How gentrification is affecting housing prices in Atlanta
Gentrification is the process of improving an area so it’s more fitting for the upper and middle classes. Atlanta has been revitalizing their communities since the 1996 Olympics and hasn’t stopped yet. On paper, gentrification sounds like a great thing, who doesn’t want a vibrant, modern, remolded community? Even with those perks gentrification in Atlanta has been the subject of praise and condemnation.
When a formerly depressed neighborhood suddenly becomes hot, the rapid growth can transform an area almost overnight. But it can also bring expensive growing pains. Is gentrification making Atlanta unaffordable?
Gentrification can happen quickly. As higher-income buyers move into a growing neighborhood, the cost of living goes up. Rents typically escalate, forcing poor and working-class families to move elsewhere.
For many residents, the effects of gentrification can quickly become a politically-charged issue. The question is whether the benefits outweigh the drawbacks.
Top 10 gentrifying cities in the USA
Nationwide, only about five percent of urban tracts that could be gentrified are actually going that route, according to a 2016 study from the Denver Office of Economic Development. But in the top gentrifying cities, new higher-income residents are displacing the existing lower-income residents at a much more rapid pace.
The top 10 fastest-gentrifying cities in 2020 are:
- Detroit, MI
- Miami, FL
- Charlotte, NC
- Austin, TX
- Raleigh, NC
- Oakland, CA
- Phoenix, AZ
- Pittsburgh, PA
- Philadelphia, PA
- San Antonio, TX
The pros of gentrification
According to a study by Daneil Hartlye, a top researcher at the Federal Reserve Bank of Cleveland, there are certain economic patterns that develop in cities undergoing gentrification. Hartlye’s study showed that the common side effects of gentrification is an increase of income, home prices, home rent, and sometimes changes in education quality.
When you add all those qualities together you also see a decrease in crime, and overall neighborhood amenities improve. The report specifically points out, “a neighborhood is gentrifying if it is located in the central city of a metropolitan area and it goes from being in the bottom half of the distribution of home prices in the metropolitan area to the top half.” With this fact in mind the city of Atlanta has completely turned itself around and now ranks 6th in the nation.
The cons of gentrification
One of the biggest concerns of gentrification is the loss of historical black neighborhoods, to make room for more affluent white families. A major concern is the large-scale displacement of residents who have lived in these gentrified communities for generations. Since most cities undergoing gentrification are only focused on building up the high-scale quality of downtown living they often don’t have enough “affordable” housing built up for displaced residents.
A group of students from Georgia State University also released their own study on gentrification, but they focused on the specific causes of residential displacement. Though the factors are difficult to isolate individually, one factor often feeds another factor, the students did create a list of factors:
- Increased living costs in gentrified neighborhood
- Rent increases
- Land value increase
- Higher taxes to pay for community amenities
- Investors flipping properties
How gentrification can help homeowners
As property values rise, homeowners often find themselves stuck paying ever-higher property taxes. Those who can’t afford the taxes must often sell their homes. But there is an upside: the opportunity to profit handsomely from a higher selling price.
Homeowners who stick around, meanwhile, can enjoy the economic benefits of gentrification, including new shopping, new restaurants, new job opportunities, better schools, and lower crime rates.
Is it all bad?
Atlanta has seen major changes since the city has undergone gentrification. Roughly over the last decade Atlanta has seen an economy boom, but new migrants have decreased and the population of African Americans has decreased from 67% to 54%. Atlanta gained 22,763 white residents, which equates to more than double all other races combined. Residents living downtown with at least a four-year degree increased by 61%.
The more cities change the face of their communities the more pros and cons will be discovered. Everyone wants to live in a community with a good economy, lots of jobs, great educational opportunities, and a low crime rate. The thing is gentrification can supply these benefits, and those benefits are achieved relatively quickly, but some think it’s done at the expense of building up the community, and not the people.
Gentrification in Atlanta
In April 2017, the mayor of Atlanta announced a new fund to help residents affected by gentrification. Home values in the Beltline have grown rapidly since 2015, with some properties doubling in value in the past two years alone.
Supported by philanthropic donations, the new fund gives grants to qualified homeowners in the Ashview Heights, Atlanta University, English Avenue, and Vine City neighborhoods.
How to buy in a gentrified neighborhood of Atlanta (without spending a fortune)
Without a doubt, gentrification is raising home values across parts of Atlanta, and finding a bargain isn’t easy. By the time a neighborhood starts heating up, real estate prices are already shooting skyward. But that doesn’t mean it’s too late to buy a home at an affordable price.
We Buy Ugly Houses Atlanta buys homes in all areas of the city, renovates them, and then sells them at the best possible prices. No matter which neighborhood is next in line for gentrification, you can still find a great home to buy.
Updated May 2020, originally published May 2017.