Living in a Gentrifying Neighborhood Will Save You Money

Living in a Gentrifying Neighborhood Will Save You Money

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2 years ago I set foot in Manhattan after landing a job in NYC and I’ll admit, I got used to the insane prices and crazy spending. All of my friends were doing it, and so I followed as well. When the graduates one year above you go out and do this, you kind of follow, because monkey see, monkey do.

$10+ lunches? $5 coffees? Brunch Saturday and Sunday ($50), and hanging out on Saturday nights ($50+). I don’t think I cooked more than a handful of meals per year for those two years, and I never bought groceries ($10+ per takeout meal?). Work provided dinner as I worked late most weekdays and if not, I would just order in or pick up some food. Delicious food wasn’t a celebratory event, it was just normal. Taking Ubers and taxis was the norm ($10 each time before uber pool?), compared to the subway. The charges rang up.

Your Perception of Normality Is the Average of the 5 People You are Closest To

After a while, this was just normal. People tell you those in your industry only save their bonuses and you believe them. I did utilize my retirement accounts and put extra into a brokerage account, but I wasted so much money on stupid things. I thought that was pretty good, until I discovered FI/RE and realized that you could be financially independent and retire 3 decades earlier if you just saved all your money every year instead of spending it by coming up with clever extra ways to make money and fun side hustles. I saw the savings rates of some people on r/financialindependence and realized that I wasn’t doing near as well as what I could be doing! When you see it’s possible to save 70 percent of your income because other people did, you go into overdrive trying to figure out how to do it.

You start analyzing all your expenses one by one and by the time it comes to move, you start reconsidering where you live. Does it really make sense to live in the most expensive rental area if moving somewhere else is just as convenient, but even cheaper and nicer? It takes me less time to bike to get to Grand Central than it used to, and I now live in an apartment that’s probably 1.5x the size for the same price, with more amenities. There’s a Citibike station literally right outside my apartment now, and it saves me a ton in Subway fares, transport time, and I get extra exercise every day instead of breathing in Subway fumes and being packed in the Subway like a sardine.

Everything Is Cheaper!

The first night we moved we ventured out to eat somewhere, because the apartment was too messy for us to think about cleaning. I also didn’t label any of my boxes (rookie mistake) so I didn’t know which box held the kitchenware. For a meal that would’ve cost $50 each in our old neighborhood, we had even better food for $10 each. I don’t even need ambiance most times, I just want delicious food.

The next day I went out for lunch as I still had yet to locate the kitchenware box and managed to get some stewed lamb with rice and beans for $5. Seriously? I’ve never even come across something this cheap before. It was also the best stewed lamb I’ve ever had, so tender and succulent. When I paired it with some brussels sprouts on my weekend grocery trip, it came out to something like $3 a meal since I split it into two meals.

I then learned of a Costco near me, which is now near enough to me that I can bike to it with the Citibike. Now I can get my grocery bill down to $40 a week, for what I’d consider an extravagant grocery list. Chorizo and prosciutto sandwiches? Mmm deliciousness.

People are Much Nicer!

The neighborhood around me has people who say hi and are friendly. They’re open to talking about their experiences and lives, which is something you don’t really encounter in the old place. The area is much much quieter — in the old place, no matter where you lived, it seemed you’d get train horns blaring, emergency vehicle sounds, cars honking, and generally all sorts of noises.

It’s also nice to be brought back to reality to what you could be spending when you don’t have to. The groceries here are 30-50 percent cheaper, the restaurant quality food is much cheaper and just as, or even more delicious. There are a lot more restaurants that are family owned instead of chains, and more authentic food for great prices. In the old place there were a lot more beautifully designed restaurants with mass produced food at higher prices due to the cost of rent.

The Unfortunate Side Effects of Gentrification

I don’t know how long the gentrification process will take, and if I’ll even be here in this neighborhood when it does. It’s a bit sad for the family owned businesses, but ultimately I can’t do anything to stop it. People have been pouring into this neighborhood and some good turns into bad for others. Hopefully the rezoning laws will allow the small businesses to stay where they are, but I’m not confident in that. It’s a bit sad :(.

You should always be kind to the people already in the neighborhood and try to frequent the already existing establishments (they’re much cheaper!). Remember the golden rule.

Mostly, I’m thankful for being able to save more and feeling more grounded as I’m in this new neighborhood. I can see myself happy just walking in the garden, cooking for myself or eating at a great restaurant, and reading my book back home. The amenities make it feel like I don’t need to pay for “fun” — I can just have it free here.

You Should Move to a Gentrifying Neighborhood

In short, moving to a neighborhood that is in the middle of being gentrified is something everyone should do. The new buildings are continuing to go up here, and most newly built buildings in the area are subject to rent stabilization (no increases the past 2 years, with a 1.25% increase this year)  due to negotiations on tax abatements and rezoning. It’s safe enough in the neighborhood to walk alone at night and some of the cheapest food that I’ve ever seen the states. A local to the area tells me that I haven’t even seen cheap though, so I’m looking forward to that. You just never know what you don’t know.

A friend moved to the same neighborhood 2 years ago and his return on investment is something like 200 percent (due to usual mortgage leverage), which I am quite highly jealous of.

