The Problem of Displacement

Displacement is the process by which people and businesses are forced to leave an area where they live or operate. Displacement can happen directly, such as when buildings are demolished or properties are sold, or indirectly, when rising rents and property values make it too expensive for existing residents or businesses to stay.

Displacement is a common concern in real estate redevelopment. In the Van Aken District project, the City of Shaker Heights made efforts to reduce the negative effects of direct displacement. The city’s economic development director worked with tenants of the former shopping center to help them find new locations before demolition began.

Even when cities take steps to limit direct displacement, redevelopment can still lead to indirect displacement. This occurs when new development causes nearby property values and rents to rise, which makes the area less affordable for longtime residents or businesses. This type of displacement is often associated with gentrification, a process where reinvestment in urban neighborhoods attracts higher-income residents and businesses, sometimes at the expense of existing community members.

Local officials might consider displacement a favorable outcome in cases where the existing land use is seen as unsafe or holding back the broader community’s goals. For example:

• Removing unsafe or blighted properties – If a neighborhood has abandoned buildings or unsafe housing, officials may see redevelopment that displaces current uses as a way to improve public safety and quality of life. Displacement can have a favorable side when it leads to the removal of nuisance businesses, such as bars or motels tied to repeated crime or unsafe conditions.
• Attracting new investment – In some cases, officials view higher-income residents or businesses as desirable because they bring in more tax revenue, which can help fund city services and schools.
• Changing land use priorities – If a site is underperforming economically (for example, an outdated strip mall with high vacancy), officials may support displacement in order to replace it with uses that generate more jobs, activity, or tax revenue.

However, for those directly affected, displacement can mean losing not just a home, but also their community ties and sense of belonging. For small businesses, it can mean losing their customer base.

To make redevelopment more fair, many city officials and developers consider the potential for displacement from the very beginning and keep paying attention to how the project affects the community over time. One way local governments can reduce the negative effects is by requiring affordable housing as part of new developments. This helps make sure that people with different income levels can continue to live in the area. Another approach is to offer relocation assistance to those residents and businesses.