Gentrification and Economic Development: Impact on Poor Inner City Residents

Posted: 10 Mar 2008

Date Written: March 7, 2008


Since the 1970's, American inner cities, particularly in the northeast, have undergone significant economic, structural and aesthetic changes. Many cities with predominantly blue collar work forces have found it difficult to adjust to the changing demands of the market place. An economic conversion took place during the 1970's which led to a decrease in the demand for blue collar workers and increased the need for better educated and technologically literate workers. Some cities understood the historical cyclical changes inherent in their economies and were prepared to address these changes. Those cities which were ill prepared for these structural changes in market demands realized record unemployment rates, pervasive poverty and urban flight. In recent years, cities have engaged in extensive urban renewal and revitalization of downtown areas in order to attract the middle-class citizens back to the inner city. This process, often referred to as gentrification often displaces and marginalizes poor inner city residents. This paper examines the impact of gentrification on the social and economic progress of low income citizens in urban areas. The primary goal of this paper is to determine if gentrification adversely impacts the economic growth rate of poor persons by displacing them to areas with decreased opportunities for upward mobility and by segregating them to areas with limited access to essential public and private sector services.

Keywords: gentrification, economic conversion, economic transformation, urban flight, urban renewal, economic cycles, urban blight

JEL Classification: A1, B2

Suggested Citation

McFayden, Elgie, Gentrification and Economic Development: Impact on Poor Inner City Residents (March 7, 2008). Available at SSRN:

Elgie McFayden (Contact Author)

Kentucky State University ( email )

400 East Main Street
Frankfort, KY 40601
United States
502-597-6665 (Phone)
502-597-5931 (Fax)

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