7_Understanding Gentrification Flashcards
What is gentrification?
Gentrification is the process where high-education or high-income households move into historically low-income or working-class neighborhoods, sometimes altering the neighborhood’s demographic composition.
What are some concerns raised by gentrification?
- Displacement: Low-income residents may be forced to leave.
Rising Rents: Even without displacement, housing costs can become unaffordable.
Loss of Neighborhood Character: Cultural and historical aspects of communities may change.
What does Edlund et al. (2019) suggest drives gentrification?
The rise in time-scarce high-income households, leading to increased demand for central city housing due to high effective commuting costs.
What additional factors contribute to gentrification according to Edlund et al. (2019)?
- Increase in dual-earner households.
Assortative matching: High-income individuals marrying others with similar education and wages.
Rising returns to skills, allowing wealthier individuals to outbid others for housing.
How does gentrification vary across different time periods?
Data suggests that gentrification has increased dramatically in the past two decades, with an observable shift in the fraction of college-educated residents moving closer to the central business district (CBD).
How do home prices change with distance from the CBD over time?
Edlund et al.’s data shows that home prices closer to the CBD have increased significantly from 1980 to 2010, contributing to gentrification.
Edlund et.al graphs
What does Su (2020) suggest about high-skilled residents and their living locations?
High-skilled residents are increasingly living in central city neighborhoods, but the locations of high-skilled jobs have not been centralizing.
What trend does Su (2020) identify regarding high-wage workers since 1980?
High-wage workers have become increasingly likely to work long hours, while working long hours has become less common for low-wage workers.
What role does endogenous amenity growth play in gentrification, according to Su (2020)?
A modest inflow of high-skill workers to central city neighborhoods creates amenities that attract even more high-skill workers.
Who benefits from gentrification?
Landowners, including landlords and homeowners in gentrifying neighborhoods.
Who is harmed by gentrification, and what factors determine the extent of harm?
Renters; the degree of harm depends on the cost of moving (including psychological costs) and the availability of close substitute neighborhoods.
What is the key question revisited regarding poor residents in central cities?
Why do the poor in the U.S. live in central cities, and could differences in transportation methods contribute to this pattern?
What are some concerns raised by gentrification?
- Displacement: Low-income households are forced to move.
- Rising rents: Even without displacement, budgets of low-income households may be strained.
- Loss of neighborhood character: Emotional attachment to neighborhoods can be disrupted.
What are the key findings of Su (2020) about the change in skill ratio by distance to downtown?
The change in log skill ratio is highest closest to downtown, with a decline as the distance increases.
What are the two main predictions of the monocentric model regarding land values?
As distance to the CBD increases, the price per square foot for land falls and building height decreases.
How does population density vary in different parts of a city?
Population density is higher in central-city locations due to taller buildings divided into smaller dwellings, whereas suburbs have larger dwellings with lower density.
What does the slope of the bid-rent curve indicate?
The slope shows how rent changes with distance but does not determine the overall rent level.
What determines the height of the bid-rent curve in the monocentric model?
Commuting costs, number of households, building technology, and the value of land under its next best use.
What determines the intercept (height) of the land-rent function?
The intercept is a function of agricultural rent (𝑟𝑎), commuting costs (𝑡), and population (𝑁).
How is the residential bid-rent (𝑃(0)) related to land-rent?
𝑃(0)=c(R(0))=c(r𝑎+tN), where c(.) is the unit cost function.
Who lives in central cities, the rich or the poor?
It depends on which group has a steeper bid-rent curve, which is influenced by commuting costs relative to housing consumption.
What happens if commuting costs are equal for rich and poor households?
Higher-income groups will live farther from the city as long as housing is a normal good.
How does income elasticity affect location choices in cities?
If income elasticity of housing consumption (𝜀ℎ𝑦) is greater than that of commuting costs (𝜀𝑡𝑦), the rich will live in suburbs; otherwise, they will live in cities.
What is gentrification?
The movement of high-income or highly educated individuals into historically low-income or working-class neighborhoods.
What are common concerns associated with gentrification?
Displacement, rising rents, and loss of neighborhood character.
What factors does Edlund et al. (2018) identify as driving gentrification?
Increase in dual-earner households, assortative matching, and rising returns to skills.
What key observation does Su (2020) make about high-skilled workers?
High-skilled residents are centralizing, but high-skilled jobs are not.
What role does amenity growth play in gentrification according to Su (2020)?
The influx of high-skilled workers creates amenities that attract even more high-skilled workers.
Who benefits from gentrification, and who is harmed?
Landowners benefit, while renters may face displacement and higher housing costs.
Why do the poor live in central cities according to Glaeser et al.?
Due to better access to public transportation and urban government redistribution.
What does the ‘Two Transportation Modes’ graph illustrate?
Travel costs increase with distance, but buses have a steeper cost increase than cars.
How does transportation cost minimization affect location decisions?
Residents choose locations that minimize their travel costs based on available modes of transport.
How does bid-rent change when there are two transportation modes?
The bid-rent function exhibits a break where the dominant transportation mode shifts.
What happens when only the rich can afford cars?
The poor live closer to the CBD, while the rich settle in the suburbs due to lower transportation costs.
What do Glaeser et al argue?
The income elasticity of demand for land is too low for urban poverty to be
the result of wealthy individuals’ wanting to live where land is cheap
* Urbanization of poverty appears to be the result of better access to public transportation in central cities
* Urban governments also may offer greater redistribution to the poor
Two Transportation Modes (Initial)
What does the first transportation modes graph illustrate?
The graph compares travel costs for two transportation modes—bus and car. The bus has a steeper cost increase with distance, indicating that it becomes relatively more expensive as one moves farther from the central business district (CBD), whereas car costs increase more gradually.
Two Transportation Modes (Combined Cost Function)
What is the significance of the second transportation modes graph?
This graph introduces a combined cost function, denoted by “t,” which represents the minimized travel cost for residents based on their chosen mode. The function reflects how people optimize their commuting costs by selecting the more cost-effective mode depending on distance.
Residents Minimize Travel Costs
What does the “Residents minimize travel costs” graph demonstrate?
It shows how residents adjust their commuting behavior to minimize costs. The break in the slope suggests that at a certain distance, the preferred mode of transport changes, leading to a shift in travel cost trends.
New Bid-Rent with Two Modes
How does the bid-rent curve change with two transportation modes?
The graph depicts a new bid-rent function, incorporating the minimized travel costs from the transportation cost function. The break in the slope represents a shift in the dominant mode of transport.
Bid-Rent and Transportation Affordability
What does the final graph suggest about the relationship between income, transportation, and housing location?
The graph illustrates how the poor (P) and rich (R) bid for land differently. If the rich can afford cars and the poor rely on public transportation, the poor will be concentrated in the city center (higher bid-rent), while the rich will move to the suburbs.
