Congratulations! You Gentrify: Displacing a Community

Investor · Atlanta, GA · Member since 2017 · 184 posts · 204 votes

This question is one I pose to anyone who has an opinion on the topic.

Obviously we're all here because we like something about the idea of REI and passive income. As the process goes, we find a "good deal" in some area, maybe make an improvement or 2 to the "deal", and if all goes well, we sit back watch the fruits of our labor grow through rental income, increased property value or equity. Now, multiply this by 100... 100 of us have found 100 deals, made 100 improvements, and raised 100 property values.

Boom. We just gentrified an area. A community that used to live there can no longer afford to be where they've grown up because there were a lot of good "deals" for investors to take advantage of and help our families and bolster our investment portfolio.

Granted, we may not have intentionally displaced a community, but collectively, we do. We just saw an opportunity and took advantage.

The question(s) I pose:

Do you think gentrification is an issue?
Do any of you ever struggle with the reality that we collectively price people out of their communities?
Do you ever think of it that way?
Do you ever feel bad about contributing to the gentrification of communities?
What are the alternatives?

This is just a philosophy question and some things that I think of, not pointing fingers or trying to be accusatory, or maybe I am. Just wanting to get a conversation started!

67 Reply

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James Free

Rental Property Investor · Fort Collins, CO · Member since 2015 · 128 posts · 327 votes

"Gentrification" is not wrong.

A neighborhood is either desirable or expensive or undesirable and inexpensive. It can move in either direction for a variety of reasons.

Maybe a community loses its industry and there are no more jobs, so prices go down, but it's still a bad place to live because there are no jobs and no future. Maybe hot new industries come to town and the opposite happens.

Maybe crime goes up, and people who can afford to leave move away. Maybe crime goes down, and people who used to avoid the neighborhood start moving in.

The list goes on and on.

Suppose we have a low-cost area that is in reasonable commuting distance from high-paying jobs. Why is it low-cost if it's so well-located? The obvious answers include crime and dilapidation. There are two ways things can go from here: The conditions improve and the prices go up, or the conditions stay lousy and the prices stay low. The "anti-gentrification" crowd tells you that price increases are immoral, but are they really ok with crime-ridden slums? Of course not. They promote magical thinking - the idea that we can get rid of crime and fix up the buildings without increasing the prices, even though the only reason that the prices were low was the conditions!

All of this without even mentioning that everyone who OWNs in a "gentrifying" neighborhood wins the appreciation lottery.

Shorter commutes are more green. It's better for society as a whole if the people working the high-paying jobs live near them. People doing little to no work don't have any particular reason to prefer one area to another, nor should we pander to them. The idea that you are more entitled to live in a particular area if you "started out there" has terrible implications and quickly becomes oppressive.

Finally, of course, the elephant in the room is identity politics. Most ant-gentrification rhetoric usually stems from toxic identity politics. People who get very angry when Identity Group A is displaced by Identity Group B don't care one whit when the opposite happens somewhere else. At best, such people are consistent in supporting the displacement of "richer" people by "poorer" people, or at least those they imagine to be so, while opposing the displacement of "poorer" by "richer." But adding emotional rhetoric doesn't change the facts above.

There is no good reason to keep crime in place, to keep dilapidation un-remedied, or to maintain filthy hovels when better alternatives are available.

