Gentrification is the process through which low-income central-city neighbourhoods experience investment and renewal accompanied by immigration of middle-class and upper-class residents (Hwang, 2016). Gentrification is one of the most challenging and prominent trends present in both developed and developing countries affecting metropolitan areas (Walks & Maaranen, 2008). Toronto’s urban development focuses on isolating working-class and underclass demographics in inner-city neighbourhoods with middle-class and upper-class residents (Caulfield, 1994). Toronto has seen some of the most significant urban growth. One neighbourhood in specific, the Junction, has been undergoing gentrification for the last 10 to 15 years (Kern, 2015). Gentrification also has various negative results. Gentrification is affecting the Junction as there is displacement of poor into less accessible neighborhoods due to the reduction of affordable housing, the rise of chain stores replacing small businesses, and destruction of neighbourhood authenticity (Walks & Maaranen, 2008). In other words, the destruction of historical buildings to build new condos. This paper outlines the impacts of gentrification in the Junction specifically focusing on commercial impact and impact on tenants after which some solutions will be presented that have been proposed and implemented.
Commercial gentrification is defined as the process by which long-term businesses that provide products and services to low-income people leave the downtown neighbourhoods and are replaced by high-end consumer markets (Rankin, 2008). Gentrification’s commercial impacts include the replacement of small businesses with well-known franchises and closure of small businesses due to condo developments; therefore, causing small businesses catering to low-income families to move out.
Even though franchises, such as Walmart and Starbucks, may be a valuable addition to the Junction by providing additional facilities to residents, small businesses suffer negative impacts due to the risk of losing revenue by an increase in rent. According to an article on Forbes, “the downside of gentrification is that rents at small businesses may be jacked up” (Otar, 2017). The results of increases in rent directly affect revenues of small businesses since they have an additional cost to pay. Since small businesses are already known for generating low profits due to high turnover rates, this increase in cost can drive small businesses out of business.
Another way gentrification affects small businesses is when developers or well-known franchise companies attempt to buy out pieces of land where small businesses are present. As an example, “the Junction’s first Starbucks opened last week in a renovated former hardware store” (Kupferman, 2010). It can clearly be inferred that the small business, in this case, had to shut down to allow Starbucks to open its franchise in this key location. Additionally, an example of a similar case can be seen in the following quote; “once home to a travel agency and a pizza joint, with tenants upstairs, until a developer snapped them up with ambitions of transforming the site into nine new townhouses” (O’Connor, 2018). In this case, a developer attempted to buy out small businesses for development. This affects the small businesses present in the Junction, as small businesses will become nonexistent if these movements continue.
Small businesses migrating out of a neighborhood, such as the Junction, can be a critical issue for the people residing. “Many of the existing businesses and services that cater to lower income residents and communities will be under displacement pressure” (Lehrer & Wieditz, 2009). This quote suggests that small businesses that cater to low-income families, allows low-income families to continue to stay in the neighborhood. With the disappearance of small businesses, low-income residents are automatically forced to leave the neighborhood since they will not be able to afford goods anymore at a reasonable price.
Impact on Tenants
Alongside its commercial impacts, gentrification also negatively impacts tenants living in the neighborhood. Specifically, tenants are impacted by an increase in rent and a decrease in shared services, which induces a negative impact on the quality of life of these tenants.
The process of gentrification includes the development of new and more expensive condo buildings. “Development of Keele St. has been encroaching on what has always been a low-income area, driving out the poor and reducing access to affordable rental spaces” (Wheeler, 2017). This quote demonstrates an example of when gentrification has caused low-income families to relocate from their own neighborhood. The development of condo buildings increases the overall rent in the neighbourhood. Hence, it can be inferred that gentrification is causing tenants that cannot pay such high rent to move out of their neighborhood. When these families are forced to resettle, it is likely that they will have to move to an area that may not be as accessible, which will have a negative impact in the quality of life of these families.
Due to the construction of new businesses and condos, the cities are transitioned into congestion, causing the lack of shared services like parks, which are usually essential resources for low-income families in the neighborhood. In an article by Toronto Star, it was mentioned that “Watkinson Park is an important restorative space for the low-income community who do not have yards” (Wheeler, 2017). Low-income families in neighborhoods, such as the Junction, require more common green spaces where they can benefit from a shared service. Instead, gentrification is causing the development of these spaces to decrease in favor of condo buildings. A decrease in services like these will generate a decrease in the quality of life of poor income families since they will not have these shared services available to them anymore.
Various solutions have been proposed for Junction or implemented in other areas to fathom the problems gentrification creates. Out of all potential solutions, a few common solutions are Community Land Trust and inclusionary zoning.
The concept of Community Land Trust (CLT) has been proposed to allow a local non-profit organization to acquire and manage land for purposes that will be in the best interest of the community, such as for food production or affordable housing (The Parkdale Villager, 2014). This has been implemented in many areas similar to the Junction. A specific example of this is the Parkdale Neighbourhood Land Trust (PNLT), the first in Toronto. PNLT set up by seven local Parkdale organizations promotes land security for community use and makes Parkdale affordable and diverse (Agha, 2018). Similarly, the goal of implementing the CLT model in the Junction is to ensure housing will inevitably remain affordable for low-income families, and property is not sold in the real estate market. It will allow for sustainable growth without displacement, ensuring the wealth of the community remains within the community, and the historical landmarks are preserved to further appreciate the neighbourhood (Agha, 2018).
As the housing crisis of affordability increases, more and more cities are implementing zoning policies of inclusion. Inclusionary zoning programs implemented through the zoning regulation of municipality require new developers to incorporate certain percentages of units as affordable housing in new housing developments (City of Toronto, 2018). Inclusionary zoning has been implemented with positive results in various North American cities including Boston, Detroit, San Francisco, Boulder, Baltimore, New York, and Vancouver. After the implementation, in the first nine months of the regulation, over 1,500 affordable homes were approved in New York (City of Toronto, 2018). The Detroit City Council mandates that 20 percent of affordable housing should be included in residential developers receiving public subsidies or building on government-owned land (Ferretti, 2017). The Junction can take advantage of inclusionary zoning by creating a mixed-income community with more accessibility to jobs and other amenities, and providing affordable housing, which is often supported by government funding. Baltimore, Maryland is a great example of inclusionary housing policy requiring the government to fund part or full cost of providing the affordable units (Rappaport, 2018).
These previously proposed/implemented solutions in other neighbourhoods can be taken into consideration for the Junction to help mitigate the effects of gentrification on the Junction area.
The main issues discussed above include the replacement of small businesses, rising rent for businesses and residents, displacement of low-income residents, and lack of shared services. The solutions to be mentioned were also discussed in the paper to solve gentrification issues including the implementation of Community Land Trusts (CLT) and inclusionary zoning. The implementation of CLT in the Junction will ensure that rent prices do not rise and will provide local non-profit organizations the authority to build, sell, and rent housing for those in need while maintaining land ownership. Equivalently, inclusionary zoning on Junction’s new condo development will ensure affordable housing for low-income households, which will prevent residents from paying more than 30 percent of their gross income on annual accommodation costs. Furthermore, the City of Toronto and the Junction need to take actions to ensure that low-income families have affordable housing when new developments are taking place. Once the city staff understands the need for inclusionary zoning, it will further require the approval of Minister of Municipal Affairs.