Ever look around your neighbourhood and notice things changing?

Perhaps your favourite family-run cafe has been replaced with a chain restaurant, or an ever-vacant building is now home to a stylish clothing store. And towering above these street-level transformations is a new apartment block sprouting in a once-neglected area.

This is gentrification.

While we may inherently believe gentrification is good for neighbourhoods, the process of a rundown area becoming trendy and expensive has a complex impact.

In this blog post, we uncover why gentrification happens, the positives and negatives, examples of gentrification, and how cities can make changes that benefit everyone.

Gentrification definition

Gentrification describes when an ignored area, often with lower property values, becomes attractive to wealthier residents and businesses. It can be sparked by many reasons, such as proximity to certain developments or having a cool, historic vibe.

As wealthier people and businesses move in, the area gets a makeover, and the neighbourhood’s character changes.

The official Merriam-Webster definition of gentrification is:
“A process in which a poor area experiences an influx of middle-class or wealthy people who renovate and rebuild homes and businesses and which often results in an increase in property values and the displacement of earlier, usually poorer residents.”

A gentrified neighbourhood

About gentrification

When did gentrification start?

While urban development has existed for centuries, the modern concept of gentrification, and indeed the term itself, emerged in the 1960s.

‘Gentrification’ was coined in 1964 by Ruth Glass, a sociologist who described an occurrence she witnessed in London, England.

Wealthier people, referred to as the ‘gentry’ in British society, were descending upon charming working-class neighbourhoods in the country’s capital. The new settlers were drawn to these underinvested urban areas and began renovating the older housing.

The arrival of wealthier residents sparked a renovation drive; neglected buildings were restored, and new businesses arrived that catered for the new demographic. This led to a rise in living costs, displacing many original residents.

The trend has been apparent throughout history. Even in the pre-industrial late 19th century, early forms of gentrifying neighbourhoods were seen — although it wasn’t called gentrification then.

Wealthy elites would often reside close to the central action of cities — near markets and town squares — while the working class lived on the peripheries. Suddenly, as cities grew, the faraway working-class areas became desirable due to their proximity to economic hubs. This can be seen as an early form of gentrification.

What causes gentrification?

Gentrifying neighbourhoods aren’t caused by 1 sole factor. Instead, it’s fuelled by a mix of government policies, economic forces, and social trends.

Whether intentional or not, government policies impact where gentrification happens.Zoning laws for residential buildings in derelict commercial areas, for example, can accelerate gentrification, as can incentives for developers.

Economic factors play a part, too. A growing job market, for example, brings new residents to the city. This, paired with other factors such as a limited housing supply, can cause people to pour into neglected urban neighbourhoods.

Finally, cultural shifts can breathe new life into forgotten areas. A newfound appreciation for walkable neighbourhoods with historic architecture can spark interest in neglected areas from young professionals looking for somewhere with character.

Gentrification in progress

How does gentrification work?

Gentrification unfolds through a succession of events.

The process begins with an interest in a neglected area. This could be born from unearthed hidden potential, proximity to a new business development, or government initiatives.

After interest blossoms and perceptions change, a new type of resident is attracted to the area, as are small businesses that look for affordable commercial space.

These first settlers spearhead the development and attract investment.

As the area gains popularity and more people see it as a feasible option, property values begin to rise.

This leads to: investment from real estate developers who buy land to build housing and business sites, renovations by new residents, and retailers and restaurants moving in to capitalise on the growing market.

With these factors in motion, the biggest downside of gentrification unfolds. A significant increase in housing costs and property taxes is inevitable, forcing long-term residents — typically low-income families — to find more affordable areas.

The transition to a neighbourhood which is typically more affluent, with modern shops and new amenities, comes at the cost of the neighbourhood’s original feel and culture.

Pros and cons of gentrification

Gentrification is a complex phenomenon that comes with pros and cons. It’s a double-edged sword that revitalises neighbourhoods and economic activity but can be expensive for long-term residents.

Pros of gentrification

Improved infrastructure for all

When an urban neighbourhood becomes more desirable and attracts new residents, the local government usually follows up with service improvements. These include everything from better roads, walking paths, and bike lanes to new public transport routes and access to micromobility vehicles.

Local business boom

Gentrification creates considerable job opportunities, which boosts the local economy. Construction and renovation workers are needed for rebuilds and renovations, and new shops and restaurants require retail and service workers.

Neglected areas get some love

Gentrification gives urban areas that have been overlooked for many years a much-needed refresh. Old buildings and landmarks are renovated, amenities are improved, and crime rates drop, transforming run-down neighbourhoods into vibrant and safer places.

Property values rise

For existing homeowners, gentrification can cause property values to increase. The financial windfall earned from selling a home for a profit can be welcome for long-term residents and is a great way to secure retirement, pay off debt, or even buy a bigger house in a different location.

Cons of gentrification

Spiralling costs

While longstanding homeowners can expect a jump in property values, they typically see increased property taxes, too. And rental prices skyrocket, which can make it difficult for residents to find affordable living options.

Original residents displaced

Rising rents, property taxes, and minimal affordable housing inevitably cause many long-term residents to leave. Established communities are displaced as they look to further afield budget-friendly areas.

