Gentrification and Socioeconomic Impacts of Neighborhood
Integration and Diversification in Atlanta, Georgia

Ebenezer O. Aka, Jr.
Morehouse College

Introduction
     Gentrification can be defined as the upward change in land use to middle and upper income residential (Keating, 2003).  In the simplest form it can be explained as the upgrading of devalued or deteriorated urban property by the middle class or affluent people.  It can also be thought of as “reversed neighborhood” (Freeman, 2008).  Gentrification is a common issue in urbanized nations around the world.  The presences of gentrification begin to become common in the United States around the mid 1970s. There are many factors that feed into the existence of gentrification.  And there are numerous social and economic consequences of gentrification. Often times referred to as a double-edged sword, gentrification sets off a chain of both positive and negative effects. It is seemingly impossible to completely eradicate the negative effects of gentrification. However, it is possible to minimize the negative effects that gentrification presents.  The question is, can gentrification lead to a long-term stable or greater volatility due to conflicts arising from the socioeconomic differences between whites, blacks, and other minorities in Atlanta.
Purpose of Study
     This paper focuses on the socioeconomic effects of gentrification in five Atlanta neighborhoods. The five neighborhoods are in an area of Atlanta known as Intown-South. The neighborhoods include Summerhill, Grant Park, East Atlanta, Edgewood, and East Lake (see Map 1, Map 2, Map 3, Map 4, Map 5, and Map 6). These neighborhoods span eastward from Atlanta’s Interstate 75/85 Connector. Each neighborhood is in close proximity to downtown Atlanta and is easily accessible to interstates 75/85 and or 20. These neighborhoods exist in different City Council Districts and different Neighborhood Planning Units.  Each of these neighborhoods shares similar socioeconomic characteristics. These neighborhoods were chosen based on recent inter-metropolitan migration trends in Atlanta. Each of these areas has been or is becoming of immense popularity with persons moving into Atlanta’s in-town neighborhoods.
Methodology of the Study
     Using the aforementioned neighborhoods as a point of reference, this paper seeks to provide recommendations on ways to minimize the negative effects of gentrification in Atlanta. In order to provide recommendations, we will analyze the political, economic, and social factors that feed into gentrification- using secondary research components as a catalyst.  To determine the occurrence of gentrification and its effects, there will be a longitudinal analysis on variables of race, age, educational attainment, income, housing values and rent cost.
Theoretical Framework for the Study of Gentrification
     As stated in the introduction, gentrification may simply be defined as the upgrading of devalued urban property. But as one elects to go deeper into understanding gentrification, it broadens to encompass much more. Gentrification is not easily explained in a few sentences. We can begin to understand gentrification more thoroughly by dispelling one major inaccuracy associated with it.  That inaccuracy being that gentrification is brought on only by wealthy individuals moving from suburbs or exurbs into blighted areas of the central city. Bruce London and John Palen, two sociology professors, believe that this misconception is brought on by the root word of gentrification – gentry means upper or ruling class. While it is true that gentrification is the result of higher income groups moving into central city neighborhoods, these persons are often time only marginally middle class and often times relocate from other areas of the city proper (Keating, 2003).   They also use their own labor to increase the value of the homes they purchase. “Newcomers are attracted to revitalizing areas because house prices are moderate compared” (London and Palen, 1984, p.7).
     Despite the inaccuracy associated with only wealthy persons moving into the central city from the suburbs and exurbs, it is true that an influx of higher-income groups into an area increase property values and thus induces gentrification. This is true because higher-income helps fix up dilapidated houses, and because businesses follow consumers who have purchasing power. And as businesses invest in depressed areas, the residential and commercial property values increase. This increase in area property values is the double-edged sword that people refer to when they are speaking of gentrification. “Some observers see in this process the coming end of the urban crisis; others stress the increasing impoverishment of the displaced” (London and Palen, 1984, p. 14).
     From higher property values, there are great economic benefits for the local neighborhood as well as the municipality, county and state. However, these economic benefits flow from taxation- this means that citizens pay an increased price in the cost of living for improving an area. As property values rise, so do property taxes. And as conspicuous consumption increases in new found popular enclaves, so do sales tax revenues. In Atlanta, 50% of property taxes go to the Atlanta Board of Education; the remaining portion is divided between the City of Atlanta, Fulton County, and the State of Georgia. The property taxes and sales taxes that are divided up amongst the city, county and state, serve as general revenue. They are used to provide services such as police protection, sanitation, and highway maintenance. So as property taxes and sales tax revenues increase, the education provided in local public schools improves, the provision of public services becomes greater, and the overall quality of life is improved.
