Three Essays on Gentrification and the United States Housing Market

This dissertation consists of three essays that look at the impact of gentrification in the US housing market. Research on gentrification has shown that the displacement effects of gentrification are not felt disproportionately by low income and minority households. The premise of this dissertation is that examination of the displacement effects of gentrification is a very broad approach that may obscure some of the effects. Therefore the focus of this research is to decompose the displacement effects approach of analyzing gentrification in order to document any differential or disproportionate impact that it may or may not have on different household groups. The first essay shows the changes in consumption patterns that result from the process of gentrification using survey data for Columbia Heights a gentrifying neighborhood in Washington D.C. The findings support the consumption theory of gentrification, with changes in the neighborhood leading to the creation of displacement pressure for longstanding residents. The second essay isolates affordability, one of the factors that causes displacement and documents the impact of gentrification on housing affordability using American Housing Survey (AHS) data for six metropolitan areas. In this essay a multinomial logistic regression model is used to estimate filtering of housing units and document a disproportionate effect of gentrification on housing affordability with low income households bearing the burden of this decline in affordability due to gentrification. In the final essay a search cost model is used to document the disproportionate impact of gentrification when analysis of the displacement effects of gentrification is related to other social issues in the housing market, in this case racial discrimination. Based on a bid rent approach modeled using spatial regression analysis the essay documents the decrease in housing options for minorities. The dissertation recommends policy to ensure equitable development in the urban housing market including, mixed income developments, inclusionary zoning, homeownership programs and stricter enforcement of anti discrimination laws.