Class Notes | Gentrification
⤏ WRITTEN AND RESEARCHED BY GISSELLE PERNETT AND EDEN HAIN
⤏ EDITED BY CIANA ALESSI AND FAYE ORLOVE
Class Notes is a recurring series exploring topics that we find hard to understand (purposefully or otherwise!). Started as Instagram infographics, Class Notes has shifted into a monthly Jr Hi the Magazine feature which you can read here!
Today we’re covering gentrification. Again. Yes folks, the big G word is still here and frankly, it couldn’t adequately be covered on Instagram. Honestly, it probably can’t adequately be covered in any form…not unlike a review covering your neighborhood’s recently opened Tartine.
Although there are countless books written about gentrification, there is still so much misunderstanding about what it actually is. Is it a new problem with deep roots, or an old problem that’s been slowly stripping the rights and dignities of our BIPOC neighbors? What we do know is that before white people were moving in, they were moving out, or keeping people of color from buying property where they already lived. So we present to you Gentrification: the second coming.
What is gentrification?
Gentrification is marked by investment in a property for a short period of time, where the interest only exists for as long as it takes to flip said property for a profit. Furthermore, it includes actively not engaging with the existing long-standing community. While gentrification and revitalization — investment into a neighborhood, usually with the existing community in mind — can overlap, who is “revitalization” helping? And who is missing out?
Before we get into the nitty gritty details, let’s explore the main features of gentrification.
Although there is not a clear-cut technical definition, the 2003 PBS film, “Flag Wars” characterizes gentrification by several key characteristics:
Change in Demographics — An increase in median income, a decline in the proportion of racial minorities, and a reduction in household size, as low-income families are replaced by young singles and couples.
Fluctuating Real Estate Markets — Large increases in rents and home prices, increases in the number of evictions, conversion of rental units to ownership (condos) and new development of luxury housing.
Adjusted Land UsE — A decline in industrial uses, an increase in office or multimedia uses, the development of live/work "lofts" and high-end housing, retail, and restaurants.
Shifting Culture and Character — New ideas about what is desirable and attractive, including standards (either informal or legal) for architecture, landscaping, public behavior, noise, and nuisance.
The ABC’s of the big G:
Home Owner’s Loan Corporation — A group of home appraisers who created a neighborhood ranking system for purchasing and refinancing houses across the US. HOLC was established when President Roosevelt signed the Home Owners Loan Act into law as part of the New Deal.
New Deal — A series of projects and legislation initiated by the Roosevelt administration to benefit America and dig the American people out of the Great Depression. Roosevelt unveiled 15 new programs within the first hundred days of his presidency. The New Deal expanded the scope and size of the Federal government.
Redlining — The discriminatory practice of denying financial housing assistance to low-income BIPOC neighborhoods. Areas shaded red were used to indicate “hazardous” communities on HOLC’s color coded maps.
Click through this image for the “Mapping Inequality” map, created through the collaboration of three teams at four universities.
Let’s set the scene:
It’s 1929 and the economy is in shambles. President Roosevelt is elected into office and immediately gets to work passing sweeping financial reforms. Yes, this is the same President Roosevelt we talked about last month who incarcerated Japanese-Americans on the West Coast. Tip: keep this fun fact on the back burner when thinking about the lasting effects of American society and the housing crisis.
The Home Owner’s Loan Corporation
The Home Owners Loan Corporation was established through the New Deal to help stimulate the economy, encourage American citizens’ trust in banks, and develop generational wealth through homeownership. Today, homeownership is still the best way to encourage generational wealth, because when you rent a property you don’t have any assets. And when you don’t have assets you lose out on investment opportunities. When you don’t have investment opportunities, you can’t accrue wealth. And when you can’t accrue wealth, you’re closer to the poverty line than you are to becoming a billionaire. HOLC benefited the American people by making loans require smaller down payments which could be paid off over longer periods of time, helping grow the American upper class. Additionally, the HOLC aided struggling families in refinancing their mortgages to avoid foreclosure. Sounds positive until you consider who exactly the HOLC decided to help.
