Debunking the Gentrification Myth

Scenic Honolulu Oahu Hawaii Suburban Neighborhood
Scenic Honolulu Oahu Hawaii Suburban Neighborhood
James Brey — Getty Images/iStockphoto

For residents of economically vibrant cities like New York and San Francisco, there are few facts of life more salient than ever-­rising real estate values. And with that comes pain among working-class families who increasingly can’t afford to live in cities they have called home for years.

But in big swaths of the country, the real estate scene looks quite different. Gentrification, as it relates to high-income residents’ displacing large numbers of lower-income ones, is actually fairly rare in most of the U.S., says Redfin economist Nela Richardson, and ­“mostly concentrated in a handful of cities along the East and West Coast.” Many economists have shown that an influx of wealthy residents can often be beneficial, leading to income increases for workers of color with high school diplomas. Plenty of mayors spend ample energy trying to attract high-earning, educated residents to pad their tax bases. And Redfin points to several highly gentrified cities where residents with varying incomes co-exist without yuppies taking over the neighborhood (Boston and Seattle are particularly successful examples).

Another reason not to fret too much about the rush to city centers? In lots of urban areas, housing prices aren’t climbing that fast. Real estate data firm Trulia looked at the pace of price increases in the largest 100 metropolitan areas in the U.S., comparing values within urban limits with those in suburban* environs. This past June, suburban prices rose faster than urban ones for the first time in more than a year—and the trend has continued thus far in July, with suburban asking prices rising 9.7% year over year, vs. 6.8% in urban areas.

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These data underscore the fact that not every American city is experiencing a one-sided urban renaissance paired with suburban decay. Cities like Chicago, Honolulu, and even San Jose are seeing prices rise far faster in surrounding suburban counties than in the urban core. That will be cold comfort to the San Francisco residents whose rents continue to climb past the stratosphere, but Americans who crave city living may do well to look a little farther inland.

Where 2016 Suburban Price Growth Is Outstripping Urban Growth Year Over Year


Urban: 35.8%; Suburban 73.4%

View to Detroit, Michigan. Detroit view, Brush Park area.Peeter Viisimaa — Getty Images/iStockphoto

Las Vegas

Urban: 6.9%; Suburban: 25.5%

Desert Homes and Mountains Desert homes, mountains and winter storm skies in the Western United States.Getty Images/iStockphoto

San Jose

Urban: –21.6%; Suburban: 2.1%

Residential neighborhood in San Jose, California Quiet residential neighborhood, treelined street in San Jose, California.Andriy Prokopenko — Getty Images


Urban: 13.1%; Suburban: 32.7%

Scenic Honolulu Oahu Hawaii Suburban NeighborhoodJames Brey — Getty Images/iStockphoto

* Trulia labels zip codes as suburban where more than 50% of the homes are single-family detached dwellings.

A version of this article appears in the August 1, 2016 issue of Fortune.

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