By David Christafore (Weber State University ) and Susane Leguizamon (Western Kentucky University)
City leaders have often suggested attracting gays to neighborhoods within their cities as a remedy for urban blight. A 2013 Slate column discusses the CEO and president of the Detroit Economic Growth Corp who explicitly suggested that city leaders try to attract gays to Detroit to spur gentrification of decaying areas. The research literature suggests a few reasons why gays may act as “urban pioneers” who revitalize run-down areas close to downtowns. One proposed reason is that gays and lesbians may be willing to invest and reside in run-down areas to create welcoming communities in the presence of perceived discrimination elsewhere. In creating these enclaves, gays and lesbians renovate the aging housing stock and provide additional amenities to the region.
Another proposal suggests that gays and lesbians may not directly revitalize the area but attract a diverse population that increases growth and, as a result, decaying areas experience gentrification. Richard Florida has spearheaded this growing literature suggesting that a relatively large gay and lesbian population may act as a signal that the area is tolerant. This signal of tolerance (and diversity) is thought to be positively related to knowledge spillovers and, consequently, attract investment.
Given this assumption that cities may experience greater growth by making a city attractive to gays, one might think there is an abundance of causal evidence connecting gays to urban redevelopment. However, most of the existing literature on the relationship between gays and gentrification is driven by small case studies. Our analysis is the first, to our knowledge, which provides large-scale empirical evidence on this matter. We consider how a greater presence of gays and lesbians influences the probability that a low-income census tract will gentrify over a ten year period for large metropolitan areas in the United States. We find that one a percentage point increase in the number of same-sex couples in a neighborhood increases that neighborhood’s probability of gentrifying by 2-3%.
We define low-income neighborhoods as those within the bottom 25% in terms of average neighborhood house prices within an MSA. A neighborhood is considered to be gentrified if it is no longer in the bottom 25% 10 years later. Although as with any paper we cannot definitively prove causation, we take care to control for as many factors that might be associated with both same-sex couples and gentrification. These include the percentage white, family size, and percentage with a college degree. Furthermore, we control for the percentage of different sex unmarried couples, as they are likely similar to gay and lesbian couples in many ways except for sexual orientation.
In addition to our main specification that relates the presence of same-sex couples to the probability of gentrification, we estimate the impact of same-sex couples on neighborhood house prices. We disaggregate neighborhoods into low, low-middle, high-middle, and high-income groups so that we can get an idea of the heterogeneous effects of same-sex couples across neighborhood types. With this specification, we find that same-sex couples increase house prices, but the magnitude of the increase is diminishing to almost 0 moving from low to high-income neighborhoods. This result speaks to the benefit of focusing specifically on how gays impact low-income neighborhoods and the chances of gentrification, rather than house prices in general.
Our findings suggest that attracting gays and lesbians to decaying cities may indeed be a viable strategy for city leaders looking to revitalize the area. We find that a larger population of gays and lesbians in low-income areas is positively related to the probability that the area will gentrify in the coming decade and efforts to attract gays and lesbians appears to be warranted.
David Christafore joined the faculty of Weber State University in 2016 and currently serves as a visiting professor of economics at the Goddard School of Business & Economics. He previously taught at Konkuk and Yeungnam Universities in South Korea, Toros University in Turkey, and most recently at the University of California, Riverside. He has published research on various topics in urban economics including zoning regulations, sexual orientation discrimination laws and housing prices.
Dr. Leguizamon is currently an assistant professor of economics at Western Kentucky University where she researches topics related to housing, regional development and discrimination. Dr. Leguizamon has published several papers examining the influence of same-sex couples on local housing markets.