Factors that Change Urban Neighborhoods

By: Courtney Lester

Neighbourhoods are not simply physical spaces, bounded in some way by housing,
transport, and environment, but are also thriving social communities. Both, physically and
socially, they alter over time in a flux of patterns that initiate change. This essay will
examine key factors in why neighbourhoods in urban systems change. Four major
components will be examined; the physical deterioration/obsolescence of housing stock, the
social and demographic change of a place, investment/reinvestments of a neighbourhood,
and the housing market, concluding that urban neighbourhoods go through a variety of
spatially-based attributes, both physical and social, that ultimately change it overtime, each
phase affecting and overlapping another.

The physical deterioration/obsolescence of housing stock

The most evident and straightforward characteristic of neighbourhood change
comes from the physical deterioration of housing stock. The rate of physical deterioration
of any neighbourhood is primarily based on two factors; first the quality of initial
construction and second, the level of subsequent maintenance by property owners.1 Both of
these factors are linked to the socioeconomic backgrounds and lifestyles of each resident.
Normally each subdivision or sector of new housing comes with a depreciation curve as it
gets older. Yet, real estate depreciation does not take into account any local unevenness in
physical deterioration, usually due to variations in maintenance, upkeep, or any
improvements needed. This means that housing of the same age and general quality can
depreciate unevenly. Sometimes it does not even reflect the occupants but depends more on
the local area and certain effects from road work, redevelopment, conversion, natural

damages and wears. Generally, 50 or 60 years is the average life expectancy within North
America.1 This unevenness in the rate of depreciation ends up becoming an important
prerequisite for social change within a neighbourhood.
Similar to the physical deterioration of housing stock is the structural and
technological obsolescence. Both are evidently a function of the needs and expectations of
the occupants, and potential occupants, of a household. Structural obsolescence happens
when the nature of one's house starts to become incompatible, or unsuited, for the resident's
contemporary needs. The result of obsolescence tends not to be of demolition and
renovations but instead brings a change of occupants and leads to a shortened physical
household life cycle. This can be seen by looking at North America's earliest suburbs,
where housing before 1910 became obsolescent for car owners, since they lacked parking
spaces and garages. In recent decades, technological obsolescence has taken place, when
the functionality of housing equipment and neighbourhood infrastructure becomes
outdated. This is seen through the addition of swimming pools, heating and cooling systems
and even simple kitchen appliances.2
Both of these factors can lead to whats known as gentrification. Gentrification a
physical, economic, social and cultural phenomenon; and is the arrival of wealthier people
in an existing urban district, which in turn increases rent, and property values. This often
pushes the original occupants out of the neighbourhood and ends up changing the districts
character and culture. It usually takes place in neighbourhoods that hold highly deteriorated
housing stock, which then gets changed by physical renovation or rehabilitation once the
new occupants arrive. The whole community ends up being affected, even if certain houses
have not been renovated, as the neighbourhood undergoes a substantial price appreciation.
Although gentrification has been seen mostly in world cities like New York and London it

has become virtually global in its prevalence. Research on gentrification in the United
States suggests that it is increasing and involves between 1 and 5 percent of urban
households and the displacement of an estimated 900,000 households each year.3
Gentrification can been seen as both negative and positive. On the one hand, since it
cultivates capital accumulation, caters to the consumption patterns of higher-income
groups, and results in the displacement of vulnerable and disadvantaged households, it has
become symbolic to the urban restructuring of modern cities and a threat to urban change
for ideological liberals. While, on the other hand, it can create improvements to the current
environment, encourages new retail opportunities, and results in the expansion of the local
tax base without necessarily drawing too much on public funds, it has become an important
symbol and prospect for urban change for ideological conservatives.4 Since it usually takes
place in larger cities, and since said cities generally experience a higher level of
immigration, one can make a direct relationship between gentrification and immigration.
Immigration consecutively affects neighbourhood change since it varies the layout of a city
and the ways it separates occupants. In Canada, the impact of gentrification has been
limited yet the cities most affected are undoubtedly the largest cities, Toronto and
Vancouver, which also receive the highest number of immigrants. In a study by Pricenton
university, Jackelyn Hwang examines how the rise of immigration and its associated racial
and ethnic changes relate to gentrification; stating that these relationships vary by the ways
a city is racially segregated and by the extent to which its immigrant population has been
incorporated. The research compares Chicago, a highly segregated city and primarily
Hispanic immigrant destination, with Seattle, a primarily white city with high levels of
Asian immigration. The outcomes show that immigration has unique and evolving
relationships with neighbourhood changes that are embedded in the racial and immigrant

histories of each city, and that gentrification maintains racial and ethnic inequality in both
cities.5

