Gentrification and its Discontents

(New Development in East Lorin Neighborhood of Oakland | Author Image)

A recent essay at Oakland North by Jessica Nowlan has me amazed at how confused most people are about what gentrification actually is. Even commenter Len Raphael, who understands urban economics better than most, thinks we should 'force the burbs and surrounding cities to build their share of affordable housing.' Nothing of the sort is needed, Oakland simply needs to allow abundant housing, though this may (and should, that's where people want to live!) shade Mr. Raphael's heirloom tomatoes in Temescal.

Gentrification is the result of the restricting of housing supply (and commercial spaces) such that prices rise in the face of increased demand, as people (re)discover weather, restaurants, bungalows, easy commutes, etc. Because gentrification encompasses some increases in supply (but not enough), many people wrongly assume new development causes it. But gentrification actually occurs when supply is not allowed to increase as much as demand, raising prices. The primary solution is to increase the supply of housing (and commercial spaces) enough to capture fully the increased demand. If we did so, prices would stabilize, marginal businesses would be able to exist alongside thriving ones, and struggling folks would be able to live amongst prosperous ones, albeit in smaller, lower-quality dwellings.

I am sorry Ms. Knowlan was pushed out of San Francisco, and now feels threatened in Oakland, but this must be understood as a public policy decision (and failure!) sought by incumbent landowners to limit the supply of habitable urban space (through zoning and height restrictions, parking minimums, etc.), thereby pushing up prices to their benefit but to the detriment of the rest of us. Ms. Knowlan seems to blame developers, however they are actually helping ameliorate the problem, not exacerbate it. We should be doing more to support and make easier their good work, in which denser development is good for the environment, good for the economy, and good for people throughout the country (and world!) who would like to move to Oakland but can't afford it.

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