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Urban and Regional Economics Seminars

Gentrifying cities, amenities and sorting: evidence from San Francisco

Federico Curci (Carlos III de Madrid)


Friday 05 June 2020 13:00 - 14:30

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About this event

After decades of suburbanization in the U.S., there is a recent movement of the most educated people back to city centers. In this paper, we provide evidence of the effects of gentrification on local amenities and sorting. We exploit the introduction of buses made by high-tech companies (e.g. Google buses) to move its employers from San Francisco to Silicon Valley to exogenously predict which blocks gentrify. We show that the influx of high-skill workers to specific neighborhoods further increases housing demand. The treated blocks experience improvement in local amenities. New residents are willing to pay higher housing costs, housing rents increase by 9%, and to have larger commutes to work to locate in those neighbourhoods. We show that the number of business and restaurants rise, local restaurant prices increase by 6%, and crimes decrease. Finally, we show that all previous residents do not benefit from increased amenities. Higher prices create a displacement of the poorest population and preserve income segregation at the city level.

This series is part of the CEP's Urban and spatial programme.