Urban planners’ debates about gentrification have been going on for many years. How does a well-meaning local government encourage neighborhood improvement without inadvertently pricing longtime residents out?
If you are reading this in hopes that I have a suggested solution to that dilemma, you’re in the wrong place, although there are certainly some intriguing theories floating about. But there is one approach to upgrading deteriorating neighborhoods that I enthusiastically support. It’s an insight I owe to my husband, from his years as Indianapolis’ Director of Metropolitan Development.
The typical downward trajectory of lower-middle and working class neighborhoods starts with a lack of visible maintenance–houses with peeling paint, unkempt yards, perhaps even broken windows. Lack of maintenance is evidence that leads many disapproving observers to conclude that “those people” just don’t care. My husband’s conclusion was rather different: “those people” were applying their inadequate incomes to “frivolities” like food, utilities and transportation to work.
What would those neighborhoods look like if we raised the minimum wage to $15/hour? What if desperately poor people, or those on the cusp of poverty, had some disposable income?
There is an often-overlooked connection between economic health and neighborhood revitalization. Regular readers of this blog have read my rants about job creation before, and are aware of my absolute conviction that jobs are created by demand. The owner of the widget factory isn’t going to hire more people to manufacture his widgets if there aren’t more people willing and able to buy them.
A recent study has added to the already ample evidence for this conclusion–and to the also-ample evidence that “supply-side” economics is, and has always been (as George H.W. Bush memorably labeled it) “voodoo” economics.
“Supply-side” is the economic theory embraced by Reagan and others in the 1980s. That theory dismisses the importance of wages at the bottom of the economy—the demand side. Instead, it rests on the theory that if we “free up” capital at the top—the supply side—wealthy entrepreneurs will create new jobs and a rising tide will lift all boats.
This is the theory that has justified Republicans’ forty-year commitment to tax cuts for the rich. The theory never made sense, and during the past forty years, all evidence has rebutted it. Tax cuts for the rich have never sparked economic growth, although they have certainly made the rich richer.
And that’s what the most recent study has found.
In their study of 18 countries over 50 years, scholars at the London School of Economics and Kings College concluded that tax cuts do not “trickle down.” In fact, they do little to promote growth or create jobs. Instead, they drive up inequality, by limiting their effects to the people who get the tax cuts.
Focusing on the bottom of the income distribution–ensuring that low-wage workers don’t sink into poverty, that they can afford to put food on their tables, buy diapers for the baby, and see a doctor when necessary (a different but equally pressing issue) and still have funds to fix that broken window and repair the lawn-mower–would do more to “revitalize” neighborhoods than many if not most of well-intentioned government programs.
Would there still be people who don’t keep their properties up? Sure. Would there still be landlords who are basically stingy slumlords? Yes. But investments in real estate represent a considerable asset to most owners, and the fiscal incentives to protect those investments by maintaining the properties are strong.
The real lesson behind my husband’s long-ago insight, however, is the holistic nature of our communities, and the importance of not limiting our focus when trying to improve one aspect of our common lives. We need to recognize the inter-relationships of such things as economic development, job creation and neighborhood improvement.
And “bottoms up” isn’t a phrase limited solely to alcohol consumption.
29 thoughts on “How To “Gentrify””
Professor Suess-Kennedy: I have had the great fortune to work with the leadership of the Indianapolis Neighborhood Housing Partnership and with your husband. We can work together to help re-build neighborhoods from the ground up, as opposed to top down. Your message today is profoundly important. Thank you.
Good thoughts today. And if Walmart and such paid a living wage, their employees would not need public assistance while working their butts off.
Sorry to digress, but here’s an article from Forbes about a similar Supply Side study done by the Congressional Research Office more than 8 years ago. Of course, no one heard about it; unlike Benghazi, Hillary’s emails, or Obama’s tan suit.
Fast forward and today we see 110 members of Congress committing Sedition and the Dems are silent. Amazing, ain’t it?
