Courtesy of Right to the City
In recent years, the term “gentrification” has been used to describe a number of urban phenomena: the infiltration of a neighborhood by coffee shops and thrift stores, the addition of bike lanes, the construction of the multi-family “gentrifier” building and the like. However, the multiplicity of meanings associated with the term can obscure the core issue that warrants our collective concern. Sociologist Ruth Glass originally coined the term to describe the movement of middle-class intellectuals into working-class neighborhoods, which resulted in blue-collar workers being displaced in London in the early 20th century. At its core is a concern for the displacement of lower-income individuals from their communities.
In the United States, transportation infrastructure—highways, mass transit, bike lanes, pedestrian walkways—has historically been a key facilitator of displacement. When agencies invest in transportation infrastructure and enable transit-oriented development, property values in surrounding neighborhoods can increase, which can push out lower-income residents. Comprehending the full extent of this displacement is challenging because displacement can manifest in various forms: the physical uprooting of residents from their neighborhoods, livelihoods being disrupted, and cultural shifts manifested in the changing character of a neighborhood as new residents and new businesses move in.
Recent instances of transit-induced displacement in Atlanta, Portland and Denver, among others, underscores the need to devise strategies to address displacement caused by investments in transportation infrastructure. Adding to this concern is the recent surge in transportation investments facilitated by the Bipartisan Infrastructure Bill. Importantly, the Justice40 Initiative mandates that 40 percent of climate and infrastructure investments target disadvantaged communities. However, in the past, transit investments intended to support those most reliant on public transportation, have inadvertently displaced vulnerable communities. As these projects progress, consideration must be placed on strategies for mitigating displacement.
Strategies for Minimizing Displacement
A fear for displacement should not, however, deter from improving transit infrastructure, which can aid the physical, economic, and social mobility of people dependent on transit; it can be a means to a better life and livelihood. Planners have a wide array of anti-displacement strategies at our disposal. Broadly, they can be categorized into three types: the production of new units to increase the supply of affordable housing, the preservation of the existing housing stock, and neighborhood stabilization strategies that ensure long-term housing affordability and protect the cultural and social fabric of the community. Here we explore some of these policies, and discuss their relative effectiveness, and progress on their implementation in New Jersey.
This article draws upon the insights and research findings presented in the “White Paper on Anti-Displacement Strategy Effectiveness” by Karen Chapple of UC Berkeley and Anastasia Loukaitou-Sideris of UCLA.
Production
Traditional perspectives commonly assume that increasing the supply of market-rate units automatically enhances affordability by balancing demand and supply dynamics. However, when focusing on mitigating displacement, planners and policymakers should prioritize the production of affordable units as this can more directly and immediately mitigate displacement over mere market-rate supply increases.
Accessory Dwelling Units (ADUs)
ADUs, commonly known as “granny flats” or “garage flats,” increase housing supply by allowing the construction of separate units within single-family-zoned lots. They not only diversify housing options within a community but also increase housing density while maintaining the neighborhood’s character. ADUs can accommodate various demographics, including young professionals, students, and seniors, fostering a blend of housing types to meet diverse needs. Such developments benefit both municipalities and residents alike. By increasing density in existing housing areas, ADUs reduce per-unit infrastructure expenses for utilities and transportation projects, generate income through permitting, and boost property tax revenue per square foot for municipalities. For those who own their homes, ADUs can be an added source of revenue, and can be leveraged to pay off mortgage payments.
The impact of adding units to existing single-family units may appear marginal, yet ADUs have proven remarkably effective in increasing housing supply. In the State of California, between 2016 and 2022, when the ADU permitting process was streamlined and statewide standards for ADUs were established, permits skyrocketed by 15,334 percent, resulting in the creation of a total of 83,865 ADUs. As of 2022, ADUs make up 19 percent of all housing units produced in California.
In New Jersey, many towns currently prohibit ADUs, with some notable exceptions like Princeton, East Orange, South Orange, Maplewood, and Asbury Park. However, proposed state legislation aims to mandate all towns across New Jersey to permit ADUs, and would also prohibit many of the existing restrictions imposed by local municipalities. This initiative is viewed by some as a potential pathway to addressing the issue of affordable housing in the state.
This bill, an amendment to the Fair Housing Act in New Jersey, aims to facilitate the development of ADUs on properties containing single-family dwellings. The bill, introduced in the Senate, would allow all single or two-family houses property owners to develop ADUs on their lots. It prohibits municipalities from imposing certain requirements, such as passageways between units or additional parking spaces beyond what’s necessary. The bill, when passed, would also streamline the approval process for ADUs, designating it as a ministerial action without public hearings, and sets a 60-day timeline for application review.
Inclusionary Zoning
Inclusionary Zoning (IZ) is another strategy used to encourage affordable housing production. IZ programs mandate private developers to incorporate a portion of affordable housing units (usually 10 to 30 percent) within their new market-rate developments or contribute an equivalent amount to constructing affordable housing elsewhere. In exchange for compliance, developers may receive incentives such as density bonuses, faster permit processing, tax exemptions, relaxed design regulations (including parking and height restrictions), fee exemptions, additional subsidies for affordable units, or limitations on fees.
