Gentrification & Inequality: A Summary of the Solutions of Enrico Moretti

Gentrification and inequality were the issues at the forefront of the opposition to Amazon’s effort to locate secondary headquarters in Long Island City, Queens.   

Although Mayor de Blasio was a key player in the effort to bring Amazon to Queens, the views he frequently voices on economic development tend to differ from the methods undertaken by former Mayor Bloomberg.

The sharp contrast is representative of differing views held by the residents of our City.

As part of an ongoing effort to explore the interplay between economic development, gentrification and inequality and contribute to our City’s discourse in this area, in this article we summarize the solutions offered by author Enrico’s Moretti as provided in his book, “The New Geography of Jobs.” 

He insightfully noted the stakes involved when he wrote that changes caused by gentrification “can affect a city’s identity.”

THE DARK SIDE OF GENTRIFICATION: DISPLACEMENT

Moretti is among the researchers who have explored the negative effects of gentrification that can result from economic development.  

He notes in a section of his book entitled, “Gentrification and Its Discontents,” that, “a stronger labor market can sometimes have a dark side. Higher real estate prices can displace the poor, significantly altering the mix of residents in a community.”

Such potential displacement was a key concern of individuals such as Congresswoman Alexandria Ocasio-Cortez in opposing Amazon’s presence in Queens.

Moretti goes on to identify the causes of the displacement using the example of Boston, noting the ‘significant social costs,’ that arose after that city’s economic recovery after the 1970’s. He notes that, “[m]any longtime residents ended up being priced out of their own neighborhoods. And even those who stayed were not spared, as the character of some communities shifted in sudden and sometimes uncomfortable ways.”

Displacement of residents is a critical issue in numerous gentrifying neighborhoods in NYC including Harlem and Williamsburg.

COMMON COMMUNITY REACTIONS

Moretti notes the acrimony that can result from displacement and that in various cities there is opposition to economic change.  

He identifies the reaction in many communities to attempt to slow down socioeconomic changes through the limiting of the number of new office buildings and the limiting of new market-rate construction, saying that such efforts “aim to reduce private investment with the intent of preserving the existing economic and cultural demographics.”

It can be noted that the reaction in Long Island City was of a similar nature in that it sought to preserve the make-up of the neighborhood.

MORETTI’S SOLUTIONS

Moretti’s research leads him to believe that “the real solution to the problem of gentrification is exactly the opposite of restricting new residential development,” because, “rationing new housing in a city invariably results in even higher real estate prices … [because] reducing supply can only raise the price.”

He believes in fostering urban housing development as it results in lower housing costs, citing the studies of urban economist Ed Glaser, and that ‘progressive’ development policies can “significantly mitigate the negative effects of gentrification.”

He also provides the example of Seattle and in doing so also notes his view that housing development concentrated in the urban core can be beneficial when he says that “the city decided to increase the number of new housing units available to families by allowing a significant amount of infill urban development – the type of development that focuses on making an area denser by renovating existing buildings and developing empty lots, thus avoiding sprawl.”

He states that the increase in supply “kept real estate prices in check.”

It should be noted that he feels that gentrification should also be accompanied by an expansion of a city’s transit system. 

As far as attempts to limit new office buildings goes, he believes that cities should welcome high skilled workers due to a multiplier effect that can potentially benefit existing non-high-skilled sector residents. His central belief is that 5 ‘non-traded sector’ jobs are created for every 1 ‘traded sector’ job, with traded jobs being those related to global commerce and non-traded ones being local in nature outside of the technology sector.

LESSONS FOR NYC

Whether one agrees with Enrico Moretti’s views about gentrification and inequality or his proposed solutions, exploring the possible inclusion of additional housing units and increased transit system capacity at the outset of any economic development project to the extent applicable can be considered a prudent approach.

It can be noted that Mayor Bloomberg’s administration came to adopt this approach. Deputy Mayor for Economic Development & Housing, Dan Doctoroff states in his book, “Greater than Ever: New York’s Big Comeback,” “When we better understood the relationship between growth and housing – for all New Yorkers – we developed a record-breaking plan.” Also, through their PlaNYC initiative, Bloomberg and his team also sought to expand our City’s transportation system, but legislation needed for their efforts failed to pass in Albany.



Categories: Next Generation Impact, Our Communities & Social Entrepreneurship, Uncategorized

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