Enact Policies to Stop Gentrification and Displacement

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What is Gentrification?

Dictionary Definition:

The process of renovating and improving a house or district so that it conforms to middle-class taste.

Real World Definition:

When landlords renovate their properties and build new luxury homes, landlords increase rent costs, and people of the high middle class move into new gentrifying neighborhoods while working-class families who are unable to afford the high rents are pushed out of their homes.

What are the Impacts?

In neighborhoods on their way to becoming gentrified, many retailers have taken up the practice of re-tenanting, “the practice of finding retail buildings where tenants pay low rents, getting landlords to boot those tenants, and then finding new tenants who will pay higher rates for the same spaces,” (Barragan, 2014). Home retailers are targeting low-income people knowing that their rent is lower, raising rents and making room for people with a higher income to move in, who can afford the higher rent.

Gentrification is not only social or economic issue, it is a health issue as well. One common symptom of displacement and spiking rents is the stress of moving to a new place and not knowing the area, having to commute longer than before to get to your job, and having to be far from friends and family. Chronic stress on the body can lead to a variety of problems on the body, according to Healthline, a medical newsletter, which states that “If you already have a breathing problem like asthma or emphysema, stress can make it even harder to breathe…” with frequent and chronic stress, your heart then works harder leading to, “blood pressure rises…” increasing, “your risks for having a stroke or heart attack,” (Legg, 2017). The newsletter also indicates that because of the stress signals fight or flight mechanisms, “..stress may increase your risk of developing type 2 diabetes...stress hormones will weaken your immune system and reduce your body’s response to foreign invaders. People under chronic stress are more susceptible to viral illnesses...” (Legg, 2017).

Gentrification also negatively impacts the economy, given that “housing shortages cost the economy between $143 billion and $233 billion annually… [majority] due to households spending too much of their incomes on rent or mortgage and not enough on consumer goods,”(McKinsey Global Institute, 2017). Money that could be put into higher wages, better education, and better healthcare plans. If more people can start saving more money, studies have shown that the economy gets increasingly better. The Institute specifically found that because of the housing crisis and spiking rents, $53 billion dollars are lost in consumption spending, $85 billion dollars in economic activity related to construction is lost, and $5 billion is spent on services for homelessness. All of this money is lost because of how incredibly high housing costs are in California, and this significantly hurts the economy. Finding a solution to the root of the problem (high rents and lack of enough affordable housing) would decrease the amount of money lost greatly, and actually benefit the economy, because the billions lost could be reinvested into profit.

The Solution

The State of California should enact a 2 step policy that would combat the side effects of gentrification in cities all over California.

This policy should:

Update rent control laws so that renters have limits on how much they can increase rents regardless of redevelopments and renovations. This would require provisions to the Rent Stabilization Ordinance so that all buildings constructed before and after 1978 can have no more than a 4% increase in rent per year.

Require the state to amend inclusionary zoning laws to require developers to include 37% affordable units in their developments regardless of the year in which they are established, while providing developers, who abide by the updated inclusionary zoning laws, with the incentive of tax abatements to offset the cost of building more affordable housing.

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