Aaron Renn argues that gentrification, which he defines as the gradual replacement of an urban neighborhood’s poor population with a more affluent population, has emerged as a popular strategy for urban revitalization because there are few other proven pathways. Immigrants have succeeded in revitalizing outlying urban neighborhoods, to be sure, but the decline of mid-skill manufacturing employment and the fiscal limits to expanding public sector employment limit the potential for an influx of middle-income households in urban neighborhoods. The problem with the gentrification model, in Renn’s view, is that it generates few benefits for households further down the economic ladder.

My sense is that gentrification is fully compatible with a broader strategy for the economic uplift of low- and middle-income city residents, provided the supply of housing increases as public safety and local quality-of-life improve. This will tend to mitigate increases in housing costs, thus limiting the geographical displacement of incumbents and creating mixed-income neighborhoods. Poverty concentration will decline, which will tend to reduce the economic isolation of low-income households. Renn laments the decline of mid-skill manufacturing employment, yet gentrification coupled with an increase in housing supply will create opportunities for relatively lucrative service work, provided less-skilled workers have the necessary complement of noncognitive skills. This is a big “if,” and it is a reason why immigrants often fare better in urban labor markets than the native-born poor.