     Despite all of the positive effects that result from gentrification, there are negative effects that result as well. Displacement is probably the most notorious of all. “Displacement most frequently, refers to the forced involuntary dislocation of needy households (i.e., the poor, black, ethnic minorities, and the aged)” (London and Palen, 1984, p.12).   As property taxes begin to rise, many long-term homeowners are unable to keep up with increasing property tax rates. In the process, commercial and residential landlords often increase rent to continue earning a profit on their investment property. Landlords also increase rent prices because they know renovations to the surrounding area will increase the attractiveness of their property. Those seeking conspicuous consumption will be willing to pay a higher price for the services and amenities that the property provides. Displaced residence often times find it difficult to find sufficient housing at a price relative to what they were paying before being displaced. In many gentrified areas it may be quite normal to see high-priced condominiums and fancy boutiques replace older dwellings, and “mom and pop” corner stores. Eventually, a neighborhoods entire demographic profile changes. The indigenous sociological community is destroyed and replaced by another. What is perhaps the one of the most disheartening effects of gentrification is that people who once owned gracious homes in the gentrified area- which may have needed a little maintenance- can often time not even conceive of buying back into the area once it had been totally restructured.
     Georgia Institute of Technology Professor, Larry Keating, suggest that Gentrification in Atlanta has six key characteristics. In Keating’s paper, “Resurgent Gentrification: Politics and Policy in Atlanta,” Keating refers to Atlanta’s current trends in gentrification as being more extensive, less dependent on unique architecture, state sponsored, having reversed racial tension, greater volatility, and affecting racial composition of the electorate. Gentrification is referred to as being more extensive because more housing units are being affected as more neighborhoods experience gentrification. It is because past occurrences of gentrification in Atlanta were based on historical preservation efforts that Keating adds that current gentrification is less dependant on unique architecture. People are moving into in-town neighborhoods because of its close proximity to the central business district and other amenities. Racial transition is a characteristic of gentrification in Atlanta because many persons moving into predominately black in-town neighborhoods are white. The social and economic differences between blacks and whites create conflict. The conflict that arises is what accounts for the greater volatility. It is because public subsidies are being drastically reduced, that Keating sites gentrification as being state-sponsored. Also, the black population of Atlanta has declined from 67 percent in 1990, to 61.1 percent in 2000, while the white population has increased form 31 percent to 34 percent. These small shifts can shift political power by changing the racial composition of the electorate (Toon, 2003).
Political, Economic, and Social Factors of Gentrification
Political Factors
     The political factors that feed into gentrification stem from the policies and actions of governing authorities. One major political factor includes a decrease in the amount of federal funds given to municipalities throughout the United States. During the 1980s, the Regan administration drastically reduced the amount of money given to cities to sponsor redistributive activities such as affordable housing-the availability of affordable housing greatly affects gentrification and displacement. As cities face increasing difficulty in the equitable distribution of scarce resources, policy makers must often times choose between opportunities for economic development or redistributing resources to provide affordable housing. “City policy makers establish economic development and affordable housing policies in their communities. They also help determine the level of local resources to devote to each policy” (Baslo, 2000, p.318). Both economic and social policy areas bare great affects on the well being of municipalities. Economic development initiatives work to improve the city’s fiscal problems and employment woes. Policies aimed at housing concerns ensure that there is a sufficient supply of adequate and affordable housing.  In the face of inter-jurisdictional competition, policy makers will often times direct their attention to economic development issues – diverting attention away from redistributive affordable housing initiatives.  Public choice argues that policy makers will likely be more sensitive to the desire of constituents that demand greater public services.

