How One San Francisco Neighborhood Became “Immune” to Gentrification

With more than a quarter of the Tenderloin’s housing stock owned by nonprofits or the government, longtime residents have staying power.
Tenderloin Peoples’ Garden. Photo by Sergio Ruiz.

The Tenderloin Peoples’ Garden. Photo by Sergio Ruiz / Flickr.

This article was originally published on Rooflines.org.

Can a neighborhood be immune to gentrification? If so, can local governments and community organizations work together to build up that kind of immunity over time?

We’ll soon find out, as a 40-year experiment in San Francisco’s Tenderloin neighborhood is about to be put to the test.

The Tenderloin has long been a concentrated area of acute poverty and social distress in the middle of one of the world’s most affluent cities. The streets of the Tenderloin are alive with drugs and crime. Much of the area’s population lives in inexpensive Single Room Occupancy (SRO) Hotels.

“It's hard to gentrify a neighborhood when a major portion of its land isn't available to speculators.”

But after decades of neglect, investment is suddenly flooding into the neighborhood. First, Internet firms like Twitter and Zendesk moved into offices on the edge of the Tenderloin, and now a wave of new housing and commercial development is working its way through the city’s planning process.

It is a story that must sound familiar to anyone working to improve an urban neighborhood in America: decades of disinvestment and neglect replaced almost overnight by speculation and runaway market pressure. But the story of the Tenderloin is taking a turn that is entirely unlike every other American neighborhood.

When disinvested neighborhoods finally start to get significant market activity, we have become accustomed to seeing neighborhood leaders turn and begin focusing their efforts on preventing displacement.

But that is not what is happening in the Tenderloin.

There have been no anti-displacement marches in the famously well-organized Tenderloin. There have been no sit-ins at city hall designed to block these new developments.

Part of the explanation for this unexpected calm is a surprisingly widespread feeling that the Tenderloin is, as the city’s housing director recently described it, “immune” to market pressure. Could the Tenderloin be the rare place where new market rate housing development can happen without triggering widespread displacement of lower-income residents?

This possible immunity didn’t just happen. Starting in the 1970s and continuing uninterrupted over the decades since, Tenderloin activists, working with city government and a set of strong nonprofit partners, bought or otherwise obtained control over a significant share of the area’s real estate.

If the neighborhood is immune to gentrification, the vaccine is permanently affordable housing. Longtime Tenderloin activist Randy Shaw explains that:

more than 25 percent of the neighborhood’s housing stock is either in nonprofit hands or has rents subsidized by the government. It’s hard to gentrify a neighborhood when a major portion of its land isn’t available to speculators.

So, even if the neighborhood is overrun by luxury housing and upscale restaurants, the residents of these affordable units will not be displaced.

However, just like a vaccine where a small treatment provides systemwide immunity, the presence of permanently affordable housing units at this scale may be enough to permanently constrain the character of any market rate housing in the area. You can only go so far upscale in this context.

Because housing for very-low income residents is a permanent feature of the neighborhood, a certain level of tolerance of economic diversity is a necessary characteristic for any new residents—not just during a transition period, but permanently.

It is, of course, far too soon to know whether the level of permanently affordable housing in the Tenderloin is enough to provide “immunity” that will protect residents of the remaining SRO housing stock—much of which is still privately owned. There could still be significant displacement in the Tenderloin, but it seems fairly clear that the neighborhood itself won’t be flipped in the way of so many other neighborhoods.

It is not too late for many communities to follow the Tenderloin’s example.

Recently the city published a new strategy for revitalization of the Tenderloin. It calls for low-income residents, social service agencies and tech companies to work together to make the neighborhood cleaner and safer and to attract new investment. The plan calls for prioritizing investments that “provide resources to take care of low-income people” and are compatible with a truly mixed-income community.

It’s a “win-win” strategy that could be dismissed as wishful thinking in any other contested neighborhood. But in the Tenderloin, community control of land makes it possible for community leaders to risk improving the neighborhood without worrying that new investment will push out all the low-income people. And this sense of security makes it possible that everyone could, for once, row in the same direction toward a safer and cleaner neighborhood.

Those strategies may or may not ultimately succeed in the Tenderloin (it is a very tough environment) but, that such a collaborative strategy is even being seriously pursued is a major achievement made possible only through decades of steady investment in permanently affordable housing.

And while it is a truism that the best time to start buying real estate is 40 years ago, it is not too late for many communities to follow the Tenderloin’s example and invest in lasting affordability. In fact, this strategy of steady land acquisition and permanent affordability controls is probably the only approach to combating gentrification that can actually win.