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A noteworthy urban phenomenon over the past 10 years is gentrification, a complex concept that is essential to understand. This process typically occurs when a working-class neighborhood with many deficiencies is gradually displaced by higher-income residents, forcing out the original inhabitants.
Here, we will analyze in detail what gentrification is, how it arises, and its effects on housing prices. We will also examine its types, causes, examples, and potential strategies to combat or prevent it.
As mentioned, gentrification is a process in which a neighborhood or urban area is renovated, causing housing prices to rise rapidly. Middle-class residents move in, while low-income residents are often forced to leave.
The term gentrification comes from the English word “gentry,” loosely translated as “bourgeois,” but it involves much more than simple societal gentrification. It entails the displacement of the most vulnerable people and a radical transformation of the neighborhood or area.
This urban phenomenon appears as a form of urban quality-of-life improvement that, while real, benefits only a few. The main beneficiaries are new residents and high-income individuals who begin frequenting the area and eventually move in.
Former residents are largely displaced due to changing conditions and rising housing and service costs. Currently, with the emergence of peer-to-peer investor platforms for tourist accommodations, speculative housing opportunities are on the rise.
This speculation affects part of the Spanish real estate market, ultimately impacting the smallest and cheapest housing segments and apartment investment. This generates a new form of exploitation that partially contributes to rising housing prices, especially rental prices.
In this way, two new terms have become popular: tourism-phobia and touristification, which are directly linked to gentrification. However, the process of touristification has proven to be more toxic in its effects because it replaces a population with a non-population.
This process is happening much faster and has led policymakers to speak of a “Gentrification 4.0,” with clear threats of creating dehumanized urban spaces. These areas often lack basic services for long-term residents, such as local commerce and affordable housing.
It even considers minimum living conditions, and the situation is much more severe in tourist areas. In other words, it transforms spaces where professionals of all kinds struggle to find housing near their workplaces.
According to several authors, the world is experiencing the fourth wave of gentrification, moving beyond the classic model of rehabilitating neighborhoods to densify them. This wave expands into new areas, including water sources, urban and rural peripheries, implementing rehabilitation, demolition, and new construction.
However, the constant displacement of low-income residents continues, stripping them of their neighborhoods to be used for consumption rather than residence. In this context, there are various types of gentrification, which can be classified according to their main purpose as follows:
Referring to the influx of middle-class students from neighborhoods and towns near a university, there are known cases of “studentification” that transform small towns into real urban centers where students drive social change.
Small cities that have served as models or monitoring centers for establishing universities or higher education institutes are transformed into student cities. While this can be seen as a positive aspect of gentrification, it also has consequences that are not entirely positive, especially for the original residents.
This is seen as the influx of small luxury retail merchants who replace the residential functions of workers and low-income residents. This leads to the emergence of well-known mini-markets, cafes, makeshift clothing stores, and family-run community kitchens.
Boutiquization ultimately formalizes a type of commerce that initially began informally, as authorities “assimilate” it and require tax payments. This generates revenue for municipalities but also turns them into consumers of services that sometimes don’t even exist.
Defined as the transformation of neighborhoods into enclaves exclusively for tourists, often featuring corporate entertainment. Popular housing is replaced by accommodations, restaurants, and other services for tourists. A similar process occurs with the gentrification of coastal cities.
Here, fishing villages, for example, are transformed into summer and vacation hubs for both the local and international middle class.
A process that occurs in a cascading manner from a major city, such as London, to smaller towns. Villages are gradually taken over by new residents and their buildings, eventually transforming them into “bedroom communities.”
An influx of middle-class individuals seeking permanent housing near rural areas displaces farmers and local residents. A devastating consequence of this type of gentrification is the loss of agricultural and livestock-raising land, which is replaced by profit-driven activities.
It is a process of “rehabilitating” neighborhoods, coastal areas, or residential centers in developing countries to make them accessible to the middle classes of developed countries. This neoliberal urbanism, which affects cities worldwide, can be seen as a form of neocolonization by the middle class and the white population.
It refers to a more intense form of gentrification occurring in select neighborhoods of major cities such as New York. This phenomenon involves increased private financing, stronger social changes—resulting in more evictions and exclusion—and a globally connected elite.
Gentrification is a complex, multifaceted process that arises from the interaction of economic, social, and political factors. Here are some of its main causes:
Central urban areas with transportation, services, and job opportunities are very attractive to new investors and residents.
The interest of developers and investment funds, along with municipal support, often helps foster this phenomenon.
Migration of young professionals, artists, and other upper-middle-class individuals into affordable neighborhoods brings energy and attracts others.
The search for authentic, well-established neighborhoods as an alternative to suburban areas.
Government plans and projects aimed at revitalizing deteriorated urban areas undoubtedly drive gentrification, , attracting investments and infrastructure improvements.
The rise in the cost of living and inflation in other parts of the city can transform neighborhoods that were previously less attractive. Access to mortgage loans and financing for acquisition and renovation facilitates the purchase and improvement of properties in these neighborhoods, and it also makes it easier to invest in real estate with limited funds.
The popularity of digital platforms for short-term rentals increases housing demand in certain areas, driving up prices and promoting gentrification through tourism.
The lack of affordable housing in certain parts of the city puts pressure on residents to seek options in more affordable neighborhoods. Investors buy properties knowing they can quickly increase theirnet asset value quickly, which displaces lower-income residents.
The main consequence of gentrification is the displacement of people from a specific neighborhood to more affordable areas. It’s common to see this “mass exodus” from central areas to the periphery, and even peripheral neighborhoods themselves can become “gentrified.”
We are also seeing how the gentrification process affects the use of affected areas, making it increasingly “normal” for certain neighborhoods to have a reduced stable population. This results in a radical change in commerce, where basic services disappear and livability—such as being able to sleep at night—is affected.
Another consequence of gentrification is the increase in commuting between the outskirts and central areas. Many people must travel from their homes to their workplaces, where cultural and recreational services are more accessible.
Another consequence of gentrification is the increase in commuting between the outskirts and central areas. Many people must travel from their homes to their workplaces, where cultural and recreational services are more readily available.
A case often cited as a “classic” example of gentrification is Puerta del Ángel, Carabanchel, or Usera in Madrid. Here, one can observe how both the per capita income of its inhabitants and rental prices have increased.
Another example can be seen in the Malasaña neighbourhood, which went from being abandoned during the 1980s and 1990s to becoming an attractive area for young creatives. The neighborhoods of Lavapiés, La Latina, Huertas, and Chueca in Madrid also exemplify a form of “spontaneous” and natural gentrification.
Regarding “Airbnb gentrification,” a consequence of more radical changes, one example is Barcelona, where tourism displaced many residents. This changed the layout, usage, and services in areas such as Malasaña or Chueca, shifting from spontaneous gentrification to tourist-focused gentrification.
There are many examples of gentrification in Spain, such as the ever-diminishing boundaries of real estate investment , driven by attraction policies, real estate tokenization, crowdfunding, and other forms of investment. Ultimately, to try to see gentrification as something positive, it would be a matter of weighing the pros and cons and analyzing them.
It’s an open secret that citizens with fewer resources are often forced to leave their rental apartments in search of more affordable housing. The question is whether authorities with decision-making power are capable of passing legislation to help those most in need—some call it hope.
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