Could Growth In Urban Cores Remedy Problematic Gentrification?

The argument that increased supply of urban housing will lower prices is rapidly being disproved by successive waves of gentrification throughout American cities. Stephen Smith offers a considered analysis of the economics behind this dynamic.

1 minute read

September 29, 2011, 2:00 PM PDT

By George Haugh


For the original, and often poor residents of newly gentrifying neighborhoods, the market remedy of increasingly supply doesn't make anything cheaper. Rather, they find themselves pushed out by the increased cost of housing, and amenities.

Smith believes that price increases respond to new amenities along an S-curve. "The first 100-unit rental building with the neighborhood's first high-quality grocery story is a huge boon, but the hundredth glass tower with the neighborhood's fifth bank won't even be noticed. It's at this point that the price-lowering effect of dumping new units on the market will outweigh the price-raising effect of the new amenities – in other words, prices will start to fall."

The problem is that once a neighborhood has all its amenities, new housing construction is ground to a halt by a NIMBY shield and any remaining original homeowners who are unlikely to allow their home values to fall.

Thursday, September 29, 2011 in Forbes

portrait of professional woman

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching. Mary G., Urban Planner

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching.

Mary G., Urban Planner

Get top-rated, practical training

Close-up of "Apartment for rent" sign in red text on black background in front of blurred building

Trump Administration Could Effectively End Housing Voucher Program

Federal officials are eyeing major cuts to the Section 8 program that helps millions of low-income households pay rent.

April 21, 2025 - Housing Wire

Logo for Planetizen Federal Action Tracker with black and white image of U.S. Capitol with water ripple overlay.

Planetizen Federal Action Tracker

A weekly monitor of how Trump’s orders and actions are impacting planners and planning in America.

April 30, 2025 - Diana Ionescu

Close-up on Canadian flag with Canada Parliament building blurred in background.

Canada vs. Kamala: Whose Liberal Housing Platform Comes Out on Top?

As Canada votes for a new Prime Minister, what can America learn from the leading liberal candidate of its neighbor to the north?

April 28, 2025 - Benjamin Schneider

Washington

Washington State’s Parking Reform Law Could Unlock ‘Countless’ Acres for New Housing

A law that limits how much parking cities can require for residential amd commercial developments could lead to a construction boom.

2 hours ago - Streetsblog USA

Bluebird sitting on branch of green bush.

Wildlife Rebounds After the Eaton Fire

Following the devastation of the Eaton Fire, the return of wildlife and the regrowth of native plants are offering powerful signs of resilience and renewal.

4 hours ago - AP News

1984 Olympics

LA to Replace Inglewood Light Rail Project With Bus Shuttles

LA Metro says the change is in response to community engagement and that the new design will be ready before the 2028 Olympic Games.

4 hours ago - Newsweek

Urban Design for Planners 1: Software Tools

This six-course series explores essential urban design concepts using open source software and equips planners with the tools they need to participate fully in the urban design process.

Planning for Universal Design

Learn the tools for implementing Universal Design in planning regulations.