Pace of gentrification fastest in Houston
Fed analysis finds city passing other Texas metros as urban cores shift
Neighborhoods near downtown have gentrified faster in Houston than in any other major Texas metropolitan area, according to a recent analysis by the Federal Reserve Bank of Dallas.
Between 2000 and 2015, the median income of the neighborhoods less than three miles to downtown Houston increased by 67 percent, a faster pace of income growth than equivalent neighborhoods in Dallas, which increased by 49 percent; San Antonio, which increased by 39 percent; or Austin, which increased by 65 percent.
Much of the increase in median incomes near the city’s core can be explained not by a rising tide in income for those living near downtown, but by the movement of people. As areas near the city’s core have become more attractive to wealthier residents seeking shorter commutes and urban amenities, the population considered low-income (making less than $30,000 annually) has not only declined in these areas, but at a far greater rate than in outer neighborhoods or the suburbs, the analysis found.
“High-skilled or college-educated workers like certain amenities in the city, so when they go into a nice downtown neighborhood, they transform the amenities there,” said Yichen Su, a research economist at the Dallas Fed, who completed the analysis. “Things like Whole
Foods and Starbucks come in, and those things become attractive to other ‘gentrifiers,’ and that increases the demand for housing.”
As the demand for housing increases, rent increases. That makes living in the area more expensive, and so low-income families both leave the area and stop choosing to move there.
“People who are more willing to pay for housing are going to go to these neighborhoods, and if not, they have to move away,” Su said. “As this plays out, you will see segregation (of incomes).”
Economic segregation
Houston is one of the most economically segregated cities in the United States, according to a Pew Research study in 2012. Thirty-seven percent of low-income households were in low-income neighborhoods, while 24 percent of high-income households were in high-income neighborhoods. Only New York and Philadelphia were more economically segregated cities.
Gentrification has long been a difficult, complex issue, viewed as both a blessing and a curse. New development and rising incomes can provide economic opportunity, but the same phenomenon can uproot families from longtime homes.
In some Houston neighborhoods, residents are concerned that the rapid transformation of their communities will force them out. In one gentrifying neighborhood, the Third Ward, a survey of residents by Rice University’s Baker Institute for Public Policy published in October found that most residents in the area have lived in the Third Ward for more than 15 years, but a third of respondents reported that they may have to move in the next year. Of the residents who worried about having to move, 69 percent listed rising rental costs as the primary reason.
Jack Hyman, president of the super neighborhood council in the Third Ward, said he has seen the neighborhood, which was predominantly black, become more diverse in recent years. Residential property is changing hands a lot more frequently, and commercial development doesn’t seem far behind. “It feels like it’s coming,” he said.
The quickening pace of change has made many established residents fearful of getting pushed out, he said. Developers need to be sensitive to that, he added, working with and listening to local residents and businesses.
Ultimately, he said, the developers and the community need to find a balance that will bring in new investment while preserving the culture and character of the old neighborhood.
“We don’t want a sea of affordable housing or a sea of market housing,” he said. “We need options.”
‘Well-to-do’
It is difficult to know for sure if rising incomes near the city’s core are displacing long-time residents, because very little data on the migration history of individuals exists, said Su, the economist. Higher costs might also discourage lower-income families looking to relocate to the Houston region from areas near downtown and lead them to move to suburban locations.
Ben Temcharoen, a resident of the Fourth Ward, a neighborhood just west of downtown, has lived on Andrews Street since he bought a home there in 2006. He said has seen his neighborhood transform from what he said was a harbor for crime and drug dealing, to, “babies and puppies” walking down the street. He feels the transformation has, overall, been positive.
“The opportunity was here 20 years ago, and if you took a chance, and you worked hard, now the property value is triple,” Temcharoen said. “I think it’s great.”
In recent years, Temcharoen, 36, who has a 2-yearold son, said developers are gobbling up land in the area. But he said he hasn’t so much seen his neighbors leave as younger, wealthier neighbors move in. Many of his new neighbors are dualincome households of young professionals in their early 30s to 40s.
“They’re people with money,” Temcharoen said of the people moving to the area in recent years. “They’re very well-to-do.”