Predictions about the policy choice of local officials are based on an extension of public choice theory. The mobility of residence and their desire for favorable service-to-tax ratio motivates local decision makers to adopt developmental rather that redistributive policies. The potential for residence to move out of a jurisdiction results in local policies that provide the best benefit to cost to the above average income resident…This rational, economic decision criterion across cities leads to intercity competition as local decision makers seek to attract and retain residence (Baslo, 2000, p.17).

      Some government sponsored programs and initiatives may be inadvertently linked to gentrification. As development initiatives, the City of Atlanta has sponsored tax abatement programs.  The development initiatives have been instrumental in helping to attract new businesses and residence to the city and increasing the city’s tax base. But the increased attractiveness of the city has also added to the rise in the cost of housing-having an adverse affect on the affordable housing market.
     The Urban Enterprise Zone (UEZ) Program is one of Atlanta’s most noted tax abatement programs. It was designed to relieve distressed areas of the city by offering tax incentives for private development and investment. “During the first five years of UEZ designation, property owners are eligible for 100 percent tax abatements. During the sixth and seventh years of designation, the tax abatement is reduced by 80 percent, followed by 60 percent during the eight year, and 40 percent during the ninth year, and 20 percent during the tenth year. Housing and Residential/ Commercial UEZs have played a significant role in helping to increase property values. The following chart shows the impact that Housing and Residential/Commercial UEZs have had on housing prices in three Atlanta neighborhoods. The figures are based on census tract data collected before UEZ designation, and after the expiration of UEZ designation (see Figure 1).  In these three areas, UEZ designation has been beneficial. There have been 423 new or rehabilitated units, and the median home values and rent prices have increased significantly. The Affordable Provisions Compliance requires that twenty percent of the dwellings be reserved as affordable housing units. Unfortunately, the city’s method for determining who is eligible for affordable housing is ineffective. “Housing is affordable in the City of Atlanta if it is accessible to individuals and families who qualify as Extremely Low Income Families or Very Low Income Families according to HUD definitions of Area Median Income” (City of Atlanta Task Force, 2001).   Because Atlanta bases its definition of affordable housing on the Area Median Income, extremely low income, and very low income households that live within the city limits are at a disadvantage. “…the median household income in the city of Atlanta for 2000 was approximately $35,000.00. The median household income for the metro Atlanta area was $63,000.00” (City of Atlanta, Comprehensive Development Plan, 2000).
     In addition to present day political factors linked to gentrification, historical political actions have has a bearing on the phenomenon as well. Housing subsidized after World War II helped to systematically move white citizens, as well as investment capital, out of the inner cities, and into the suburbs. “The FHA was a major source of home financing from its inception in 1930s through the 1950s, when it financed 60 percent of all home purchases, virtually all of which were in suburban communities” (Squires, 1996).  Years later, anti discrimination laws - such as the 1968 Federal Fair Housing Act and the 1974 Fair Credit Opportunity Act – made it possible for the black middle class to move out of the inner cities, and into the suburbs with their white counterparts. The mass exodus of the white middle-class, followed by the mass exodus of the black middle-class, lead to poverty concentration in central city neighborhoods. Poverty concentration in turn lead to the deterioration of inner-city neighborhoods.
Economic Factors
     The economic factors of gentrification appear to be inherently linked to politics. In studying how economic forces have contributed to gentrification, there is a strong emphasis placed on intentional neglect of inner-city neighborhoods by powerful land-based interest groups. “This implication is that powerful interest groups follow a policy of neglect of inner-city neighborhoods until such time as they become aware that policy change could yield tremendous profits. Then policies change accordingly, with little regard for the powerless inner-city residences who will be displaced from their homes” (London and Palen, 1984).   Stakeholders in the local real estate market have massive earning potential in distressed areas. Neil Smith’s rent gap theory substantiates this ideology. The rent gap is the difference in property values in depressed areas before renovations and after renovations. When the rent gap is large enough, investment money is pumped into dilapidated areas. According to Smith, the government amplifies this effect through various zoning, financing, and fiscal practices” (Kennedy and Leonard, 2001).
     Another economic factor, which contributes to gentrification, is the imbalance between job growth and the housing supply. As the number of jobs in a city grows greater, the demand for housing grows greater. As the demand for housing grows greater, the cost of housing grows greater – this is a simple example of supply and demand. A survey, conducted by social scientist Sybil McWilliams, showed that one of the top reasons people move into Atlanta’s inner-city neighborhoods, is to be close to their place of employment. Other reasons include closeness to downtown and the low cost of housing (McConnell, 1980). 
Social Factor
     In studying the social motives that fuel gentrification, one is seeking to find out what are the non-economic and non-political forces, which inspire higher income groups to move into inner-city neighborhoods. The search for cultural diversity is recognized as on of the key factors that inspires and increases the migration of upper-income groups to inner-city neighborhoods. Irvin Allen, a sociology professor at the University of Connecticut, claims that the heterogeneous city sponsors cultural advantages for both single persons and families with children. The higher-income, highly-educated adults that are moving into inner-city neighborhoods are able to emerge themselves in pro-urbanism – gaining acceptance of alternative lifestyles, different ethnic and racial groups, and taking responsibility for social injustices. Children raised in diverse ethnic and cultural environments have a greater understanding and tolerance of cultures that do not reflect their own (London and Palen, 1984).   The complex social environment of the central city serves as an impetus for urban migration. Also, persons who gentrify are noted in many instances as being on a quest for individualism. With self expressionism being an important part of American culture, many find the heterogeneous central city to be a welcoming place.