In August 1991 Mayor Bill Hudnut asked the Department of Metropolitan Development to do a study on the abandoned houses in Marion County. At that time there were 4,500 – 5,000; the last public report I saw was over 14,000 of these properties. The study in 1991 escalated as the public became aware and became actively involved in the study which culminated in numerous meetings and an all-day Conference with City and business leaders and the public. Goldsmith threw out the study in 1992. A few years ago an Indianapolis Star journalist (Brian ?) wrote a series of articles, “Abandon Indy” which provided much in depth information on the problem of deteriorating neighborhoods. Properties are abandoned for a number of reasons and “sold” at public auctions but what the purchaser purchases is the tax lien not the actual property due to a tax law giving the original owner additional time (1 year) to redeem the property. During that time frame the purchaser who purchased the tax lien has no rights to protect the property and to put money into improvements with the possibility of the property being redeemed means is not economically feasible. Also; the county no longer owns the property so bears no responsibility for the condition and high crime areas develop.
“At the auction, your home is sold to the highest bidder subject to the right of redemption. So, after the sale, most people get a certain amount of time in which to pay off the debt, plus various other amounts, to get the house back (redeem the property).”
If the tax law were changed by providing ownership of the property, it could be “gentrified” by the purchaser. These properties are the start of deterioration of entire neighborhoods; would $15 per hour minimum wage help? Of course it would but many of these homes are owned by seniors on limited income and general maintenance and upkeep is beyond their (our) means.
“Would there still be people who don’t keep their properties up? Sure. Would there still be landlords who are basically stingy slumlords? Yes. But investments in real estate represent a considerable asset to most owners, and the fiscal incentives to protect those investments by maintaining the properties are strong.”
A few months ago I had an electrical problem of “polarization”, diagnosed by my cable guy, which means black and white wires were incorrectly wired. My attempt to find an electrician resulted in one who was willing to come for a diagnostic fee of $265. A neighbor came to my rescue but that is an example of why all forms of maintenance is beyond affordability. There is also the problem of cities selling entire blocs of houses and businesses, including apartment buildings with seniors, low income and disabled residents who are often evicted with no assistance, to out-of-state developers who too often ignore the property and eventually write it off as a tax loss.
I am one of the seniors on a limited income trying to keep my 65 year old home together because I cannot afford a decent apartment. Raising the minimum wage will not help any of us in this situation (I just received notice of my $8 per month Social Security COLA); meanwhile our older homes drain what little income we have as we attempt to “gentrify” our homes. We are basically trapped in our situation. As for our neighbors who ignore maintenance and upkeep; it would be a great help if Zoning Ordinances were upheld by local government.
“Urban planners’ debates about gentrification have been going on for many years. How does a well-meaning local government encourage neighborhood improvement without inadvertently pricing longtime residents out?”
Yes, your husband is quite right. Numerous studies have already dispelled supply-side economics as a fraud engaged by both political parties – not just the GOP.
In fact, any progressive pointing out the fraud of Milton’s theories, which were mainly endorsed by rich donors at the University of Chicago, found the Democratic Party running a corporate democrat against them. Please see @AOC’s last primary opponent.
I was recently reminded of Reagan’s efforts to eliminate the over 100 years of free public education in CA as he privatized education. Thus in CA, so in D.C.
The benefactors of supply-side economics got exactly what they wanted and are evident abundantly throughout our society today. Those of you hoping to accomplish anything through our rigged elections comprising one large group of actors will be endlessly disappointed even when the next economic bubble bursts.
I have minus-zero knowledge of urban planning, but I know what I see, at least in the rapidly growing Research Triangle of North Carolina. it seems to be as much about the demand side. Young people want to live in the city with bars and restaurants and they work from home or coffee shops or “start up spaces” nearby. The developers swoop into minority and/or working class neighborhoods that are barely holding on and suddenly they are replaced by tear downs and/or mid-rise slick apartments/condos.
How about, instead of property tax abatement for companies that come in, take our money and file for reorganization, we give property tax abatement to long term residents of areas that have started gentrification? They should pay the same tax as before the neighborhood improvements started and funds and assistance could be made available to paint and repair their homes from the increased taxes of the gentry.
If the local school system has a building arts program that teaches construction, what better way to get hands on experience than helping repair and restore some of those old homes. If the local school system does not have a building arts program, why not?
@ David Honig … Are we?
We don’t really need to read any analyses from academics in England to know that supply-side economics was always a lie. Always. So, naturally, Republicans happily embraced it.
