The Potential Effects of Urban Renewal and Gentrification on the Economy

Sociology
Name
Institution
Gentrification generally entails a process in which wealthier people enter in an urban setting, acquire land, develop property and transform the urban district into a modern district with better living standards and converts the urban land into better use. The result is often increased rental rates and displacement of the poor people from the urban areas neighbourhood since they cannot afford the higher rental rates. Some argues that gentrification results in inequalities in urban districts. Generally, gentrification has both positive and negative effects on the economic and social life of the neighbourhoods.
Gentrification may lead to increased income for low income earners. This is a result of flow of income through development activities such as construction and supplying of materials to construction as well as the higher population that arises after gentrification. Urban developments generate income that is taxed and a portion used in development of social amenities in the neighbourhoods. Also, people from different ethnicities enter the urban areas leading to diversity of ethnicities which reduces racial discriminations.
While there are several positive effects from gentrification, there are also negative effects to the neighbourhoods. As gentrification sets its pace, crime rates increase among the neighbourhoods as some of the displaced people turn into crime as a source of livelihood. An example is the case of Los Angeles which witnessed increased crime as a result of gentrification. As a fact, the new arrivals in the urban areas benefit from gentrification at the expense of the lower-income earners. The new arrivals earn reap from stylish affordable housing and all the accoutrements of trendy life found in the urban setting such as clubs, high ...