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Are the benefits of gentrification worth its negative effects?

What is gentrification?

the process of repairing and rebuilding homes and businesses in a deteriorating area accompanied by an influx of middle-class or affluent people and that often results in the displacement of earlier, usually poorer, residents

“Gentrification”

Gentrification is happening everywhere. As cities grow, the government turns towards it in an attempt to bring in more revenue and open up a neighborhood to more residents. The positive effects gentrification can have are numerous: lower crime rates, higher property values, better infrastructure, new businesses, a better economy, etc. But there are two sides to everything.  Long time residents get pushed out by the new higher cost of living, lower-income residents become marginalized as new arrivals come in, people lose their source of income as new business push old ones out, etc (Roos). 

Chinatown, San Francisco, California

Take a look at Chinatown, San Francisco. It sits in the center of booming San Francisco, and many people suspected that it would follow suit like the rest of the city and gentrify. Anti-displacement zoning policies, rent control, and a well organized community has kept this neighborhood as an Asian American low-income enclave (“Policy”). Chinatown is a testimony to the fact that there are ways to avoid gentrifying but still have a booming economy. 

As my video introduced, game theory is a good way to look at what strategies are the best for each side. Our two players are the government and citizens in and around the neighborhood. 

Government:

A: Gentrify the neighborhood so that land value and taxes will increase, generating more revenue for the government. People from other neighborhoods will be more likely to come into the area because the process will clean it up

B: Give subsidies to existing businesses for moving into the neighborhood – businesses will hopefully pay to build new buildings, cleaning up the area, but there will not be as much motivation for new people to move in

C: Build new infrastructure  to make the neighborhood more modern without increasing land value and displacing people – this does not necessarily bring businesses in

D: Put zoning policies and rent control in place for the neighborhood

E: Leave the neighborhood alone

Citizens:

A: Petition for better infrastructure to make the neighborhood more accessible and livable – new residents and businesses may move in

B: Petition for rent control and zoning policies to ensure that no one will get pushed out

C: Open new businesses in the area

D: Do nothing – allow the government to do what it wants

 

 

 

 

Matrix:

 

A

B

C

D

A

(10,2)

(10,2)

(10,3)

(10,1)

B

(7,6)

(7,4)

(7,3)

(7,5)

C

(6,10)

(6,5)

(6,5)

(6,9)

D

(5,6)

(5,10)

(5,6)

(5,9)

E

(1,1)

(1,1)

(1,6)

(0,0)

Justification for payoffs

One way to solve non-zero sum games such as this one is by finding the Nash Equilibrium, which is a solution in which no participant can gain by a unilateral change of strategy if the strategies of the others remain unchanged. There is a Nash Equilibrium saddle point at (A,C), or (10,3). But, I also think that it is important to look at the Pareto Optimal solution, which is a solution such that any redistribution or other change beneficial to one individual is detrimental to one or more others. The Pareto Optimal solution describes a mixed strategy for the government between A and C, and a mixed strategy for the citizens for A and C. This solution shows that while gentrification may disturb people’s lives, it is often the best way to boost the economy. 

 

Works Cited and Consulted

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COMMENTS: 1
  1. April 26, 2020 by Megan

    Hi Emma! I really like your project, and how you applied game theory to a very important topic like gentrification. I recently visited San Francisco, and I think the Bay Area is really interesting because of how populated and growing it is. I really liked how you included SF’s Chinatown as your example. I also got to learn about the Nash equilibrium, something I’ve never heard of before!

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