Gentrification? What gentrification?

An aerial view of downtown Evanston from Google Maps.

Opponents of new high-rise developments in downtown Evanston often claim that they cause gentrification.

Gentrification is frequently defined as a process of attracting new, more affluent residents to a neighborhood, which often results in the displacement of existing poorer residents.

For the most part, new high-rise developments in downtown Evanston have been built on land that either was vacant or that had been devoted to commercial uses -- so a claim of direct displacement of existing residents by the new construction is simply not credible.

But we decided to take a closer look -- and see what's happened to the median income of downtown residents in recent years and how any change compares to changes in the citywide median income.


Census tract block groups that include a significant portion of downtown Evanston.

One difficulty in conducting this analysis is that census block group boundaries don't perfectly align with the area defined as "downtown" by the city's 2009 Downtown Plan.

Five census tract block groups, shown on the map above, include some significant portion of the area, outlined in black, that the plan identified as downtown.

And, as you'd expect, those block groups have seen significant population growth with new construction in recent years, as shown in data from the Census Bureau's American Community Survey, comparing the period 2007-11 with the period 2012-16.


Population change from 2007-11 to 2012-16 in downtown census block group areas.

Overall, the population of the five downtown census block group areas increased by 23 percent -- from 6,298 to 7,759 people -- an increase of 1,461 people.

By comparison, Evanston's overall population growth was just under 2 percent during the same period and totaled 1,323. Without the new residents downtown, Evanston's population would have declined, rather than increased.

Now let's look at how the median income has changed in each of those census track block groups from the 2007-11 to the 2012-16 period, as tracked by the American Community Survey.


Change in median household income from 2007-11 to 2012-16 in downtown census block group areas.

While median incomes increased in some of the areas, they fell in others. Average the changes for the five areas, and you get a decline of nearly 4 percent for the period. During the same period, the median household income in the city as a whole rose by more than 4 percent.

And the average of the latest median income figures in the five downtown block group areas is just under $53,000, more than $21,000 below the citywide median household income of just over $74,000.

Gentrification? Sure doesn't look like it.

Census data for this report was provided by PolicyMap.com. Maps were prepared in Google Maps.

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Comments

A couple of surprises ?

I could not read the streets and tried online to find better census maps. 

The two that seemed odd were income changes for 8094.004 and 8095.002. 

Is there any information why the decrease, esp.8094.004 which should be fairly wealthy.

Surprises

I was a bit surprised by the the sharp decline in median income -- especially in the 8094.004 area that runs from Clark to Davis and from Hinman to the alley west of Chicago Avenue.

Except for the Park Evanston and Evanston Place, that area is mostly 1920s to 1970s vintage apartment buildings. But it is relatively desirable for its location close to campus and the lake.

If I had to guess, I might speculate that there was an increase in the number of households composed of students, who, even if they're from wealthy families, may have low personal incomes.

As for the 8905.002 area, mostly bounded by Asbury, Davis, the Metra tracks and Lake Street, it had one new-construction condo project that was in financial distress during much of the period. Otherwise, it's dominated by 1920s to 1970s vintage apartments. Exisitng tenants may have seen their incomes drop, and landlords may have had some difficulty attracting higher-income tenants as new, flashier buildings started to become available elsewhere.

But that's just speculation.

One other thing to remember is that these figures are based on surveys, and they do have a margin of error, which gets larger as the size of the geographic area being viewed gets smaller.

-- Bill

I’ve had people straight up

I’ve had people straight up laugh at me when I mention the gentrification argument re: downtown Evanston.

Gentrification

Can anyone explain how gentrification negateively affects home owners?

Homeowners

Hi Dan,

If your neighborhood becomes gentrified, the value of your home would go up. That's good if you're interested in selling it.

OTOH, it also means your taxes would go up.

If you were someone who was living on a fixed income and you didn't want to move (or couldn't find new quarters you could afford) the added tax burden could put a strain on your finances.

Other than that, for existing homeowners, gentrification typically has a lot of up-sides.

It's not so great for lower-income renters, who may no longer be able to afford the higher rents in the more desirable version of the neighborhood.