     Low-income and minority groups have been vulnerable to the effects of gentrification primarily because they lack the knowledge necessary to recognize the phenomenon in its wake, and they lack the unity needed to confront it. The breakdown in community ties is a driving force in the political and economic ignorance of inner-city residence. It disables residence from coming together and rectifying issues within their own community. Breakdown of community ties results from the poverty and crime that plagues the inner-city neighborhood. “This type of neighborhood has low voter turn out and weak community organizations. There is little connection between residence that live in fear of crimes such as muggings, rapes, drug-related violence, and burglary” (Grotidiner, 1994).
Gentrification in the City of Atlanta
      To effectively gauge the occurrence and impact of gentrification in Atlanta’s Summerhill, Grant Park, East Atlanta, East Lake, and Edgewood neighborhoods, there are six variables that will be analyzed. The variables include, race, age, educational attainment, income, housing values, and rent prices. Many experts believe that these six variables are the essential indicators of gentrification. Variables on each neighborhood are based on U.S. Census Bureau census tract information. There are census tract maps for each neighborhood located at the end of the paper. 
     The change in the racial composition of a neighborhood is a major indicator of gentrification. Only black and white residents are used in this paper because in each of the five neighborhoods, blacks and whites totals at minimum 90% of the population. From 1990 to 2000 four of the five neighborhoods have seen dramatic shifts in the number of black and white residence. Four of the five neighborhoods have experienced a dramatic decrease in the number of black residence. The total number of black residence decreased from 23,435 in 1990 to 16,019 in 2000. In ten years the black population dropped by 7,416 – a 32% decrease (see Table 1). The only neighborhood to increase its black population was Summerhill.
Population Change in the Five Neighborhoods
     While the black population declined in four of the neighborhoods, the white population increased in all five neighborhoods. The total white population increased from 2,331 in 1990 to 3,092 in 2000- a 34% increase. Although the white population is relatively small compared to the black population, the percent changes show that the white population is growing. With a 208% change and an 1160% change taking place in Summerhill and Edgewood respectively, these two neighborhoods had astonishing growth.   The following are graphical representations of black and white population changes from 1990 to 2000 (see Figure 2).
     The senior citizen population is recognized in this paper as a person 65 years or older. It is important to recognize the change in the senior citizen population because they are one of the primary groups affected by gentrification. Many senior citizens live on a fixed income – receiving monthly social security and retirement checks as their only source of income. Unlike the working population, they are unable to get overtime pay or yearly salary increases. As the cost of living rises in their neighborhoods, many cannot keep up.  In each of these five neighborhoods, the senior citizen population has decreased. From 1990 to 2000, the number of senior citizen residence has decreased from 2,944 to 1,845. With a decrease of 16%, Edgewood suffered the smallest loss of senior citizens, while East Lake suffered the largest loss of the senior citizen population with 57%Educational AttainmentHigher levels of educational attainment are indicative of gentrification as well. Each of the five neighborhoods in this paper has had an increase in the number of residents holding degrees in excess of a high school diploma. The following pie charts are a ten-year comparison on educational attainment in the combined five neighborhoods (see Table 2).  In 1990 55% of the persons 25 years and over did not have least a high school diploma in these five neighborhoods. In 2000, the percentage of persons without at least a high school diploma dropped by 17%. The percentage of persons holding only a high school diploma remained the same at 29%. There was a small 1% increase in the number of persons holding an Associate Degree. The percentage of Bachelor Degrees present among neighborhood residents more than doubled – jumping form 9% in 1990, to 19% in 2000. Only 3% of residents held graduate and/or professional degrees in 1990, while 9% of residents held graduate and/or professional degrees in 2000 (see Figure 3)
Income           
     Just as the levels of educational attainment have increased in each of the five neighborhoods, so have the yearly income amounts per individual. In 1990 the combined median
income for the five neighborhoods was $84,821. In 2000 the combined median income for the five neighborhoods was $157,849. – a total increase of 86%. In each individual neighborhood, there was no one instance where the median income decreased. The smallest increase in the median income per individual occurred in Grant Park. The median income in this neighborhood was $24,560 in 1990 and $39,167 in 2000. East Lake had the largest increase in median income per individual. The income jumped from a measly $13,494 in 1990, to $36,887 in 2000 (see Table 3).
Housing Cost
     The change in the cost of housing has been significant in each of these five neighborhoods. In 1990, the median home value for the combined five neighborhoods was $48,200. In 2000, the median home value for the combined neighborhoods was $116,700. With an increase of $43,500, Edgewood had the smallest change in median home values, while Grant Park had the largest change in median home values with a $126,400 increase.   Just as the median home values increased significantly, so did the median gross rent prices. In 1990, the median gross rent price for the combined five neighborhoods was $374. In 2000, the median gross rent price for the combined five neighborhoods was $530 (see Figure 4).
Effects of Gentrification
     Analyzing each variable independently makes the presence of gentrification evident. When all of the variables are analyzed together, there is a greater understanding of how the neighborhood is being restructured. Each neighborhood is seeing an influx of white residents, while loosing segments of the black and senior citizen populations. There are a greater number of more educated individuals inhabiting the neighborhoods – bringing with them higher incomes.  Just as the income of neighborhood residents has increased, so has the cost of housing and rental prices.  This economic and social restructuring which is occurring in each of the neighborhoods brings with it lower crime rates, higher tax revenues, ascetics, poverty de-concentration, social motivation, and overall civic improvement.  Unfortunately, the problem in neighborhood restructuring boils down to a matter of displacement and racial discord. We can account for the higher-educated individuals, with higher salaries that are moving into these five neighborhoods, but what is happening to the elderly, and those with little education and small yearly incomes. The only trace of these people is in a negative percent change. Racial discord can be seen as a spillover from the white flight era.  Some black residents blame the state of inner-city urban America on the past actions of whites. They see the influx of middle-income whites back into the central city, not as a source of good, but as a “take over.”
Policy Recommendations and Suggestions
     Recommendations and suggestions focus on how to minimize the negative effects of gentrification, how to create and preserve a stable community, and how to promote the idea that gentrification is not marketed for the whites only but for everybody.

