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Diving Deeper into Gentrification - Part 02

Updated: Dec 6, 2023

Facilitating One Talk Away, a workshop on Gentrification at One World Everybody Eats, I had the chance to dive a little deeper into discussion on this topic with a few fellow cafe owners. Are initial discussion revealed a myriad of definitions. Some looked at gentrification as a form of social and economic impact, fueled by major detached investments, that ultimately effected the poor. Others saw it as the change of culture through through lived experiences, the growth in economic opportunity, the gamble of future prosperity in exchange or potential displacement, and the act of making neighborhood improvements. Some did not have a definition and where not familiar with the term.

We started the talk by exploring gentrification as the process in which old deteriorating homes, businesses, and communities are renovated, followed by the influx of a more affluent population, often resulting in the displacement of older, existing residents. Yet, when we dive a a little deeper into why this happens to certain communities we discover that gentrification, as a form of hostile design, has been influenced by many years of intentionally oppressive tactics aimed to deny resources to certain communities throughout American history. 

From utilizing zoning to deny both Chinese [1] and Jewish [2] communities from inner urban areas by outlawing the buildings associated with their employment or living, to the Home Owners Loan Corporation which ranked communities based on race to determine mortgage eligibility and risk, often referred to as redlining. These tactics have hindered certain communities, primarily communities of color, from being able to live equitably and build wealth. Even though redlining was outlawed in 1965, the effects still linger, as many of the communities affected still live in areas of extreme poverty and wealth,or lack of, has become the current means to segregate communities.

We explored land and building ownership and how an increasing percentage of property owners are absentee [4], investing in parcels of land and properties with no intent of living or directly using the buildings built. The commodification of spaces drives up the selling price, as landowners, cities, and investors seek to maximize their return. Particularly with Fort Worth, since property taxes contribute a large percentage of the city’s revenue, there is incentive to maximize the amount of taxable space and the amount taxed on land. This in turn results in an rising cost for local businesses and residents. Residential properties also have influence on this. Wealth generation has been long associated with home ownership, creating the incentive to maintain and raise residential values to maximize gain for the individual or individual family. Although it can provide benefit to the next generation one has to question how this might contribute to limiting access to new homeowners as each sale on the home raises the asking price. With out some reform to guarantee access and availability and to protect all communities, this will continue to enable current disparities. As prices increase, the market can start to favor more affluent families, usually resulting in a sudden shift in demographics as the community evolves. Until recently, the largest percentage of families migrating domestically to Texas came from California to capitalize on lower housing cost. However, as housing prices rise in Texas, it is becoming increasing difficult for families to own a home, unless they come from one of the areas of the country with high-priced houses like California.

Wage stagnation also plays a huge role in contributing to this challenge. In Texas the minimum wage has not increased since the federal increase in 2009. With a federal minimum wage of $7.25, a worker in Fort Worth would have to put in 115 hours to make rent and cover basic needs with no room to build wealth or cover any unforeseen needs. A wage gap still exist between communities of color and women as compared to their white male counterparts. Women on average earn 80.7 cents for every dollar a white man working full time earns. The gap is more severe for black women who earn 67% of their white male counterparts and Hispanic women who only earn 58%. For Asian women the gap is slightly less at only 97%. Asian men are the only non-white community earning on average more than their white counterparts. Some of the disparities are caused by educational attainment, yet when stacked with some of the historical policies used to discriminate in addition to years of racial discrimination and the quickly rising cost of living, one could conclude how these tactics have crippled some from having economic mobility. However, correcting this is becoming difficult for certain communities as political parties carve up districts to minimize their voting power

Real Estate is big business and has a substantial influence on what gets prioritized. Cumulatively totaled at $217 trillion dollars, real estate accounts for nearly 60 percent of the value of all global assets, with residential compromising 75 percent of the total [3]. Zoning also helps play a role in this, as the capacity of the land helps determine the asking price. Typically, the more capacity that can be extracted from the use on the land, the higher the price. With the ability to build a higher capacity project, some justifications and adjustments can be made to cover the heightened cost. However, a higher price can also help limit what functions are feasible. This can result in luxury apartments or high-end commercial spaces being the only viable option, contributing to the rising cost of living and lack of affordable options in a local community. 

As cities look to spur urban renewal, they can utilize several tools to accelerate development. One common tool, Tax Incremental Financing (TIF), allows cities to issue a bond to finance development projects upfront. This could be used to improve existing streets, installing critical infrastructure, or even upgrading existing deteriorating buildings. To facilitate repayment to the bond, cities utilize the value gained from prospective developments to generate additional tax revenue. This can take the form of increased tax rates on existing land and properties as adjacent projects get completed, to the additional tax generated from new developments. This often results in increased cost for the businesses and homeowners that benefit from the upgrades as tax rates increase to repay the TIF. There are also other indirect effects that can happen as well. Lets say a TIF is used to finance housing. The local school district does not necessarily gain new revenue to account for new student populations. This can also apply for other key public services like police, fire, garbage, and water that would be needed to properly facilitate new growth. Granted there are cities that account for this, it is not universal in its application.

Other policies include creating economic zones or incentive packages that offer tax abatements and reduced municipal processes to incentive rapid development. Common with mega projects like sports stadiums, these policies work on the gamble of forecasting increased spending and jobs to justify the exuberant amount of public funding often dumped into these projects. However, stadiums do not always deliver on this promise. The jobs are usually temporary or lower wage, and the money spent does not often stay within the community. In addition, the new activities the stadiums bring can increase traffic “crowding out” other events, and hurting the local economy. These development projects and other like it can hinder funding for other public projects, even though some of the organizations that benefit have seen substantial increases in their value.

With the substantial amount of resources required to develop space continuously increasing to capture value and profit, cities are becoming less affordable, accelerating the effects of gentrification and the number of families affected.  As we concluded our discussion with the participating cafe owners, a few new perspectives emerged. Some shared how gentrification could affect communities both positively and negatively. Others discovered how communities often get effected by displacement due to factors outside of their control. While some worried how diverse and less fortunate groups could get marginalized for financial gain.

The lingering question became what could a community cafe do to to help address gentrification and were they facing similar challenges of gentrification at the cafe's themselves? 

[1] Scott, Mel. America City Planning Since 1890. University of California Press, 1971

[2] Stein, Samuel. Capital City Gentrification and the Real Estate State. Verso, 2019

[3] Farha, Leilani. "Report on the Special Rapporteur on adequate housing as a component of the right to an adequate standard of living, and on the right o non-discrimination in this context." United Nations Human Rights Council, January 18,2017.

[4] Clark, Patrick. “Landlords are taking over the US housing market.” Bloomberg, February 23,2017

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