Gentrification is the process through which affluent individuals move into a working-class community, converting it from a low-value to a high-value one. The shift takes place when wealthy arrivals need to feel more at ease in their surroundings.
Relationship Between Gentrification and Housing
New enterprises and facilities frequently spring up to meet their needs, and infrastructure is fixed and improved. Additionally, gentrification will bring about changes such as a rise in the area’s average earnings, the development of luxury housing, higher rents, real estate prices, and a shift in the area’s culture.
These changes attract more rich people, and property values continue to rise as a result of the adjustments. As a result, those who lived there before the wealthy people arrived no longer consider it their home, as the lifestyle continues to evolve.
Furthermore, landlords feel compelled to raise rents so that these newcomers can afford to maximize profits. The original renters are evicted as a result of this process. These displaced residents will undoubtedly suffer due to gentrification, as they will be forced to relocate, with some even becoming homeless.
However, while gentrification has many cons, it also has certain perks for some people. For example, in the case of student apartments in Norman, they may be able to benefit from enhanced infrastructure and neighbourhood upgrades. So, what are the effects of gentrification on housing?
Displacement of Low-Income Tenants
Lower-income families cannot pay for higher rents, forcing them to leave the region when gentrification occurs. As a result, low-income households are disproportionately affected, and their turnover rates are substantially higher than those of other households. When low-income residents vacate their apartments, more higher-income families move into the neighborhood. As a result, gentrification displaces and replaces the area’s initial low-income residents.
Many rent-stabilized tenants do not want to leave their communities due to rising rents since their home includes memories, which they believe is more significant than rising rent rates. In this circumstance, some landlords will take extreme measures to evict renters.
For example, landlords may refuse to collect rent, file a lawsuit, provide false information about succession rights, and engage in deceptive building techniques. In gentrified areas, homeowner evictions are rising due to unjust landlord tactics. Low-income families who opt to stay in the neighborhood live in poor housing or pay a higher proportion of their income in rent.
Increased Property Value and Taxes
The most substantial change from a gratifying neighborhood is that there will be a rise in the estimated worth of your home. Additionally, property tax increases have an impact on landlords in gentrifying neighborhoods since changes in the neighborhood reflect how valuable the property is.
Property taxes are charged based on the millage rate, which the owner is obligated to pay. The millage rate is a set amount per $1000 of the home’s taxable value that varies by location. Additionally, gentrification results in increased coverage of services such as 911 Firefighters and Police departments, and increased use equals more cash spent, which comes from state and local taxes.
Real estate investors may pressure homeowners to sell their houses when gentrification strikes. Some homeowners agree while others choose to rent out their homes and relocate to a lower-income neighborhood. When renting out a home in a gentrifying area where you don’t live or frequent, it’s usually better to hire a qualified management company to oversee the everyday concerns.
Because of the massive societal challenges of gentrification, a property and its renters may demand more supervision than a home in a stable market. It is best to choose a reliable manager capable of handling complaints and maintaining customer satisfaction to avoid vacancies on your property.
Because the manager is usually on the property more often than the house owner, one of the disadvantages of remote ownership as a result of gentrification is that the homeowner may have little or no access to their home. The owner of a home may not be aware of everything that occurs on his or her property.
Enacting regulations that encourage social inclusion and provide purposeful housing options will help to reduce gentrification. Low-income earners are less likely to be displaced from their houses due to such measures, as are other gentrification-related negative consequences.