• There must be political and legal will to make the above statement to happen [may be     pressed by, say, community development corporations (CDCs), etc.].
• Make housing available for low income people to avoid the high volatility of those individuals.
• Strengthening and preserving affordable housing more social housing through community development block grant (CDBG) money.
• Bring resources into the neighborhoods e.g., good schools, good services, etc.
• The assurance that most public subsidies reach the low income families, especially in education, skill development, job training, and job opportunities.  Added here also are some of the recommendations formulated by the City of Atlanta GentrificationTask Force (2001) which include:
• Provide counseling to low income homeowners on the short term and long term consequences of neighborhood gentrification. It is advised that gentrification counseling should be coupled with loan counseling. 
• Adopt a one-for-one replacement housing policy providing that for each unit of affordable housing owned by the Atlanta Housing Authority (AHA) that is subject to demolition, one new unit of affordable hosing will be created and owned by the Atlanta Housing Authority.
• Adopt as City policy a definition of Affordable Housing as being housing units that are accessible to individuals and families at or below 50% of Area Median Income.
•  Provide that utilization of housing enterprise zone tax abatement subsidies incorporates an obligation for the development of at least 33% of Affordable Housing Units.
•  Increase the basic homestead exemption for owner-occupied elderly and low-income residents.
• Modify the existing zoning ordinance to create presumptions in favor of rezoning applications and zoning variances that contain an Affordable Housing component.        
• Increase federal resources to cities.

