Since the 1970s, American families and businesses have been uprooted from their neighborhoods because of sudden increasing property values and rent . Why does this change occur? Wealthier firms and families decide to move into lower-level income neighborhoods because property is cheap and they know they will be able to spend more on renovations. Soon more and more people realize this and choose to follow suit.
This is a smart business move, but there are several negative externalities. The old neighborhood goes through a remodel and is suddenly a new, hip, urban area where businesses and families will pay a lot to get into. The author of Naked Economics, Charles Wheelan, writes, “But our measure of how much we value something is how much we are willing to pay for it- and the rich can always pay more for something than everyone else” . Businesses that once resided there either get bought out or the property taxes become unaffordable. Families definitely do not find solace in the fact that their apartment complexes will likely get bought by someone either looking to astronomically raise their rent or evict them. Schools face low enrollment rates when their students are forced to move and the people causing these things to happen do not have to worry about it.
Austin, Texas has been going through this in almost every area since the 1920s . An author at The Daily Texan, Audrey Larcher, wrote an article about the lasting effect of gentrification is Austin and how it is still happening. She explains, “As young professionals converted laundromats into tastelessly named bistros, the value of East Austin real estate skyrocketed, and those native to the area simply could not keep up with rising property taxes. Even as Austin’s general population multiplied, the percentage of minority residents declined. In fact, they suffer. Martin Middle School, which serves Central East Austin, is losing funds due to low enrollment. The notoriously hipster Blue Cat Cafe sits on the ruins of family-owned piñata store Jumpolin, which landowners bulldozed in a controversial case of imminent domain. In a community built by minority populations, the neighborhood’s infrastructure has been hijacked to serve new wealthy inhabitants. ” .
So, while firms making these purchases and striking up deals with neighborhood businesses is a very textbook good business move, it is unfair and leaves many undesirable effects on communities. Is another new restaurant worth forcing a family out of their home? For the restaurant, absolutely. For the neighborhood school, not so much. For the family, no. It paves the way for the entire area to be completely wiped out. Having new restaurants, hotels, and coffee shops that charge $8 for a coffee is not a bad thing for the economy- in fact it’s good, but pushing people out of an area so that it can thrive without them is inconsiderate and selfish. Creative destruction always leaves something bad in its wake, and in the case of gentrification, it means evicted families, worse schools, and forced displacement of citizens. The way it works now is not worth it, but that could change.
 Osman, Suleiman. 2016. “Gentrification In The United States”. Oxford Research Encyclopedia Of American History. Oxford University Press.
 Charles Wheelan. Naked Economics: Undressing the Dismal Science [New York: Norton, 2010], 62.
 Larcher, Audrey. “Gentrification Is Chipping Away At Austin’s Unique Culture – The Daily Texan”. Dailytexanonline.com. 2017. Web. 30 Mar. 2017.