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From The Peopling of New York City

Gentrification

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Gentrification is .....

Gentrification: gen·tri·fi·ca·tion

Pronunciation:

   \ˌjen-trə-fə-ˈkā-shən\

Function:

   noun

Date:

   1964
the process of renewal and rebuilding accompanying the influx of middle-class or affluent people into deteriorating areas that often displaces poorer residents

Definition courtesy of Merriam-Webster Dictionary


Examples of Gentrification

Besides East Harlem, there have been many neighborhoods that are examples of, and have experienced gentrification. They include:

Roxbury, Massachusetts

Near South Side, Chicago

Harlem, NYC

East Village, NYC

SoHo, NYC

Williamsburg, Brooklyn

Park Slope, Brooklyn

Silk Stocking District Columbus, Ohio

Haight-Ashbury, San Francisco


Pros and Cons

There are many people in favor of gentrification who claim that without the effects of gentrification many neighborhoods would remain dilapidated and would not have been revitalized to their current state. However, there are still others that feel gentrification brings only negative effects, especially for current residents who are often pushed out of the community due to an elevated cost of living. These people are often in favor of grass-roots movements of revitalization.

Positives of Gentrification

Gentrification increases the amount of revenue in a community, which can be used for the maintenance and upkeep of the neighborhood. Public housing buildings in East Harlem are notorious for their poor living conditions. Tenants complain about peeling paint, broken appliances such as refrigerators and stoves, and rodent infested apartments. Landlords are not given much money, rent is subsidized, and there are too many tenants. This is an extreme contrast to the money that comes into the neighborhood and that goes into maintenance when residents pay higher rents for apartments.

East Harlem Projects. Courtesy of Gotham City Insiders

Gentrification improves the lives of low-income families in a neighborhood. There is plenty of activism on the part of the community, as well as other organizations to combat being displaced by wealthier residents. This activism can lead to having better living conditions and more understanding of one’s rights. In East Harlem, residents were able to get a bill passed that made it illegal for landlords to discriminate against tenants paying with Section 8 vouchers (means of payment by those who have federal aid). Nonprofit organizations also bought public housing projects to ensure that they are not turned into condos by developers. These organizations then revitalized these buildings and donated funds to tenants. 1NewYorkTimes.com


Little Sisters of the Assumption of Family Health Care. Courtesy of New Housing New York Legacy Project

Buildings that were utilized by the East Harlem community have also been renovated by corporate funding as well as donations as a result of gentrification, or more investors and thus more revenue being present in the neighborhood. In 2003 the nonprofit organization, Little Sisters of the Assumption of Family Health Care received $7 million dollars in donations for renovations. This organization still tends to the needs of the underprivileged residents of East Harlem by providing health care as well as tutorials in language and legal aid.Littlesistersfamily.org


Gentrification encourages and increases the practicality of development. Businesses are clearly not going to want to open stores in which there is little revenue. Gentrification of a neighborhood attracts investors and developers, this causes a domino effect in which more and more wealth is attracted to that area. There has been a major surge in development in East Harlem in which many abandoned and neglected structures have been rehabilitated in just the past ten years. One of the sites that have been rejuvenated was the abandoned Washburn Wire Factory on 116th Street and the FDR Drive. It was torn down and is being incorporated into the extensive $300 million East Rive Plaza commercial project. Employment then rises as well as revenue when shoppers are attracted to an area. 1

Gentrification also reduces the crime rate in a community. The increase police presence in the lower portion of East Harlem could be a response to the influx of young middle class professionals on the fringes of the Upper East Side. As these new residents moved in, the crime rate in the lower portion of East Harlem declined dramatically. The number of violent crimes has gone down by 15% in a two-year span (2001-2003). In the 23rd Precinct (lower East Harlem) overall crime has also gone down by nearly 70% in a ten-year span (1993 to 2003). EastHarlem.com

Negatives of Gentrification

A Development in East Harlem called The Bridges NYC: 2279-2283 Third Avenue, at 124th Street. Courtesy of Curbed.com

The positive effects of gentrification are extremely beneficial to residents but usually occur only after the negative effects. Because residents have to endure such harmful changes, many argue that the negatives outweigh the positives.


