Clarifying gentrification and its repercussions in the Bay

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Elizabeth Klingen/Staff

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Over the last couple of years, there has been a noticeable increase in media coverage of gentrification and the rise of Bay Area urban real estate prices. Below is meant to be an explanation of what gentrification is and why the issue of affordability in cities has become such a high-profile topic lately.

I’ve been hearing a lot about “gentrification” and an increase in Bay Area housing prices lately. What’s all this about?

To put it in as few words as possible, gentrification is what happens when a neighborhood experiences an influx of people with more wealth than the current residents, thereby increasing the costs of living — such as rent prices — in the neighborhood. The resultant displacement forces out the poorest residents of a neighborhood, usually fixed-income retirees or those working minimum wage.

Even if this displacement is caused by “green-friendly” development, the goal of any successful redevelopment project is to increase the land value of the targeted area, which inevitably leads to higher rents, mortgages and so on. This brings us to the key puzzle at the root of gentrification: How do you increase property values in a given area without pushing out its native residents?

Malo Hutson, a UC Berkeley assistant professor of city and regional planning, told the High Country News in 2011, “You would get the Nobel Prize in Economics — or Peace — if you could figure out a way to keep the community that existed before the redevelopment project came along.”

Well, hold up a minute, doesn’t the quality of these neighborhoods go up along with the housing prices and land values? And doesn’t an increase in the aggregate wealth of an area lift the bottom up as well?

When new, wealthier residents move into a lower-cost neighborhood, it’s true that better services often follow them there, as some academics have shown. These improvements could be new municipal transit lines, renovated or recently constructed public parks and a whole host of other public services. This simultaneously increases the standard of living in a neighborhood while pricing out those who already live there.

Rising tides of wealth in America tend to lift all yachts. Though it’s true the 2000s Silicon Valley tech boom created massive economic gains in the Bay Area, little of this rapid economic growth went to the Bay’s poorest or rapidly collapsing middle class. It also doesn’t hurt that some of the most well-funded tech companies have received huge tax breaks for merely keeping their offices in Bay Area cities, even if they don’t employ that many people.

In a feature article for the New Yorker last year, George Packer detailed this increase in inequality and the tech industry’s response to it:

“Why has a revolution that is supposed to be as historically important as the industrial revolution coincided with a period of broader economic decline? I posed the question in one form or another to everyone I talked to in the Bay Area … Few of them had given the topic much consideration.”

Aha! So that’s what this is really all about — all of this gentrification stuff that’s been in the news is just because of tech and the Google buses and so on.

Not so fast. Gentrification and the displacement of the Bay Area’s poorest has been happening for decades now. After World War II, the passage of the Housing Act of 1949 enabled the federal government to engage in “slum clearing” and pass exclusionary zoning laws, which in effect devalued and demolished urban neighborhoods predominantly populated by people of color.

Hutson said the Bay Area was “hit hard by urban renewal.”

“In West Oakland, you’ve had the construction of BART, the USPS Distribution Center, the freeway — they all wiped out the old Victorian homes that used to be in West Oakland,” Hutson said. “In San Francisco, urban renewal policies destroyed the Fillmore district, which was historically an African American area.”

Okay, but what about today? If the influx of wealth and capital into these neighborhoods is happening, what can we do about it to keep housing costs down? And what can tech do to help fix the problem?

There are a number of options that leaders, communities and policymakers are pursuing to deal with the problems that come with gentrification.

In Berkeley, the municipal body that deals with issues related to housing and affordable rents is the Rent Stabilization Board. Commissioner Katherine Harr said in an email the city “has one of the strongest tenant protection ordinances in the state.”

Berkeley residents have some protections from evictions and sudden increases in rent, Harr said, pointing to how the board “requires landlords register their rents, and tracks them, sending out letters each year to inform landlords and tenants of the allowable maximum rent.”

For San Francisco, some argue the issue is a lack of vertical development. They believe that if the city, which is a 7-by-7 mile peninsula with few open spaces, were to increase available housing units, it should do so by building upwards. For decades, San Francisco zoning laws have stymied vertical construction, which critics argue have artificially inflated the cost of housing.