Now, you might be asking yourself, “How can I read the acronym HOLC and not think of the superhero, The Hulk?” Frankly, it’s not possible, and might be an accurate metaphor for the carnivorous exploitation of the housing market itself upon unsuspecting civilians. Once you get past the HOLC/Hulk dilemma, you might be wondering, how did the HOLC let banks, insurance companies, and loan officers know which neighborhoods were worth investing in? Well, by creating a residential security map, AKA a discrete ranking system of all American neighborhoods.
This system worked on a color-coded A — D grading scale. Neighborhoods with an A (green) rating consisted of “ethnically homogeneous” middle to upper-class constituents. People who lived in these neighborhoods were considered the best candidates for loans. Yes, that means white people. B (blue) were considered desirable because they were nearly or completely white neighborhoods. C (yellow) neighborhoods were considered “declining” for an “infiltration of a lower grade population,” better known as working class people of color. Neighborhoods with a D (red) rating were considered hazardous for its infiltration of “undesirable populations.” Guess who lived in these neighborhoods? Not white people!
This process — known as redlining — was used by banks and private lenders to deny loans to people they deemed “high risk.” The main goal of redlining was to keep people of color out of white neighborhoods. “If it ain’t white, it ain’t right!” said old-timey bankers (we assume). While most mortgage loans were denied to prospective BIPOC homeowners, the ones that were actually approved came with a higher interest rate. This created a racial wealth gap, preventing people who lived in or around predominantly Black neighborhoods from buying the home they lived in or repairing the home they did own. A lack of investment in redlined communities subsequently resulted in underdeveloped neighborhoods and limited or completely eliminated access to essential resources like food and healthcare.
Black residents who were able to buy a home did so through contract buying. This meant that a white homeowner could sell their house to a Black buyer with a hefty downpayment and high interest rates. The deed would remain in the white homeowner’s name until the house was paid in full, effectively making the white homeowner a landlord. There were no laws to protect buyers from this scam and people in these contracts were still under threat of eviction at any time.
Another way Black residents were able to buy homes was in “blockbusted “ neighborhoods. In their Black Past article, journalist Brent Gaspaire writes:
“Blockbusting refers to the practice of introducing African American homeowners into previously all white neighborhoods in order to spark rapid white flight and housing price decline.
After intentionally placing an African American homeowner onto a block, speculators solicited white owners with tales of impending depreciation. Fearful residents often sold their homes to these speculators well below market value. As white residents began to flee in great numbers, other white residents sold their homes at even lower prices, thus further depressing housing prices in a self-fulfilling prophecy.”
While the Fair Housing Act of 1968 “banned” “racial” “discrimination” (laughs quietly), the effects of redlining are very much still present. The recent publication of HOLC’s redlined and annotated maps online exemplifies the frustrations of disenfranchised communities who, for generations, couldn’t afford to live anywhere else. The communities HOLC deemed to be bad investments because they were too diverse, too close to waste facilities, or too full of Jews are still systematically disinvested properties today.
Moving along from the HOLC, we have another potential superhero/villain (is the Hulk a good guy or a bad guy?): the Federal Housing Administration.
The Federal Housing Administration
While HOLC focused on preventing foreclosures, the Federal Housing Administration worked with banks and private lenders to guarantee loan repayment through underwriting. To decide who should be approved for mortgage loans, the FHA created the Underwriting Manual, an evaluation system that rated the property, location, and applicant’s loan worthiness. The FHA used the Underwriting Manual and coded phrases to push their pro-segregation agenda. They also recommended building highways and “natural or artificial barriers” to protect neighborhoods “and the locations within it from adverse influences.” As a further prevention measure, the FHA promoted restrictive covenants. Since these were private agreements, there were no laws protecting BIPOC homebuyers.