Because Harlem was declared a New York City Empowerment Zone in 1996, East Harlem has also experienced a surge of money invested into the neighborhood. As a result, housing prices have risen to relatively extreme heights. The ultimate effect is the displacement of the poor residents who cannot afford this change, which are actually most of the residents of East Harlem. Instead of providing better housing for the poor, gentrification has made it possible for wealthier individuals looking for affordable housing to move in to East Harlem. Additionally, these new residents become the ones left to reap the other benefits of gentrification that take longer time to come into effect.


Graffiti on the facade of a building in East Harlem. Courtesy of Gothamist.com

With the displacement of residents, another major concern is the loss of the neighborhood's culture or "flavor." Because most of the new residents are wealthier non-Hispanics, neighborhood dynamics are bound to change. New names for East Harlem such as SpaHa and Upper Yorkville are now replacing El Barrio. East Harlem has adopted these new names due to the emergence of new shops that cater specifically to the new wave of residents moving in. With increased competition, local shops are bound to be replaced by more expensive stores and larger generic stores. Many see the gentrification of East Harlem as a cultural renovation, rather than an economic one.


Many argue that East Harlem will always stay the way that it is because of public housing, which is partly true. Because of tenements, there will always be a presence of poverty in the neighborhood. Those who cannot afford the costs of renting an apartment in New York City can afford living in a tenement. However, the changing dynamics of East Harlem are making it more difficult for these residents to live in the neighborhood. The process of gentrifying East Harlem and investing money into the neighborhood is causing an increase in general living costs, leaving those who decide to stay in the neighborhood, including residents of public housing, with very few options.

Commercial

Gentrification in a neighborhood also affects the businesses that service the community. East Harlem has seen a lot of activity in reference to the commercial sector in the past several years. These effects have been seen in the shapes of "big-box" store development and smaller, fine retail.

"Big-Box" Stores

East River Plaza

The most talk about the development of large warehouse style stores has been about the development of a lot of land along Franklin D. Roosevelt Drive in between 116th and 119th streets. The developers, Forest City Ratner owned by Bruce C. Ratner and Edward Blumenfeld, hope to call the finished lot the East River Plaza. Originally, the city approved plans for the development of this lot in 1999 when the projected leasers included Home Depot and Costco. The plans have changed some since the original design.

This is the site of the East River Plaza.

In September of 2006, the New York Times reported that Costco had been dropped from the plans and Target Corp. had been picked up to take its place. Brottman, the chariman for Costco, was shocked by the decision to be replaced by the developers. From the developers perspective, Brottman found inconsequential detail after inconsequential detail to argue about. One of the details that was argued about was financing for a $45 million parking garage. It was said that the involved parties had decided on charging customers $3 for the first two hours of shopping. The developers also claimed that Brottman and Costco were taking too long to sign the lease agreement, whereas the Target deal took less than 45 days. Brottman, disappointed said that, unfortunately what this deal came to was money.

Since then, Target, Best Buy and Home Depot have all signed lease agreements. Home Depot is slotted for the first floor, Target on the second floor, and Best Buy presumably on the third. However, recent news states that Home Depot is looking to drop the East River Plaza spot after all. The developers have said that they signed an agreement and expect the other side to maintain it. This implies that if Home Depot does decide to back out of the lot then they would be responsible for finding a replacement for their spot in the Plaza. Speculation as to why Home Depot would want to drop the location states that companies large and small in all sectors are reconsidering expansion during this time of economic recession and that Home Depot in particular is experiencing intense competition from Lowe's Home Improvement.

This is the projected finished product of East River Plaza. Courtesy of Gothamist.com

Target's plans to acquire a Manhattan location is just part of a large expansion campaign that the company is in the midst of pursuing. Reuters Magazine reported in October of 2007 that Target Corp. planned on placing stores in all 50 states. The only three states left that do not have a Target store are Alaska, Hawaii, and Vermont. Target also hopes to gain another location in Manhattan in the Midtown area, however company representatives say that they have been unable to find a site that would give their shareholders a large enough return in that area as of yet. Also, Target's rival WalMart Inc. has yet to acquire a store in Manhattan.