“This is the theory that has justified Republicans’ forty-year commitment to tax cuts for the rich. The theory never made sense, and during the past forty years, all evidence has rebutted it. Tax cuts for the rich have never sparked economic growth, although they have certainly made the rich richer.” This statement sums up our slide into the pits of poverty. The lie is perpetuated by the “exceptionalism” B.S. also perpetrated by Republican liars. It’s what they do.
Republicans haven’t had any intention of governing since 1981. Their sole purpose has been to screw the working classes for the benefit of the rich donors that keep funding their idiotic and corrupt power grabs. Many on this blog have, in one form or another, been pointing these facts out for years.
How about instituting a kind of urban Marshall Plan for OUR cities? We did it in Europe after WW II, so we have the model. Taking unemployed and idle people off the corner and putting them into trade school (paid attendance) so they can rebuild their OWN neighborhoods and thus creating their OWN dignity seems like the best use for government largesse.
Of course, all this would mean we’d have to stop spending a billion dollars a day in a useless and worthless war in Afghanistan. Oh, no. We couldn’t do that, could we? That would mean all those defense contractors in all 50 states would feel a pinch and their stockholders would whine and whine. Do you care about their stocks?
Well then … back to David Honig’s one word: Kansas. Does anyone wish to entertain a classic fable originated in the very early 1900’s? In the Wizard of Oz, the Tin Woodsman is in search of a heart and Dorothy is very motivated by whatever adventure or bizarre characters (including a self-absorbed king consumed by personal vanity) who obstruct her quest to find home. The fable ends as Dorothy exclaims: “Home is where the heart is.” Whether a Fusitzu rated F-4 tornado or well intentioned urban redevelopment policy, gentrification does not mean much if home is not where the heart is.
This is an opinion based on miles and miles of walking, running and biking. There are lots of people who don’t know how to do the tasks necessary to maintain a house. What if mortgage lenders required a short class or workshop to make first time buyers aware of what lies ahead?
You present a good thesis. Keep in mind, that Henry Ford increased the wages of his employees, how many decades ago, just so that they could afford to buy the very cars they were building!
“Trickle down” was bogus, and people in the Reagan admin. knew it at the time, some have come out and said so.
Conservatives seem to be very happy inside the blinders they create for themselves, not able to see that everything is connected to everything else.
Thomas Piketty’s book, Capital in the Twenty First Century, and his sequel thereto, Capital and Ideology, are massively researched books dealing with inequality in its many forms, including but not limited to my favorite whipping boys, income and wealth. His first book I call my “secular bible,” and I am into his sequel, a some 980 page tome, so heavy that when I am reading it in bed I get in my weight-lifting exercises as a bonus.
What Sheila is weighing in on today is the result of inequality in the sharing of the income and wealth of our economy, an economy that produces electricians (as JoAnn notes) who want $265 to check out electrical wiring for an elderly person on limited income, thus completing the Wall Street cycle of greed to include Main Street. There are, of course, many other forms of inequality to be found in medical care, education and the like, and none escape Pitketty’s merciless attention. I recommend both these books to those who wish to study inequality (and its results) in depth.
My constant complaints of wealth and wage inequality here and elsewhere draw the usual claims of socialism from the rich and their surrogates. Apparently these derogators cannot distinguish fair play from some ism such as socialism, an ism, incidentally, that could become the prevailing ism for given societies if the rich and corporate class continues its (as Piketty puts it – HyperCapitalism).
This has turned out to be a book(s) report, so to the topic > Yes, the fraying and neglect of some urban neighborhoods is directly due to not only an unfair and inequitable sharing of the income and wealth of our economy, but as JoAnn points out, an inadequate social safety net as well. It seems that hypercapitalism is great – for the few – whose greed may ultimately be their undoing; but as for the rest of us – suffer, serfs!
“What would those neighborhoods look like if we raised the minimum wage to $15/hour? What if desperately poor people, or those on the cusp of poverty, had some disposable income?”
The current federal minimum wage is $7.25 an hour. Nobody is paying $7.25 an hour. If you apply for an entry level job at McDonald’s or Walmart or if you are a cashier at a gas station, you’re almost certainly going to be making more than $10 an hour. Probably more like $11 or $12 an hour.
The trouble is there is a lot of people making between $12 and $15 an hour. The notion that every employer can simply pay more money, at least $15 to its hour, is pie-in-the-sky stuff. It is inevitable that fewer people or going to be hired at $15 an hour or people are going to have their hours cut.