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Roderick Smith
Investor · Birmingham, AL · Member since 2015 · 74 posts · 25 votes
7y
1. Do you think gentrification is an issue?
It would depend on the overall impact of the current residents and whether or not the demographic changes because of the improvements.
2. Do any of you ever struggle with the reality that we collectively price people out of their communities?
It seems as rent values are increasing regardless of the improvements in less economical areas. Especially where I live in Birmingham. I had to increase my rents as the costs of insurance, and taxes have been raised. It has nothing to do with gentrification for me.
3. Do you ever think of it that way?
Yes i know some people who do intentionally buy in low value areas just because of the cheaper price they can get by exploiting people life's issues and profit from their pain.
4. Do you ever feel bad about contributing to the gentrification of communities?
No because it is not my intention to price people out. I instead buy, rehab, and provide affordable housing for people in these areas. I give them the opportunity to live in decent housing for a change and most appreciate the advice and counseling I provide in conjunction with the nicer houses because I want them to own these houses. So I provide them with owner financing options.
5. What are the alternatives? Provide education and counseling to people in these communities to help guide them into homeownership. Hire the people in these communities to work on the houses that are being rehabbed. Provide job training for people in these areas.
3 Reply
Darius Ogloza
Investor · Marin County California · Member since 2018 · 1k+ posts · 2k+ votes
7y
My parents emigrated from Eastern Europe in April 1966. Back in the old country, they and their four children occupied a 3 room (room, not bedroom) apartment - basic communist hovel. Neither had an education beyond the sixth grade. They had no savings to speak of. Father had a trade. Mother cleaned office buildings. By September 1968, the had enough for a small down-payment on a 3 flat on the northwest side of Chicago. The seller agreed to hold the note. Next door Sunoco gas station (mind you, in the days of leaded gasoline). Across the alley textile factory with loading docks - basic American hovel. The renters in the two apartments (above and below) took care of payments on the note. Savings from work allowed them to payoff the note in no time. Sold in 1975 with enough capital accumulated for a down payment on a 50% interest in a 12 unit apartment building. Occupied and managed one of the apartments. Rinsed and repeated with larger properties and died worth strong seven figures.
Maybe this experience has given me too legalistic a view but homeowners displaced by gentrification make voluntary decisions. I am not going to pretend I have a better grasp of their own self-interest than they themselves do. If they want to sell because they have better use for the money God bless them. If they prefer to stick around and risk that the neighborhood does NOT improve God bless them also. Renters have no choice. When you buy and payoff a home, it's yours (subject to the tax man only). When you sign a one year's lease, that what you have: a right to occupy for 1 year (unless some progressive local government decides to transfer traditional owner rights to the tenant (e.g., rent control). In a sane world, signing a one year lease does not give you some right of permanent residence in the name of "community."
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Jonathan AndersonPro Member
Real Estate Agent · Greenville, SC · Member since 2016 · 198 posts · 105 votes
7y
Great post, Evan. This conundrum is something that I've been struggling with for a while now. I live just north of you in Greenville.
I believe gentrification is a major issue. It's happening in Greenville and it's happening all across the country. I struggle daily with that reality. I see the cool growth in my city. I play a part in it because I love visiting the breweries and unique locally source food options, all of which are surrounded by renovated mill-houses. What I don't see as easily (because of my privilege as a straight, white, male) are the effects it has on the communities being displaced because of the rising home/rent prices.
I just bought my first house hack (two SFH on one lot) in a gentrifying part of town. My tenant is fabulous. She's lived here for years, never missed a months rent. Keeps the house and yard in better shape than I keep my own. I know for a fact that the rent she's paying is about 200-300 "to low" for the area. I currently have no plans to raise the rent because she is literally a dream tenant, and I know for a fact she could not afford an increase.
I struggle with this daily. I do not know the answer. I don't think the answer is to buy houses and rent them under market value. I don't have that kind of expendable money. I don't think investors are inherently bad people for purchasing a home to flip or BRRR. I think a city has to be aware of the issue and take massive action to ensure the disenfranchised and marginalized are represented. Because I think about this and struggle with this so regularly I'm constantly brainstorming how I can make a difference and yet also build a better path to FI for my wife and I through real estate.
Thanks again for posting this question, Evan. I think a lot of investors forget that there is a human on the other side of their rental check. We can say "it's just business" all day long, but it's a business that effects people in some very serious ways and I don't think that should be taken lightly. Empathy and compassion are severally lacking in REI and I want to change that.
If you're ever up in Greenville let me know, would love to grab a coffee or a beer with you.
4 Reply
Dexter Yu
New York City · Member since 2018 · 2 posts · 1 vote
7y
I am really torn between the two of these since I come from an immigrant family who chose to live in town that they identified with.
It was low in rent which my parents could afford with their low wage income. They were trying to make it in America just like everyone. With that community of people, it showed our roots and our traditions which gave me a sense of "home". In the end, the majority will never truly see me as American because of my face.
My parents made and moved out of the neighborhood, but when I go back to visit and see gentrification. It does upset me because I know the rent is too high for immigrant families which get pushed out of their neighborhoods which they are not accepted in. Also, it also means that traditions are going to wither away.
I understand no one wants to live in a trashy neighborhood and gentrification is a way of cleaning the area, but cold hard money goes into the pocket of an individual not a community.
I am still thinking about a solution and hopefully when I become wealthy, I can create a nonprofit to solve this issue.
1 Reply
Chris Koch
Member since 2019 · 26 posts · 13 votes
7y
@Jonathan Anderson Can you please explain how your "privilege as a straight, white, male" has any implication on your ability to see "effects it has on the communities being displaced because of the rising home/rent prices."? I am not sure how your sexuality, gender and color of skin have anything to do with your ability to "see" and/or understand effects "on the communities being displaced...". Unless of course you are saying that the only communities being displaced are gay, minority and female. Which would mean you are making assumptions and that would be stupid. That said... nice virtue signaling!
4 Reply
Tanner Marsey
Rental Property Investor · San Diego, CA · Member since 2017 · 439 posts · 578 votes
7y
Originally posted by @Nicole Heasley Beitenman:

Originally posted by @Tanner Marsey:
I was raised in a pretty expensive coastal area.
And boy does it show.
"Just go get a new job and move" isn't a thing for blue-collar workers and below. In case you weren't aware, doing those things costs money.
Haha... as a matter of fact IT IS a very viable option! Want to know how I know this? Because myself, along with about 2,500 other men and women I work alongside (in a blue collar industry) tend to all have an hour plus commute into work. Why? Because we can’t afford to live in the city. My personal commute is 100 Miles each way. We even have people that live out of state and commute in for days at a time to work and then commute back home. You want to take a guess at how many of us are on government assistance because “we deserve to live where we work!!” Just a guess but I’m gonna say zero. Nobody owes you or I anything. If you can’t afford to live somewhere.... you don’t live there. Same as if you can’t afford an expensive steak dinner.... ya don’t go in and order one. Should the government pay for half your meal? Should the big bad restaurant owner not charge you as much? Nah, keep walking to McDonald’s. The fact that anyone thinks otherwise is absolutely absurd.
4 Reply
James De Stefano
Real Estate Agent · Houston, TX · Member since 2017 · 290 posts · 233 votes
7y
Originally posted by @James Free:

"Gentrification" is not wrong.
A neighborhood is either desirable or expensive or undesirable and inexpensive. It can move in either direction for a variety of reasons.
Maybe a community loses its industry and there are no more jobs, so prices go down, but it's still a bad place to live because there are no jobs and no future. Maybe hot new industries come to town and the opposite happens.
Maybe crime goes up, and people who can afford to leave move away. Maybe crime goes down, and people who used to avoid the neighborhood start moving in.
The list goes on and on.
Suppose we have a low-cost area that is in reasonable commuting distance from high-paying jobs. Why is it low-cost if it's so well-located? The obvious answers include crime and dilapidation. There are two ways things can go from here: The conditions improve and the prices go up, or the conditions stay lousy and the prices stay low. The "anti-gentrification" crowd tells you that price increases are immoral, but are they really ok with crime-ridden slums? Of course not. They promote magical thinking - the idea that we can get rid of crime and fix up the buildings without increasing the prices, even though the only reason that the prices were low was the conditions!
All of this without even mentioning that everyone who OWNs in a "gentrifying" neighborhood wins the appreciation lottery.
Shorter commutes are more green. It's better for society as a whole if the people working the high-paying jobs live near them. People doing little to no work don't have any particular reason to prefer one area to another, nor should we pander to them. The idea that you are more entitled to live in a particular area if you "started out there" has terrible implications and quickly becomes oppressive.
Finally, of course, the elephant in the room is identity politics. Most ant-gentrification rhetoric usually stems from toxic identity politics. People who get very angry when Identity Group A is displaced by Identity Group B don't care one whit when the opposite happens somewhere else. At best, such people are consistent in supporting the displacement of "richer" people by "poorer" people, or at least those they imagine to be so, while opposing the displacement of "poorer" by "richer." But adding emotional rhetoric doesn't change the facts above.
There is no good reason to keep crime in place, to keep dilapidation un-remedied, or to maintain filthy hovels when better alternatives are available.
Excellent thread! And this is possibly the post of the year here! TV and social media may present a sad story regularly, but honestly, anyone who stays and updates their home to match the neighborhood, would want quality homes as well, even with a price increase over time.
Safety and school is such an incredible driver for families. And the quality of homes in an area is one of the 1st things people think of, IMO.
0 Reply
Account Closed
Specialist · Paradise Valley, AZ · Member since 2018 · 3k+ posts · 2k+ votes
7y
Originally posted by @Evan Parker:
This question is one I pose to anyone who has an opinion on the topic.
