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Report Analyzes New York City’s Gentrifying Neighborhoods, Finds Dramatic Demographic Shifts

May 9th 2016 / Download PDF

New York, New York—A new report by the NYU Furman Center explores gentrification within the context of New York City's neighborhoods. Of the city's 55 neighborhoods, the report classifies 15 as "gentrifying" and analyzes how their housing and population have changed over the past two decades.
 
The analysis was released as part of the NYU Furman Center's 15th annual State of New York City’s Housing and Neighborhoods in 2015 (PDF) report, which provides a compendium of data and analysis about the city's housing and neighborhoods. Additionally, the report defines “gentrifying” neighborhoods as areas that were relatively low-income in 1990 (among the bottom 40% in the city), but then experienced higher than median neighborhood rent growth in the following 20 years. Using these criteria, 15 of the city's 55 neighborhoods are classified as "gentrifying."

The authors then examine indicators of neighborhood change over time and compare them to changes in lower-income neighborhoods that did not gentrify (termed “non-gentrifying”), and neighborhoods that were among the top 60 percent with respect to income in 1990 (termed “higher-income”).

"The term ‘gentrification’ is often used to describe a number of different aspects of neighborhood change. We wanted to create a definition that allowed us focus on dramatic rent growth, which is the change that is of greatest concern in lower-income neighborhoods." said Ingrid Gould Ellen, faculty director of the NYU Furman Center

The report also finds that many of the demographic shifts observed citywide through 2014 were more pronounced in the city's gentrifying neighborhoods. The city as a whole became more educated and comprised of more single-person households and households with unrelated adults; and, all of these changes happened to a greater extent in the city's 15 gentrifying neighborhoods than in non-gentrifying and higher-income neighborhoods. 

As for racial and ethnic changes, the report shows that gentrifying neighborhoods saw an increase in white population, despite a citywide decrease. Gentrifying neighborhoods also saw a larger decrease in the black population through 2014 than the city as a whole.

The report also compares income changes across neighborhoods. Between 1990 and 2014, average household income in gentrifying neighborhoods rose by 14 percent. By contrast, average household income in non-gentrifying neighborhoods declined by 8 percent while average income remained steady in higher-income neighborhoods. 

"As demand grows and neighborhoods become more economically and racially integrated, long-time residents may benefit from new neighborhood amenities, reduced crime rates, and higher housing values," said Ellen. "However, rising rents threaten the long-run diversity of these communities.”

Read: State of New York City’s Housing and Neighborhoods in 2015

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Gentrification Key Findings

1. To more clearly define “gentrification” in the context of New York City’s neighborhoods, we establish a classification system with three categories: gentrifying, non-gentrifying, and higher-income. 
“Gentrifying neighborhoods” consist of sub-borough areas (SBAs) that meet two criteria: (1) low-income in 1990, and (2) experienced rent growth above the median SBA rent growth between 1990 and 2014. “Non-gentrifying neighborhoods” also started off as low-income in 1990 but experienced more modest rent growth. “Higher-income neighborhoods” are the city’s remaining SBAs, which had higher incomes in 1990. Using these criteria, 15 of the city’s 55 neighborhoods were “gentrifying,” seven were “non-gentrifying,” and 33 were “higher-income.”
 
2. Gentrifying neighborhoods have not gained back population lost in the 1970s.
New York lost about 822,000 people, between 1970 and 1980. The loss was heaviest in the low-income neighborhoods that would gentrify by 2014, where the population declined by over 25 percent. Despite the recent population growth in gentrifying neighborhoods, their aggregate population was still 15.8 percent lower in 2010 than it had been in 1970. 
 
3. Between 2000 and 2010, housing units in gentrifying neighborhoods grew at a faster rate than in other neighborhoods. 
Housing stock growth between 2000 and 2010 was most rapid in gentrifying neighborhoods. In these 15 neighborhoods, the number of housing units grew by 7.2 percent, as compared to just 4.5 percent in higher-income neighborhoods and 5.5 percent in non-gentrifying neighborhoods.
 