Some terms to know:
Upwardly Mobile Citizen — The upwardly mobile citizen is characterized by higher educational achievement, economic status, and social class. If a neighborhood sees an increase in these demographics, it can increase property value.
White Flight — The phenomenon of white people moving out of neighborhoods when a larger BIPOC population moves in, influenced by racist propaganda and a fear of their properties being devalued where restrictive covenants aren’t in place.
Restrictive Covenants — “A [clause] imposing a restriction on the use of land so that the value and enjoyment of adjoining land will be preserved.” These were legal up until 1948 where, after the fact, they were still implemented de facto.
De Jure vs De Facto — De Jure refers to that which is recognized through the passage of a law. De facto refers to norms we accept as a society even though no law validates it.
Underwriting — Today, underwriting refers to the process of lenders verifying “your income, assets, debt and property details in order to issue final approval on your loan application.” At the establishment of HOLC, race and immigration status were also used to determine loan approval.
The moral of the story? The FHA is officially a super villain! Moving onto…displacement!
displacement
Let's think about who gains from revitalization. White people? Black people? Cartoony bank executives?
Well, displacement can look different across various landscapes, but it usually results in low-income residents being pushed out of a developing neighborhood and into another lower income, disinvested area. Direct displacement occurs when long-time residents are financially unable to remain in their homes, or are being forced out by soft evictions — like when your landlord keeps ignoring your requests to get that mold checked out — or extreme rent increases. Indirect displacement, however, is when low-income housing is no longer affordable to people with low income. Make. That. Make. Sense.
This combination of ever-increasing obstacles naturally prevents new generations from becoming homeowners. While displacement can be linked to many different factors, it becomes deadly when it’s intertwined with gentrification to prioritize upwardly mobile citizens. Ultimately, low-income BIPOC residents are intentionally excluded from reaping the benefits of revitalization.
Remember those artificial barriers we mentioned earlier? Well, the construction of freeways across the U.S is one of those barriers! Their existence has contributed to the destruction of redlined communities and the displacement of predominantly Black and Latine residents. Much like Sugar Hill — once a wealthy Black Neighborhood, now the Santa Monica freeway — sections of Boyle Heights were demolished to create the interchange where the 5, 10, 60 and 101 freeway intersect, and two thousand homes were bulldozed in the process. Those that lost their homes were not offered assistance after being forced to relocate, because that would be too humane.
I-5 and I-10 freeways cutting through East L.A. in 1961 (LA Public Library)
“Starting in 1948, bulldozers cleared wide urban gashes through the multiethnic but mostly Latino neighborhoods of Boyle Heights, Lincoln Heights, and East L.A., demolishing thousands of buildings and evicting homeowners from their property...They balkanized the community, making strangers out of neighbors and discouraging urban cohesion...Residents did fight back, flooding public meetings and picketing construction sites. But unlike the mostly white and politically powerful neighborhoods that killed plans for a Beverly Hills Freeway, L.A.'s Eastside couldn't stop the bulldozer. By the early 1960s, all seven of the planners' freeways crisscrossed the community.”
— Eduardo Obregón Pagán, “How Bleacher Seats Demolished a Barrio” (PBS)
Moving on, you know them, you hate them, now let’s dish about…the police!
policing and gentrification
As white upper-class residents move into low-income neighborhoods, new social expectations are imposed onto long term residents. Activities that were once considered normal are now considered suspicious and police surveillance is increased. These activities (aka 311 complaints — loitering, noise complaints or having a barbecue at a public park, apparently) are used by all and abused by upper-class residents as a means to gain control of how public spaces are used. This poses a greater harm to BIPOC residents as we’ve seen in cases like Eric Garner or the McKinney pool party incident, 311 complaints can escalate resulting in police misconduct, violence, and oftentimes unnecessary death.
