As affordable housing continues to be an issue for University students and the city considers banning “stealth dorms,” which would further limit available housing options, a recent study conducted by the Federal Reserve Bank of Cleveland suggests Austin may actually benefit from gentrification.
Gentrification is the process in which neighborhoods rise in property value, reducing housing affordability for current neighborhood residents. “Stealth dorms,” single-family residences that house multiple unrelated adults, are currently being examined by the Austin City Council.
In the study, research economist Daniel Hartley examined housing prices in Austin and other major cities. The study compared home prices, rents, incomes, the percentage of residents with a bachelor’s degree and the percentage of owner-occupied housing units in gentrified and ungentrified areas. It also suggested residents in gentrified neighborhoods have better credit scores than those in ungentrified areas.
The study does not explain why those who stay in gentrifying areas seem to do better financially and it does not address what happens to long-time residents who are not able to stay in gentrifying neighborhoods, according to Mark Rodgers — executive director of the Guadalupe Neighborhood Development Corporation, a nonprofit organization that builds housing for low-income residents in Austin.
“Obviously, when people are able to stay, they have some sort of different circumstances than those who are not able to stay,” Rodgers said. “Certainly, [for] those that stay, you wouldn’t see much change in credit scores.”
Rodgers said he believes there are some benefits to gentrification.
“There may be more opportunities, less crime — sure, that happens — but the real question is what happens to the folks that are displaced?” Rodgers said. “What opportunities are they finding, if any?”
According to Rodgers, the Guadalupe Neighborhood Development Corporation had about 250 households on a waiting list for affordable housing in 2006, and this year there are more than 600.
Emree Weaver, who graduated from the University in 2012, said she has noticed new buildings being constructed near her neighborhood in the Cherrywood area, as well as downtown.
“We frequent the bars near Sixth Street a lot, but I’ve heard from other people that my neighborhood in particular is pretty booming,” Weaver said. “Austin is growing so much — we all know that — and there’s always something being built.”
Weaver said she has noticed a trend of artists moving to East Austin, which she said may be one cause of gentrification in the area.
“The artist community is sort of moving its way over to the East side,” Weaver said. “I don’t think it’s bad, but things are just changing.”
Elizabeth Mueller, associate social work and architecture professor, said gentrification is a complex issue without an easy solution.
“There is no single silver bullet,” Mueller said. “In Texas, the fact that we rely so heavily on property and sales taxes to fund local government makes this [affordable housing] burden higher than in other places that have a state income tax to balance out revenue.”
According to Mueller, the historical marginalization and exclusion from economic growth experienced by many of these communities has contributed to the undervaluation of their property values.
“I think a lot of city residents living in other areas may not know these neighborhoods or think about them as related to their own lives,” Mueller said. “But they are part of our city’s history and part of what makes Austin unique — for better or worse.”
