Gentrification in its classic form entails an influx of higher socioeconomic status individuals and investment into relatively poor neighborhoods that have experienced disinvestment. During the early waves of gentrification that were first noticed in the United States in the 1960s and 1970s gentrification typically entailed the rehabilitation of older housing units. In recent decades, however, gentrification has also taken the form of “new build” housing where private developers build market-rate housing for an upscale clientele in formerly poor neighborhoods. The state, too, sensing an opportunity, has gotten in on the act—at times subsidizing housing development in neighborhoods ripe for gentrification. After decades of disinvestment and white flight in the mid-20th century, gentrification is like a magic elixir returning old central cities to the vigor of their youth.

But the elixir of gentrification is not without side effects. As higher socioeconomic status individuals and investment capital flow into formerly depressed neighborhoods, these same spaces become more valuable. More and wealthier people want to live there and are willing to pay a premium to do so. This translates into higher values for owner-occupied homes and higher rents for rental units.