Obviously we're all here because we like something about the idea of REI and passive income. As the process goes, we find a "good deal" in some area, maybe make an improvement or 2 to the "deal", and if all goes well, we sit back watch the fruits of our labor grow through rental income, increased property value or equity. Now, multiply this by 100... 100 of us have found 100 deals, made 100 improvements, and raised 100 property values.
Boom. We just gentrified an area. A community that used to live there can no longer afford to be where they've grown up because there were a lot of good "deals" for investors to take advantage of and help our families and bolster our investment portfolio.
Granted, we may not have intentionally displaced a community, but collectively, we do. We just saw an opportunity and took advantage.
The question(s) I pose:
Do you think gentrification is an issue?
Do any of you ever struggle with the reality that we collectively price people out of their communities?
Do you ever think of it that way?
Do you ever feel bad about contributing to the gentrification of communities?
What are the alternatives?
This is just a philosophy question and some things that I think of, not pointing fingers or trying to be accusatory, or maybe I am. Just wanting to get a conversation started!
Your comment: "Granted, we may not have intentionally displaced a community"
Years ago, When I was buying in Seattle, the people in the Central District (poor area, now gentrified) were sure happy to sell their neglected properties for enough to buy a new house in Skyway, Renton and Tukwila. It was so popular that whole extended families sold their places and moved next to each other.
I don't buy the premise that it's anything other than the free market at work. It improved the neighborhood and it improved the lives of the people who moved and who could now live in houses that didn't leak, in safer neighborhoods.
2 Reply
Evan Parker
OP
Investor · Atlanta, GA · Member since 2017 · 184 posts · 204 votes
7y
Originally posted by @Kyle Fitzgibbons:
The question(s) I pose:

Do you think gentrification is an issue? No. Is it an issue that I want to live in a penthouse in Manhattan? Everyone probably agrees that I don't get to live in a place simply because I want to. I can't afford the penthouse so I live somewhere cheaper.
Do any of you ever struggle with the reality that we collectively price people out of their communities? No. I'm not convinced "we" price people out of their communities. There is a huge shortage of housing in America and that is largely government regulated. I lived in Singapore for almost four years and with a population where literally 1 in 6 people are millionaires almost 90% of the population lived in government housing (HDB's). It was common and understood that citizens needed places to live regardless of income. The government designed and maintained systems to enable this. This also was thought of as "government housing". They were nice clean and without stigma. It's just how things were done. Compare that to the NIMBYism of places like California.
Do you ever think of it that way? Yes.
Do you ever feel bad about contributing to the gentrification of communities? No. See point 2. I'd be happy to have different laws and regulations. I'd vote for politicians that wanted to build millions of housing units. And don't call this socialism unless you're willing to call places like Singapore socialist. The problem is just bad economic policies not investors.
What are the alternatives? See the above. There are even ethical alternatives such as deciding not to have kids unless you can fully support them - ie give them literally everything. I don't have kids myself and one major reason is that I see a very large ethical demand on myself before ever considering it. This argument is similar to the penthouse one above. Should I get to have kids just because I want them? Should I get to live in the penthouse just because I want to? These things cost money and I don't have them. I don't blame anyone (other than my own parents). I grew next to the most expensive zip code in America in San Diego and I could never afford a house there especially as a teacher that would be making 40K a year. I moved abroad to Korea then Dubai then Singapore and now Afghanistan. I went from making $2000 per month to $22000 per month while teaching overseas and never paying rent. After ten years of doing this I was just able to purchase my first house in California and should pay it off in less than five years. Gentrification is not the problem. People who aren't willing to adapt and make painful sacrifices while also voting poor economic policies into reality are.
Wow that's fascinating about Singapore, I never knew that before!
0 Reply
James Wise
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
7y
Originally posted by @Tanner Marsey:

