The Supposed Gentrification of Denton

Is Denton experiencing gentrification? Citing rising property values, changes in the downtown business make-up, new development in our urban core, and several anecdotes about people not being able to buy a house or afford rents, many in town are taking to social media to claim that we are. Even our local newspaper is chiming in, forwarding the narrative that downtown is in trouble and the Denton Creative Class is being forced out.

Let’s bring some data to the discussion.

But first, let’s define the question. According to a dictionary, gentrification is “the process of renewal and rebuilding accompanying the influx of middle-class or affluent people into deteriorating areas that often displaces poorer residents.”

This definition shows why the phenomena is generally found in certain areas of our nation’s urban centers, usually following a renewed interest in downtown areas that have been neglected for decades thanks to the growth of suburban America post-World War II. You don’t refer to a city, as a whole, undergoing gentrification, rather you point to a particular neighborhood that experiences significant change over time.

There’s also significant back-and-forth among urban planners and urban researchers as to the problems gentrification brings and whether managed gentrification can be good for underserved areas.

It is important to understand what gentrification is not (according to all definitions):

• a general rise in property values that track across a city and track with trends state and nation-wide
• a housing market that makes it difficult for most homebuyers to purchase a home anywhere in a given city due to supply and demand
• the closing of a particular business
• the opening of a particular business
• Walmart coming into town
• Chain businesses setting up (in fact, many point to the emergence of distinctively local, trendy, and unique/boutique businesses as a sign of gentrification)

For the purposes of this analysis, let’s look at how property values, rent, income, and ethnic make-up track over time in Denton by zip code. If Denton was experiencing gentrification in one or more of its neighborhoods, we would expect to see this played out in one or more of these categories. And you’d see it happening in neighborhoods connected to our downtown core.

Daniel Hartley, research economist at the Cleveland Federal Reserve, defines the metrics of gentrification as follows: a neighborhood (census tract) that has “moved from the bottom half of the distribution of home prices in the metropolitan area to the top half” between a given set of years. As we look at the data, let’s look for neighborhoods in Denton that follow a trend similar to this.

Here’s a zip code map of Denton. Pay attention to 76201 – that’s where downtown, our two universities, and their surrounding neighborhoods reside. There have been massive changes and investment in this area over the last ten years with renewed interest in our downtown, so if gentrification is happening in Denton, this is where you would expect to find it:

PROPERTY VALUES
The following chart shows the trend of property values in Denton since 2007 and compares those trend lines with the average values in the US, in Texas, and for purposes of comparison, a city to the North of us (Sanger), and a city to the South of us (Lewisville).

Denton is the yellow line. This shows that the rise in property values that we are experiencing in Denton are all part of a trend nationally and Texas specifically. Notice the parallel trend lines of Texas, Denton, Sanger, and Lewisville.  The slope of property values in Denton is not anomalous and therefore not indicative of something particularly problematic for our city.

This is also made clear by the median home sales price per square foot. Consider the following chart comparing Denton to the rest of the country:

But what do the trend lines look like within Denton? Do we see significant property value changes in certain neighborhoods in Denton signaling gentrification? Do we see what Hartley says to look for – a particular neighborhood going from the bottom of the pack toward the top rapidly? Below are the property value trend lines by zip code in Denton since 1996:

This chart demonstrates a remarkable stability across Denton’s neighborhoods. While some neighborhoods are more expensive, property values are rising at a consistent rate across the city. The revitalization around the downtown square, train station, and universities (all within 76201 – the bottom line) has not impacted the property values of the surrounding single family neighborhoods in a way that is different from the property value increases across the city. In fact, 76201 continues to be the cheapest place to by a home across the entire city. A fact I find remarkable.

Compare this with a case of actual gentrification in Austin – the ascent of 78702 in East Austin. Look for the dotted line representing that zip code. Notice how it is rapidly ascending from the bottom of the pack toward the middle. That sort of trend-bucking change is a great indicator of gentrification:

IS THE RENT TOO DAMN HIGH?
Not everyone can or desires to purchase their own home, so rents across our city are another important indicator that might point to gentrification. Let’s first consider how Denton compares nationally, in the state, and with the same cities we used above in the area of single family home rental cost per month:

Here you see that Denton is above the state and national average, but that it has been that way for a while and the trends lines are roughly parallel to the national, state, and averages found in other cities.

Let’s see how single family home rental rates track across zip codes within Denton since 2010:

Once again, as we saw with home values, the trend lines are consistent across the city and 76201 – where our downtown neighborhoods reside – continues to be the cheapest place to rent a home in the entire city.

And here’s a chart showing the trend lines for multi-family rental units across zip codes in Denton:

While 76201 is not the cheapest place to rent an apartment in Denton (it’s the second cheapest), it also isn’t trending abnormally as compared with other parts of town. And this is particularly remarkable given several hundred high end units that have gone in around the square in recent years.

CHANGING ETHNIC DEMOGRAPHICS?
Something else to pay attention to as it relates to gentrification is the changing percentages of ethnicity within key neighborhoods. According to the census, neighborhoods in 76201 continue to become more diverse between 2000 and 2014:

INCOME DATA
Gentrification typically occurs when something triggers a surge of higher income residents into a particular area. Denton, generally speaking, does not have the type of jobs or income characteristics to force rapid gentrification anywhere in the city. Denton’s median household income consistently lags behind the state. And as you see from the below chart, 76201 is well behind that:

CONCLUSION
A look at every metric associated with gentrification, Denton – and in particular our downtown neighborhoods – show absolutely no sign of such a trend. In fact, when I came on council in 2011 – just after the approval of the Downtown Implementation Plan and at the dawn of the downtown apartment boom – I remarked often how the plan left the downtown single family neighborhoods out of the equation. I argued then (and continue to argue) that the first couple of rings of single family homes around downtown have the most potential to realize a renaissance. But not a renaissance associated with the displacement of poor families and minorities, rather a renaissance of families moving back to neighborhoods that have historically been seen as places for real estate investors to have rental homes for college students. The conversion of downtown neighborhoods from college rentals to owner-occupied homes would be a welcome change.

So much more could be said on this topic and the unique impact of having two growing universities within our downtown core and how that impacts these neighborhoods and what sort of college apartment policy we should have to guide this… But I’ll stop here.

Thoughts?