Did you ever hear of Gentrification?
Honestly, I did not know exactly what it means until I listened to a report by NPR’s Marketplace, about the gentrification of the Highland Park neighborhood in Los Angeles.
Gentrification is about urban renewal (read Merriam Webster’s definition for its specific meaning). Often it is used in a negative context. Residents of gentrifying neighborhoods are squeezed out by wealthier, upper middle-class families who pay much higher prices for remodeled homes.
The Role of Real Estate in Gentrification
Real estate plays a major role in gentrification. Investors buy foreclosed or abandoned homes, rehab them and sell them to wealthier buyers moving into the neighborhood. This leads to incredible opportunities for home flippers and rehabbers, as desolate neighborhoods are revitalized. But it also results in the “displacement” of low income residents who can no longer afford the higher cost of housing.
It is remarkable that this is happening without government funding or intervention. Gentrification can result in urban renewal completely based on the free market.
For an intricate study on Highland Park’s incredible transformation, which started with a coffee shop, read the York & Fig Blog by Marketplace’s Wealth & Poverty Desk.
Gentrification in Columbus
In 2003 PBS produced a film called Flag Wars. It was about gentrification in the Olde Towne East neighborhood in Columbus, which experienced a major turn around 10 – 15 years ago. Olde Towne East went through numerous phases of renewal, mostly lead by gay and lesbian couples buying and renovating run-down brick mansions to live in.
For real estate buyers and investors it is important to recognize which neighborhoods are in the gentrification process. In some parts of Columbus the City’s Department of Development is heavily subsidizing urban renewal. They try to force re-vitalization.
The Weinland Park area South of the Ohio State University Campus, Franklinton and the South Side, just South of Children’s Hospital are great examples.
Gentrification efforts lead by the government instead of private enterprise are often not successful. The City may improve the infrastructure, build new schools and repave roadways. However, a successful urban renewal depends on individual residents moving into that neighborhood.
Gentrification ‘Without the Negative’ in Columbus, Ohio from The Atlantic on Vimeo.
We believe that gentrification is good, as it creates business opportunities for both real estate entrepreneurs, as well as the residents of the neighborhood.
Which Columbus neighborhoods gentrify right now?
Where are the best opportunities for real estate entrepreneurs?
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