Pressure to Sell: Gentrification as “Reverse Blockbusting”
The Raced-Space of Gentrification: “Reverse Blockbusting,” Home Selling and Neighborhood Remake in North Nashville
Cameron Hightower, James C. Fraser
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Both opponents and proponents of gentrification agree that long-standing homeowners can benefit from the opportunity to convert their increased home values to wealth or cash. But little evidence documents how this plays out in practice and whether existing homeowners truly realize the benefits of gentrification. This case study of predominantly Black neighborhoods in North Nashville, Tennessee, explores how homeowners, developers, and real estate agents in the area perceive neighborhood change and whether homeowners who choose to sell their homes ultimately benefit from gentrification.
Using building permit data between 2014 and 2017, the authors estimated the return on investment for real estate developers purchasing properties from longtime homeowners at the peak of the redevelopment period in North Nashville. They supplemented this analysis by conducting in-depth interviews with 15 stakeholders, including 3 real estate agents with deep roots and relational ties to North Nashville, 2 real estate developers who did business in North Nashville but did not have relational ties to the neighborhood, and 10 current or former homeowners. The authors also applied a historical lens to analyze and contextualize the data in the history of racially discriminatory and exclusionary housing practices in the United States.
The study found that many homeowners who chose to sell their homes at the peak of redevelopment sold them at bargain prices to developers. Though these prices were significantly higher than what the homeowners originally paid to purchase their homes, they were significantly below market value. This enabled developers to make substantial profits while the former homeowners struggled to find affordable homes in geographically comparable areas. The study did not explore the consequences of gentrification for long-term homeowners who kept their homes.
- Developers made substantial profits by flipping homes from existing homeowners. Through the buying, renovating, and reselling process, developers earned, on average, a 45 percent return in a little over a year. This was made possible by acquiring properties at a bargain price.
- Many homeowners in North Nashville were older, had little experience buying or selling homes, and were easily convinced to sell, despite being offered prices that were significantly lower than the market value.
- “Cash for homes” offers can be very attractive for residents with limited cash on hand or who are dealing with any sort of financial emergency, are late on payments, or just need a temporary release of financial pressure.
- Rising property taxes influenced some selling decisions, especially for older homeowners on fixed incomes who do not yet qualify for property tax freezes.
- Some developers structured the sales process to their benefit by acting as both the realtor and the buyer.
- Homeowners experienced predatory practices, including repeated calls, door knocks, and letters in the mail, encouraging them to sell their homes. Two interviewees reported having their property damaged or knew someone whose property was damaged by aggressive developers trying to acquire the property.
- Real estate professionals reported that developers prefer to buy and sell in bulk to quickly remake the perception of the neighborhood. The racialized nature of this process resembles the “blockbusting” of the past, in which real estate speculators convinced white homeowners to sell their homes at low prices by stoking their fears that Black or other nonwhite homeowners would be moving to the neighborhood, and then reselling the homes to Black and other nonwhite homeowners at inflated prices. In the case of modern-day North Nashville, however, this process is more accurately described as reverse blockbusting.
- The authors argue for race conscious policies to close the wealth gap that has been created by the US’s history of racist policies and institutional practices. But for such policies to be seriously considered, they suggest Americans need to first look at their history through a critical and sober lens, come to terms with how the nation’s past relates to its present, and challenge the myth that past injustices and systems of oppression will simply go away with time.