-- Bill

Gentrification, neighborhood decline- Evanston has had it all

The negativity of gentrification is property taxes rise. Homeowners on fixed incomes or no incomes have difficulty paying the tax hikes.

Rather than losing a home to unpaid property taxes or owed second or third mortgages owners sell when they otherwise wouldn't. Sometimes they lose their homes to the bank. Then of course human fears play a role in the negativity of gentrification. People start moving in your neighborhood that appear more wealthy or may not look like you and the longtime locals are upset.

The reverse in gentrification also has a negative effect. Crime rises, schools become mediocre and more rentals pop up around you. Those can be signs of a neighborhood in decline. We've had both in Evanston in the recent past. Evanston is diverse in this sense.

One of the conundrums about lower income residents in Evanston is that they always seem to vote for the "chosen" Democratic politicians who always seem to find ways to increase all kinds of taxes, including the dreaded property tax that can lead to gentrification. There's been this false notion over the decades that the Democratic party represents poor people. They don't. It's one big fat lie.

Excellent Analysis!

Thank you Bill for the analysis.  It is great to see a fact based argument in this day when there opinion and assumptions dominate news reporting.

Re: Gentrification

Through the years Northwestern University students have increasingly occupied a growing percentage of units in and around the downtown area, so it should not come as any surprise that median incomes have dropped. Not saying this is a bad thing, just an explanation.

Gentrification that failed

I don't think we have had examples like some areas of Chicago had in the late 70s.

Some like along North Ave. from LaSalle to Clyborne, just west of DePaul on Fullerton were very successful. Others like north Rogers Park from 7000 to 7600 and the lake to Ashland were disasters for those who paid high prices, and from a few block from the lake to Ashland. The failures were from young professionals speculating based on successful areas seeing big changes  in value and maybe buying as rentals.  I don't think we have seen such in Evanston.  Changes have been slow in Evanston and I don't think much speculation. Of course in the late 70s-early 80s we had the big apartment to condo conversion that did shake things up. I guess that might have been gentrification but I think that was buy to occupy.

 

Gentrification IS real in Evanston

Bill Smith fails to understand gentrification in Evanston as it applies to Black residents, because he does not consider the more important effects of gentrification on the population living beyond the downtown area.

He calls gentrification “a process of attracting new, more affluent residents to a neighborhood, which often results in the displacement of existing poorer residents”.  Clearly, “new, more affluent residents” are being attracted to the downtown area.  Data published in Evanston Now show that there have been almost 1,100 high-end luxury units built in the city over the last four years.  The average rent for a two-bedroom apartment in these buildings is a staggering $2,900/ month. According to Crain’s Chicago Business, over 320 more are already in the pipeline and 536 more proposed. 

But what about the “displacement of existing poorer residents”, many of whom are Black? New developments downtown have raised housing costs in the city as a whole, not just in the downtown area, with rents in the city increasing by 25.3%between 2006 and 2015.  In contrast, average incomes in the city during the same period only increased 7.6%.  This failure of incomes to keep up with increasing in housing costs, the lack of affordable housing, especially in new luxury rental developments in the downtown area, has forced many Black families to leave the city, leading to a decline in the Black population of 8.5% between 2006 and 2015. As is happening across the country, luxury rental developments are forcing the Black population not just out of downtown areas, but out of entire neighborhoods.

In his effort to promote the downtown luxury, high-rise development, Bill Smith entirely ignores the most important effects of gentrification by suggesting that effects are only felt by residents of the downtown area.  Gentrification has already had long-term, irreversible impacts on the poorer residents of Evanston, many of whom are Black.  

Let’s be careful to understand all the effects of this damaging process before we come to any misleading conclusions in print.

Sources

2015 5-year ACS 

https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_16_5YR_B25064&prodType=table

2006 1-year ACS

https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_10_1YR_B25064&prodType=table

Rent increases not limited to Evanston

Hi Clare,

You keep denying reality.

For gentrification to be happening we'd have to be see major increases in median incomes and/or major shifts in the distribution of incomes toward the high end of the range. That's not happening.

