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Downtown Los Angeles Leads Nation in Gentrification

Downtown Los Angeles has become the fastest gentrifying zip code in the country. In recent years, gentrification has become synonymous with “hipster invasion” – an increase in housing prices and the addition of trendy storefronts, cafes, galleries and pop-up bars. According to a survey by RENTCafe, downtown LA’s 90014 took the top spot in the 20 fastest gentrifying zip codes in the country.

According to a recent article in The Real Deal (Gentrification Nation: Downtown LA is Fastest Gentrifying Area in the US, Report Says), using data from increases in median home values, median household incomes and population holding at least a bachelor’s degree, the report ranked the zip codes from 2000 census and the 2016 American Community Survey. Of the 11,000 zip codes examined, downtown Los Angeles easily reigned at number one.

From 2000 to 2016 median home values in 90014 rose 700%. This area also includes part of the Financial District and a cross-section of income levels. This huge rise in home values along with an increase in income and education levels led to this top spot.

Washington D.C.’s 20001 zip code came in second. There was a 200% rise in home values. Houston’s 77003 followed in third place just ahead of Philadelphia’s 19123 which came in fourth.

Fifth place is held by New York’s 10039, which is located on the far east side of Manhattan. This area had a 356% increase in home values during that period, yet household incomes grew just 32%.

Among the top 20 in the survey was the 90013 zip code. That area, which encompasses Downtown Los Angeles’ poorest part of the city saw an increase in home values of 133%. New York also had another zip code which saw a dramatic increase in the number of new apartments, high-end restaurants and food markets. West Harlem, zip code 10026, came in at a surprising 15th place. Five other New York zip codes, all in Brooklyn, were in the top 20.

In Downtown L.A. one can see gentrification in the luxury condos, such as the Ritz Carlton Residences and the Metropolis. One broker, Maranda Blanton, noticed gentrification as being most apparent in the new stores opening up in the area, especially Whole Foods and fine cuisine restaurants. “It’s the hub of all art, dining and fashion,” she noted. Her firm is selling condos at the Metropolis, as well as a $100,000 per month penthouse at Onni Group’s Furnished Living.

Despite 90014 being a tough sell in the beginning, broker Yvonne Arias Neustadter said, “gradually I’ve seen the demand increasing, and it’s become the cooler, hip place to be.”

While it can paint a lovely picture on emerging markets, underneath is a not so pretty truth. Gentrification is not always welcome for many in the community as it can lead to a displacement of longstanding residents. Rising home values can only widen the income gap, and income growth, while significant, has not been sufficient to support living in these locations. The majority of the residents still live under the poverty line.

The growing displacement of so many residents has led to the formation of activist groups. Strategic Actions for a Just Economy, for example, led the fight in South Los Angeles against a huge, $1.2 billion planned mixed-use development.

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About Author: Condo.com Team