I’ve heard the silly studies that raising the minimum wage won’t cost jobs. Indeed it if is raised to $11 an hour it won’t cost many jobs, but that’s because virtually every employer already pays that. But to those who say raise it to $15 an hour and that won’t cost jobs or reduced hours, why stop at $15 an hour? Why not $20, or $25, or $30? Heck why not make the minimum wage at $50 an hour? Bottom line, the basic rules of economics is that if you raise the price of labor for employers you’re going to get less of it in terms of fewer employers or reduced hours.
The minimum wage right now is pretty meaningless because market competition has driven low end wages much higher than the minimum. I know it’s blasphemy but the minimum wage was never a good idea. Pretty every economist will say that.
There is another huge obstacle to gentrification – remote work. A lot of people live downtown because they want to be near work. If they don’t have to travel downtown to work, fewer people will want to live downtown. You’re going to see a move to the suburbs and exurbs and even rural communities the next few decades. Cities are going to have to fight the consequences of the exodus. Continued gentrification I think is kind of wishful thinking. At best, the status quo can be hoped for.
Sorry about all the typos and other errors in my long post. I cringed when I look back and see them.. When are we going to get that edit button, Sheila?
Discussing this in past threads, a lot of points of been touched on! I’m not familiar with Indianapolis that much, except for the children’s Museum and the barbecue joint up the street from there, but it seems like a similar issue/cancer has taken hold there as in Chicago and every other major American city!
It used to be where a building close to the elevated and other public transportation was not desirable because of the noise. Now, it’s a major hub of gentrification or so-called gentrification. Buy up large blocks close to public transportation, tear down existing buildings and build soundproof monoliths with expensive condominiums inside to make things convenient for those who have money. The original residents in those areas are cast out like chaff in the wind.
In Chicago, the former mayor Rahm Emanuel wanted to have Elon Musk use his tunnel boring systems to create un-encumbered pathways to the inner-city. Areas that have square miles of unused property. Abandoned manufacturing plants and steel mills all over the city proper. With tunnel systems coming to these areas, new manufacturing and residential opportunities would abound. Local residents would have opportunities for employment without having to travel 2 or 3 hours a day for work. This should be part of a national infrastructure program that the new Biden administration has been talking about. If inner cities are healthy, here and everywhere else, there’s going to be a financial Renaissance that lifts the community. The local residents will have good paying jobs!
Alas, that might be too grandiose! There are too many purveyors of ill will and greed to get past. The attempt would be uplifting though.
It’s always been that way, those who are poor, were the ones that would eat lobster (sea bugs) and salmon which were considered garbage fish at one time. Once the wealthy decided it was good, the cost of just these 2 edible creatures became out of reach for those who were of meager means. Those peeling paint and Unkept lawn properties are mostly owned by slumlords, I know an individual who owns about 80 homes, he charges a lot of rent and receives a lot of money from the government, and puts little to no reinvestment dollars into those properties. It’s all greed, just like the large corporations! The money from those massive tax cuts never gets reinvested into the communities, they never look towards uplifting the inner cities, it’s all about how much more they can get from these cities by asking them for TIF zones, basically tax-free to the corporations and using public financing to supposedly allow them to upgrade their properties which never happens. Tax money doesn’t come into the public coffers, it drains out, therefore putting the burden on the middle-class taxpayer once again!
A lot of things could be accomplished with a massive infrastructure bill, trillions of dollars, probably one of the most ambitious building programs in the United States, even larger than the interstate highway systems. But the result would be a huge uplift in the quality of life for all citizens and therefore creating massive amounts of money pouring back into the public coffers.
Drought proof and fireproof large areas of this country with massive desalinization plants on the coastal areas. No more water shortages, increased food production and a better quality of life free of water shortages. All of the freshwater that gets dumped into the ocean from the Mississippi River could be channeled West through massive tunnel systems feeding existing and future reservoir systems that could turn desert regions into green lush Prairie’s. This technology exists already, it just takes a desire, and vision! Something that rarely exists today. We would rather let corporate America extort the taxpayers and make sure shortages stay in place because it increases their bottom line. In the end, greed wins.