Proved wrong, you then shift your argument to say rents are rising. Well, yes they are. And people are being financially squeezed by that. But it's not just happening in Evanston.

The ACS data says median rents from 2006 to 2016 rose 30 percent in Evanston. 27 percent in Skokie and 27 percent across all of Cook County.

If rents are rising by roughly equivalent amounts across the region -- whether or not a town is seeing new high-rise construction -- that provides no evidence for your false claim that Evanston is being gentrified.

Stopping construction of high-rise buildings in Evanston would not stop rents across the region from increasing.

Adding to the supply of high-end properties does modestly increase median rents in Evanston -- but it doesn't mean that people living in older buildings here are forced to pay more. If anything, by increasing the overall local supply, it may slightly reduce what owners of older, less desirable properties can charge.

-- Bill

Highrise impact on rest of Evanston

"In [Bill's] effort to promote the downtown luxury, high-rise development"

I never got the sense that Bill tries to promote the downtown luxury, high-rise development, but is certainly not against offering more housing opportunities (luxury or otherwise) to residents where none currently exists today in the forms of vacant lots, parking lots, etc. As he said above, increasing the supply of housing (expensive or not) should theoretically reduce costs for other nearby residents. Based on the economics of Evanston (construction costs, etc.) and the requirements of the inclusionary housing ordinance, a downtown developer CANNOT make a "non-luxury" housing development profitable and worthwhile anymore, unfortunately. (And hence why we're seeing behemoths now rather than low-rises.) But fortunately for Evanston residents, there is still plenty of affordable housing relative to other nearby suburban communities.

Can we look at some statistics for Census Tract 8092? Which is a majority black census tract. I honestly don't know the results, so would be interested to see. But let's say the following scenario plays out...there are three apartments currently priced at $500/month each for 1 BRs (market value of $50k/each) and a distressed property next door that is a complete eyesore and in terrible need of repairs valued at $80k for land. Avg property value = $57.5k value. Somebody buys up the distressed property for $80k, then rehabs it to make it livable without expanding the footprint and sells it to a new family for $225k. Obviously, that act DOES increase the "average" home value/rent for the four properties to $93.75k, which is significant (obviously, this isn't happening at a rate of 1 in 4 properties, but just giving an extreme example). Is that a negative for the neighborhood? I personally don't see it and would welcome a change like that. Maybe you do see that as a negative. (And yes, I live very close to properties that this has occurred to. We're not talking luxury by any measure, but nice livable homes for families.)

I understand that it's possible that values could rise up significantly and increase property taxes for those neighborhoods, but we haven't seen that play out in Evanston (well, property taxes certainly HAVE increased, but that's because of added fees -- not exorbitant house price appreciation in census tract 8092). And of course, in my above example, a SFH wouldn't impact an apartment since they're classified differently and the property taxes aren't by census tract anyway, they're by tax neighborhood (which, incidentally, is IMPOSSIBLE to find a map for...I haven't been able to).

And for those that eventually sell, having your property appreciate in value is absolutely a POSITIVE, not a negative. In almost all cities across the country, people WANT to see their properties increase in value, not decrease. That's people's primary source of net worth, so having a house stagnant or worse, decline, has a significant impact on an individual.

(And yes, the downtown rents for some of these new buildings are outrageous - I don't understand it either. But clearly it hasn't impacted the housing stock of other areas of Evanston and CAN make Evanston a more desirable place to live as more residents downtown attracts new business, etc.).

TL;DR version: while more luxury condos have been built downtown, evidence suggests it has NOT replaced lower cost housing but rather supplemented the housing options of Evanston residents. More supply = lower cost for existing tenants/owners EVEN if the "average" goes up (due to a new luxury housing option). The economics of downtown Evanston and the requirements basically make it financially impossible for developers to build anything other than luxury places downtown to turn decent profits. Furthermore, the cleanup/rehab of distressed properties in need of major repairs to livable standards in other areas (which occurs sporadically, but certainly hasn't been widespread) should be seen as a positive for all communities of Evanston. Evanston still has way more affordable housing than other nearby suburban communities -- it's not even close.