Today, many young professionals are looking to get in on the big city action without the big city prices. So, what do you need to consider when seeking a rental in an up and coming neighborhood in your city? Let’s find out.
What is Gentrification?
Many developers are taking advantage of the low property prices in deteriorating neighborhoods and turning lots into modern, sought after real estate.
The process of repairing and rebuilding homes and businesses in low-income urban areas is referred to as gentrification. Before we jump in, we’d like to point out that gentrification can be a controversial topic.
We’re not advocating for or against it, but rather presenting the facts to renters looking to move into a gentrifying neighborhood. With that being said, before you rent in a gentrified neighborhood, there are a few things to consider.
New and Affordable Real Estate
In the beginning stages of gentrification, real estate developers will purchase abandoned properties or buy out owners of homes in the area, and turn them into new or renovated living and retail spaces.
Because they are able to buy and rehab the locations for cheap, they can typically rent them out at an affordable price as well. This process creates an entirely new environment for the neighborhood and usually attracts a younger crowd that is looking for cheaper living in the city.
The brand new renovations offer opportunities for not only incoming residents but for those who originated the neighborhood as well. One of the most discussed disadvantages of gentrification is the rising prices of surrounding real estate which has resulted in low-income homeowners being displaced. However, few cities have had significant increases in displacement due to gentrification.
In fact, A Realtor.com report examined the U.S. cities with the highest rates of gentrification where original homeowners are actually benefiting.
For example, Charleston, South Carolina median home prices rising 77.5 percent from $152,100 in 2000 to $270,000 in 2015. While it makes buying a home more expensive, those who already own them will realize a huge increase in their property’s equity.
Food and Activities
With newly renovated living spaces comes newly renovated commercial spaces. As higher-income residents start to inhabit these neighborhoods, so too will restaurants, cafes, clubs, boutiques, and other businesses looking to take advantage of the wealth influx.
These new businesses contribute to the up-scale feel of the community while offering exciting night-life excursions. A newly gentrified neighborhood typically consists of interest-centered young adults who are always searching for their next adventure.
While business turnover rates are relatively high in up and coming urban towns, it benefits the community in the sense that they will constantly have new spots to explore. Don’t worry, places you love won’t go under. If you love it, chances are your neighbors do too.
To support more new, affluent community members, business owners will cater the offerings to meet their new audiences’ tastes. While some of the retail clothing stores and fine dining restaurants may be out of the originating member’s price range, the new attractions will provide thousands of employment opportunities.
You might be thinking that the new residents will obviously fill the staffing needs of their new community. In fact, it’s the opposite. Most people moving into gentrified neighborhoods are doing it for the convenience of the commute to their jobs in Center City.
Affordable properties also allow start-up businesses to develop. If you have ever had a crazy idea or maybe a lifelong dream to open a restaurant, boutique or even a tattoo parlor, a gentrifying neighborhood is a perfect spot. The community will welcome you with open arms and give you a fair chance; remember, the cost of living is low so new residents have money to spend!
In addition, one of the leading health problems within inner-cities is the lack of fresh fruits and vegetables. Gentrification gives everyone in the community the opportunity to obtain fresh produce by opening markets and grocery stores.
Safety and Cleanliness
Beautiful new construction only goes so far in a crime rampant neighborhood if it is not accompanied by safety and cleanliness. Neighborhood safety benefits both new and old residents; no one wants to walk through trash or get robbed on their way home.
The gentrification process can encourage additional police presence, neighborhood watch programs, and security systems in new apartments and stores. Waste disposal and street cleaning are often prioritized more in an economically sound community, which helps cut down litter.
Of course, there are two sides to every story, especially when it comes to the pros and cons of gentrification. In some ways, gentrification can be viewed as a positive thing. It increases property value, offers plenty of opportunities and creates safer, cleaner and healthier environments. However, there are downsides, like long-time residents being forced out of their homes due to rising property values.
If you’re looking to move into a gentrifying neighborhood, we encourage you to do your research on the history of the neighborhood and crime rates.