Though I understand your logic regarding wages and employers who will pay them, but you are missing a major point. Those employers – at least the ones who understand their own business models, will raise the prices of their products. They’ll do it a nickel and dime at a time and nobody will notice. Why do you think we pay $3 – $5 for a loaf of bread, when it was $0.75 when I was a kid?
AND, people making $15 per hour (or less) spend every dime of it because they have NO discretionary income. That means that they’re buying stuff. When they buy stuff it creates demand. Demand creates pressure for employment… or automation – which creates a different kind of employment demand.
So, pie-in-the-sky is what Henry Ford did. Pie-in-the-sky is what John Maynard Keynes proposed and FDR implemented to get the economy moving in the right direction. Pie-in-the-sky is what the Marshall Plan did to rebuild our vanquished foes and turn them into our biggest customers… which created more employment.
If we want higher-quality education curriculums and better teachers, PAY them the pie-in-the-sky wages that will attract the underemployed engineers and scientists and authors and publishers, etc. to teach our children how to create a more perfect union, minimize poverty and create that other pie-in-the-sky entity that the rest of the civilized world has, UNIVERSAL HEALTH CARE.
I prefer APPLE pie with a scoop of pure vanilla ice cream, topped with chocolate sauce. It’s not in the sky, it’s on my agenda.
Paul K. Ogden; that $15 minimum wage increase was never meant to be an instant increase if it was ever passed. You are more than likely correct in your statement that jobs don’t actually start at $7.25 per hour BUT deduct all taxes from that $10, $12 or even $15 per hour and what do they take home to support their families? Along comes April 15th the following year and they file taxes, never having paid what is owed to IRS and figure the dwindling exemptions which seem to decrease every year and what would their actual income be? I am a bottom-line person because that bottom line figure is the reality they live with.
Service people in restaurants and bars do not get paid that $7.25 per hour so must depend on tips; an issue we covered here 2 or 3 days ago. Also; a waitress friend explained that SHE does not get to keep whatever tip is left for her but shares it with the cooks and those who bus tables who are also paid less than minimum wage.
I figured my current $826 Social Security check, added my $277.62 PERF monthly retirement and figured my hourly wage if I worked a 40-hour week and my income is $6.89 per hour. My utilities, groceries, gas, food, personal care and household cleaning products cost the same as those earning $30 – $40 per hour. We won’t get into upkeep, maintenance and repairs on homes and lawn care or vehicle expenses.
Todd, reference California public education and Reagan:
I lived in California two different times while Reagan was governor. He pushed to eliminate property tax. Done. But then how do we finance public education, since property taxes had been the go-to capital for that? No problem. Eliminate the truancy laws and mandatory school enrollment for children 16 and under. Done. And it worked, sort of. Suddenly, average class size dropped to 14 and average class attendance per classroom dropped to 4. Scores of teachers were no longer needed. Some advocated closing public schools completely, to which Reagan gave his famous self-satisfied shrug of the head.
It was wonderful for millionaires, who like to invest in property in the bush and wait to gather the profit until citizens had paid for roads and streets and utilities to be brought from miles away to the edge of the property. And never have to pay a dime in real estate taxes in the profitable interim.
It was good for public transportation, too. Busses filled up with surfboards and kids heading to the beach on weekdays. I soon gave up public transportation in fear for my life. Then, for the third time, I got the hell out of Reagan-ruined California.
I did go back later for another try. I lived in California five different times in five different geographical/political areas. The last time there I found public education and real estate taxes somewhat restored.
In the biggest picture supply-side economics is the means by which the wealthy harvest the wealth of a nation. Assuming that they are informed it’s probably because they have concluded that the opportunities to make money on the productivity of the nation are in decline.
The problem in the US is that we have redefined poverty to mean a less awful condition than traditionally. By that I mean there have been many times in which what distinguished the wealthy from the poor was survival. Now it’s a matter of the level of discomfort. This is real progress but the paragraph above wonders if it’s sustainable now that the wealthy have been successful in harvesting our ability to grow economically.
This comes at a time when clearly the old ways in several critical areas like how we harvest energy have reached the end of their means to help us without hurting us. We face no alternative to a future of costly conflict with the climate as well as extremely expensive infrastructure changes to provide the most basic need of civilized living, energy.
