By Nora Tooher
Chicago is one of the most gentrified large cities in the country, according to a recent analysis by the Federal Reserve Bank of Cleveland. The study found that 28 percent of Chicago’s low-priced urban neighborhoods have been transformed into high-priced housing districts.
The study defined a neighborhood as gentrified if it was located in the central part of a city and went from being in the bottom half of home prices in the city to the top half between 2000 and 2007.
Boston had the highest amount of gentrification, with 61 percent of Boston’s low-priced neighborhoods – about a fourth of the city’s entire population – redeveloped between 200 and 2007.
Seattle was second, with a 55 percent gentrification rate. Other cities where significant shares of neighborhoods were redeveloped include New York, 46 percent and San Francisco, 42 percent.
Also high on the list were Washington, D.C., 35 percent; Atlanta, 31 percent; Portland, Ore., 28 percent; Tampa, Fla., 24 percent and Los Angeles, 23 percent. Thousand Oaks, Calif., an LA suburb, boasts a median home value of $629,300.
Cities on the low end of the gentrification scale include Buffalo, N.Y., El Paso, Texas and Omaha, Neb., all where only 6 percent of the city’s low-priced tracts gentrified; Raleigh, N.C.; Toledo, Ohio and Wichita, Kan., all 4 percent; and Oakland, Calif., Baltimore, Tulsa, Okla. and Detroit, all 3 percent.
And although gentrification sometimes has a bad rep, the Cleveland Fed study claims it can be beneficial to the financial health of the original residents, including renters. Living in a neighborhood that gentrified was associated with an 8 point increase in credit scores. And both mortgage holders and renters benefited from the rise in credit scores, the study found.
Delinquency rates, meanwhile, declined, with the share of people whose accounts were 90 or more days past due dropping by 2 percentage points in gentrifying neighborhoods compared with other low-priced neighborhoods.