Originally posted by @Nicole Heasley Beitenman:
Originally posted by @Tanner Marsey:

I was raised in a pretty expensive coastal area.
And boy does it show.
"Just go get a new job and move" isn't a thing for blue-collar workers and below. In case you weren't aware, doing those things costs money.
Haha... as a matter of fact IT IS a very viable option! Want to know how I know this? Because myself, along with about 2,500 other men and women I work alongside (in a blue collar industry) tend to all have an hour plus commute into work. Why? Because we can’t afford to live in the city. My personal commute is 100 Miles each way. We even have people that live out of state and commute in for days at a time to work and then commute back home. You want to take a guess at how many of us are on government assistance because “we deserve to live where we work!!” Just a guess but I’m gonna say zero. Nobody owes you or I anything. If you can’t afford to live somewhere.... you don’t live there. Same as if you can’t afford an expensive steak dinner.... ya don’t go in and order one. Should the government pay for half your meal? Should the big bad restaurant owner not charge you as much? Nah, keep walking to McDonald’s. The fact that anyone thinks otherwise is absolutely absurd.
Amen brother. People crying about this need to be told to work for it or shutup.
2 Reply
Account Closed
Specialist · Paradise Valley, AZ · Member since 2018 · 3k+ posts · 2k+ votes
7y
Originally posted by @Nicole Heasley Beitenman:

Originally posted by @Tanner Marsey:
I was raised in a pretty expensive coastal area.
And boy does it show.
"Just go get a new job and move" isn't a thing for blue-collar workers and below. In case you weren't aware, doing those things costs money.
Staying "poor" and not moving is even more costly.
2 Reply
Tanner Marsey
Rental Property Investor · San Diego, CA · Member since 2017 · 439 posts · 578 votes
7y
Originally posted by @Chris Koch:

