What is Gentrification and What Happens to Neighborhoods that are Gentrified?

Do you love the energetic pace of living in a city but find home prices out of reach? You might explore some of the gentrifying or up-and-coming neighborhoods in your metro area. Despite the bad rap that the word gets, weve taken a look at what the term really means and how it can be effective for cities and aspiring homeowners.

What Is Gentrification?

Gentrification is one of the by-products of urban sprawl. You can think of it as an expansion to a citys boundaries. Sometimes, it happens when developers buy industrial properties like warehouses, homes, and abandoned buildings, no longer in use, and gives them a makeover. There may also be empty lots for sale, which is typically not the case within a downtown core.

According to a Governing Magazine report, gentrification particularly accelerated, though, in recent years as growing numbers of Americans opted to pursue urban lifestyles.

Most Gentrified Cities in the U.S.

To figure out whether a specific zip code is gentrified, RentCafe conducted a study of the current real estate market. The study took into consideration changes (upward trends) over time based on three data points:

Median home value
Household income
Education (bachelor’s degree and above)

Of their top 20 most gentrified zip codes, 5 were located on the East Coast:

Brooklyn, New York (11211, 11222,11216, 11237, and 11221)
Manhattan, New York (10039 and 10026)
Philadelphia, Pennsylvania (19123 and 19146)
Washington, DC (20001, 20021 and 20010)
Baltimore, Maryland (21224)

The top spot for most gentrified area went to Gallery Row-Fashion District in downtown Los Angeles. This area is undergoing a huge revitalization of mixed-use developments. This includes renovations to historical properties, an influx of hotels, and a huge transformation to the banks of the Los Angeles River.

In other words, an area that was once avoided is fast-becoming a magnate for all kinds of new tenants and with it, a home value change of 707 percent.

What to Expect When You Move to a Gentrified Neighborhood

Gentrified neighborhoods, as you might imagine are in transition. Often, you’ll find work-in-progress signs and construction projects underway. What else can you expect when you move to a gentrified neighborhood?

Investment Property

If you want to buy with an eye to the future, a gentrifying neighborhood, one thats on an upswing, could be a smart investment. Investopedia reports that buying property in a gentrifying part of town can result in a big windfall if the neighborhood does turn around and the property values increase. This is also true if you can afford to buy an income property – one youll be renting out.


One study by MIT reports that gentrification reduces crime rates and increases public safety in city neighborhoods. Their analysis looked at the results of the rent de-control in Cambridge Massachusetts (circa 1995). They assert that modernizing run-down buildings may attract businesses like yoga studios and coffee shops while displacing some criminal activity. Its still a bit ambiguous whether what they call urban renaissance actually improves public safety. But, if this worries you, there are resources to help you assess whether your neighborhood is safe.


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