The effectiveness of IZ programs in creating affordable units depends on several factors: the percentage set aside for affordable units, the length of time units are mandated to remain affordable, whether the program is voluntary or mandatory, alternatives and opt-outs for developers, and incentives. IZ programs have been criticized for imposing additional barriers into housing production process, which can drive up the cost of development that can then translate into higher rents and house prices. However, recent research from the Urban Institute shows that when IZ policies are properly designed, they can be effective in producing affordable units. For this to take effect, the following conditions must be met:
- IZ programs must be made mandatory: Mandatory inclusionary zoning policies were significantly more effective in producing affordable units compared to voluntary policies.
- IZ programs must target rental units: Policies creating rental units tended to yield more affordable units annually than those creating for-sale units.
- Policies with more flexible income requirements were more likely to be highly productive, regardless of affordability term lengths.
New Jersey is generally recognized as a fore-runner in the implementation of inclusionary housing programs, because of the large number of local inclusionary housing programs. As of 2024, there are a total of 292 Inclusionary Housing Programs in municipalities across New Jersey. However, the IZ ordinances have varied considerably from one municipality to the other. As stated above, the effectiveness of these policies is subject to how they’re designed.
Newark’s city-wide IZ Ordinance, first implemented in 2017, and updated recently in 2022, mandates that 20 percent of housing units must be reserved for affordable housing. This requirement applies to new construction projects or substantial renovations involving 15 units or more. Developers can receive benefits such as density bonuses, variances, and relaxation of zoning standards. Additionally, the payment-in-lieu fee for units not meeting the 20 percent requirement is $180,000 per unit, with an additional $2,000 administrative fee. While IZ programs are not a panacea for the need for affordable housing, they are one step in the direction of maintaining affordability, especially in growing cities like Newark.
Preservation
Given the high costs associated with housing production and its typically long-term effectiveness, it’s essential to also undertake short-term strategies to address displacement. Preservation of the existing housing stock can be one way to counteract displacement pressures in the shorter term.
Community Control of Land
Community land trusts (CLT) are nonprofit organizations that acquire and hold land for the benefit of the community. It was popularized in the US after the Civil Rights Movement in the 1960s, when activists in Albany, Georgia used it as a mechanism to build economic empowerment among impoverished Black farmers. In a CLT, land is typically collectively owned, while individuals or families may lease or purchase homes or other structures situated on this land. CLTs aim to promote affordable housing, community development, and stewardship of land by ensuring long-term affordability and community control over the use of the land. Their operations often focus on preserving affordable housing, promoting sustainable development, and fostering community involvement in decision-making regarding land use. However, these initiatives are not widespread in the US because they require coordinated efforts from tenants and financial resources. Even where CLTs are established, they are sometimes not created to support individuals with the lowest incomes.
A 2011 study on CLTs in the United States found that only 1.3 percent of mortgage loans held by CLT homeowners were seriously delinquent at the end of 2010, significantly lower than the 8.57 percent delinquency rate reported for conventional market-rate housing. Additionally, only 0.46 percent of mortgage loans held by CLT homeowners were in foreclosure proceedings, compared to a foreclosure rate of 4.63 percent among owners of market-rate homes. These findings highlight the success of CLTs in reducing mortgage delinquency and foreclosure rates among their homeowners, underscoring the effectiveness of CLT practices in promoting housing stability and affordability.
Many local governments offer financial assistance to CLTs in the form of subsidies. These subsidies are aimed at reducing the cost of single-family houses or condominiums owned by CLTs. They can take the form of grants or deferred-payment, forgivable loans. Typically, these are interest-free, don’t require monthly payments, and are forgiven if the CLT successfully completes and monitors the project for a specified period. For instance, Minneapolis offers interest-free, deferred loans to the City of Lakes CLT with a 30-year term. These loans are forgiven upon maturity, contingent upon the CLT consistently meeting the city’s performance standards.
In New Jersey, approximately 332,877 acres of land is dedicated to 28 active CLTs but only a few are dedicated to maintaining affordable housing. Among these is the Essex CLT, which creates permanent, high-quality, and affordable housing, including condos, single-family homes, two-family homes, townhomes, and rental properties. Despite the presence of these CLTs, there is currently no statewide policy in place to support their initiatives.
Subsidized Housing Preservation
Another way of limiting the displacement of lower-income residents because of rising property values is the preservation of “at-risk” presently subsidized housing. This can involve initiatives at federal, state, and local levels aimed at maintaining the affordability of housing units constructed through government subsidy programs. These subsidized units are made available to income-eligible households for a specified period, after which they may be converted to market-rate housing, potentially reducing the stock of affordable housing. Factors such as the remaining years of affordability restrictions and the management entity (e.g., for-profit or non-profit) influence the risk of conversion to market-rate. Preservation efforts aim to prevent displacement and promote residential stability by providing financial and non-financial incentives to retain these restricted units.
