Gentrification debate heats up

Views differ on whether rising affluence or deepening poverty is at work

The debate over whether gentrification is at work in Minneapolis neighborhoods heated up this fall when two University of Minnesota researchers released data from an ongoing study that they said show gentrification shrank the city’s pockets of affordable housing between 2000 and 2014.

“This is not just neighborhood improvement; this is neighborhood improvement on steroids,” said Ed Goetz, director of the University’s Center for Urban and Regional Affairs.

Just as global warming threatens low-lying island nations with rising sea levels, Goetz said a tide of gentrification is swamping low-income neighborhoods with rising housing costs. Goetz and his co-author on the study, Humphrey School of Public Affairs PhD candidate Tony Damiano, have labeled the phenomenon “the shrinking city,” and said it’s likely to continue because of a confluence of trends: safer, cleaner downtown neighborhoods; employers relocating from the suburbs to city centers; significant local investments in transit, sports stadia and other amenities; and a preference among young workers for urban living.

The two shared preliminary findings in late November, prompting a firm rebuttal from another University faculty member, law professor Myron Orfield. Eleven months earlier, Orfield set out to debunk what he described as myths about neighborhood change in a January 2016 paper, in which he wrote that his review of the data showed “little or no evidence of gentrification in any Minneapolis or St. Paul neighborhood.”

Questions about motives and methodology have been raised on both sides.

Even a basic definition of gentrification is matter of debate by academics, but it’s generally described as the change that occurs when low-income areas experience an influx of new, more affluent residents. A wave of investment follows, raising property values and forcing those with lower incomes to move.

Orfield said the only parts of Minneapolis experiencing anything like that are Uptown and other parts of Southwest — but since they weren’t low-income to begin with, it’s not really gentrification.

“But in these poor neighborhoods, the rents have gone up not at all,” Orfield said in a December interview. “What’s happening in these neighborhoods is people there have gotten a lot poorer, and that’s because of racial segregation and because of the concentration of poverty.”

Debating signs of change

Orfield said affordable housing developers seize on studies like Goetz’s, build more units in already struggling neighborhoods and worsen the concentration of poverty, which he argued had far-reaching negative effects. He has advocated strenuously in recent years for dispersing affordable housing in more affluent neighborhoods and suburbs.

Goetz described Orfield’s repeated references to affordable housing developers as part of the “poverty housing industry” as “reprehensible,” and said it was Orfield who distorted the data with “dodgy methodology.” Goetz and Damiano filtered census data through three established gentrification indices to come up with their results, and found just over one-third of low-income census tracts showed signs of gentrifying in Minneapolis.

Many of those potentially gentrifying tracts are located in near-downtown neighborhoods and adjacent to significant public investments, including light rail lines and the Midtown Greenway. A few are scattered across the North Side.

Goetz said a slight increase in rents between 2000 and 2014 was just part of the story. Affordability also has to do with household income, and census data indicates wages are largely stagnant or in decline for Minneapolis renters — dramatically so for African Americans renters, who saw the median income of their demographic group drop 44 percent, to $14,951 in 2014 from $26,729 in 2000.

The median income of Latino renters dropped by about one-quarter over that same period, while white renters saw just a slight increase.

“For Latinos and Hispanics, their affordability is now confined to the really the near South and the Near North sides of the city,” Goetz said. “If you’re African American, there’s not a single neighborhood in the city where the median renter and afford the median rent. The city has disappeared for African Americans in terms of affordability over this time period.”

Orfield and Goetz agree that incomes clearly declined for some demographic groups between 2000 and 2014. But Will Stancil, an attorney at the University’s Institute on Metropolitan Opportunity, where Orfield serves as director, questioned the reliability of the rent data that serves as a basis for Goetz and Damiano’s research.

Rent data is collected through surveys, which have a high margin of error, and in areas as small as a census tract, even one new apartment building opening with higher rents than neighboring properties can skew the data, Stancil said.

“I went and looked by hand at the 26 tracts they said were gentrifying, and in 21 of the 26 tracts poverty has increased since 2000,” he said. “In I think 13 of them, poverty has increased by more than 10 percent.”

“What we’re saying,” added Orfield, “is the neighborhoods where schools are becoming all black and poor, neighborhoods where the banks are disinvesting, neighborhoods where rents are lower than almost any other rents, where people are not moving in, where incomes are not increasing to any substantive degree are not gentrifying.”

Views on gentrification

To an outsider, gentrification can look like a positive change; formerly run-down neighborhoods are refreshed with new housing and businesses.

“A $10 or $12 dollar Ice House burger is delicious, but I also want the $2 or $3 dollar taco. I want the reasonably priced bowl of pho,” said Whittier Alliance Executive Director Ricardo McCurley, reflecting on the way Eat Street has evolved in recent years — an example, in his eyes, of gentrification’s double-edged sword. As new apartment buildings go from plans to reality in Whittier, McCurley wondered if the neighborhood’s identity would change.

“With that diversity, we have a richness that we don’t want to lose,” he said.

The flipside of the renewed vibrancy gentrified neighborhoods experience is the displacement of lower-income residents, who leave behind familiar neighborhoods and social networks.

It’s also one of the most difficult effects of gentrification to track with data, Goetz said, which is why he and Damiano plan to gather anecdotal evidence through interviews during the second phase of their research. They expect to share those findings this spring.

For Owen Duckworth, a coalition organizer at the Alliance for Metropolitan Stability, a nonprofit that works for racial, economic and environmental justice and health equity, the evidence of ongoing and widespread gentrification is easy to spot in recent newspaper headlines: residents forced to move after a developer purchases St. Anthony’s Lowry Grove mobile home park in June; low-income residents leaving the Crossroads at Penn in Richfield ahead of its conversion into the upscale Concierge Apartments in the fall of 2015; residents of Glendale Townhomes in Prospect Park protesting the public housing project’s potential redevelopment at City Hall in March.

Duckworth said the academic debate over “displacement” glosses over “the real impacts on people.”

“We call it the loss of people’s homes or communities,” he said.

Jennifer Arnold, a former Lyndale Neighborhood Association organizer who is now director of Inquilinxs Unidxs por Justicia (Tenants United for Justice), said she believes recent rent hikes at QT Property Management buildings in Lyndale are yet another example of gentrification, forcing some residents to relocate to cheaper housing in places like Richfield. The city’s rental market is already tight and, from Arnold’s perspective, development around the Midtown Greenway is putting pressure on property values several blocks south.

“What I’m seeing is landlords seeing an opportunity,” she said. “There’s a squeeze in apartments, so there’s an opportunity to raise rents and (go) upscale”