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  • Writer's pictureSang Han

Chapter 18. The Gayborhood Phenomenon (Property values as a bellwether of social change)

Updated: Dec 19, 2021






People settle in a place that welcomes them.



There are places where certain types of people live together. For example, almost every large city in the world has a China Town. Likewise, there are specific immigrant towns in big cities such as Little Italy, German Village, and of course, Korean towns.

Settling in where welcomes them is one of the natural human habits. And these days, people with more diverse commonalities are settling and living together in a specific area. And certain groups of people who have gathered in a place ignite local gentrification and raise real estate prices.



Then what type of people with the same commonalities activates these gentrifications?



As many of you may already anticipate, areas with gay/lesbian communities are more likely to experience gentrification and increase house prices. If you look at the regions where gentrification has occurred since 2000, even outside the US, you can observe the commonality that the gay/lesbian community is active.


The book introduces an interesting research result related to this. David Christafore, a professor at Dankook University in Korea, and Susane Leguizamon, a professor at Tulane University in New Orleans, compared house prices in areas that favor gay marriage in Columbus Ohio, and those that do not. The results show that in areas that favor same-sex marriage, the price of a neighborhood's house rises by 1.1% every time a new gay couple is introduced, whereas, in areas that oppose same-sex marriage, the neighborhood's house price falls by 1% per new gay couple.


Zillow's analysis also shows that areas with gay communities have always had higher real estate prices than other areas of the same downtown over the past 40 years. So, how does gentrification happen?



First of all, low-wage LGBT people move to a specific area of downtown where they can live without getting bothered, and where rent is cheap. (In places like Greenwich Village in New York or Castro in San Francisco, house prices were about 6-8% cheaper than surrounding areas in the 1970s.)



Second, As this place gradually becomes an LGBT community, life becomes easier for LGBT people, and LGBT professionals also migrate. However, they have money, so they buy land or a house and start decorating the area and house.


Finally, as the region becomes a larger LGBT community, people gather to enjoy its diverse culture and restaurants. As a result, the overall economy of the area grows.


Looking at the two examples above, in 2000, real estate prices in the Castro area were 40% higher than in the surrounding San Fran area, and the Greenwich area was 27% higher than the surrounding New York area.


This phenomenon can be observed throughout the United States. In other words, if you are in an area where the LGBT community is being formed, there is a high probability that house prices will rise faster than the surrounding area. Therefore, we recommend that you consider these aspects as one of your considerations when purchasing a property.



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