There are several policies which can maintain existing affordable units. The City of Los Angeles has considered covenant extensions and “buy-downs.” In these scenarios, properties nearing the end of their affordability terms may receive supplementary rental income from the city. This additional support aims to prolong affordability and prevent displacement. In Davidson, North Carolina, new inclusionary homeownership units are priced to ensure affordability for households earning below 120 percent of the median income. If a family decides to sell their home, the city’s deed restriction mandates that they inform the city before listing it on the market. The city holds the option to buy back the home at a price determined by a specified formula outlined in the deed restriction.
In New Jersey, under the Fair Housing Act, regulations govern the expiration of affordability controls on restricted rental units. When the affordability term for a rental unit expires, and the household occupying the rental unit continues to earn a gross annual income of not more than 80 percent of the area median income, the landlord is prohibited from increasing the rent until the household elects to vacate the rental unit. If the household’s income exceeds 80 percent of the area median income when the affordability term expires, the landlord can lease the rental unit at fair market rent beginning on the next scheduled lease renewal or after 60 days, whichever occurs later.
Neighborhood Stabilization
Neighborhood stabilization tactics that provide safeguards for tenants, enabling them to stay in their changing communities, serve as a more immediate approach to preventing displacement compared to conventional efforts focused on building or preserving housing.
Just Cause Evictions
Just Cause Eviction Programs establish rules that prevent property owners from evicting tenants except for specific reasons, like failure to pay rent, lease violations, or the permanent removal of a rental unit from the market. Legislation on just cause eviction implemented by state and local governments typically consists of three main elements: defining legal grounds for eviction, setting limits on rent increases, and strengthening notice requirements. While these protections share commonalities, they also have distinct features influenced by the state and local contexts in which they are enacted. Understanding these unique characteristics is crucial for developing new just cause eviction laws effectively. A 2019 study found that eviction rates dropped by 0.808 percentage points and eviction filing rates dropped by 0.780 percentage points after passage of just cause eviction ordinances across major cities in the state of California.
Cuellar, J. (2019). Effect of “Just Cause” Eviction Ordinances on Eviction in Four California Cities. Journal of Public & International Affairs.
New Jersey’s just cause eviction legislation, known as the “Anti-Eviction Act,” was enacted almost half a century ago to tackle the state’s housing shortage by preventing landlords from unfairly displacing tenants. This law restricts landlords from evicting tenants who haven’t violated their lease terms and clearly outlines legal grounds for eviction, such as non-payment of rent, disorderly conduct, property damage, illegal activities, lease violations, or landlord intentions to convert the property or use it personally. Additionally, the act stipulates that any rent increase leading to eviction must be reasonable and compliant with all relevant laws and ordinances, including rent control regulations.
Rental Assistance
Since a significant portion of eviction filings against tenants stem from relatively small amounts of unpaid rent, short-term rental assistance may be one way to curb displacement in the short run. Essentially, Rental Assistance Programs provide emergency funds to low-income tenants facing economic hardships, helping them to cover their rent and avoid eviction and displacement.
In June 2023, New Jersey’s Department of Community Affairs (DCA) unveiled a statewide eviction diversion and intervention program to aid low-income renters confronting eviction threats, amidst the expiration of pandemic-era tenant protections and an increase in rent and utility arrears exceeding national averages. The Comprehensive Eviction Defense and Diversion (CEDD) program will operate across all 15 court districts, aiming to maintain housing stability for renters through no-cost housing support services and financial assistance. Tenants will receive assistance from experts for crisis intervention techniques and will be facilitated with relocation, rehousing, social services, and rental assistance resources. Additionally, the program will provide financial aid to cover eviction-related expenses such as past due rent, relocation costs, and legal services.
Conclusion
Historically, transportation infrastructure projects have often contributed to displacement, especially in neighborhoods where property values are on the rise. This phenomenon occurs as improved transportation access increases the attractiveness of these areas, leading to increased demand for housing, increased investment, and, when left unchecked, gentrification. However, by proactively identifying at-risk neighborhoods and implementing a layered approach to policies, cities can mitigate displacement pressures.
Cities like Boston have begun mapping displacement risk across various neighborhoods, considering factors such as demographic composition (race/ethnicity, educational attainment), housing dynamics (renter tenancy, housing cost burden), access to amenities (rapid transit), market changes (rent appreciation, commercial development density), and development patterns (potential development sites, condo conversions density, property appreciation). A similar model was developed by the Urban Displacement Project, based out of UC Berkeley, which maps displacement risk across the State of California. This approach aids in identifying areas vulnerable to displacement, facilitating targeted interventions and policy decisions to mitigate displacement pressures. Recognizing and comprehending displacement risk, particularly the reasons behind its incidence in specific neighborhoods or communities, is the first step towards effectively mitigating its impact. However, meaningful progress can only be achieved through effective coordination among various stakeholders: city officials, state governments, local advocates, and planners. Collaborative policymaking is essential; it would ensure that any policy formed is reflective of the diverse perspectives and needs of the community.
We would like to express our sincere appreciation to Zohra Aslam, former NJ TRANSIT intern, for her research and drafting of this article.
Resources
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