Nearly one-third of poor neighborhoods in Oakland and San Francisco experienced gentrification between 2013 and 2017, the highest rate in the country according to a new national study.
San Jose was also among the top 10 cities in the U.S. where families with low median household incomes were replaced by high wage earners with college degrees, according to a report released Thursday by the National Community Reinvestment Coalition.
The study spotlights the Bay Area’s rare bubble — poor communities in other cities across the country have seen little new investment and gentrification over the last decade, NCRC research showed. But high-wage tech workers and expensive housing have continued to push lower-wage neighbors out of West Oakland, Uptown, East Palo Alto and other communities.
The study quantifies what Bay Area residents have seen for years: historically low-income neighborhoods rapidly changed by new, higher-income residents. “It’s a combination of economic activity, land use and geography,” said NCRC director of research Jason Richardson. The nonprofit coalition advocates for private reinvestment in under served communities.
The researchers looked at census data in poor communities from 2012 to 2017 for substantial rises in median household income, housing prices, and the share of residents with four-year degrees to find gentrification.
Researchers identified 41 of 131 low- and moderate-income tracts in San Francisco and Oakland that saw substantial increases in household income, education and home prices. The San Francisco and Oakland metro are saw 31 percent of its eligible communities gentrify, outpacing Denver (27. 5 percent) and Boston (21 percent) as the most intense changes in the country, according to NCRC.
In San Jose, 13 of 72 tracts — about 18 percent — had large gains in wealth and educational status.
In West Oakland, for example, median household income rose from $80,700 to $86,300 between 2010 and 2017, while the percent of population with four-year degrees rose from one-third to nearly one-half, according to the study.
The study also considered the possible future effects of federal opportunity zones on low and moderate-income neighborhoods. The opportunity zones, established in the 2017 Tax Cuts and Jobs Act, allow tax breaks for certain investments in distressed communities. The program is designed to fuel investment in 8,000 urban and rural zones designated as disadvantaged by state governors.
NCRC researchers found nearly 70 percent of the opportunity zones overlap or run adjacent to communities most likely to experience gentrification. “These are some of the most distressed neighborhoods in the U.S.,” said report co-author Bruce Mitchell. The investments could bring opportunities for residents — but studies have shown long-time residents are usually displaced by the community make-overs. Renters and people of color are most vulnerable.
Critics worry that the investment program may accelerate gentrification in many neighborhoods, even as properties are redeveloped.
NCRC researchers said its too soon to gauge the impact of opportunity zones on communities. Mitchell noted that reinvestment will likely be slowed as the economy is hampered by the coronavirus pandemic.
California Housing Partnership CEO Matt Schwartz said the long-running trend in the Bay Area has been driven by booming job growth in the tech sector. Other factors, including lack of new construction and state property tax laws, have driven up housing prices across the region.
In a 2019 report, the partnership found the mounting cost of housing hit households of color hardest. A 30 percent increase in rents, for example, led to a nearly 30 percent decline in low income minority residents in Bay Area communities. Existing white residents, however, were likely to stay put as their neighborhood changed, the study found.
“The impacts were not equal,” Schwartz said.
The runaway housing prices in the Bay Area have pushed basic needs for renters well out of reach in recent years. An exclusive analysis of Zillow housing data by this news organization last year found moderate and low-income residents have been slowly priced out of the region since 2012.
Families with a household income of $100,000, about the median income in the Bay Area, could not afford the typical rent in 7 in 10 zip codes in the region, including all of San Francisco, San Mateo and Marin counties. For a family earning less than $64,000 — common for two, minimum wage workers — no Bay Area neighborhoods had an affordable median apartment rent.