If there are no further delays or postponements the East River Plaza is projected to open in Fall of 2009. Also, eventually there may be residential units added on top of the stores. This was another sore spot for Costco when negotiating the agreement, because Costco has been a basement leaser with residential units above at another location. However, who knows how pleasant these apartments will be considering they will be placed over three floors of "big-box" stores. Despite this fact, the rents for these apartments will probably reflect the trend of escalating housing prices in the rest of the neighborhood.

Other Developments

This is the school building being advertised for real estate developers by Massey Knakal

There have also been other projects that are in the works for the development of East Harlem. One website, AllBusiness.com, lists commercial real estate openings. On the website is a listing for the availability of a closed East Harlem school. The website is particularly marketing this site for real estate developers to convert into another luxury condominium. While this sale is still part of the commercial sector now, it could very quickly affect the residential real estate in the area. This is actually the hope of the Massey Knakal Realty Services Inc. partner handling the sale. Shimon Shkury said, "Considering its unique architecture, size and commanding corner location, 2269-75 First Avenue is the best opportunity in today's market to lead northern Manhattan's future residential developments through even higher price barriers." It is obvious that Shimon Shkury and Massey Knakal Realty Services Inc. favor gentrification in East Harlem and it is due to their financial involvement in this movement.


Another large development in the commercial sector of East Harlem lately is the possible rezoning of 125th Street. The Bloomberg administration wishes to rezone the corridor between 124th Street to 126th Street from Broadway to Second Avenue, which makes this plan affect both East and Central Harlem. This plan could displace 70 businesses and their 975 workers. The plan hopes to place office buildings, luxury condos, art galleries, and night clubs (some of these buildings as high as 29 stories) in the lots of the businesses their now that include hair dressers and soul-food restaurants. Amanda M. Burden, chairwoman of the Planning Committee, has stated that the rezoning is trying to bring back the world renowned culture and night life that 125th Street once had.

This is the site of the MLB Headquarters

Burden also assures all concerned in the matter that she is taking this proposal into careful consideration and has spent more time considering this plan even than the Atlantic Yards in Brooklyn and Columbia University's expansion on the West Side.

The actual plans for 125th Street rezoning were approved by the City's Planning Committee on March 10th, 2008.


Also related to the 125th Street rezoning, The Daily News reported on March 8th of this year that the Major League Baseball headquarters would be placed on 125th Street in East Harlem. The building would be allowed to be built if a zoning exemption were accepted that had been presented to the Planning Committee the day before. The building would be built at a height of 330 ft., almost a 200 ft. over the capped height of other building being built on the strip. The location of the building will be at 125th St. and Park Ave. in a lot that was zoned for a 458 foot-limit for a Marriot Hotel, which had not been built.



Smaller Retail Store

The New York City Department of City Planning has recently approved an East Harlem rezoning plan which promises that new small businesses and stores will support a growing community . It fails to specify, however, which types of businesses will be introduced and what effects they will have on the current businesses. A growing population will result in a greater demand for goods. Rent prices for commercial properties will increase. This may force current proprietors to abandon their businesses, fostering further gentrification. Although it carries good intentions, the rezoning of East Harlem threatens to displace and harm many of the current residents and business owners of East Harlem.


Those who oppose gentrification will argue that the introduction of new businesses will attract new residents and a new demographic of consumers. This in turn will continue the gentrifying effect. For example, the introduction of a business like Starbucks in a neighborhood often attracts a more middle-class, white-collar consuming market. Starbucks caters to this consumer market. This group of consumers is able to afford a coffee at Starbucks as opposed to a working class consumer, who will likely view a Starbucks coffee as a luxury. They will be restricted to the typical seventy-five cent coffee at a food stand.

Smallstore.jpg


The same is true of other food businesses. Fast food restaurants are often the only option for those less affluent consumers that choose to eat out. For those less affluent consumers who choose to cook their food, grocers are also limited. An organic food store, which can be viewed as a gentrifying business, is often too high-priced for low-income consumers. Many of these consumers even rely on government aid for their food.

