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If Twin Cities gentrification is a myth, what’s the real problem?

MinnPost photo by Jana Freiband
On any given block, street, or small-scale neighborhood, the kinds of changes associated with gentrification might be everywhere.

Spend much time going to neighborhood meetings in Minneapolis and St. Paul and it’s usually only a matter of time before the “G-word” rears its head. Discuss a new development, park or trail, or zoning change, and the sound *cough* gentrification! *cough* will rise from amidst the ranks.

But a new study [PDF] from the Institute on Metropolitan Opportunity released this week seeks to debunk gentrification concerns. According to the data going back 15 years, by nearly any measure gentrification isn’t actually happening in core areas of Minneapolis and St. Paul. Instead the report argues that the cities’ poor and middle-class neighborhoods, the places often invoked in gentrification conversations, are growing even more removed from our region’s wealthier communities. 

Looking at the data

Defining “gentrification” is never easy. It can be a catch-all term that refers to a range of issues including racial disparities, architectural critique, city subsidies, rising rents, or simply the passage of time.

Here’s how the report describes it:

“[Gentrification is the] displacement of lower-income households by higher-income residents, replacement and/or rehabilitation of housing stock, and displacement of racial minorities by higher-income white residents. The changes are also usually depicted as being very rapid in nature – in other words, not the product of gradual neighborhood changes, but the product of economic and social forces “pushing” against resident populations.

The new report, titled “Are Minneapolis and St. Paul Gentrifying?" focuses specifically on data describing demographics (changes in race and class), changes in housing stock, and changes in the housing market. Institute Director Myron Orfield and his team then ran the numbers for Minneapolis and St. Paul using similarly sized census tract “neighborhood” definitions. And by all accounts (with only one exception, and more on that in a moment), they found that none of these things was happening in the Twin Cities.

For example, take rent. According to the data, core city neighborhoods are simply mirroring changes in the region.

“Rent’s going up regionwide,” Orfield explained to me this week. “If rents are going up [in your neighborhood], you might think it’s a pattern. But the rental market has been fairly tight in general across the entire region. The pattern is really a regional pattern, and [in core city neighborhoods] rents are still less, [and] going up slower than anything else."

Data is a stubborn thing, and when you include both inflation and the larger regional context into the picture, the report finds that core-city gentrification is largely a myth.

Source: Institute on Metropolitan Opportunity

The importance of scale

One of the key differences between Orfield’s look at gentrification and more individual narratives about neighborhood change has to do with scale. On any given block, street, or small-scale neighborhood, the kinds of changes associated with gentrification might be obvious. (Think of Uptown along the Greenway, or the new restaurants in Lowertown.) 

Source: Institute on Metropolitan Opportunity

But if you zoom out just a bit and look at the Twin Cities' urban neighborhoods at a larger spatial and temporal scales, these changes disappear. Over a few years, that shiny, expensive building is offset by declining housing stock elsewhere, and the family of color that moved away is offset by similar newcomers.

“If you cut data fine enough for any given period, some neighborhoods will become a little whiter, and less wealthy,” Thomas Luce, the IMO’s research director, told me. “People tend to say that a store or a development is going to create gentrification, but there’s a constant churn. But zoom out far enough and get past the random noise and economic activity, and you see longer-term patterns.”

For example, the one exception to the report's (lack of) trends lies in Minneapolis’ Powderhorn neighborhood, which has increased its white population percentage from 45 percent to 51 percent over the last 15 years. (Note that the scale here is slightly different from the usual “neighborhood” definition used by the city’s neighborhood groups; here “Powderhorn" encompasses some of the adjoining neighborhoods.)

Source: Institute on Metropolitan Opportunity

“While most of the neighborhoods were becoming more racially diverse, the Powderhorn neighborhoods became a bit whiter during this period,” Luce explained. “It was 50/50 at the end, but the other indicators — income, housing, and things — were all going the other way [away from gentrification].”

