Investing area's going through gentrification

The National Post posted an interesting article about the different homicide rates for different neighborhoods in Toronto. In the article they mention neighborhoods with similar demographics have very different homicide rates.

Why?

Urban observer Jane Jacobs gave a compelling case that neighborhoods are structurally created in such a way that promotes crime.

I saw this first hand in Rochester seeing how crime festers through the way roads, services, businesses, and community infrastructure is designed. This results in significant costs to policing and social programs (both of which are in the top 3 in Toronto spending).

Many investors who dream of finding that one property cheap in a neighborhood that is transitioning should understand two things:

1. Because there is some development (i.e some infrastructure spending, new condo's etc) in a neighborhood doesn't mean it will transition
2. Transitioning will slow significantly because of our current recession.
   

Still think you are on to something?

To avoid being a hero in a market by investing too early or investing in the wrong neighborhood, understand what these barriers are (look at my previous post on the ghetto loop to understand what to avoid).

Think of how many times people have tried to revitalize the downtown East side of Vancouver. Imagine investing there in the past thinking that the millions of dollars going to support the area would change things.

To spot an area that is prime for gentrification and re-development is actually occurring key in on neighborhoods that are pedestrian friendly (what makes an pedestrian friendly will be discussed later).

Take a look at this video from BNN for the positive impacts of making neighborhoods more pedestrian friendly (go to 6:34 mark).

Jan Gehl gave highlights of Melbourne and it's recent revitalization:

• Less purposeful use of the city to more enjoyment and livability
  
• 50% more pedestrians (2x as many at night)
  
• Cafe's and street patios
• All economic factors are up (more turnover, more jobs, higher real estate values, lower taxes)

In the BNN report they gave evidence of the Bloor-Annex (click here to see the study they got their evidence from). Pedestrians outspend drivers (i.e. those going to big box stores) therefore there is more demand from business for the space...creating more traffic in the area and therefore reducing crime and increasing property values.

Every city has people as passionate as Jan Gehl..find them, they're even in Edmonton.

(Thank you David Hamilton for being a wealth of information, I'm glad I can we can be sounding boards for Edmonton's future )

Until next time