Residential

The landscape of East Harlem real estate has been experiencing significant changes as new high-rises shadow old worn-down buildings and vacant lots give way to expensive condominiums. Private developers have taken great interest in East Harlem, making it the latest hotspot for development as affluent New Yorkers, price out of expensive neighborhoods like the Upper East Side, seek to move into more affordable housing in East Harlem. As the once humble prices of housing start to skyrocket, old residents are forced out while more affluent newcomers begin to flock in, bringing with them numerous changes.

Effects of Gentrification on Residential Real Estate in East Harlem

Housing Costs 1999-2000
1990 2000
Median Home Value $131,038 Median Home Value $462,720
Median Gross Rent $430 Median Gross Rent $467
Average Gross Rent $481 Average Gross Rent $513
Percentage Breakdown of Amount Residents Paid for Rent
Less than $335 37.3% Less than $299 34.4%
$335-$600 35.1% $300-$599 32.9%
$600-$736 11.8% $600-$799 16.5%
$737-$1000 10.7% $800-$999 8.6%
$1000+ 5.1% $1000+ 6.6%
$2000+ n/a $2000+ 1.1%


The above data, compiled from the 1990 and 2000 census, shows an increase in the median home value as well as the median and average gross rent over the course of ten years. The median and average gross rent increased by 8.6% and 6.7% respectively, relatively little compared to the 253% increase of the median home value. This jump in home value is indicative of a changing economic situation in East Harlem, as is the increase in the percentage of residents paying higher rent prices and decrease of residents paying lower rent prices. There was a 5.1% drop in residents paying less than $600 a month and a 5.2% rise in resident paying more than $600 a month, with 1.1% of the 5.2% paying more than $2000 a month, which wasn’t even a category in the 1990 census.

New condominium on 118th Street and 2nd Avenue


The higher home values and rent prices reflect an influx of money into the area, which can be representative of gentrification in the neighborhood. This makes sense from an economic standpoint – when supply is low and demand is high, prices can be increased. In the case of residential real estate in East Harlem, as the rent in neighborhoods like the Upper East Side skyrocket, the demand for lower priced apartments increase. Realtors and corporations begin to gentrify East Harlem, where home values and rents are much less than most of New York City, so that it becomes more attractive to affluent New Yorkers. As the neighborhood is gentrified, wealthier New Yorkers move in, allowing realtors to increase rent to below that of the most expensive neighborhoods, but still far above what existing residents can afford to pay. The influx of money into the area allows for improvements to neighborhoods institutions, making the neighborhood on the whole, more desirable. The homes in the East Harlem increase in value and the rent prices increase, as more people want to move into the neighborhood, which has become more attractive after gentrification.



The price of real estate has gone up significantly in the last eight years. The average rent for a one bedroom is $1569, increasing to $1949 for a two bedroom and $2850 for a three bedroom , with rent ranging from $1000 for a single bedroom to $25,000 for a four bedroom apartment. On the selling end of the real estate spectrum, apartments in East Harlem are going for anywhere from $275,000 for a studio with a single bathroom in a condominium to $1.5 million for a 4 bedroom/3 bathroom condominium apartment.

Affordablehousing.jpg

Residents living in rent-controlled apartments are now facing pressure from development corporations to leave their apartments. One source of major pressure has come from Dawnay, Day Group, a privately owned British bank that manages $10 billion in worldwide assets and has real-estate holdings in Europe, India and Australia , who in 2007 bought 47 rent-stabilized and rent-controlled buildings in East Harlem. Dawnay, Day Group, now in charge of 1,137 apartments in East Harlem has been accused of “harassing its tenants and charging them for repairs that never took place, in an effort to push the rent-regulated residents out.” The residents’ point to the group’s buyback program, where tenants are offered $10,000 to vacate an apartment, as an attempt to push residents in rent-controlled apartments out so that Dawnay, Day can raise the rent prices. Dawnay, Day Group’s director, Phil Blakely did nothing to quell those accusations when he estimated, for the London Times, that the East Harlem properties would increase in value from $280 per square foot to more than $1000 per square foot once they were renovated.


