Effects Of Urban Renewal and Gentrification – Social Change

Economically distressed urban areas strive to implement several strategies to revitalize the areas. Urban renewal and gentrification are some of the measures that are thought to improve the economy of the distressed urban areas. Urban renewal refers to the transformation of old urban areas with new buildings, businesses, and residences. On the other hand, gentrification refers to the efforts to change the socioeconomic composition of an old and poor neighborhood through the remodeling of the old structures and building of new residences, which help in attracting middle and high-income residents into the area (Chambliss & Eglitis, 2015).

Urban renewal and gentrification lead to the entry of higher income earners into a certain urban area. They in turn help in increasing the economic activity of the areas. The high-income earners can afford to purchase various products, which are usually more expensive, at the new businesses that are set up in the area. Urban renewal and gentrification enable the residents of the areas to enjoy better services. Increase in economic activity due to urban renewal and gentrification could also help in increasing the income of families that choose not to relocate due to the increase in the costs of living in the areas. This would help in raising their level of housing-related satisfaction to align itself with the existing conditions after gentrification or urban renewal.

However, urban renewal and gentrification also have a negative impact on the previous residents of the area. It leads to a significant increase in the rents and taxes in the areas. In addition, products from the new businesses may be very expensive that the low-income families may not afford to purchase them. For instance, if lattes used to cost $2, urban renewal or gentrification may lead to the setting up of establishments that sell the same lattes for $5. This ultimately forces the low-income families to relocate from the areas. Some of the low-income families may be long-time residents of the area who do not have anywhere else to relocate to.

Use of the rent gap theory may help in balancing the needs of people who may be displaced due to urban renewal. Rent gap refers to the difference between the actual ground and the present land use of a certain property. The difference is usually small for a building that has just been erected. However, after some time, the building loses its value as its fabric becomes dilapidated and its amenities can no longer meet the accepted standards. This forces the landlords to rent out the buildings, either legally or illegally, to people who do not have access to houses that meet the acceptable standard in the area. Further deterioration of the area leads to an increase in the rent gap, especially if the building is in a central location that expanding outwards. When the rent gap is so large, a reinvestment is made on the plot through renovation or the construction of a new building (Smith, 1996).

The government can use the rent gap theory to balance the needs of those of who would be displaced due to urban redevelopment by ensuring that when areas are experiencing disinvestment it steps in and covers for the unprofitable investments. If the areas are receiving investment, the government should ensure that it creates a policy that helps in maintaining the rent gap. This would help in preventing massive relocation of people in a certain area due to urban renewal.

From the reading, it is clear that urban renewal leads to the increase in costs of living of neighborhoods forcing low-income earners to relocate from the region. This is highlighted by Chicago’s Logan Square area. Urban renewal in the area led to a significant increase in the rent in the area. In addition, low-income families in the area could not afford the high cost of products from new establishments that were set up due to urban renewal. This ultimately led to the relocation of a significant number of low-income families in the area.

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