What we talk about when we talk about gentrification

In my experience, the term gentrification is most often used to refer to differences in economic and cultural power between racial groups in historically underprivileged core city areas. It’s a useful way to describe the effect when the vast bulk of new apartments, restaurants and other urban changes that seem aimed at attracting wealthier white markets. Or it can describe how city policies tend to ignore the pernicious racial disparities that remain a huge problem, especially in the Twin Cities. In other words, just because the overall demographics of a neighborhood aren’t changing doesn’t mean that changes that do happen aren’t overwhelmingly focused on wealthier white people.

“Minneapolis is becoming more and more economically polarized,” Orfield told me, “but we’re not doing anything to make it more integrated. Gentrification is used as a justification in city policy documents to keep all affordable housing in neighborhoods that are becoming poorer, a policy driver trying to preserve places from becoming white and rich.”

The other big take-away of the study, from a data perspective, is that neither Minneapolis nor St. Paul have anything on the big coastal areas when it comes to gentrification. Whenever I hear friends in New York or San Francisco describe rising rents or displacement in Manhattan, Brooklyn, or the Mission District, there’s nothing in the Twin Cities that compares. (For example, check out this great blog about displacement of old businesses in New York City.)

Here’s what the report concludes about the Twin Cities’ national context:

Source: Institute on Metropolitan Opportunity

The take-away from these charts is clear: Extreme care must be taken when comparing Minneapolis or St. Paul to cities with prominent gentrification fights, because for most residents, housing is far cheaper to obtain here than in those cities. Relative to these places, the Twin Cities have become more affordable over time.

Lingering policy questions

It’s very important to note that the report does NOT say that gentrification isn’t happening. Rather, the Twin Cities’ gentrifying neighborhoods are the already wealthier white areas, like parts of Southwest Minneapolis.

photo of teardown
MinnPost photo by Marlys Harris
Orfield suggests gentrification is making places like Linden Hills and Edina less accessible.

“Linden Hills and Edina,” was Orfield’s answer when I asked him where gentrification is actually a problem. “These are the places that really are skyrocketing, not the poorest neighborhoods in the city; the neighborhoods in the city that were always white are moving from middle-class white people to richer white people, and becoming unaffordable and inaccessible.”

Meanwhile, according to Orfield and his team, the real problem with the Twin Cities’ core neighborhoods isn’t gentrification, but the continuation of decline and social segregation. For example, across town on the East Side of St. Paul, the numbers look grim. According to Orfield, gentrification should be the last of the worries here.

Source: Institute on Metropolitan Opportunity

Orfield points to a 2012 survey of low-income housing residents where the main desires were for safer neighborhoods and better schools, outcomes that are not closely tied to debates about gentrification.

Next time you hear people talk about gentrification, be sure to ask a follow-up question. They’re probably, and wholly justifiably, worried about economic or social marginalization. So it might be a good idea find out what they mean by “the G-word,” and begin talking about the real problem.

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Comments (4)

Never liked the G word

Maybe I'm missing something, but I want to talk about this:

"[Gentrification is] a useful way to describe the effect when the vast bulk of new apartments, restaurants and other urban changes that seem aimed at attracting wealthier white markets."

Don't the results here say that this "effect" isn't really there? That is, adding more expensive housing and services might be "aimed at" attracting wealthier people (not terribly shocking that business are interested in that), is either unsuccessful or offset by other changes?

Similarly:

"In other words, just because the overall demographics of a neighborhood aren’t changing doesn’t mean that changes that do happen aren’t overwhelmingly focused on wealthier white people."

Doesn't it exactly have to mean that? Or is there a distinction between changes that happen on purpose - e.g, building something new or fixing something up - versus those that happen via inaction - e.g., aging/wearing of other housing stock?

