Gentrification on the Lower East Side: New Report Shows We’re #3

Image via Furman Center report on the state of NYC neighborhoods.

Image via Furman Center report on the state of NYC neighborhoods.

It probably doesn’t surprise you that — statistically speaking — the Lower East Side is near the top of the list when it comes to gentrification in New York City neighborhoods. A new report from the Furman Center at New York University finds that Community District 3 (Lower East Side/Chinatown) has experienced more rent escalation since 1990 than all but two other communities.

We’ll dive into the LES-specific numbers in a moment. First, though, let’s take a look at the overall findings from the 15th annual State of New York City’s Housing and Neighborhoods in 2015 (PDF).  Here’s a summary from the press release put out yesterday:

…The report defines “gentrifying” neighborhoods as areas that were relatively low-income in 1990 (among the bottom 40% in the city), but then experienced higher than median neighborhood rent growth in the following 20 years. Using these criteria, 15 of the city’s 55 neighborhoods are classified as “gentrifying.” … “The term ‘gentrification’ is often used to describe a number of different aspects of neighborhood change. We wanted to create a definition that allowed us focus on dramatic rent growth, which is the change that is of greatest concern in lower-income neighborhoods.” said Ingrid Gould Ellen, faculty director of the NYU Furman Center. The report also finds that many of the demographic shifts observed citywide through 2014 were more pronounced in the city’s gentrifying neighborhoods. The city as a whole became more educated and comprised of more single-person households and households with unrelated adults; and, all of these changes happened to a greater extent in the city’s 15 gentrifying neighborhoods than in non-gentrifying and higher-income neighborhoods. As for racial and ethnic changes, the report shows that gentrifying neighborhoods saw an increase in white population, despite a citywide decrease. Gentrifying neighborhoods also saw a larger decrease in the black population through 2014 than the city as a whole. The report also compares income changes across neighborhoods. Between 1990 and 2014, average household income in gentrifying neighborhoods rose by 14 percent. By contrast, average household income in non-gentrifying neighborhoods declined by 8 percent while average income remained steady in higher-income neighborhoods.  “As demand grows and neighborhoods become more economically and racially integrated, long-time residents may benefit from new neighborhood amenities, reduced crime rates, and higher housing values,” said Ellen. “However, rising rents threaten the long-run diversity of these communities.”

Here’s a look of those 15 gentrifying neighborhoods:

gentrifying neighborhoods

As you can see, rents went up an average of 22% in New York City as a whole between 1990 and 2014. On the Lower East Side, they went up more than 50%.  Only Williamsburg/Greenpoint and Central Harlem experienced more dramatic rent spikes.

The reports looks at gentrification in several different ways.  Changes in income in our neighborhood have not been as pronounced as you might think. There’s been a 5% jump in households earning between $100,000-250,000/year from 2000 to 2014 (it’s now 19%). There’s also been a 5% drop in households earning between $40,000-60,000. But households earning $20,000-40,000 have stayed steady at around 48%.

The median rent was $987 in 2014, up 12% from 2005-2009. In 2015, there were 1363 new apartments authorized by new building permits. There were only 236 the previous year.

The white population went up eight points from 2000 to 2014 to 36%. Meanwhile the Hispanic population has dropped 5 points to 23% and the Asian community has shrunk 3 points to 33%. The foreign born population dropped to 35% in 2014 from 40% in 2000. The portion of residents with a college education rose to 44% in 2014 from 28% in 2000.

Community District 3 is the fifth most racially diverse neighborhood in the city. It has the second highest income diversity ratio (an indication that there’s a high concentration of both poor and affluent residents).

See below for the full Community District 3 report.