Defining Terms: What do we mean by Gentrification and Displacement? <br />The Urban Displacement Project out of the University of California, Berkeley, defines gentrification as "a <br />process of neighborhood change that includes economic change in a historically disinvested <br />neighborhood by means of real estate investment and new higher -income residents moving in, as well as <br />demographic change, not only in terms of income level, but also in terms of changes in the education <br />level or racial make-up of residents."12 These economic shifts can be spurred by either private or public <br />reinvestment, including new transportation infrastructure and expanded transit options for higher -income <br />residents.13 This transition has winners and losers—some people tend to see the change as positive, while <br />others experience only the downside. <br />Displacement is a component of the gentrification story relating to the inability of existing households' to <br />remain in a neighborhood in transition due to escalating costs or other factors. Gentrification can lead to <br />displacement in several ways, including: <br />1) Escalating rent for existing housing that the household can no longer afford <br />2) Evictions or non -renewal of a lease in advance of a major property remodel, redevelopment, or <br />conversion to condominiums, or simply to replace existing tenants with higher -income tenants <br />3) Deteriorating conditions in existing housing slated for remodel or redevelopment <br />4) Increasing property taxes that homeowners can no longer afford <br />Some sources also consider a household's inability to relocate within the neighborhood (even if they are <br />moving for reasons unrelated to gentrification) to be a form of displacement. For purposes of this report, <br />the examples listed above in which a household is unable to remain in their existing housing are <br />described as direct displacement, while inability to move within the neighborhood when relocating <br />voluntarily due to reasons unrelated to changes in the neighborhood is described as indirect <br />displacement.14 <br />Homeowners in Oregon are largely insulated by measures adopted in the 1990s that limit annual <br />increases in property taxes to 3% per year regardless of the change in market value.15 Additionally, if a <br />homeowner does choose to sell their home, they are more likely to capture the increase in property <br />values in the form of home equity, giving them a greater chance of buying a similar home in the same <br />neighborhood. Thus, renters are at much greater risk of both direct and indirect displacement than <br />homeowners. <br />12 Urban Displacement. "Gentrification Explained." Retrieved from http://www.urbandisplacement.org/gentrification- <br />explained. <br />13 Herrera, Roanel and Sandoval, Gerardo. Transit -Oriented Development and Equity in Latino Neighborhoods: A <br />Comparative Case Study of MacArthur Park and Fruitvale. April 2015. National Institute for Transportation and <br />Communities <br />14 Research has shown that disadvantaged residents in gentrifying neighborhoods do not necessarily move more frequently <br />than similar residents in other non -gentrifying neighborhoods, suggesting that the neighborhood demographic changes may <br />be due more to a change in who is moving into the neighborhood than to an increase in the rate of low-income residents <br />moving out. Ding, Lei, Jackelyn Hwang, and Ellen Divringi. 2016. "Gentrification and Residential Mobility in Philadelphia." <br />Regional Science and Urban Economics 61: 38-51 <br />15 For some parts of the River Road/Santa Clara area, property tax increases as a result of annexation are a consideration <br />if the City's annexation policy were to require annexation for certain property owners. <br />ECONorthwest 25 <br />198 <br />