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Pros and Cons of Gentrification in East Austin

Pros and Cons of Gentrification in East Austin

Long before the daily line of locals, tourists, students, hipsters, and Food Network camera crews started snaking down the street in front of Austin’s now iconic Franklin Barbecue, the neighborhood along East 11th street served as the gateway to the African-American and Latino communities during the segregated 1920s. These neighborhoods grew and thrived for decades, leaving their unique mark on the city through churches, restaurants, music venues, and art that can still be seen years after the desegregation of the area.

The Historic Scoot Inn, now a popular bar and music venue for local and nationally touring acts, was a saloon founded by early Austin African-American residents and served as a home and music venue for the East Austin community. The famous Tex-Mex restaurant Juan in a Million opened in 1980 and served delicious food to community members long before it became synonymous with the Austin food scene and a must-visit place for food tourists. Today, the look and feel of East Austin is far from the same, which is either a good or bad thing depending on who you ask. As long-time residents of these neighborhoods are beginning to move away in record numbers, the area is experiencing rapid growth and rapid change thanks to the newest wave of gentrification.

Over the past two decades gentrification has become a polarizing topic of discussion. On the one hand, gentrification brings new development, hip restaurants and bars, and higher-end shopping to other parts of a city. However, it also changes the identity of neighborhoods and forces many people out of homes and communities they’ve lived in for generations, all thanks to rising rent costs and property values. From San Francisco to Washington D.C., the nation’s urban cities are experiencing a significant shift thanks to gentrification, and the East Austin neighborhoods are a prime example. In fact, the East Austin ZIP code 78702 recently made the list of most gentrified neighborhoods in the nation coming in at number 13 with a 212 percent median home value spike and 47 percent median household income jump.

Proponents of gentrification champion new commercial development and growth as a natural and inevitable phenomenon. However, critics complain that its impact on established neighborhoods is causing an erosion of culture and rapid displacement among African-American and Latinos who can no longer find affordable housing. This argument does have some merit. While the overall population in Austin grew by 20 percent between 2000 and 2010, a study from the University of Texas at Austin found that Austin is the only U.S. city with double-digit population growth that also saw its African-American population decline.

Gentrification is often thought of as a coastal problem in the United States. We’ve all heard about the soaring rent costs in places like San Francisco, Los Angeles, and New York City, but Texas alone has four cities in the top 20 including Houston and Fort Worth alongside Austin. This is no surprise for long-time residents of East Austin or even recent homeowners in the neighborhood. Homes reminiscent of the past are being torn down and replaced with houses or apartment complexes that are beginning to define the city’s future. While some families struggle to remain in their homes, apartment complexes with built-in workspaces, restaurants, and grocery stores are popping up along streets all over East Austin. And with it, the culture and uniqueness that made Austin a city for artists and creatives is slowing becoming a city for the wealthy and elite.

The trouble with the most recent wave of gentrification, is what experts call hyper-gentrification. While gentrification is where middle-class residents move to working class and more impoverished neighborhoods in search of more affordable housing, hypergentrification is when large corporations and the city government work together to inflict massive transformation that removes all history and culture of the former neighborhood and replaces it with huge developments intended for the wealthiest residents. This, in turn, pushes out lower-income individuals and families as well as artists thereby remaking the city forever.

Is Gentrification Always Bad?

The most recent wave of gentrification can be attributed to many factors, but one of the biggest was the boom of tech industry jobs in Austin starting in the early 2000s. The influx of tech jobs and economic opportunities brought population growth and therefore the need for more housing. It also reversed the trend of middle-class families leaving urban centers and moving to the suburbs as more companies moved closer to downtown. But do these economic benefits extend to everyone?

The consensus amongst gentrification critics is that an influx of development and more white residents makes housing unaffordable thereby forcing minority populations out of the area. But three recent studies have given gentrification proponents some ammunition. The first study from NYU’s Furman Center claims that public housing residents in more gentrified neighborhoods actually make more money, experience less violence, have better education options, and therefore better-funded schools. Another from the Philadelphia Reserve Bank found that displacement related to gentrification is lower than people feared while a third study from Columbia University failed to find convincing evidence that minorities were leaving gentrified neighborhoods in London.

While gentrification can cause a feeling of uneasiness or anxiousness about the future of the city and neighborhood, there is evidence to suggest that rising property values and higher income families moving to these areas can result in economic benefits. For example, residents in improving neighborhoods in New York City reportedly saw an overall increase in credit scores and between $3,000 and $4,500 more in income for public housing residents.

For Austin specifically, the growth of the city has contributed to the local economy thanks to new residents moving to town and tourists wanting to experience local music festivals, the thriving food scene, and everything else that makes Austin weird. And yes, East Austin has experienced rapid growth and a changing identity over the last decade because of gentrification but it has also expanded the city’s epicenter and brought Austin into the national spotlight as one of the best places to live in the country.

At Domain Realty, we have years of experience in finding homes for new residents or lifelong Austinites in neighborhoods all over the city. Whether you want to experience the culture and history of East Austin or find a home in another part of town, our realtors specialize in the local market. To start your home buying process, contact us today at (512) 872-4211.