Residents in East Harlem also have to deal with the loss of affordable housing provided via the Mitchell-Lama Housing Program.

Housingprojects.jpg

The Mitchell-Lama program was started in order to provide affordable housing to middle-income residents; it gave low-interest mortgage rates and tax exemptions to developers who built affordable housing. Unfortunately, the program also gave developers the right to withdraw or buy out after a period of time. With the gentrification of East Harlem attracting wealthier people to the area in recent years, more and more developers have chosen to leave the Mitchell-Lama program and increase their rent prices drastically, leading to a radical loss of affordable housing. Residents can take some comfort in knowing that, as of July 2007, new regulation closed the loophole what allowed developers to withdraw from the Mitchell-Lama program. It came a little late, but it offers some assurance that at least 19,000 housing units will remain affordable in city.

The Aspen on 101th Street and 1st Avenue


One of the positive results of gentrification came in the form of the Aspen, a luxury condominium on 101st Street and 1st Avenue that offered both market-rate and reduced-rent apartment. The building was built under the City’s 50/30/20 affordable housing program, which gives financial incentives for developers who rent 50% of apartments at market rate, 30% at rates adjust for middle-income residents and 20% at rates adjusted for low-income residents. How successful the 50/30/20 housing program will turn out remains to be seen, but with results like the Aspen, there may be hope yet, for more affordable housing both in and out of East Harlem.

Effects on The People of East Harlem

This page is filled with facts, statistics, textbook definitions and research studies. However, gentrification has a pulse, it has a face. The whole story isn’t buildings being renovated, chain stores being erected, property values increasing and a shift in the demographics of the area. These buildings have tenants, these chain stores have employees, and these suffering local businesses have owners who need to provide for their families. Here, gentrification is presented through the stories of Annika, a young resident of the area; a local bakery worker; a group of elderly Domino players, and a manager of a Dunkin’ Donuts/ Baskin Robbins.

Residents

"There is nothing wrong with our neighborhood, we do not need to be revitalized, there is no need for revival here.” (Resident, 4/20)

Residents playing Dominoes on 117th Street


"When Italians were mostly here there was no problem and then the Puerto Ricans and still no problem. The whites came and we have high rents." (Resident 4/18)


“The changes are good for the neighborhood but not for the people who live in it.” (Resident 4/18)


“This community does not need to have all these stores. All around us are shopping streets. We need more parks and community centers, a YMCA. There should be basketball tournaments held, get people together. We don’t need all these stores; people don’t shop all day. This community has needs that can’t be met by a McDonalds or a sneaker store.” (Annika, Resident 4/18)


Chain Stores

Dunkin Donuts on 1st Ave and 116th St

“We are just bringing these people what they want. You never hear someone say, I crave a donut from that bakery or a burger from that street vendor. You DO hear people say, I’m in the mood from Baskin Robbins or McDonalds. Not only do we give these people jobs but we allow them to have the things they want. We are not mean people ruining their neighborhood. And if a Starbucks or Burger King makes someone not able to afford their apartment, maybe they should stop wasting their money on other things. People like to blame the big businesses and companies for problems they help create.” (Chain-store manager 4/18)


"Locally owned stores don’t usually have many people working there. If there is, it is probably a niece or family friend.” (Chain-store manager 4/18)


Local Stores

"You can't compete with homemade" (Local bakery worker 4/18)

“The flavor of the neighborhood is becoming planned… We can’t compete with their (chain stores) advertisements…" (Local bakery worker 4/18)

"I’ve been without a lease for three years; there is pressure to get us out…" (Local bakery worker 4/18)

"Any renovations or repairs that need to be done, we have to get certain companies to do them because the city gets kick-backs…They don’t want uniqueness, they want cookie-cutter…the buildings on the block look all the same…" (Local bakery worker 4/18)

"We are a dying breed.” (Local bakery worker 4/18)

References

References