The social and demographic change of a neighbourhood

All of the factors listed above help when developing the social and demographic
change of a neighbourhood. Since most housing property is developed for specific and
relatively similar groups of people, the main factor about social demographic changes in
communities stems from the concerns of the original founding group of people, the gradual
aging of a neighbourhood's residents. Households that are unwilling or unable to move may
have a lifespan equal to that of the house, for example 60 years, starting when the owner is
in their 20s and lasting until death in their 80s. The tendency for family life cycle changes
to trigger a change of residence means that the phase of demographic change ends up being
much shorter than that of physical deterioration and obsolescence.6 However, certain phases
of the household life cycle may move people to different types of housing in different parts
of a city.
This develops residential mobility. Residential mobility is the main factor of urban
social geography, as it provides a spatial expression of the link between an individual
household and a social structure, between a households life-world and its historical
situation, between internal culture-building developments and the physical spatial pattern of
the city. Residential mobility holds the power to shift a community's resources, institutions
and overall marketplace. For example, differential mobility in and out of a neighbourhood
could result in an increasing share of minority residents, new immigrants, rising home
ownership rates or incomes, young families or even a rising number of childless residents.

The evolving profile of a neighbourhood's population can further affect investments by both
individuals and institutions through social and political processes that are developing
continuously over time. Nonetheless, selective mobility can also sustain a neighbourhood's
status quo, despite any changes in individual residents welfare. For example, if the more
successful residents leave a distressed district and are replaced by others who are less well
off, the neighbourhood will remain distressed, although individual households from the
neighbourhood improved their economic status.7 As a result; successive rounds of filtering
often bring about a change in neighbourhood residents. This filtering often results in
attracting younger and less wealthy occupants to the neighbourhood. This change can stem
from a variety of factors, from government fiscal policies to neighbourhood lifestyle
changes.
Overall, of course, physical deterioration, structural and technological obsolescence,
and the aging of the communities original residents, will for the most part change a
neighbourhood so much that it reaches a point where even further changes are induced,
until the neighbourhood goes through a complete makeover and hosts a significantly
different socioeconomic, demographic, ethnic, or lifestyle group.

Investment/reinvestments of a neighbourhood
When neighbourhoods start changing it makes room for investments and further
developing opportunities. Naturally, overtime neighbourhoods end up attracting a certain
amount of investment through homeowners, and landlords as they have to put money into
house improvements and renovations to maintain the property.
Investments in housing markets are far from being equal since they depend on a

number of outside factors. One factor is the changes that can affect the landscape of
investment opportunities for property developers. For example, a physically quite sound
and socially and demographically stable neighbourhood, which ordinarily means stability
without the need for any major reinvestment, might be considered for
redevelopment/reinvestment due to a difference between current rates of return on property
in the area and the rates of return anticipated from investment in a change in neighbourhood
character or land use.8 Basically then, the anticipated profits from established low-income
housing may be substantially less than the profits anticipated from a new shopping mall in
the same location.
Another factor affecting neighbourhood change by investments takes place through
changes in market demand. For example, a neighbourhood may have changed to the point
where modest investments by property owners are able to attract new or growing markets
through conversions. This could mean that a rental apartment could get renovate to a
condominium, or industrial lofts could be bought and completely turned into residential
lofts. These outcomes would drastically change the demographics and flow of a
neighbourhood.
In circumstances when physical deterioration, obsolescence, and social change
discourage people from investing, a period of disinvestment may take place. Disinvestment
happens when homeowners and landlords deliberately neglect routine maintenance. This
results in homes, apartments and empty lots being put up on the market at low prices and
can even result in owners abandoning them altogether.