Finally, this quote from Orfield demonstrates why the G word is so potentially dangerous:

"Gentrification is used as a justification in city policy documents to keep all affordable housing in neighborhoods that are becoming poorer, a policy driver trying to preserve places from becoming white and rich."

We need to be very careful not to maintain segregation out of good intentions.

Economic isolation

I can't speak to the causes or history of economic segregation in the Twin Cities – though that would be a fine topic for an investigative series – but my experience moving here from metro Denver supports Mr. Lindeke's suggestion that Twin Cities housing is, overall, less expensive than housing in many other metro areas around the country. Because my income is relatively fixed as a retiree, I had an opportunity to make some direct comparisons when I arrived here from Colorado. Compared to that big, square state, Minnesota certainly qualifies as a high-tax state. My property taxes went up more than 50%, though it's apples and oranges to compare a metro-Denver condo with a Minneapolis single family, detached house, so I'm inclined to ignore that part. What I don't ignore is that my state income taxes were, for my first couple of years here, more than 2-1/2 times higher in Minnesota than they were in Colorado – for the exact, to-the-dollar, same income.

If that were all there was to it, I ought to be living in a cardboard box under a bridge somewhere.

Instead, my modest standard of living (by American standards – by 2nd and 3rd-world standards, I live like a minor-league prince) has not deteriorated at all in economic terms. While I haven't entirely figured out just why I'm not in that cardboard box, two things occur to me. One is that Minnesota's tendency not to add sales tax to clothing and food helps those living on modest incomes significantly – more so than it does the area millionaires who are fleeing to South Dakota, if Republican rhetoric is to be believed. I don't buy nearly as much clothing as I did when I was working, but I make the same trips to the grocery store that everyone else makes, and proportionately, food still takes up a significant portion of my budget.

The other factor, which I deem more important in the long run, is precisely that relative cost of housing that Mr. Lindeke pointed out. There's no real indication of gentrification (in the sense defined in the article) in my specific neighborhood, though some new housing, at probably twice the cost of the median house already extant in the neighborhood, is being built literally across the street/boundary between my neighborhood and one adjacent to it. Regardless, my housing costs here in Minneapolis are significantly lower – at least 25% lower – than they were in metro Denver, and that includes the mortgage payment, property tax and homeowner's insurance. Utility bills are pretty much a wash, so the major difference is in the "big 3" of mortgage, taxes and insurance.

Colorado has far lower taxes, but housing there is also far more expensive. My current house in Minneapolis would likely sell for at least 25% more than I paid for it if it were located in my former neighborhood in metro Denver. That assertion is pretty much in line with what I see when I browse real estate sites online. I've no doubt that People of Money are, whether consciously or unconsciously, segregating themselves from those of us of lesser means, and doing so in both the Twin Cities themselves as well as the more affluent suburbs, but while the ethics of that can be debated, it's a difficult issue to address through public policy unless people in elected office are willing to take a long, hard look at zoning policies and ordinances.

Few policies and/or ordinances are guarded more jealously by local governments than zoning, and while my bias is that economic segregation is just as ugly and indefensible as racial or cultural segregation, I see no evidence that local governments are willing to wean themselves from it by substantially altering their zoning ordinances.

Speaking in Edina

There are plenty of people in Edina not too thrilled with all the residental tear down redevelopment going on. Do you think Orfield would be interested in speaking in Edina about gentrification?

