Gentrification Explained

Gentrification Explainer Video - Sources & Resources


Understanding gentrification

Gentrification: a process of neighborhood change that includes economic change in a historically disinvested neighborhood —by means of real estate investment and new higher-income residents moving in - as well as demographic change - not only in terms of income level, but also in terms of changes in the education level or racial make-up of residents.


Gentrification is complex -- to understand it, there are three key things to consider:

  1. The historic conditions, especially policies and practices that made communities susceptible to gentrification.
  2. The way that central city disinvestment and investment patterns are taking place today as a result of these conditions.
  3. And the ways that gentrification impacts communities.


Historic conditions:

  • Redlining: From the 1930s through the late 60s, standards set by the federal government and carried out by banks, explicitly labeled neighborhoods home to predominantly people of color as “risky” and “unfit for investment.” This practice meant that people of color were denied access to loans that would enable them to buy or repair homes in their neighborhood.


  • White flight: Other housing and transportation policies of the mid-20th century fueled the growth of mostly white suburbs, and the exodus of capital from urban centers, in a phenomenon often referred to as “white flight.”
    • Take the GI Bill as an example: the program guaranteed low-cost mortgage loans for returning WWII soldiers. But discrimination limited the extent to which black veterans were able to purchase homes in the growing suburbs.
    • In fact, the FHA largely required that suburban developers agree to not sell houses to black people in order for the developers to access these guaranteed loans.
    • Resource: Read about the history of residential segregation in America: “The Color of Law: A Forgotten History of How Our Government Segregated America (2017).” Rothstein, Richard.
    • Resource: Read about the suburbanization of America: “Crabgrass Frontier: The Suburbanization of the United States (1985).” Jackson, Kenneth T.


  • Urban renewal: Left behind in central city neighborhoods, low-income households and communities of color bore the brunt of highway system expansion and urban renewal programs, which resulted in the mass clearance of homes, businesses, and neighborhood institutions, and set the stage for widespread public and private disinvestment in the decades that followed.
  • Foreclosure crisis: In more recent history, the foreclosure crisis also contributed to making places vulnerable to gentrification. In low-income communities of color, disproportionate levels of subprime lending resulted in mass foreclosures, leaving those neighborhoods vulnerable to investors seeking to purchase and flip homes.


Central city disinvestment and investment patterns:

Today, both people and capital are flooding back into these historically disinvested neighborhoods. Why?

  • Relative affordability
    • In many US cities, the rental market has gotten increasingly expensive, and even moderate income earners are on the hunt for lower housing costs.
    • For example, in San Francisco, the median rent of a typical 2BR apartment went up nearly 70% between 2011 and 2017. Source: Zillow Data.
  • Older, historic housing stock that appeals to new residents
  • Close proximity to city centers, where jobs, restaurants, and art spaces are increasingly locating
  • Revitalization -- cities are investing in some of these neighborhoods with improved transit access and infrastructure in part to draw in newcomers


On the ground, gentrification may look like:


Impact of gentrification on communities:

While increased investment in an area can be positive, gentrification is often associated with displacement, which means that in some of these communities, long-term residents are not able to stay to benefit from new investments in housing, healthy food access, or transit infrastructure.

Learn more about the forms displacement takes and its long-term impacts on families from our displacement explainer video and accompanying resources page:

Another impact of displacement to consider is cultural displacement: Even for long-time residents who are able to stay in newly gentrifying areas, changes in the make-up and character of a neighborhood can lead to a reduced sense of belonging, or feeling out of place in one’s own home.


What’s next?

On the whole, we cannot ignore that the adverse impacts of gentrification, ranging from individual health effects to the suburbanization of poverty, are only the most recent wave in a pattern of urban restructuring that has been imposed upon and negatively affected low income and communities of color over generations.

Public, private, and non-profit sector leaders have the opportunity to implement strategies that give long-time residents a chance to benefit from increased investment in their communities, and even be a part of driving how some of the changes in their neighborhoods take place.

Protection of residents, production of affordable housing, and preservation of existing affordable housing stock are all key pieces of preventing displacement. Check out our Investment without Displacement workshop series for more information.

Additional resources:




  • There Goes the Neighborhood: Season One -- a KCRW, The Nation, and WNYC Studios podcast about the gentrification of Brooklyn.
  • There Goes the Neighborhood: Season Two -- a KCRW, The Nation, and WNYC Studios podcast about the gentrification of Los Angeles.
  • The View From Here: Place And Privilege -- Capital Public Radio’s latest multimedia documentary project explores the history, politics and economics of housing affordability in Sacramento.
  • City Rising -- A KCET and Link TV one-hour broadcast special and multi-media project that analyzes six California communities undergoing gentrification: Boyle Heights and South Central in Los Angeles, Long Beach, Santa Ana, Oakland and the Oak Park neighborhood of Sacramento.

This video was made in collaboration with the San Francisco Federal Reserve Bank
and ​the Great Communities Collaborative, an initiative of the San Francisco Foundation.
Take a look at the gentrification and displacement page on the San Francisco Federal Reserve Bank's site.