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Gentrification is a positive phenomenon that also benefits the poor

Montreal, July 28, 2016 – While acts of violence on the part of anti-gentrification activists continue to occur in certain Montreal neighbourhoods like Hochelaga-Maisonneuve, the MEI shows in a new publication that gentrification is a normal phenomenon that entails beneficial effects for everyone, including the poorest members of society.

Gentrification, whereby middle-class families and young professionals establish themselves in working-class neighbourhoods, is often associated with an increase in social diversity which leads to more employment opportunities, more shops and restaurants, and a richer neighbourhood life.

“In addition to reversing the economic decline of an area, increased economic activity can provide substantial income gains for poor individuals. With gentrification, in addition to higher-end boutiques and cafes, affordable supermarkets establish themselves, leading to lower prices for basic foodstuffs,” explains Vincent Geloso, economist and co-author of the Viewpoint.

Living in more dynamic neighbourhoods also increases the likelihood of upward socio-economic mobility, especially among children.

While it is true that an increase in demand for housing can raise prices and push some residents to leave, opposing gentrification and its benefits is not a sound policy course, because without this process, poor neighbourhoods end up becoming less and less livable, causing more displacement than gentrification.

“The best policy would be to make sure that those who are displaced have access to affordable housing alternatives. When zoning laws are too restrictive, they limit the supply and the accessibility of housing, a well-documented phenomenon in the empirical literature,” points out Jasmin Guénette, Vice President of the MEI and co-author of the Viewpoint.

“Gentrification is a normal process, and is beneficial for everyone. Instead of opposing it, those who are concerned about the plight of the poor should call for an easing of land-use regulations, which would lower housing prices and allow the full benefits of gentrification to materialize,” concludes Mr. Guénette.

The Viewpoint entitled “The Widespread Benefits of Gentrification” was prepared by Vincent Geloso, economist, and Jasmin Guénette, Vice President of the MEI. This publication is available on our website.

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The Montreal Economic Institute is an independent, non-partisan, not-for-profit research and educational organization. Through its studies and its conferences, the MEI stimulates debate on public policies in Quebec and across Canada by proposing wealth-creating reforms based on market mechanisms.

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Interview requests: David Descôteaux, Communications Consultant, MEI / Tel.: 514-919-4450 / Email: ddescoteaux@iedm.org

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