Gentrification of Creative Areas: Impact on Businesses, Workers, and Residential Sectors
In a new discussion paper, researchers Tasos Kitsos, Max Nathan, and Diana Gutierrez-Posada delve into the relationship between the growth of creative industries, the characteristics of creative workers, and patterns of residential gentrification in urban areas across England and Wales. The study, titled "Creative Destruction? Creative firms, workers and residential gentrification", sheds light on the significant role the creative economy plays in reshaping urban neighbourhoods.
The researchers combine a range of microdata at the Census Output Area level to investigate the impact of creative industries on urban gentrification from 2001 to 2011. The study finds that the presence and expansion of creative sector firms are closely linked with processes of residential gentrification. Creative firms tend to cluster in neighbourhoods that are undergoing or about to undergo gentrification, often accelerating increases in local property prices and changes in the socio-economic makeup of neighbourhoods.
Creative workers, defined broadly beyond just artists to include professionals in knowledge-intensive, design, tech, and cultural industries, are both drivers and beneficiaries of gentrification. These workers tend to move into gentrifying neighbourhoods attracted by affordability initially, followed by amenities and cultural vibrancy that grow with gentrification. The influx of creative workers further supports the locality’s economic transformation, reinforcing the creative economy ecosystem.
The study highlights a feedback loop where creative firms attract creative workers, who in turn raise local demand for housing and amenities, driving residential change. There is also evidence of displacement pressures on existing, often poorer, residents as a result. However, the authors find that the creative actors play a limited role in displacing poorer residents, contrary to some claims.
Effects vary by city and neighbourhood context, with some places experiencing more pronounced gentrification linked to creative industry growth, depending on local housing markets and policy frameworks. The impacts are mostly concentrated in major cities and very creative neighbourhoods.
The authors recommend integrated policy approaches that promote creative sector growth while safeguarding housing affordability to ensure that urban revitalization benefits a broad spectrum of residents. Policies should aim to harness the economic benefits of creative sector growth without exacerbating housing displacement. This requires integrated urban planning that links economic development strategies with affordable housing protections.
Increasing affordable housing supply in gentrifying neighbourhoods is essential. Tools such as rent controls, community land trusts, and targeted subsidies for low-income residents can help mitigate displacement caused by creative sector-driven gentrification. Policymakers should also foster a broad base of creative employment opportunities that include not only high-tech or design jobs but also cultural and artistic roles accessible to a wider range of residents.
The study also recommends planning rules to mitigate impacts in hotspots and employment training to help disadvantaged residents access creative jobs. The effect of gentrification is slightly larger at 0.2% for creative workers, but still small.
This report looks at the role the creative industries can play for the Levelling Up agenda. The UK's Fashion and Textiles industry contributed nearly £20 billion to the UK economy in 2020. The paper is a part of a series of discussion papers focusing on various topics such as Regional Trade Agreements, International Trade Challenges, Geography of the Creative Industries, Public Service Broadcasting, and Climate and Sustainability. Another report, "The Motives of Inbound Foreign Direct Investors in the UK Creative Industries", focuses on the global reach of the UK's creative industries.
Dr Tasos Kitsos is a Research Fellow at City REDI at the University of Birmingham. Dr Diana Gutierrez Posada is also a Research Fellow at City REDI at the University of Birmingham. Dr Max Nathan is an Associate Professor, Applied Urban Sciences, UCL. A previous study by the same authors examined the influence of creative firms and workers on neighbourhood gentrification in England and Wales between 2014-2019. The report "Working Together - Cooperatives as a creative industry business model" explores the understanding of cooperatives among creative workers and students. The discussion paper also identifies examples of work taking place in fashion micro and small enterprises in relation to Climate and Sustainability.
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