Gentrification

Over the past year, I have been trying to give “out of the box” thinking concerning how the real estate development industry may change once the economy is back on track. I would like to summarize several of my thoughts:

1. Local governments will be more diligent in directing development patterns that must utilize existing infrastructure facilities i.e. roads, water and sewer.

2. It is only time before the federal government uses incentives for local governments to force the redevelopment or “urban renewal” of existing urban core areas.

3. Vertical mixed use projects will become the norm rather than the exception. If transportation and energy components are included in the plan, the project will receive density credits.

4. Sustainable projects will have to meet certain standards before moving forward through the regulatory process.

5. Local government will use eminent domain more as a development tool by driving the private sector to pre-disposed land uses. It may be partnering of developers with local government as the next stakeholder alliance.

6. Public facilities and services will be limited to urban core areas. Government expanding services or facilities beyond an urban limit will not be common practice.

This is only a short list of thoughts but the result of the above actions may cause urban gentrification. Instead of suburban flight of homebuyers with long commutes, we may experience urban revitalization with families moving closer to employment centers.

Gentrification is the socio-cultural change of an area resulting from people moving back into urban core areas and buying houses in less prosperous areas. Obviously this will displace homeowners and renters from the area due to rising housing costs and rents due to re-development, urban renewal or urban revitalization efforts supported by local government.

Long time residents will be forced to move due to increased property values and real estate taxes. Lower income residents in these areas will be forced to sell and move to a more affordable community. As the influx of middle and upper income wage earners move into neighborhoods experiencing transformation, the gentrification of the community occurs.

$5.00 per gallon of gas, “green” cars, and federal programs may alter local government’s approach to future development patterns. The result, jobs may have to go to where the workers are located rather than the workers moving to where the jobs are located. Or our suburban neighborhoods will transform into an unimaginable condition, over time. An action always has a reaction – what are your thoughts?