Gerald, I presume to illustrate inequality of income and the problems it creates, you wrote:
‘…an economy that produces electricians (as JoAnn notes) who want $265 to check out electrical wiring for an elderly person on limited income…’
True, not to mention the wiring manufacturer’s CEO who makes $26500 per hour.
During my forty year career as an artist, my contracts with art dealers pretty much guaranteed me sufficient income to survive. Thus, I stuck to an unusual policy for pricing art I did outside the artist-dealer system. For whatever art someone requested me to do, I charged them the same hourly rate which they charged for the work they did. So, I sold some work for as little as $100 and as much as $30,000. It worked for me; it seemed fair to me; and it was fun experiencing the outrage on many occasions.
Having sat on the King Park Area Development Board for 10 years in the 1990’s I understand how hard it is to maintain an older house on a fixed or limited income. JoAnn point out the tax-sale trap, and high cost of licensed professional maintenance. I understand how important it is to have a licensed people do certain tasks, but I was even shocked with a recent quote by an electrician for a what would have been a 2 or 3 hour job for $600. When I worked IT, contractor help was $125/hr and a lawyer was $200/hr. Something is wrong in the electrician licensing market if these guys are charging $200+/hr and I suspect it could be traced to good lobbyist in the state house.
The 2008 real estate bubble and mortgage crises brought a new form of woe on poor neighborhoods where out of state brokers gobbled up properties sight unseen for investors promising to flip them for a profit doing substandard work, right up until the bottom dropped out leaving hundreds of properties abandoned in the tax-sale limbo.
In addition to propping up incomes at the bottom, elimination of the mortgage exemption would change the housing market. That is another one of those tax breaks that is generally regressive and inflates the overall market by an estimated 2.5+%, with the biggest benefit on the bottom end. I suspect it has a lot to do with the growth of sprawling suburbs with bigger lots and larger houses.
Hey… We as a country have seriously been talking about a $15 minimum wage for about 8 years now. Today we should be talking about a $17 minimum wage if you really want to get to the root of what is wrong with the minimum wage.
Thanks, Larry, for letting me use your space on Sheila’s blog to wise up some people — Clap Kruegerrand (antagonist in the first three volumes of “The Joseph’s Easel Series” by Larry Kaiser.)
Nope, a million dollars a year is not enough for me, not if YOU make $100,000. And I’m not greedy.
See, all I want is enough to demonstrate a sizable DIFFERENCE between ye and me. Think about it. With $100,000 income, you could get a loan to buy a Ferrari automobile and make my Cadillac and $80,000 F-150 Platinum Super Cab look like sickly calves. Or you could take flying lessons and once a month rent a cheap Beechcraft Bonanza for a Sunday cruse. Some people would know the DIFFERENCE between the plane I own and the cheapie you rent, but most people wouldn’t see the DIFFERENCE . At least, their eyes wouldn’t POP at the DIFFERENCE .
See, it’s DIFFERENCE I’m after, as in space between my reality and yours. I don’t care how much I have to make to create that gap between me and you, I’ll do it. Has nothing to do with greed; it has to do with truth. I’m better than you, and I have an obligation to display that truth so all will know the truth. An obligation. A duty. DIFFERENCE , DIFFERENCE , DIFFERENCE .
And you? You have a duty, too. Same as mine. DIFFERENCE . You are obligate to do what is necessary to demonstrate that DIFFERENCE , doing things like being satisfied with less. Live your gosh-danged role. Play your part in the truth.
You’re the one that’s greedy, wanting to acquire, to ravish that gap between me and you. I’m sorry and pray to my God that you will save yourself from Damnation by ceasing to murder Truth just to acquire another hunk of that gap.
Yours in Truth and DIFFERENCE
As a home owner it is my experience that good repairmen are hard to hire fur piecewirk.
No one wants to come in and repair one broken window or repair a mower.
Build new or buy new.
Good reliable jobs are in factories or new construction, full time work not in part time piecemeal wirk.
Or should we all be talking about how to stop soaring costs of everything in our lives; including the basic minimal needs to survive.
See what gentrification is doing to erase the history and culture of Black Indianapolis
The dominoes keep falling and Norwood is next: Stopping the ethnic cleansing of Black Indianapolis by gentrification
Who killed Hosbrook Street? SEND and the ethnic cleansing of Fountain Square
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