Gentrification is the physical process by which private developers, aided by city policies, invest in low-income and underserved neighborhoods. Developers buy and renovate houses and businesses in “deteriorated” urban communities, thus improving property values but often displacing low-income families and small businesses that are replaced by a more affluent class. City planning has had a large hand in the gentrification of Chinatown from new rezoning policies, to BID’s, to NYU’s plans to turn Canal Street into the southern boundary for their campus. Developers and city officials often view gentrification as a way to generate more income through more affluent residents and as a hotspot for tourists. But in turn, local residents and businesses suffer. In November of 2008, the New York City Council unanimously approved an East Village-Lower East Side rezoning plan. This plan would push luxury development into Chinatown and the Lower East Side and disproportionately impact the low-income and immigrant communities. In September of 2011, the City Council approved a BID or Business Improvement District-a public-private entity with the power to tax property owners throughout Chinatown, with the asserted goal of cleaning its streets and making other neighborhood “improvements.” BID’s concentrate power in the hands of a few who end up making decisions for an entire community and small businesses are rarely asked to vote on what “improvements” occur in their neighborhood.
Policies such as these have also contributed to a real estate crisis in Chinatown in terms of new developments. In the past couple of years Chinatown has seen the construction of over twenty-six luxury residential buildings and counting. The number of new building permits in Chinatown and the Lower East Side increased dramatically over the past 15 years, from only 40 in 1990 to 970 in 2006. At the same time that new developments are increasing, multifamily homes and rentals have been decreasing. The number of subsidized housing units decreased from 17,696 to 16,236 between 2003 and 2006.Between 2005 and 2006, prices for multifamily buildings rose by 42 percent in Chinatown and the Lower East Side. Higher-up management has also had a direct hand in gentrification via real estate.
Outside investment is also fueling gentrification in Chinatown. Investors are betting on the continued influx of immigrants, which is in turn betting on the steady demand for living spaces. These individuals thus engage in feverish real estate speculation, driving prices of buildings sky-high and forcing local residents out of the market. Going hand-in-hand with this is investment by overseas banks. Many of these banks are oftentimes the main financers behind many new developments. Here, we interviewed local real estate agent Shengfan Li, who talks about how real estate plays a role in gentrification. (Note, this audio cannot play in Internet Explorer or Firefox. Please use Google Chrome.)
Many landlords in Chinatown are suffering from the higher tax rates imposed on rental properties and as a result are looking for ways to stay afloat. Landlords are beginning to realize that they can benefit financially from evicting low-income residents in order to bring in higher-income tenants.
As a result of new developments that are catering to a more affluent class and the removal of local residents, small, traditional businesses has been on a steady decline. Stores and restaurants are now trying to cater to tourists in order to survive, selling souvenirs and T-shirts that you can find in many generic New York neighborhoods. Others have been forced to either abandon their business due to the lack of a sufficient customer base or lower the quality of their merchandise to stay afloat.
This video helps you view how diverse Chinatown is physically, often with tenement buildings and luxury condos on the same street.