The Housing Market

The patterns of how neighbourhood change materializes, must with referenced by

looking at the operation of housing markets and the way people treat housing as a
commodity. How people function in housing markets heavily affects the shaping and
reshaping of neighbourhoods. Since World War II, owner-occupation in North American
housing markets has represented the primary tenure category. This homeownership trend
stemmed mainly from the increasing affluence of North Americans, the perceived economic
benefits and social desirability of homeownership, pro-homeownership government
policies, and the declining profitability of the rented sector. However, in the U.S., the
American dream of being a home owner vividly collapsed after the U.S. sub-prime housing
market crashed in 2007-2009. Oddly enough, in Canada, in 2006, no less than 68.4% of
Canadian households were owner-occupiers, the highest level seen since 1971.9
While housing markets hold great power in neighbourhood change, the fundamental
motive of neighbourhood change come from spatial submarkets. Housing submarkets are
defined based on a variety of different conducts. Classifications are based on the type of
unit, form of tenancy, price/rent, household type, (apartment, house, etc.) occupant status
and age, economic status and race/ethnic origin. The changing components of housing
submarkets are both a result of urbanization processes and a determinant of social spatial
differentiation. Gatekeepers, such as real estate agents and mortgage financiers hold a lot of
power and their influence can ultimately change the outcome of a community significantly.
Overall, while housing submarkets can be delimited in terms of dwelling type, price range,
and location, peoples tenure represents the single most important factor.10
To conclude, it should not be surprising, given the physical deterioration of
neighbourhoods, the fluctuations of investments, residential mobility, and housing markets,

that neighbourhood change is a process that is evident in any urban neighbourhood and that
each component of change overlaps into the next, continuing the cycle but affecting each
city in slightly different directions at slightly different speeds.
Worked Cited
1. Knox, Paul L. and McCarthy, Linda. (2012). Urbanization: An Introduction to Urban
Geography. 3rd Edition. Upper Saddle River, NJ Toronto: Pearson.
2. Knox, Paul L. and McCarthy, Linda. (2012). Urbanization: An Introduction to Urban
Geography. 3rd Edition. Upper Saddle River, NJ Toronto: Pearson.

Knox, Paul L. and McCarthy, Linda. (2012). Urbanization: An Introduction to

Urban Geography. 3rd Edition. Upper Saddle River, NJ Toronto: Pearson.
4. Knox, Paul L. and McCarthy, Linda. (2012). Urbanization: An Introduction to
Urban Geography. 3rd Edition. Upper Saddle River, NJ Toronto: Pearson.
5. Hwang, Jackelyn. 2015. Gentrification in Changing Cities: Immigration, New
Diversity, and Racial Inequality in Neighborhood Renewal. The Annals of the
American Academy of Political and Social Science 660 (1):319-340
http://scholar.harvard.edu/jackelynhwang/publications/gentrificationchanging-cities-immigration-new-diversity-and-racial

6. Knox, Paul L. and McCarthy, Linda. (2012). Urbanization: An Introduction to

Urban Geography. 3rd Edition. Upper Saddle River, NJ Toronto: Pearson.
7. Coulton, Claudia, 2012. Residential Mobility and Neighborhood Change: Real
Neighborhoods Under the Microscope Western Reserve University,
https://www.huduser.gov/portal/periodicals/cityscpe/vol14num3/Cityscap
e_Nov2012_res_mobility_neigh.pdf

8. Knox, Paul L. and McCarthy, Linda. (2012). Urbanization: An Introduction to Urban

Geography. 3rd Edition. Upper Saddle River, NJ Toronto: Pearson.
9. 2006 Census: Changing patterns in Canadian homeownership and shelter costs; revised
2008,
http://web.archive.org/web/20110726143955/http://www.statcan.gc.ca/dailyquotidien/080604/dq080604a-eng.htm

10. Knox, Paul L. and McCarthy, Linda. (2012). Urbanization: An Introduction to Urban
Geography. 3rd Edition. Upper Saddle River, NJ Toronto: Pearson.
Biography
1. Knox, Paul L. and McCarthy, Linda. (2012). Urbanization: An Introduction to Urban
Geography. 3rd Edition. Upper Saddle River, NJ Toronto: Pearson.
2. Yeates, M. 1998, The evolution of the Canadian urban system. In The North American
City, 5th edition, 94-122. New York: Longman.
3. University of Manitoba Wiley Online Library:
Newcomers in the Canadian Housing Market (Hiebert)
The Role of Housing and Neighbourhood in the Resettlement Process (Carter)
Extent, Location and Profiles of Continuing Gentrification (Meligrana and
Skaburskis)