4. Only gentrifying neighborhoods saw an increase in average household income between 1990 and 2014.
Average household income in gentrifying neighborhoods grew by 7.3 percent in the 1990s and by 6.1 percent between 2000 and 2014. By contrast, average household incomes in non-gentrifying and higher-income neighborhoods changed little in the 1990s and declined between 2000 and 2014. 
 
5. The share of the population with a college degree increased the most in gentrifying neighborhoods.
The share of New Yorkers with a college degree grew 12 percentage points citywide between 1990 and 2014, but gentrifying neighborhoods experienced the most dramatic increase, with a 15.6 percentage point gain in the share college educated residents over the time period. The change was driven by recent movers; in 2014, about 42 percent of recent mover adults in gentrifying neighborhoods had a college degree, compared to 19 percent of recent movers who lived in non-gentrifying neighborhoods.
 
6. Since 2000, young adults have made up a growing share of the population in gentrifying neighborhoods.
Of the recent mover adults in gentrifying neighborhoods between 2010 and 2014, 60.8 percent were young adults between the ages of 20 and 34, compared to 47.9 percent in non-gentrifying neighborhoods and 54.7 percent in higher-income neighborhoods.
 
7. The non-family household share increased in gentrifying neighborhoods and grew three times faster than in the city as a whole.
Between 1990 and 2014, the share of non-family households (that is, people living alone or with roommates) in New York City increased by 2.7 percentage points. In gentrifying neighborhoods during this period, the share of non-family households grew by 8.2 percentage points—by 2.2 percentage points from 1990-2000 and another 6 percentage points from 2000-2014. 
 
8. Gentrifying neighborhoods saw an increase in white population (despite a citywide decrease), and a decrease in black population.
In gentrifying neighborhoods, the share of the population that identified as black declined between 1990 and 2010 (37.9 percent to 30.9 percent), which was more dramatic but consistent with the citywide change. The share of population that identified as white increased in gentrifying neighborhoods (18.8 percent to 20.6 percent) despite a citywide loss in the population identifying as white during the same period. 
 
9. Many poor people still live in gentrifying neighborhoods, but their numbers have fallen slightly since 2000.
The number of people living below the poverty line in gentrifying neighborhoods increased between 1990 and 2000, and then declined between 2000 and 2014. In higher-income neighborhoods, both the number and share of people living in poverty increased between 1990 and 2014.
 
10. Citywide, roughly half of households in all types of neighborhoods were rent burdened, though low- and moderate-income households saw the greatest increases.
Rent burdens increased sharply in gentrifying neighborhoods, but not more sharply than in non-gentrifying neighborhoods. However, rent burdens for moderate-income households rose the most in gentrifying neighborhoods.
 
11. Recently available rental units became less affordable to low-income households in all neighborhoods, but particularly in gentrifying neighborhoods.
The share of units affordable to low- and middle-income households declined sharply in gentrifying neighborhoods between 2000 and 2014. In 2000, 77.2 percent of recently available rental units in gentrifying neighborhoods were affordable to households earning 80 percent of Area Median Income (AMI). By 2014, that share had fallen to less than half. 
 
12. Crowding in renter households increased citywide across all neighborhood types.
The share of households considered crowded and severely crowded increased in all types of neighborhoods from 2005 to 2014, but non-gentrifying areas saw the starkest increases in crowding and severe crowding. Increases in crowding in gentrifying neighborhoods were relatively modest.
 
13. Citywide, the number of cases filed in housing court for non-payment of rent remained fairly constant across neighborhoods between 2005 and 2014.
According to data from the New York housing courts from 2005 to 2014, the rate of non-payment court cases filed per rental unit remained roughly constant in gentrifying neighborhoods, with the exception of an increase around the financial crisis. Non-gentrifying areas consistently saw higher rates of non-payment court filings than gentrifying areas over this time period.

Read: State of New York City’s Housing and Neighborhoods in 2015
 

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About the NYU Furman Center 
The NYU Furman Center advances research and debate on housing, neighborhoods, and urban policy. Established in 1995, it is a joint center of the New York University School of Law and the Wagner Graduate School of Public Service. More information can be found at furmancenter.org and @FurmanCenterNYU.