Gentrification has become synonymous with the pushing-out of established residents by newcomers, but a study released this week found no evidence of displacement among homeowners in gentrifying Philadelphia neighborhoods.
The study, published by the Federal Reserve Bank of Philadelphia, researched the connection between tax delinquency, homeowner mobility, and gentrification over the last two years.
Researchers found that while the increase in tax delinquency is about 4 percentage points higher in gentrifying neighborhoods than in those that have not seen a steep rise in property value, homeowners aren’t moving out any more rapidly than they are in nongentrifying areas.
In fact, the study found that in the last two years the probability that someone ages 55 to 84 will move actually went down 3.3 percent in those neighborhoods.
“Elderly homeowners as well as homeowners with lower credit scores are no more likely to move out of gentrifying neighborhoods,” the authors wrote.
That’s a surprising takeaway in a city seeing unprecedented development, rapid appreciation of home values, and dramatic changes to commercial corridors.
The study credits city programs that help longtime homeowners, like the Homestead Exemption and the Longtime Owner Occupants Program (LOOP), with preventing displacement. LOOP was implemented after the city reassessed properties in 2013 and some homeowners saw properties jump in assessment by 300 percent. Under that program, homeowners were eligible for a 10-year tax break if they earned up to 150 percent of area median income, or no more than $124,800 for a household of four.
City Council is considering a bill that would expand the program to cover families that make more money and with no limit on how long homeowners get the break.
“Philadelphia’s LOOP program is quite unique,” Lei Ding, who coauthored the study, said. “It seems that in terms of preventing tax foreclosures or delinquencies, it has positive effects in gentrification relief.”
Another reason homeowners might be staying put despite increased tax costs is that there is less demand for homes in gentrifying neighborhoods. The study found the dip in home sales was potentially due to rising property taxes keeping buyers away. (The decrease could also be affected by 10-year tax abatements running out on certain properties and making them less desirable.)
“This is a complicated issue,” said Emily Dowdall of the Philadelphia Reinvestment Fund, “but the simple answer is homeowners are probably displaced less by gentrification than you might think.”
Dowdall has worked on two reports about gentrification in Philadelphia, one that mapped displacement risk citywide and one in 2015 for Pew that found only 15 of the city’s 372 census tracts gentrified between 2000 and 2014.
Homeowners in gentrifying areas might be more likely to hang onto their homes if they like the changes they see in their neighborhood, Dowdall said. Getting loans to refinance or pay for home repairs can also be easier for them.
“If you live in Fishtown, and the bank looks at comparable prices in the neighborhood, they’re going to see really high prices and they’ll be more comfortable making a loan,” she said. “If the applicant lives in an area where prices are falling, that bank may not make the loan at the same level.”
Another important caveat: Renters, who make up nearly half of all residents in the city and are vulnerable to displacement, are not factored into the study. Homeowners were tracked using credit scores, which is one of the best ways available to trace mobility, Dowdall said, but it doesn’t include people who don’t have credit.
Even the definition of gentrification can effect studies like this. The Federal Reserve factored in median rent, home value and college education to its analysis of which neighborhoods had gentrified. The Reinvestment Fund, in its 2016 study of displacement, considered home prices over time compared to income at a fixed point in time.
“If I could afford to buy a home here 10 years ago, and I can’t today, then I’m not moving into this neighborhood anymore and I’m not going to stay here for very long,” said Nora Lichtash of the community development organization the Women’s Community Revitalization Project. “To me, that’s good data.”
Lichtash, whose group builds affordable housing in gentrifying and low-income neighborhoods, said the findings just don’t compute with what she’s seeing: people foreclosed on or selling because housing repairs become too costly.
“What I’ve seen, and I don’t have a huge data set, this is just what I see every day, are people who are selling their houses because they can’t repair them and there’s someone at their door with cash in hand,” she said.
Lichtash is part of a team from the city working with the All-In Cities Anti-Displacement Policy Network, a collaboration among 10 cities, many that have gentrified faster than Philadelphia.
“They’re telling us, ‘Oh my God, you are so lucky. You have this opportunity to see the problem and get ahead of it,'” Lichtash said. “People were saying ‘there’s no problem’ in Brooklyn for a really long time until they couldn’t say it any more.”