Gentrification

British Sociologist Ruth Glass coined the phrase “gentrification” in the 1960s to describe the process of changing the character of a community through the influx of more affluent residents.

Gentrification often shifts a neighborhood’s composition and average household income by developing new, more expensive housing. The gentrification process is typically the result of increasing attraction to an area by people with higher incomes. As wealthier residents flow into lower income communities, longtime residents may feel pressured to move to more affordable locations.

Reference a comment from the 2017 Cook County Taxpayer Survey that reflects the sentiment of some 118 (13.6 percent) of the 870 Cook County taxpayers who responded to the survey, “Never thought it would happen but moving away from here has become a frequent topic of discussion in our home.”

An August 2016 Forbes article by former contributor Pete Saunders, expands on the subject, “Find out that a house sold for an exorbitant amount or that rents at some building doubled? That’s gentrification. See bike lanes added to your street, or a rack of bikeshare bikes pop up near a busy corner? That’s gentrification. Gentrification is the transition of a community from low-income or working-class status to middle-class or affluent status, largely through in-migration.”

Even the Center for Disease Control has weighed in on this topic, stating, “Gentrification is often defined as the transformation of neighborhoods from low value to high value. This change has the potential to cause displacement of long-time residents and businesses. Displacement happens when long-time or original neighborhood residents move from a gentrified area because of higher rents, mortgages, and property taxes.

“Gentrification is a housing, economic, and health issue that affects a community’s history and culture and reduces social capital.”

So what are the factors that have contributed to Cook County’s gentrification?

“America’s Coolest Small Town” Effect

CNNMoney columnist Lydia DePillis authored a November 2017 column titled, “How Colorado became one of the least affordable places to live in the U.S.”

“A recent report by government- backed mortgage giant Freddie Mac found that the amount of housing in Colorado that was affordable to people making less than half of the median income had plunged by more than 75 percent between 2010 and 2016 – one of the biggest decreases in the country.

“Home values in the gentrifying neighborhoods have escalated nearly 70 percent between 2013 and 2015, according to a report by the city.

“ ‘We’re just one of those places that has kind of caught fire,’ says Phyllis Resnick, lead economist at the Colorado Futures Center at Colorado State. ‘And we’ve seen it again and again, that when you catch fire, it kind of becomes a legacy problem.’ “

Rising Property Taxes

The downside of skyrocketing home values and higher demand is rising property taxes. And when it comes to Cook County, there continues to be this unending allure and “value proposition” for local government spending, regardless of the associated tax burden.

The pace and scale of property-tax growth in Cook County continues to be overwhelming. In just the last four years, Cook County’s tax rate has increased 15.3 times faster than Cook County’s median household income. (Sources: 2019 American Community Survey / Ehlers Cook County Financial Management Plan)

Short-Term Rentals

The influence of the so-called ‘Airbnb effect’ on local housing markets has grown into a significant cause for concern, particularly when looking at its impacts on housing availability, prices and communities.

Senior Forbes Contributor Gary Baker, writing in a February 2020 article titled, “The Airbnb Effect On Housing And Rent,” suggests, “The ‘Airbnb effect’ is to some extent remarkably similar to gentrification in that it slowly increases the value of an area to the detriment of the indigenous residents, many of whom are pushed out due to financial constraints.”

A reality reinforced in an earlier February 2019 article by Susan Holder, titled, “The Airbnb Effect: It’s Not Just Rising Home Prices,” in which she references a study conducted by the Economic Policy Institute. The study attempts to comprehensively catalog these local impacts. The study’s author Josh Bivens contends, “It becomes a straight conflict between whose interests you care more about: long-term residents of the city, or those that visit it,” Bivens said.

“Since Airbnb helps homeowners take existing housing stock and turns some of it into short-term units, its biggest measured effect so far has been on housing prices—by repurposing units that might otherwise be long-term housing, it’s straining an already supply-short market,” observed Holder.

According to 2019 fourth quarter findings by the National Association of Realtors, Cook County’s median home price of $264,479, ranks seventh highest among Minnesota’s 87 counties! Sperling’s BestPlaces, a website created and maintained by author and researcher Bert Sperling, actually depicts the present median home price in Cook County at $285,851. That puts us in league with the six major population centers in the Twin Cities.

I’ll conclude with excerpts from the City of Grand Marais Community Vision Plan:

“Grand Marais has an affordable housing problem. About a third of residents are cost burdened …The community is concerned about the growing expense of housing and access to a variety of housing types that can serve all people throughout their lives.”

And rightly so …

Former Cook County Commissioner Garry Gamble is writing this ongoing column about the various ways government works, as well as other topics. At times the column is editorial in nature.