Each of these recommendations correlates to the political, economic, and/or social factors of gentrification discussed in this paper.
Conclusion
    Gentrification is unquestionably a double-edged sword. The benefits of gentrification make it a welcomed occurrence. The detriments of gentrification make it a dreaded phenomenon.  Results in Atlanta show: an influx of white residents, decrease in black and senior citizen populations, more educated individuals with their higher incomes, and higher housing and rental prices in the five studied neighborhoods of Summerhill, Grant Park, East Atlanta, Edgewood, and East Lake.  Government officials, civic leaders, neighborhood organization, real estate investors, homeowners and renters must collaborate to minimize the negative effects of gentrification. The low-income and minority groups which are most affected by gentrification must not only become cognizant of political and economic decisions that impact their lives, they must speak out against injustices which will have adverse effects on their well being. In short, there is no cure for gentrification, only treatment.

References

Baslo, Victoria (2000). “City Spending on Economic Development versus Affordable Housing: Does Inner-City Competition or Local Politics Drive Decisions.”& Journal of Urban Affairs, 22, pp. 317-322.

City of Atlanta, Bureau of Planning, Comprehensive Development Plan (2000).

City of Atlanta, Gentrification Task Force (2001).  A City for All.

Freeman, Lance (2008). Still Separate and Unequal: The State of Fair Housing in America. Presented by The National Commission on Fair Housing and Equal Opportunity. Panel 4: “A Vision of Fair Housing for the Future,” October 17, 2008. Morehouse College, Atlanta, GA 30314.

Grotidiner, Mark (1994). The New Urban Sociology.  (New York, NY: McGraw Hill).

Keating, Larry (2003). “Gentrification: Policy, Politics, and Policies.”  Political Science Seminar Series.  Department of Political Science, Morehouse College, Atlanta, GA, Thursday, January 30, 2003.  Dr. Larry Keating is a Professor at Georgia Institute of Technology, Atlanta, GA. He was the Chairman of The tlanta Gentrification Task Force.

Keating, Larry (2003). “Resurgent Gentrification: Politics and Policy in Atlanta.” Paper presented at the American Sociological Association’s annual meeting held August 16-19 in Atlanta.

Kennedy, Maureen and Paul Leonard (2001). “Dealing with Neighborhood Change: A Primer in Gentrification and Policy Choices,”___ A Discussion for The Brookings Institute Center on Urban and Metropolitan Policy.

London, Bruce and John Palen (1984). Gentrification, Displacement and Neighborhood Revitalization.   (Albany, N.Y: State University Press of New York).

McConnell, Dennis (1980). Urban Atlanta, Redefining the Role of the City. (Atlanta, GA: Business Publishing Division, Georgia State University).

Squires, Gregory (1996). Revitalizing Urban Neighborhoods. (Lawrence, Kansas: University Press of Kansas).

Toon, John (2003). “Tales of the City: Current Gentrification in Atlanta Contrast Sharply to Previous Waves of Urban Restoration.” Georgia Institute of technology Research News, September 4, 2003.

Map 1: Atlanta Census Tracts

Source: Atlanta Regional Commission (ARC)

 Map 2:  Summerhill (Census Tract 490)

 Map 3: Grant Park (Census Tract 50)

Map 4: East Atlanta (Census Tract 209)

Map 5: Edgewood (Census Tract 205)

Map 6: East Lake (Census Tract 202.02)

Figure 1: Median Home Values and Median Gross Rent in Atlanta Urban Enterprise Zones

Figure 2: Population Change in the Five Atlanta Neighborhoods: 1990-2000

 
 Figure 3: Educational Attainments in the Five Atlanta Neighborhoods: 1990 and 2000.
 

Figure 4: Median Home and Rental Values in the Five Atlanta Neighborhoods in 1990 and 2000