The demand for rentals, especially affordable ones, has risen to record levels since the recession, and the supply has not caught up anywhere in the U.S. Philadelphia is no exception: It lost a fifth of its low-cost housing stock with rent at or below $750 between 2000 and 2014, according to a new report out of the Federal Reserve Bank of Philadelphia. (That cost threshold is 30 percent of the annual median income of $30,000, which is around the maximum an average person in the city can afford in 2014.) Given that incomes have been flat in the city, a growing shortage of affordable housing means more rent burden and financial stress, especially in the city’s gentrifying neighborhoods.
But what’s especially concerning is that the lower-income neighborhoods that gentrified in this period have lost low-cost units at five times the rate of that in similar neighborhoods that didn’t. (Gentrifying neighborhoods are defined here as those that saw a rise in college-educated residents, as well as median gross rents or home values above the city-wide median.) “Over time, gentrifying neighborhoods became less accessible to more vulnerable residents,” says Eileen Divringi, community development research analyst at the Philadelphia Fed. “The challenge that develops from an inclusive development standpoint for the city is that there's a risk of redistributing the more vulnerable residents to more far-flung distressed parts of the city where their access to opportunity might be even worse—[it’s] an exacerbation of existing neighborhood inequalities."