The growing market for such neighborhoods—the classic gentrification magnet—is colliding with the reality that there are not enough of them in cities around the country. The scarcity attracts more affluent gentrifiers, bids up prices—and displaces long-term residents. In New York, nearly twothirds of the homeless population in shelters are families—many of them forced out of their homes by rising rents as waves of gentrification crash over formerly affordable neighborhoods.
Though this story is repeated in the coastal hubs of global wealth, gentrification has the power to displace in less likely places. Young people have been flocking to inner-city neighborhoods in Atlanta for their pleasing scale and cozy cottages and bungalows; in recent years, the city’s population has grown faster than the surrounding suburban counties’—a reversal of the historic norm. The partly built 22-mile urban BeltLine linear park touches dozens of neighborhoods, both rich and poor, as it circles downtown, and has been spurring redevelopment—and displacement.
Atlanta remains a relatively inexpensive big city, partly because of its high percentage of people who live in poverty (25 percent) or not far above it. One-fourth of renters are regarded as “extremely cost burdened”—spending more than half their income on housing—and are vulnerable to being pushed out even if rents rise only modestly.
But there is a growing consensus about how cities can manage development pressure for everyone’s benefit.
Invest in Low-Income Communities
Cities can support low-income areas by helping owners keep their houses in good repair and strengthen the skills and earning potential of local communities.
Philadelphia’s nonprofit Healthy Row House Project successfully advocated for greatly expanded financial assistance from the city to owners who need essential repairs like new roofs, windows, or furnace replacements. It also wrote guidelines for people to maintain the historic character of their row houses, many of which date to the early 19th century.
Although several cities have repair programs for older houses, “getting to scale is the problem,” says architect Kiki Bolender, a Row House Project cofounder and principal of her own firm. The Project’s advocacy helped pass a $100 million bond issue in 2017 to support renovations. It provides $60 million in grants for very low-income households “who can’t float $10,000 in debt.” The rest supports loans to households with moderate to middle incomes, many of which have been denied private-market funding.
Fixing dilapidated housing has a deep impact on those who are already vulnerable. “We linked row house repairs to health,” says Bolender, “because a ridiculous number of African-American kids are hospitalized for asthma, and the risk factors are in the house.” Seniors and children are most susceptible to maladies related to leaks, peeling lead-contaminated paint, pests, leaky plumbing, and dilapidated heating systems.
Cities also can support neighborhoods by investing in the local schools, libraries, clinics, and other resources that help job readiness, encourage collaboration, and strengthen community bonds. The people who have kept neighborhoods together over decades of disinvestment are a powerful resource who have a claim—too often overlooked—on the future. “What is the intention for the people who have lived in these neighborhoods for 40 years?” asks LaShawn Hoffmann, an Atlanta-based community development consultant. His answer is to help bring jobs to people in neighborhoods in transit-starved Atlanta. Last spring, the Annie E. Casey Foundation broke ground on Pittsburgh Yards (named after its neighborhood), a mixed-use development on a 31-acre site that will provide work spaces, designed by locally based Stevens and Wilkinson Architects. They will rent at “accessible” rates for approximately 100 businesses, with a focus on local hiring and local workforce development.
Support Small Landlords
The Row House Project discovered many people they called “inadvertent landlords,” according to Bolender, because they had inherited a house, or they take care of houses lived in by extended-family members. There are few aid programs for small landlords, who often must overcome high borrowing barriers. “Small landlords can do a lot with $40,000 or less,” Bolender notes. “A new house is going to cost at least $350,000.”
Invest in Public Transportation
Doing a better job of connecting lower-income neighborhoods to job-rich areas expands opportunities for long-term residents to move up the income ladder, helping them stay in neighborhoods that attract investment. Hoffmann says poorer neighborhoods seek the park and trail amenities the BeltLine will bring, “but we want what park promoters initially promised: 5,800 units of affordable housing and light rail lines” along the old rail rights of way. The affordable units have been slow in coming, and the transit seems a distant dream. Ample public transit also expands access to more neighborhoods and therefore to more housing, thereby reducing price pressure.
Increase the Supply of Affordable Housing
New units are most important when growth is driving prices up and the private market fails to serve the demand of both lower- and middle-income households. New York has upzoned large swaths of the city to accommodate denser development, with incentives to include units for lower incomes. The two-tower Hunter’s Point South project, designed by SHoP Architects, offers 20 percent of its 925 apartments as low-income rentals, with the rest “moderately” affordable, i.e., somewhat below market.
The challenge for architects is to work with this new larger scale while maintaining light, air, and views within neighborhoods already heavily built-up. SHoP’s towers are staggered to make the most of stunning waterfront vistas and minimize the impact on neighbors. But the development attracted 93,000 applications, indicating just how inadequate the supply is.
In Philadelphia, ISA seeks marginal lots to develop because the lower land cost can reduce the sale price, according to Phillips. “We did a 1,100-square-foot house on a 12-foot by 29-foot lot” by building five stories. “We can unlock ways of living that are desirable, though they can present some inconveniences.”
Reduce Land-Use Regulations
Changing zoning laws can lower costs and increase housing supply. The worst regulations keep out middle- and lower-income residents: large-lot/large-house requirements; strictly limiting or prohibiting multifamily projects; prohibitions against accessory units; and approval processes that are protracted and costly. Peeling back such regulations isn’t easy, because many affluent neighborhoods passionately disguise their exclusionary agenda by citing “quality of life”—and have the means to make politicians listen.
Unfortunately, the federal government, where the greatest resources could be tapped, has failed to play a constructive role in reducing displacement and homelessness.
Only about one-fourth of households eligible for any federal housing aid receive it. Congress has failed to increase either affordable-housing subsidies or the vouchers—called Section 8—that help families pay rent. In spite of the growing need, financing for affordable housing construction is declining because the Low Income Housing Tax Credit, an essential tool, has been rendered all but worthless by the Republican tax plan passed last year: it lowered tax rates so much that the banks and wealthy individuals who used the credit to reduce taxes no longer need to do so. The tax plan also treats real estate investors generously, which creates incentives to push up real-estate values, because those gains are taxed at lower rates than other investments.
The collapse of consensus on federal financing of surface transportation some years ago has prevented the creation of funding for diverse modes of transit that metropolitan areas need to help attract more investment in housing. Ample supply of low-cost transportation that links jobs to needy neighborhoods is essential to producing the broad affordability that reduces displacement as a product of gentrification.
Design plays an important role in bringing about neighborhood acceptance of low-income or homeless housing. An award-winning project called the Schermerhorn, in Brooklyn, New York, by Susan Rodriguez, former partner at Ennead, enlivens the street front with a ballet school, and also includes a community room to encourage connection between tenants and the neighborhood. The architecture helped melt local resistance to the presence of formerly homeless individuals (116 units) and low-income working people (101 units).
Gentrification and displacement too often have been treated as ultra-local problems, when solutions at scale must ultimately reckon with the human needs of existing residents and the forces—and failures—at the city, regional, and national levels.
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