@Jonathan Anderson Can you please explain how your "privilege as a straight, white, male" has any implication on your ability to see "effects it has on the communities being displaced because of the rising home/rent prices."? I am not sure how your sexuality, gender and color of skin have anything to do with your ability to "see" and/or understand effects "on the communities being displaced...". Unless of course you are saying that the only communities being displaced are gay, minority and female. Which would mean you are making assumptions and that would be stupid. That said... nice virtue signaling!
Insane.... how does being a straight white male interfere with your ability to see that if you can’t afford something then you don’t get to have it...? It’s a very simple concept but for some reason society feels the need to interject.
0 Reply
Kyle Fitzgibbons
Member since 2019 · 2 posts · 3 votes
7y
@Evan Parker Singapore is a fascinating place to live. They certainly have their own problems and it's not perfect. However it does really shed a lot of light on just how manufactured home scarcity is. The last article I read projected a shortage of roughly 2 million units in California alone. Everyone wants a house but no one with a ton of equity in the house they bought 30 years ago wants to allow development. It's crazy.
1 Reply
Rosa Ramirez
Washington, DC · Member since 2018 · 6 posts · 1 vote
7y
It's an interesting question that deserves to be examined by anyone who is living or has interest in the properties in these communities. My father-in-law grew up in the area near Georgetown (Washington, D.C.) when it was not a desirable place to live. His parents moved out of that area to give their children a better life. Georgetown is now an entirely different place than it was when my father-in-law grew up in that area.
Sometimes people choose to move out of areas that are not considered good. Sometimes they are pushed out due to price increases. The latter happened to us, and we were making decent $ from our W2 jobs. I'm not upset about us having to move out of the DC neighborhood that we liked. We simply made the effort to save a downpayment and purchase a home in a part we could afford.
I DO know that I cannot do anything for anyone if I am not in a place where I can educate others about how to get proper job skills, get a good solid financial education and other knowledge to allow them to improve their financial wellbeing and thrive in their communities.
Not sure that I added much to the conversation, other than to say that my husband and I do think about it. And the answer I keep telling myself is that what I can do about the situation is help educate people through financial literacy. I've coordinate personal finance courses, and I will continue to do that until I find a better way to "lift all boats."
In the meantime, I will continue to look for properties I can buy and hold.
Best,
Rosa
0 Reply
Michele Wax
Specialist · Chicago · Member since 2018 · 126 posts · 51 votes
7y
This is a loaded set of questions....
To help with gentrification we should all own something in a lower income area that we just break even in. If you have 100 doors that are making cash what would it cost you if one broke even or if 10 break even?
As for running people out of their neighborhoods, I would say this....this is a big country and a lot of space out of the big cities. if a group of people want to live a certain way away from others land and things are cheaper away from metropolis's
1 Reply
Michael G.
Rental Property Investor · Brooklyn, NY · Member since 2013 · 272 posts · 165 votes
7y
@Evan Parker
1st, thank you for the thoughtful question.
However, there are numerous in-baked premises & presumptions in your question. To respect the readership, I will use bullet-points.
- Gentrification need not be, and I respectfully posit, is NOT a bad-word. As long as it doesn't come too quickly, it delivers significant net benefits.
- Almost ALL asset-classes are expected to appreciate over time. Equities, Bonds (via implied interest-rate), Art, Fine-Wines, and especially Real-Estate. The phenomenon of 'ascendancy, improvement, appreciation' is agnostic to race, color, ethnicity or socio-economic class. It is simply a function of living on this earth, and driven by a reality which is inflation.
- As an example of the above, don't all salaried employees expect or - at least "appreciate" (apologies for the pun) - a raise each year? Of course they do! Do they deserve it? For the most part, Yes! They do! The cost of living goes up each year after-all, doesn't it? Pesky inflation again! And so, holders of real-estate are no different. They, too, deserve a "raise."
- Towns, villages, and of course neighborhoods are living, breathing, moving, changing, evolving things... constantly in motion... like life. The people in them move-around too. No one should expect things to remain the same (or rents, costs, etc to remain the same) forever.
- As an example of the above, many New-Yorkers were 'priced-out' of Manhattan over the last 15-20 years. And do you know what that caused? A massive & rapid ascendancy of Brooklyn as the "go-to" hotspot. So actually, the "gentrification" that "plagued" Manhattan, thought-of initially as a 'negative,' actually turned out to be a huge positive for Brooklyn. And when Brooklyn's turn is up, Staten Island might be next. That's just how life goes. People are mobile, they adapt, and move.
- So no neighborhood should rightly be expected to remain exactly the same as it's always been for the last 3 generations or 80 years... Can you imagine going back to a neighborhood where all the shops are old & tired looking, there are no credit-card machines, the awnings are all faded & torn, the houses are worn-down, the yards neglected, the store-fronts empty.
Absent "gentrification," you'll get stagnation, and that's just sad. And way, way worse.
2 Reply
Tanya F.
Rental Property Investor · Madison, WI · Member since 2013 · 629 posts · 339 votes
7y
I need to think about this more. I most definitely am already conscious of pricing people out. And most certainly don't want to do that.
The concept of the "opportunity zone" will help to revitalize some communities, but I fear that it will be more often used to gentrify. I for one, would use it to break, to revitalize but not displace, even if I decided to go this route of opportunity zone investing.
https://www.irs.gov/newsroom/opportunity-zones-frequently-asked-questions
1 Reply
Robert Comstock
Member since 2018 · 138 posts · 56 votes
7y
1. Does someone renting in a community, regardless of duration, have any right to claim ownership of that community? If i own my property i cant be priced out if i choose not to sell, except gov taxes and inflation.
2. Choices/investments determine our quality of survival. Alot of smart people make dumb investments/choices (including with their time) can we really expect "dumb" people to make smart investments/choices? If not who is....or should be responsible for making sure those people can survive in this world?
0 Reply
Andre' Arceneaux
Rental Property Investor · Orange County, CA · Member since 2019 · 151 posts · 92 votes
7y
Originally posted by @Jim K.:

Originally posted by @Andre' Arceneaux:

@Jim K. Why would you pose a hyper sensitive question about your people when his question is primarily concerned with issues his people deal with?!??
This isn't Turkey or Greece. Thanks for the history lesson and unnecessary lashing rhetoric regarding favors, but he posed questions in a manner that clearly triggered you ...
Andre', I have very little idea what you're talking about and you use an awful lot of semi-literate punctuation. I can't even really tell if you just hinted that if I don't like America I should just STFU and go back to where I came from. Did you just do that? Really?
When one starts poking via ad hominem attacks, lol, there clearly isn't a point to be made.
Your reference to my sentence structure is comical and juvenile.
The thread clearly triggered the initial long winded response from you, referncing Turkish and Greek history, with assumptions made about OP and his (lack of) understanding of history where you laid nasty sterotypes based on nothing but assumption.
What would ever draw one to such a conclusion?
Stereotypes. Never work. For anyone. The best rule of thumb, stop.
0 Reply
Andre' Arceneaux
Rental Property Investor · Orange County, CA · Member since 2019 · 151 posts · 92 votes
7y
Originally posted by @Tanya F.:

I need to think about this more. I most definitely am already conscious of pricing people out. And most certainly don't want to do that.
The concept of the "opportunity zone" will help to revitalize some communities, but I fear that it will be more often used to gentrify. I for one, would use it to break, to revitalize but not displace, even if I decided to go this route of opportunity zone investing.
https://www.irs.gov/newsroom/opportunity-zones-fre...
This is absolutely the truth, and is happening (gentrification via opp zones) in South Central Los Angeles & Inglewood, CA as we speak.
I would generally have no problemif it did not price people out.
If it were as simple as buying, Wells Fargo and other institutions being popped for charging higher interest rates for the same (many times better) credit profiles to Black and Mexican borrowers, as opposed to lower rates for white borrowers, would not be happening.
Redlining and zoning is still a thing. They've simply undertaken different measures of implementation.
https://www.revealnews.org/blog/we-exposed-modern-...
https://www.zacks.com/amp/stock/news/293839/wells-...
https://www.latimes.com/business/la-fi-wells-fargo...
0 Reply
Andre' Arceneaux
Rental Property Investor · Orange County, CA · Member since 2019 · 151 posts · 92 votes
7y
Originally posted by @Account Closed:
Originally posted by @Evan Parker:

This question is one I pose to anyone who has an opinion on the topic.
Obviously we're all here because we like something about the idea of REI and passive income. As the process goes, we find a "good deal" in some area, maybe make an improvement or 2 to the "deal", and if all goes well, we sit back watch the fruits of our labor grow through rental income, increased property value or equity. Now, multiply this by 100... 100 of us have found 100 deals, made 100 improvements, and raised 100 property values.
Boom. We just gentrified an area. A community that used to live there can no longer afford to be where they've grown up because there were a lot of good "deals" for investors to take advantage of and help our families and bolster our investment portfolio.
Granted, we may not have intentionally displaced a community, but collectively, we do. We just saw an opportunity and took advantage.
The question(s) I pose:

Do you think gentrification is an issue?
Do any of you ever struggle with the reality that we collectively price people out of their communities?
Do you ever think of it that way?
Do you ever feel bad about contributing to the gentrification of communities?
What are the alternatives?
This is just a philosophy question and some things that I think of, not pointing fingers or trying to be accusatory, or maybe I am. Just wanting to get a conversation started!
Your comment: "Granted, we may not have intentionally displaced a community"
Years ago, When I was buying in Seattle, the people in the Central District (poor area, now gentrified) were sure happy to sell their neglected properties for enough to buy a new house in Skyway, Renton and Tukwila. It was so popular that whole extended families sold their places and moved next to each other.
I don't buy the premise that it's anything other than the free market at work. It improved the neighborhood and it improved the lives of the people who moved and who could now live in houses that didn't leak, in safer neighborhoods.
If the market works without bias, why does redlining still have an affect? What's being ignored, is causation.
The onion is there to be peeled, but it gets worse as we get to the core and we'd rather peel the surface, dealing with much simpler perceptions that are rooted in subjecting some to mantras of laziness and criminal habituality.
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Pat JacksonPro Member
Rental Property Investor · Reno, NV · Member since 2017 · 284 posts · 137 votes
7y
The only constant is change.
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James Murphey
Waipahu, HI · Member since 2018 · 121 posts · 81 votes
7y
I think gentrification is great. It is great when it turns a high crime neighborhood into an up and coming neighborhood that has young professionals bringing money into the community and small business there. It provides many benefits to the community, and opportunities for real estate appreciation, and investors to make a great return. I also think it is horrible. When the property taxes are so high a family can not afford to pay the taxes on a home they own. This is not right or fair. People being displaced from a community they lived in for multiple generations because they are unable to afford the cost of living in that area. It is a complicated issues with no right answer. Just less sh**ty answers.This is a very interesting post. I think gentrification like empires, capitalism, Marxism, democracy, and many other ideas is not inherently good or bad. We like to think of things in simple terms, and see only one side of an issue so we can pick our team and voice the "issue." But things are rarely that simple.
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JD MartinBusiness Member
Moderator
Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
7y
Originally posted by @Andre' Arceneaux:

Originally posted by @Tanya F.:
I need to think about this more. I most definitely am already conscious of pricing people out. And most certainly don't want to do that.
The concept of the "opportunity zone" will help to revitalize some communities, but I fear that it will be more often used to gentrify. I for one, would use it to break, to revitalize but not displace, even if I decided to go this route of opportunity zone investing.
https://www.irs.gov/newsroom/opportunity-zones-fre...
This is absolutely the truth, and is happening (gentrification via opp zones) in South Central Los Angeles & Inglewood, CA as we speak.
I would generally have no problemif it did not price people out.
If it were as simple as buying, Wells Fargo and other institutions being popped for charging higher interest rates for the same (many times better) credit profiles to Black and Mexican borrowers, as opposed to lower rates for white borrowers, would not be happening.
Redlining and zoning is still a thing. They've simply undertaken different measures of implementation.
https://www.revealnews.org/blog/we-exposed-modern-...
https://www.zacks.com/amp/stock/news/293839/wells-...
https://www.latimes.com/business/la-fi-wells-fargo...
While correlation is not causation, I think you are probably correct regarding redlining - the difference today is that it's covert instead of overt. I grew up in a city that's 45 minutes, including stops, from midtown Manhattan by train. You can still buy houses there for very low 100k (Orange, NJ). You go 5 miles further away in virtually any direction and the housing prices increase to half a million or more. Orange is still 75% black. Coincidence? Possibly, but unlikely. This is a city with a well-formed downtown area, lots of walkability, public transit everywhere.
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Jonathan AndersonPro Member
Real Estate Agent · Greenville, SC · Member since 2016 · 198 posts · 105 votes
7y
Originally posted by @Chris Koch:
@Jonathan Anderson Can you please explain how your "privilege as a straight, white, male" has any implication on your ability to see "effects it has on the communities being displaced because of the rising home/rent prices."? I am not sure how your sexuality, gender and color of skin have anything to do with your ability to "see" and/or understand effects "on the communities being displaced...". Unless of course you are saying that the only communities being displaced are gay, minority and female. Which would mean you are making assumptions and that would be stupid. That said... nice virtue signaling!
I think you misunderstand my point. My point is on a day-to-day basis I am not effected by gentrification. If I'm not effected by it I cannot fully grasp the negative effects that it has on someones physical, financial, emotional, wellbeing... as much as I may try to be aware of it.
Not sure why you have to label that as virtue signaling. If that's all you got from my comment then I really have nothing else to say to you.
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