Oakland, S.F. neighborhoods fastest gentrifying in U.S.

Nearly one-third of poor neighborhoods in Oakland and San
Francisco experienced gentrification between 2013 and 2017, the
highest rate in the country according to a new national study.

San Jose was also among the top 10 cities in the U.S. where
families with low median household incomes were replaced by high
wage earners with college degrees, according to a report released
Thursday by the National Community Reinvestment Coalition.

The study spotlights the Bay Area’s rare bubble — poor
communities in other cities across the country have seen little new
investment and gentrification over the last decade, NCRC research
showed. But high-wage tech workers and expensive housing have
continued to push lower-wage neighbors out of West Oakland, Uptown,
Ghost Town, East Palo Alto and other communities.

The study quantifies what Bay Area residents have seen for
years: historically low-income neighborhoods rapidly changed by
new, higher-income residents. “It’s a combination of economic
activity, land use and geography,” said NCRC director of research
Jason Richardson. The nonprofit coalition advocates for private
reinvestment in under served communities.

The researchers looked at census data in poor communities from
2012 to 2017 for substantial rises in median household income,
housing prices, and the share of residents with four-year degrees
to find gentrification.

Researchers identified 41 of 131 low- and moderate-income tracts
in San Francisco and Oakland that saw substantial increases in
household income, education and home prices. The San Francisco and
Oakland metro are saw 31 percent of its eligible communities
gentrify, outpacing Denver (27. 5 percent) and Boston (21 percent)
as the most intense changes in the country, according to NCRC.

In San Jose, 13 of 72 tracts — about 18 percent — hadlarge
gains in wealth and educational status.

In West Oakland, for example, median household income rose from
$80,700 to $86,300 between 2010 and 2017, while the percent of
population with four-year degrees rose from one-third to nearly
one-half, according to the study.

The study also considered the possible future effects of federal
opportunity zones on low and moderate-income neighborhoods. The
opportunity zones, established in the 2017 Tax Cuts and Jobs Act,
allow tax breaks for certain investments in distressed communities.
The program is designed to fuel investment in 8,000 urban and rural
zones designated as disadvantaged by state governors.

NCRC researchers found nearly 70 percent of the opportunity
zones overlap or run adjacent to communities most likely to
experience gentrification. “These are some of the most distressed
neighborhoods in the U.S.,†said report co-author Bruce Mitchell.
The investments could bring opportunities for residents — but
studies have shown long-time residents are usually displaced by the
community make-overs. Renters and people of color are most
vulnerable.

Critics worry that the investment program may accelerate
gentrification in many neighborhoods, even as properties are
redeveloped.

NCRC researchers said its too soon to gauge the impact of
opportunity zones on communities. Mitchell noted that reinvestment
will likely be slowed as the economy is hampered by the coronavirus
pandemic.

California Housing Partnership CEO Matt Schwartz said the
long-running trend in the Bay Area has been driven by booming job
growth in the tech sector. Other factors, including lack of new
construction and state property tax laws, have driven up housing
prices across the region.

In a 2019 report, the partnership found the mounting cost of
housing hit households of color hardest. A 30 percent increase in
rents, for example, led to a nearly 30 percent decline in low
income minority residents in Bay Area communities. Existing white
residents, however, were likely to stay put as their neighborhood
changed, the study found.

“The impacts were not equal,†Schwartz said.

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The runaway housing prices in the Bay Area have pushed basic needs
for renters well out of reach in recent years. An
exclusive analysis of Zillow housing data by this news
organization
last year found moderate and low-income residents
have been slowly priced out of the region since 2012.

Families with a household income of $100,000, about the median
income in the Bay Area, could not afford the typical rent in 7 in
10 zip codes in the region, including all of San Francisco, San
Mateo and Marin counties. For a family earning less than $64,000
— common for two, minimum wage workers — no Bay Area
neighborhoods had an affordable median apartment rent.

Source: FS – All – Real Estate News 1
Oakland, S.F. neighborhoods fastest gentrifying in
U.S.