Not a myth

Gentrification is not a myth at all. Just look at it, you can't miss it. Expensive places are going up virtually everywhere that virtually no one can afford. Give me a break, its happening. The idea that rents have not gone up because of this seems illogical to me. Yes, the housing crash and loss of homes that caused many more people to compete for rentals is a part rents going up. And regional trends are interesting, but not necessarilly applicable. How many other places match exactly Minneapolis in all ways? Pretty much none, so no point in an apples and oranges comparison there. And you have to take into account that sometimes even if the major crush of gentrification or any other phenomenon has not hit quite yet, it might soon. Things don't happen in an orderly fashion sometimes. Sometimes a certain threshold is hit or some event happens and a major jump happens. Take SF in the last several years. They were already gentrified well beyond anything Minneapolis has dealt with, but they just got zapped with an even huger gentrification situation, with prices going up even higher. Nearby Oakland is being affected too. Its the bro-ification of those towns due to tech jobs and the tech bros who take them that has been a big cause of this. Well there are tech bros here now too, not nearly as many, but there more and more all the time, and the city is actively spending tax payer money to attract them to fill the luxury condos that they allowed to happen with their terrible housing and development policies or lack thereof in the last 15 years that allowed a ghetto to be built around Uptown, albeit a rich person's ghetto. And the luxury apartments that have followed suite are showing no signs of slowing down new developments now. So if the city's build it and they tech bros will come defacto strategy comes to fruition, and if these luxury condos and apartments keep happening, how could it fail to cause even more gentrification in Minneapolis than there already is? Uptown is the worst of course, but you can see the future makings of gentrification coming soon in other neighborhoods too. In Uptown though, its not a theory, and no fancy charts are needed. Just go and try to rent something for a decent price anywhere in Uptown now and you'll find it costs double what it did 15 years ago. And who can afford that? Not normal people unless they burden themselves hugely and get into debt etc. So regardless of narrow definitions of gentrification that help to assuage it so that developments can shrug and say "what gentrification", real costs have gone way up, and normal people can't afford them anymore, and rich people can. So you have a displacement of population going on, neighborhoods are being taken away from people who used to live there. Its happening. Take a poll of people renting who have rented in Uptown for the last 20 years and you will get a huge majority of people saying its going on, regardless of charts and other presentations that want to deny it. Is it as big as in SF? No of course not, this city itself isn't as big as SF, and hello despite smug Minneapolitan mantras that MPLS is super cool, which it is, its not on the ocean or even close and its just not as desirable a place to live as SF or the other majors, so why even compare it to them? Gentrification is happening in those places, and its happening here too. And trying to compare the scale of what happens in bigger cities to what happens here is misguided and apples to oranges. Sure the raises in rent here have been less than the raise there, but people have less money here on average and so those smaller raises are just as impactful to the people here as the bigger raises are to people in SF who have more money. You're familiar with tax policy and so many other proportionally based systems and considerations... The reason we have progressive taxes is because a flat amount of tax would hurt and be a bigger burden to some one with less money than it is to some one with more money. Gentrification IS happening here. Slower, smaller scale, but every bit as much harmful to the people who can't afford it. And I see a time in the near future when rents and home prices could suddenly start to jump much quicker than they have thus far when the snowball gathers more snow do to reaching a certain unknown threshold. Eventually we could end up with so much excess luxury stuff here and not enough people will fill it and then that market may collapse on itself and rents/prices may come down. But, I don't see that happening any time soon. If it does happen it could be a couple decades out and by that time plenty of people's lives could have been jacked around when they are displaced from their city, so it won't be any consolation to them. And the city may see economic declines due to the huge gap in what places were valued at compared to what they would be after such a crash, and that could cost us all in lots of ways including gigantic property tax increases and major cuts to city budgets unlike what we've seen before. The housing and development policies in Minneapolis were terrible for at least 15 years,and they continue to be. At least the Hodges budget has to some extent changed course and made affordable housing a bigger priority, and that is a very good thing. But, no policy has been put in place to stop or slow down the luxury developments that are out of control and out of proportion to any actual demand for that stuff. People are clearly making a lot of money building those places, and that can be a hindrance shall we say to policies that might otherwise try to control it in anyway, such as setting a percentage of all new housing that must be affordable. And those people will make money regardless of whether the condos and lux apts sell or rent or if they don't. Construction is a wonderful industry that allows a lot of money to be made on the front end. And that is the elephant in the Minneapolis living room that no one is talking about, even more so than gentrification.