Others propose that San Francisco needs a land tax whereby property owners pay more in taxes as the value of their land increases over time with the revenue generated set aside for the poor and the middle class. It’s also worth noting that a number of different cities are experimenting with new methods of tackling gentrification-related displacement, such as adjustments to property taxes for longtime homeowners.

Still, some of these ideas are flawed. It may be impossible to build vertically out of poverty. Additionally, if the tech boom is actually a bubble, using a land tax to tether revenue designated for anti-poverty measures to bubble-induced price spikes may have long-term budget consequences, should land values fall significantly in a “tech bust.”

Contact Noah Kulwin at [email protected]

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  • Advocacy for some towards city governments. Whom guilty policies of commerce is bogus! Sincerely, regarding reduce payroll taxes and exemptions. Why? Some interest in share holders meetings! Most argument why do whom? Corporation receive preference now geographically. San Francisco always been
    dominate influence. Finance and technology industries now. Attitude of those chosen political few. Not telling us there agendas. For corporate exclusiveness Google is allow. To use Muni bus stops VTA oppose. There request admire VTA response. You could assist with transportation. For improvement of Santa Clara county. Google whom ego employee’s need personal. Transport what ever! Decry of slighted assurance what is new. Lobby is whom those the enemy. Of some board commercial realtors of California. Whom supported by developers receiving. Tax exemptions now passed 2013. Excluded from “BMR” inclusions of lower income. Units when, does it ever since. Appeasement lobby and fight real estate measures. Those anticipating lower housing sales. Rentals why truth at times hurts. Never consider this Board of Supervisors.

    San Francisco allow this promise of tax profits. Well use these to correct housing inequalities. Land is hot commodity in Bay Area. Response we done enough for those. Not middle class business looking at. Growth 40% business elite yes making. Abundant compensations lobby form building. Owners whom influence by lawyers and insurance. Executives ratio of sales of new elite. 40% plenty of tax deferred foreign. Money don’t say gentrification is racist. Not against culture just income. San Francisco is guilty when look. City planning in Bay Area the credentials. Of personnel before civic duties. Working for establishment to evict you. Good luck upon stopping Ellis Act. Yes,Dave Campos increase “exit retribution. From landlords recourse rentals. Increase aware estimated 670 apts off. Market if so contact housing advocacy. Groups demand the reason for the landlords. When attack the tech firms political. Front say there revenue has bought. Economic success to whom? Not to citizens of Bay Area were. Losing ground to corporate influenced real estate. Many whom cannot paid shall be. Force out the immediate metropolitan area. Or face for some homeless! Extreme could happen in situations. Hope lobby understand the laws.

    Unfortunately, if landlord has records before. Selling building to convert TIC law. Courts all the evictions yes
    detest. Term being force out of housing! Lobby to repeal Ellis Act! Ratio affluent over $40 million income San Francisco. Has increase 30% eager to real estate. Residence being force out of Bay area opposing renters. Face uncertain future if not the elite. Bankers and developers from aboard investing high rises.
    Finally, unanimous approved to increase. Retribution for tenants facing TIC evictions. Specifically example
    they’ll receive commensurate. Market rate tenant well retaliation. Those given this relocation expense. Going receive exclusion yes how? Excuse San Francisco property owners and managers. Going deny you
    account they’ll. Have to pay you again besides. Rentals going to increase basically. Awaiting the decision to
    abolish “Rent Control”. San Francisco you notice permits for new. High rise office towers,hotels and condos.
    Developers with cash well tax write. Off to supply REIT for BMR housing. Not so city is decadent slowing.
    Process due, profits zoning allow. Taller buildings beware of shadow effect. No answer to planning is cash!
    Were going see decrease residents. Of lower career employment due. To Ellis Act gentrification a shame!

    L.A,NYC,Chicago,S.F and Northern Jersey exempted taxes! Health care,finance,pharamaceutical firms and law firms. Also cause disparity in Bay Area! You’ll this bias no French,Germany and Dutch firms. Getting tax breaks to open in Bay Area. Good for employment taxes needed for. Housing were not defeated fight. Housing is needed and renters protection! Laugh not a monologue but facts. Hidden developments to effect citizens. Equality now! Enjoyed the article thanks. South Van Ness and Tenderloin hidden goals. Development all for profits shame! Turn your doubt into laws for. Protection of renters rights fight is on now!