how to not be a gentrifier
public interest vs public investment
A coffee shop is not an inherently gentrifying force, but it doesn’t inherently have an enriching effect that benefits the community. If you put a coffee shop in a vacant property in a neighborhood where many of the houses lack washing and drying machines, do you expect them to wash their clothes with Americanos? Of course, the community would be much better off with a laundromat instead of your niche cold brew house. So yes, this neighborhood now has Tiktok-worthy coffee beverages, but the people in the neighborhood will have to spend money to wash their clothes elsewhere, frequenting a not-so-nearby laundromat. Yes, a coffee shop may bring in some public enjoyment, but coffee will not necessarily fulfill the actual needs of the community. This is the main difference between public investment and private interest.
To put it into historical context, before it was Dodger Stadium, 300 Mexican-American families lived in the self-sufficient yet underdeveloped neighborhoods of Palo Verde, La Loma, and Bishop which made up the area of Chavez Ravine. Under the Federal Housing Act of 1949, the original residents of Chavez Ravine were forced out to create 10,000 new housing projects. Some residents sold their houses below market value with the incentive that they would have first pick of the new housing units, while other residents refused to leave until the LA Sheriff's Department forcefully removed them. The public housing project was stalled because LA mayor, Norris Poulson, called it “un-American spending.” Hmm… yes, let that seep in. The LA city council bought back the land from the federal government under the condition that the land would still be used for public good.
What’s better than giving the land back to the families it was stolen from? Baseball! City officials made a deal with Dodgers owner — Walter O’Malley — promising the construction of a stadium if the team rebranded as the LA Dodgers. When pondering revitalization, you may be tempted to think that a public entertainment center revitalizes the community and improves the neighborhood. Let’s not forget that paying for a tourist attraction is no substitution for hundreds of homes that were demolished and never replaced.
who to hate
The REAL reason we wrote this article. Just kidding.
Out-of-Touch Politicians — If you thought billionaires weren’t going to save us before, let me say it again: BILLIONAIRES WILL NOT SAVE US! I’m looking at you, Rick Caruso. You can’t simply “Clean Up LA” by spending more of the budget on policing. Afterall, policing and gentrification go hand in hand.
FHA — While HOLC created the guidelines for who would make a good candidate for a loan, it is the FHA that upholds de facto restrictive covenants, and continually denies aid to “Class D” neighborhoods. HOLC and the FHA were founded at the same time, but HOLC disbanded in 1954 and the FHA still exists today.
Banks - Mortgage and refinance rates are only rising as inflation trends continue to go up. Banks aren’t on your side. Banks don’t prioritize people, they prioritize profit.
As sociologist Ruth Glass — who first coined the term gentrification — writes:
“One by one, many of the working class quarters have been invaded by the middle class – upper and lower … Once this process of ‘gentrification’ starts in a district it goes on rapidly until all or most of the working class occupiers are displaced and the whole social character of the district is changed.”
Let go of that Columbus-esque idea that you discovered anything. No one is against revitalization, but we know it’s possible to create change without racism, without displacing BIPOC residents, and without destroying the cultural integrity of historical neighborhoods. What we need is revitalization that collaborates with long-term residents and includes existing businesses in the conversation.
SOURCES AND ADDITIONAL READING
Gentrification by Benjamin Grant
Block Busting by Brent Gaspaire
Home Owners’ Loan Corporation Neighborhood Redlining Grade from ArcGIS.com
Racial Provisions of FHA Underwriting Manual from wbhsi.net
Chavez Ravine: A Los Angeles Story from Zinn Education Project
The Thrill of Sugar Hill by Hadley Meares
Creating the Santa Monica Freeway by Nathan Masters
Displacement of Black Oakland by Sam Levin
Mckinney Pool Party by Dorothy A. Brown
Criminalization of Gentrifying Neighborhoods by Abdallah Fayyad
Mapping Inequality: Redlining in New Deal America from University of Richmond