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New study finds gentrification may benefit the poor

NEW YORK — Gentrification has long been a dirty word for forcing poor people out of neighborhoods across U.S. cities.

When a poor neighborhood attracts higher income residents, expensive cafes and pricy vintage clothing stores move in, making daily living more expensive. The narrative is that gentrification displaces low income residents and in the worst case scenario causes homelessness.

Now, a new storyline is emerging that shows that it isn’t fair to blame gentrification for displacing low income residents and that there might actually even be some benefits.

A study by the Philadelphia Federal Reserve recently concluded that poor people are no more likely to move out of a gentrifying neighborhood than from a non-gentrifying one.

That doesn’t mean low income people are not pushed out of their neighborhoods. They are just not more likely to be displaced than a person of similar income in a neighborhood that’s not gentrifying.

Experts say there are may even be some benefits for the low-income residents that decide to stay on in gentrifying neighborhoods. — New job opportunities emerge as more stores open and construction picks up. — Longtime homeowners benefit from rising property values. — There’s often a decline in crime. — On average, credit scores of the poor residents improve in gentrifying neighborhoods. “It appears that when a neighborhood gentrifies, it doesn’t necessarily lead to widespread displacement,” says Lance Freeman, a professor of urban planning at Columbia University.

Freeman conducted a nationwide gentrification study in 2005, which also came up with similar conclusions reached by the Philly Fed’s findings that gentrification does not lead to higher chances of low-income residents being pushed into another neighborhood.

The Fed’s study — which focused on Philadelphia — found that people in gentrifying neighborhoods tend to move more often than those in non-gentrifying neighborhoods. But it’s not who you might think.

It’s the people with high credit scores — who tend to have high incomes — that move out of the neighborhood more frequently and often to wealthier parts of the city or suburbs.

David Fiorenza, an urban economics professor at Villanova University, says low income folks in Philadelphia’s gentrifying neighborhoods have benefited by seeing an increase in jobs and lower crime.

“Gentrification in Philadelphia is a good thing,” he says. “For some other cities, it may not work.”

Researchers stress that it’s a complex picture.

Despite the benefits, even these studies show the negative effects. Low income folks may not have a higher rate of moving out, but when they do move, it’s often to a poorer neighborhood.

And when low-income residents move, they often see their credit score decline too. It’s also highly unlikely that they will be able to move back into their old neighborhood.

And because rents and costs of living rise, it’s more difficult for low-income residents to move into gentrifying neighborhoods in the first place.

Clearly, it is not a linear narrative as American cities change.

Eileen Divringi, one of the co-authors of the Philly Fed report, said the neighborhoods they researched have “changed significantly.” (The other authors of the Philly Feds report are Lei Ding and Jackelyn Hwang.)

Despite the benefits for low-income residents, Divringi noted that the city’s “most vulnerable residents are less likely to move into gentrifying neighborhoods” because of the higher costs.

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