The 5 Phases of Gentrification -- When can it be stopped? [View all]

[GreatGazoo]

and when is it too late?

Phase 1 – Pioneering
New residents move in to abandoned or under-maintained buildings.
Banks will not lend so renovation is limited to the resources of the Pioneers.
No displacement of original residents, yet.

Phase 2 – Potential is Seen
Real estate agents promote the area’s “potential.” Vacancy rates drop.
Rents begin to rise. Banks begin to lend. Speculators buy distressed buildings.

Phase 3 – Safety and Media Hype
Gentrifiers create historic preservation, business and neighborhood associations.
Rents increase dramatically and displacement of the original residents fuels tensions.
Police adopt “broken windows” tactics and selectively enforce loitering and similar laws.
Media attention promotes the new safety and changes in the neighborhood.

Phase 4 – Peak
The first wave of Pioneers gets priced out.
Banks and investors create more high priced apartments and condos.
Buildings bought for speculation in Phase 2 get put back on the market.

Phase 5 – Post Peak
Vacancy rates increase as rents push above the limit.
Speculators take the money they made in Phase 4 and look for new opportunities in neighboring communities.
Landlords are absentee, including large banks and institutional investors.
Property values stagnate or fall from their peaks.

adopted from the work of American urban theorist Philip Clay.