What if I told you that residents of downtrodden neighborhoods across the U.S., and increasingly in Latin America, are living in fear of reclaimed abandoned buildings, declining crime rates, repaired roads and sidewalks, and new businesses bringing jobs? When I phrase it this way you would probably say I was crazy. But this is exactly the case, and it’s known as the “G” word — gentrification.
We’re used to hearing about the changes remaking once struggling neighborhoods such as New York’s Harlem, San Francisco’s Tenderloin, and London’s Brixton but now we are starting to hear reports of similar changes in Latin America. In my neighborhood in San Juan, Puerto Rico, rapid gentrification has transformed one stretch of road known as Calle Loiza from a corridor where seemingly half the storefronts were abandoned into a hub for hip nightlife. In only a couple short years this district has been redeveloped by entrepreneurs into a gastronomic hub featuring swanky cocktail bars where you could spend half your paycheck in one night.
In Santo Domingo, redevelopment efforts have been so extensive as to garner the attention (and the worry) of media outlets as prominent as NBC News. A $120 million loan from the Inter-American Development Bank is being deployed by officials intent on turning the old city center into a hub for tourism. In Mexico City, the recent history of the Colonia Roma district brings visions of Williamsburg to mind.
So, is this bad?
Stories of renters being pushed out by rising prices tend to provoke sympathy, but renters enter and exit neighborhoods frequently in any context. Renting is by its nature transitory. Increasingly, researchers such as Columbia University professor Lance Freeman and Frank Braconi, the chief economist for the New York City comptroller, are questioning whether the narratives of the exiled poor and working class residents have any basis in fact. What they found was that low-income residents not only were not leaving gentrified neighborhoods at a higher rate, but were in fact less likely to leave a neighborhood when it was undergoing this renaissance — and the reason is self-evident.
The advantages of gentrifying neighborhoods are numerous, particularly for families. Residents who committed to these neighborhoods through homeownership now have actual value in their properties. As property values rise so do the property tax revenues that fund public schools, making a decent education that much more accessible to underprivileged residents. When developers renovate an abandoned structure, they make the surrounding area safer, indisputably a net gain. Incoming residents reset crime-control expectations, allowing everyone’s children, including the poor, to play on safer streets.
But above all, new businesses that spring up bring with them job opportunities — the only sustainable path out of poverty. Joseph Cortright, a former scholar at the left-leaning Brookings Institution, has studied the data across decades. He asserts that the worst thing for the poor is not gentrification, but rather the concentrated poverty that destroys social mobility and creates transgenerational poverty.
It is clear that gentrification benefits the poor more than any other group, and by a wide margin. When a neighborhood becomes too dangerous to feel confident that your child can safely go outside, the poor are the only ones who are stuck there. The affluent can enjoy comfortable lifestyles with low crime rates, good schools and available jobs by choosing to live in places where these conditions already exist. But when they choose to revitalize and live in a once poor neighborhood, these benefits can be enjoyed by those who need them most. Let’s recognize gentrification for what it is — progress and a source of opportunity for all.
Joe Milligan is the co-founder of Fundación Libertad Puerto Rico and is executive vice president of this liberty-minded think tank startup in San Juan. In a previous life he worked in the mortgage industry, but has since dedicated himself to improving the challenging economy of Puerto Rico by spreading the message of the virtues of free markets and self reliance. For more on Joe, click here.