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Has COVID Reversed Gentrification in Major U.S. Cities? An Empirical Examination of Residential Mobility in Gentrifying Neighborhoods During the COVID-19 Crisis

Author

Listed:
  • Lei Ding
  • Jackelyn Hwang
Abstract
This paper examines whether neighborhoods that had been gentrifying lost their appeal during the pandemic because of COVID-induced health risks and increased work-from-home arrangements. By following the mobility pattern of residents in gentrifying neighborhoods in 39 major U.S. cities, we note a larger increase of 1.2 percentage points in the outmigration rate from gentrifying neighborhoods by the end of 2021, relative to nongentrifying ones, with out-of-city moves accounting for over 71 percent of the increased flight. The share of out-of-city moves into gentrifying neighborhoods also decreased significantly during the pandemic. Residents with high credit scores, younger residents, and probable homeowners were more likely to leave gentrifying neighborhoods and their respective cities. Gentrifying neighborhoods closer to city centers, with higher density or higher housing costs, or in cities that are more vulnerable to the pandemic were hit harder by COVID-induced adjustments. The results are consistent with the contention that the pandemic has slowed the pace of gentrification in many major U.S. cities. This slowed gentrification has important policy implications for local government public finance, as well as the long-term future of cities.

Suggested Citation

  • Lei Ding & Jackelyn Hwang, 2022. "Has COVID Reversed Gentrification in Major U.S. Cities? An Empirical Examination of Residential Mobility in Gentrifying Neighborhoods During the COVID-19 Crisis," Working Papers 22-20, Federal Reserve Bank of Philadelphia.
    • Handle: RePEc:fip:fedpwp:94652
    DOI: 10.21799/frbp.wp.2022.20
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    References listed on IDEAS

    as
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    2. Rosenthal, Stuart S. & Strange, William C. & Urrego, Joaquin A., 2022. "JUE insight: Are city centers losing their appeal? Commercial real estate, urban spatial structure, and COVID-19," Journal of Urban Economics, Elsevier, vol. 127(C).
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    4. Gupta, Arpit & Mittal, Vrinda & Peeters, Jonas & Van Nieuwerburgh, Stijn, 2022. "Flattening the curve: Pandemic-Induced revaluation of urban real estate," Journal of Financial Economics, Elsevier, vol. 146(2), pages 594-636.
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    More about this item

    Keywords

    Gentrification; Mobility; COVID-19; Work-from-home; Spatial Dynamics;
    All these keywords.

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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