A loss of character

Beneath the allure of new eateries and shops is the erosion of original, characterful spots. Family shops and local restaurants, once deeply woven into a neighbourhood’s culture, can be lost due to rising rents and the influx of successful chains. If nothing’s done to protect the original businesses, the result is a generic neighbourhood that lacks character.

Gentrification examples

Berlin gentrification

We’re all familiar with Berlin’s beautifully creative yet gritty character. But what role has gentrification played in all of this?

Following the fall of the Berlin Wall, neglected areas in East Berlin, boasting central locations, inspiring architecture, and tonnes of character, became attractive options for artists and young professionals wanting low-rent housing.

Neighbourhoods such as Prenzlauer Berg and Kreuzberg, once working-class areas, were now awash with young creatives. The artistic buzz that took over the areas attracted chic cafes, independent shops, and art galleries showcasing local work.

Initially, gradual transformations happened without erasing the creative spirit on which the neighbourhoods were founded. But as more and more people wanted to experience life there, property and rent prices started to climb, and many original residents who gave the neighbourhoods their soul were being priced out.

Facing displacement, Berliners demanded action and protested for stricter rent control. The city listened and stepped in to implement policies to preserve affordable housing and prevent longtime residents from being evicted.

Nevertheless, the distinct character that initially attracted newcomers was replaced by high-end amenities and a generic, upscale feel.

Berlin now faces a tricky balance: investing in urban development while maintaining the city’s character and ensuring the people who made it what it is aren’t left behind.

Gentrification in Berlin

Bolt’s scooters and e-bikes in gentrifying Neukölln are helping locals connect with existing public transport infrastructure.

Vienna gentrification

Vienna’s approach to gentrifying neighbourhoods is as impressive as it is different.

The Austrian capital tackles gentrification by keeping things affordable, encouraging development, and spreading improvement throughout the city.

Vienna mitigates resident displacement with a robust, affordable housing programme that continually builds and maintains affordable housing in new areas. More than half the city’s population now lives in public housing!

This way, the city has total control over rental costs, even when areas gentrify. This commitment ensures housing remains viable for residents of all income levels, even as the city evolves.

Vienna also ensures that new building work is mixed-use — housing developments include workplaces, stores, and eateries. Integrating necessary amenities creates a balanced neighbourhood with everything close by, thus reducing car dependency. That’s pretty neat if you ask us!

Infrastructure investment isn’t just limited to central areas. Vienna upgrades public transport across the city, allowing those who want to live further out to reach the centre without needing a car.

Gentrification in Vienna

The mixed-use urban development area Sonnwendviertel in Vienna includes residential, commercial, and office buildings to create a highly liveable neighbourhood.

How to gentrify without disruption

It’s crucial to remember that the negative impacts of gentrification are not inevitable.

By implementing certain strategies, cities can curb disruption and allow for a balanced approach to transformation.

1. Rent control

When rent increases too fast, it’s natural that this can lead to displacement. By capping rent increases, existing residents are protected from getting priced out of their homes.

2. Affordable housing

A percentage of new housing should be set aside for low and middle-class families.

3. Small business support

As rents and taxes spiral, small businesses (often the lifeblood of a neighbourhood) must be supported so they’re not lost.

4. Transport investment

Investment in transport infrastructure allows residents to live in more affordable areas outside of the city without depending on a car to get around.

5. Mixed-use urban developments

New developments shouldn’t be limited to housing. Combining residential projects with commercial spaces creates a more vibrant and walkable neighbourhood with close access to amenities. Think 15-minute cities!

Gentrification FAQs

To fully understand gentrification, let’s cover some of the most popular gentrification questions.

Is gentrification inevitable?

With solid strategies and proactive policies, not necessarily. Cities can strive for a more balanced neighbourhood transformation that benefits everyone and helps keep existing residents in their homes.

What are some signs of gentrifying neighbourhoods?

Some signs that an area is becoming gentrified include rising property and rent prices, investments into new services and amenities, new eateries and shops, and changing demographics.

Does gentrification happen everywhere?

Gentrification is common in larger cities. As the city population increases, more people look to affordable urban areas with desirable features like historical architecture, walkability, and proximity to jobs.

Although things can change rapidly, some areas aren’t set up to be the next gentrified area; this could be due to many reasons, such as being too remote, having a lack of essential services, or safety concerns.

Is gentrification a recent phenomenon?

Gentrification has been apparent throughout history, with wealthier populations gravitating towards established areas. However, the term gentrification was coined in the 1960s.

Creating better cities together

Bolt is on a mission to make cities for people, not cars.

Our transport options (scooters, e-bikes, ride-hailing, and shared rental cars) allow city dwellers to move around without a private car, which can lead to more sustainable, liveable neighbourhoods.

However, city planners must also ensure that neighbourhoods have safe bike lanes, parking spots for bikes and scooters, and wide walkways. By connecting these riding routes with bus stops and subway stations, gentrified areas benefit from lower car ownership!

Download the Bolt app and start your ride today.

The impact of gentrification on cities around the world

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