Gentrifying Census Tracts by MSA: Where Upside Is Concentrating

Dennis Lee
1 day ago
2 min read

Top MSAs — grouped into 5 tract archetypes

Gentrification doesn’t show up at the “city” level.

It shows up at the neighborhood (census tract) level — and it doesn’t look the same everywhere.

This week, we translated gentrification from a vague headline into tract-level signals by isolating gentrifying census tracts within each MSA and comparing them to the overall metro baseline.

Top MSAs — grouped into 5 tract archetypes

We built a “gentrifying-tract fingerprint” for each MSA using our full variable set, then grouped MSAs with similar fingerprints into five repeatable gentrification archetypes.

Variables used for clustering:

Built environment: Walk Score
Pricing: Multifamily Rent, Housing Value
Demographics: Median Age, Median Income, Education
Tenure: Owner Share, Renter Share

Cluster Breakdown (5 Archetypes)

🔴 Cluster D — Rent-Accelerator Urban Core

Affordability deteriorating + stress rising

These markets show the strongest “gap widening” dynamics: price-to-income is projected to worsen quickly, and delinquency is already accelerating.
Examples: Austin, Dallas, Houston, Detroit, San Diego, San Jose

🟠 Cluster C — Value-Led Re-Rating

Stress-led warning

PTI growth is more moderate, but delinquency is rising—suggesting pressures may be coming from the labor market, debt burden, or localized shocks (not just affordability).
Examples: San Francisco, Seattle, Portland, Denver, Boston, Raleigh

🟢 Cluster A — Stable-Demand Upgrading

Stabilizing and resilient

Affordability pressure is building more slowly and borrower stress remains contained—typically the most “defensive” profile.
Examples: New York, Philadelphia, Miami, Minneapolis, Salt Lake City, Milwaukee

🔵 Cluster B — Early-Shift Renter Markets

Affordability risk building, stress not visible yet

PTI is projected to worsen quickly, but delinquency hasn’t moved much—often a “late-cycle” risk bucket if affordability keeps tightening.
Examples: Los Angeles, Chicago, Atlanta, Phoenix, Pittsburgh, Jacksonville

🟣 Cluster E — Expansion / Mixed-Tenure Growth

Affordability risk building, stress not visible yet

PTI is projected to worsen quickly, but delinquency hasn’t moved much—often a “late-cycle” risk bucket if affordability keeps tightening.
Examples: Los Angeles, Chicago, Atlanta, Phoenix, Pittsburgh, Jacksonville

Key Takeaways

Gentrification isn’t a single phenomenon—it’s five repeatable tract archetypes with different payoff mechanics:

Cluster D: rent-led upside (ops + repositioning)
Cluster C: value-led upside (basis + exit re-rating)
Cluster A: stable fundamentals (steady demand + durability)
Clusters B/E: transition/expansion types (higher dispersion → better selection matters)