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Study Shows That Six Percent Creative Workers Is The Tipping Point For Gentrification Of Cities

That’s amazing! But is it working in Pittsburgh?

By Jeff Vasishta October 18, 2016

How do you go from broke to hope? If you’ve ever read Malcolm Gladwell’s book “The Tipping Point”, you know what a fascinating concept it is—to know when some big shift in popular taste is likely to happen. In real estate it’s invaluable, discerning precisely when a bad neighborhood is going to transition into a better one. What if there was some kind of scientific measure to gauge when that change was going to happen? When to start spending money buying houses in a certain area, while your fellow investors were competing with everyone else? Well there is. Six percent. That’s the magic number. If a neighborhood can get that many creative workers, it becomes an attraction in its own right, according to a study by CEOs for Cities. But when this revolutionary theory was put to the test recently in Pittsburg, the results were less than thrilling.

Related: Hipster Evacuation, Amish Style: Lancaster PA May Be The Next New Brooklyn Neighborhood

Local urban planner and developer Eve Picker decided to put the theory to the test and revitalize Garfield, a low-income, predominately African-American neighborhood in the rapidly changing East End of Pittsburgh. Picker, founder and CEO of non-profit think tank cityLAB, wanted to bring artists into the neighborhood in the hopes of attracting economic development. Fittingly, she called the project 6% Place. She’s been testing the hypothesis since 2011. Her goal was to fill board ups with bohemians, sprinkling their creative gold dust over the urban angst and squalor—and teaching the world to sing in perfect harmony. Or at least buy homes.

Alas, things didn’t exactly go to plan. One of the 6% Place initiatives was to build a prototype tiny house. It would allow their prospective market, creatives rich in spirit but low on funds, the chance to get a foothold in an escalating property market. With over 400 vacant lots to choose from, a 330 square foot structure was constructed but the price ballooned way over budget. The final cost was an exorbitant $190,000, far more than homes in the area actually cost. Vacant buildings can be purchased for under $15,000. To add insult to injury, the home sold for $109,500 (an almost $80K loss) and then wound up on Airbnb a couple of time before disappearing, defeating the whole purpose of trying to nurture and sustain a new community.

“I don’t think the URA (Urban Redevelopment Authority) would accept this, and could conceivably require the developer, cityLAB, to repay the $49,000 in URA funds that the project received,” Rick Swartz of the Bloomfield-Garfield Corporation, another cityLAB lender, told City Paper. City Paper reports that the house’s owners had indicated that they would occasionally rent the house out to visiting artists.

Picker said that once the tiny home was sold, “cityLAB relinquished any say over its use … Still, as far as we know, the owner does not have the house listed on AirBNB.”

While Garfield has been buzzed about for some time as possibly being the next Lawrenceville, local investors are still skeptical about laying their money down.

Marquise Williams, president of the Garfield chapter of Action United. Photo courtesy of DEANNA GARCIA / 90.5 WESA
Marquise Williams, president of the Garfield chapter of Action United. Photo courtesy of DEANNA GARCIA / 90.5 WESA

“They have revitalized the business section but it’s still a serious ghetto,” said John Walker of Certified Investment Properties who has been involved in over 300 rehab projects in Pittsburgh. “There is a buzz about Garfield, no doubt about it but I think people have to be extremely cautious at this point otherwise they could lose a lot of money.”

A road many investors know only too well.

Unless Garfield already had six percent of artists living there—then they’d be riding the gentrification gravy train.

 

Jeff Vasishta

ABOUT THE AUTHOR Jeff Vasishta

ABOUT THE AUTHOR Jeff Vasishta

Jeff is a writer, husband and father but not necessarily in that order. As a music journalist he counts Prince, Beyonce and Quincy Jones amongst those he’s interviewed. He's also owned and flipped homes in Brooklyn, NJ, CT and PA.

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