The data is clear: gentrification is making strides throughout the city of Baltimore. The National Community Reinvestment Coalition (NCRC) is a nonprofit that conducts research and advocacy to help build wealth and combat discrimination in real estate. Recent NCRC research using U.S. Census data placed Baltimore with the fifth-highest number of gentrified census tracts.
But while this demonstrates an opportunity for revitalizing communities and economies, this progress is not made without glaring disparities. Kevin Seawright, founder of RPS Solutions, shared his take on the impact of gentrification and the importance of making affordable housing accessible to those who need it most throughout Baltimore. He, too, turned to the facts: “Gentrification has hit Baltimore especially hard. If you look at the numbers, Baltimore accounted for half of all gentrification in the United States from 2000 to 2013. That trend has continued into 2021.”
Gentrification: The Good and the Not-So-Good Impact
To fully grasp the plight of these communities, a clear understanding of gentrification is helpful. Gentrification is a term that is loosely applied to progress and development in disadvantaged areas. While developers invest in building and infrastructure to make the neighborhood more appealing to live in, these changes don’t come without their own costs. A closer look at gentrification reveals that the process is not just about urban development. It affects the people who live in the neighborhoods and, more notably, the people who can no longer stay in their homes.
How can community investment lead to divestment for existing residents? The Urban Displacement Project offers a detailed definition of gentrification that sheds some light on the matter: “A process of neighborhood change that includes economic change in a historically disinvested neighborhood…as well as demographic change not only in terms of income level but also in terms of changes in the education level or make up of residents.”
For example, consider the plight of a low-income, minority family that pays rent in a neighborhood targeted for gentrification. As conditions improve, rents typically increase, outpricing what existing tenants can afford. Kevin Seawright explained, “Too many individuals are concerned with buying up properties or building homes that are too expensive to sell and prices out underserved communities.” Local businesses that catered to local needs are replaced by less affordable retailers that low-income households are unable to shop in. In some cases, landlords sell off their properties to developers leading to direct displacement by building closure or forced improvements and (again) higher rents.
Allocating Affordable Housing in Rising Neighborhoods
As cities like Baltimore undergo revitalization, they need to make a concerted effort not to leave behind the existing residents. Improvements in housing, infrastructure, amenities, and transit lure in middle to high-income tenants who also seek shorter commutes to city-center jobs and the novelty of new builds in historic areas. In principle, this is a great way to stimulate the economy. But disadvantaged communities can quickly turn into displaced communities in the process.
Many real estate investors use redevelopment to increase prices and maximize their return on investment. However, this inflates the rents and home prices for the surrounding buildings, which, in turn, depletes what remains of affordable housing. Seawright has seen this first hand in Baltimore, “Affordable housing opportunities are drying up, leaving almost nothing for middle- to lower-income families that are interested in homeownership. No path exists for many people to purchase properties in cities that they’ve called home their entire lives.”
One of the many issues at the root of this problem is the discrepancy around what affordable housing actually is. After all, what is affordable to one may not be affordable to all. As a rule, this is housing priced so that individuals earning less than the median household income for the area are able to pay rent or make mortgage payments while also meeting their basic needs.
Housing insecurity, already whittling away at communities in slowly gentrifying city sections, skyrocketed in the face of COVID-19. According to the Consumer Financial Protection Bureau, families without affordable housing “face the prospects of homelessness as well as a host of other negative outcomes.” What’s more, historically (and disproportionally) affected minority communities remain at risk as eviction moratoriums are lifted. Seawright’s own business is working to close these gaps: “We’re also constantly studying ways to alleviate housing barriers in inner cities so that we can open access to homeownership to even more people.” This effort remains critical since, according to the National Low Income Housing Coalition (referencing nationwide data), “Only 7.3 million rental homes are affordable to extremely low-income renters, assuming households should spend no more than 30% of their incomes on housing.”
Kevin Seawright and RPS Solutions Lead with Responsible Development
Developers have an opportunity to invest in communities in ways that enhance the quality of life without exploiting or marginalizing the people who already live there. Kevin Seawright and his firm, RPS Solutions, are dedicated to helping develop homes in Baltimore that are affordable as well. “With so many neighborhoods being gentrified, it’s more important than ever that we make these opportunities available to the people who make Baltimore great,” said Seawright.
RPS Solutions is working to set an example for other developers, too. It’s possible for these corporations to turn a profit without inadvertently displacing residents. New construction can be designed for income levels of all types, with room for affordable units in the broader picture. Seawright noted, “We can hope that the practice of adding affordable units to single and multi-family projects becomes universal.”
Incorporating affordable housing options into new development plans can prevent displacement as neighborhoods become gentrified. Seawright explained that while there may not be legislation to enforce these practices, developers have an opportunity to balance out homeownership in affected cities. “I’m very consistent in my opinion that any single- or multi-family development should be required to insert at least 50 percent affordable options for middle- and lower-income families.”
Developers can also provide community supports that enable low-income families to learn how to move toward a more solid financial ground. The RPS team supports buyers throughout the process, including the early planning stages where savings become critical. They also advise first-time homebuyers through the often overwhelming closing process. “The goal should always be to serve communities and provide individuals with their first step toward financial security,” said Seawright. “Developers need to take some responsibility for the gentrification crisis going on in Baltimore right now.”
Not waiting for the industry to catch up, RPS Solutions and Kevin Seawright continue to support members of Baltimore’s overlooked communities. Building projects aim to create more diverse societies even as gentrification threatens to marginalize low-income families. Instead, RPS strives to create affordable housing that can give families a solid foundation in the face of uncertainty, adversity, and change. To learn more about the RPS mission, visit www.rpssolutionsllc.com.