Have any of you moved to an area like this before? Am I making you reconsider moving? Rent is your biggest expense, and you spend most of your time at home when you’re not at work, so it’s some of the best spending you can analyze.


Author: Olivia

Olivia worked in finance and wants you to learn the secrets of financial independence. She believes there are so many ways to monetize your life and make money doing the things you're already doing because so many companies offer free money.

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35 thoughts on “Living in a Gentrifying Neighborhood Will Save You Money

  1. I really enjoyed reading this! My only advice is there’s a difference between renting and buying when moving to a gentrifying area…awesome for renting, be very careful on the buying side, watched people be upside down for 7+ years because gentrification stopped in Atlanta. You’re spot on with all of the benefits!

  2. Gentrification is awesome for new renters who want the lower prices and can stomach the eventual rising tide of rent. It’s also good for current owners of property who like the appreciating prices. It sort of sucks for people who currently live there and might eventually get pushed out due to rising rents. Although in certain cities there are some laws that protect people against that but not in all.

    1. I agree. There’s also a ton of concessions in NYC at this time due to the increased supply so it’s great!

      I do feel bad for those people, and it is pretty unfortunate. Hopefully if they bought their house they can reap the rewards ($250/$500k tax free gains!), but if they rent I think NYC has some law on rent control/stabilization? If not, yes they will have to move.

  3. The area I live in went through this process after we moved in, it’s become relatively expensive to live in the area now, so we might not be able to stay here long term, but it was cheap whilst it lasted and provided a good location with lots of things going on but for a cheaper price. I think you are right about normality relating to those around you. That’s what gives breed to the concept of relative poverty where you can feel poor in comparison to those around you – I know I’ve definitely felt this a lot from my background and it can be quire demotivating. It’s good if you can find people who are as frugal as you. Good post!

    1. Exactly! Living in a fancy place gives you a weird sense of normalcy. You’ve got people ordering groceries and paying 20% extra to get it delivered when it’s on your block and other people ordering takeout when it’s a 5 minute walk to that restaurant! Weird things, man.

  4. The hard part is talking to our older neighbors about their fears of seriously increased property taxes and possibly getting pushed out. But the problem for us with the “5 people closest” to us meant that even at a 20% interest rate we were doing better than everyone else. I’m very thankful to this online community for showing me a different way.

    1. That’s pretty difficult :/. It must be difficult to move when you’re older absolutely.

      True! My FI friends online remind me of what normalcy should be. My IRL friends are a lot more spendier and less FI, but I still love them nonetheless :).

  5. Oh, man, I know the process well. In 1998, I bought a one-bedroom condo in Long Beach (Long Island) for $70K. Back then it was the beginning of Long Beach’s gentrification. In 2006, when I sold that one-bedroom condo, gentrification was much further along and it was the height of an epic housing boom. It sold for $340K. Gentrification is a cruel beast. It cares not for the poor, the young, and the middle class. I’m glad you found an “affordable” neighborhood in Manhattan. I didn’t think that was possible anymore. Enjoy it while it lasts, Olivia. Great post.

    1. That is some nice gentrification! And some nice tax free gains :).

      It is a cruel beast. Fortunately there is rent stabilization or control, whichever it is :)! We’ll move to a more normal place once we’re FIRE. Metro Texas seems nice, plus bbq!

  6. I never lived in a gentrifying neighborhood. It was either bad or pretty good. It never made sense geologically for me. I prefer to live near work to minimize the commute. Then we had a kid and buying in a nice school district took priority. I’d like to live in a gentrifying neighborhood at some point. It has been a good investment for many of my friends.

    1. I think we got lucky geographically and time wise. Sounds like a plan, as long as it is safe! You can get those great tax free gains :). But you are already FI, so it might not be fun for you anymore haha.

  7. Love it. We definitely enjoy living in a gentrifying neighborhood in Raleigh (and moved in here about a decade before it started gentrifying 😉 ). 10+ ethnic stores in walking distance, probably more ethnic restaurants than that. The neighborhood shopping center has a huge full size Mexican grocery store, an Asian store, a real seafood market, and an African store in one tiny shopping center. Good eats aren’t hard to find, and the rent (or in our case, our now-paid-off mortgage) is cheap.

    1. Awesome! Sounds like my kind of area. And your kids + you guys won’t be keeping up with the Jonses because you’ll be feeling like you’re on top of the world!

  8. Interesting perspective. I think if you were to say this to the wrong people, they would be crossed because where I come from (the crap side of SF) everyone will hang you out for stealing their home etc. It’s our turf etc etc. It’s not PC but the poorer you go, the more they pride their area code. It’s weird and stupid. Like bus tagging. My entire teenhood was surrounded by that stupidity.

    I agree with you that you should move into a gentrifying neighborhood, I wish we did when we were house shopping! Missed those huge RE gains.

    1. Yeah, I can kind of see it from their perspective and feel a bit bad, but what am I going to do? Someone will absolutely move there, might as well be us!

      What is bug tagging? Is that spray painting buses?

  9. Hey Olivia. Great stuff here.

    You make a good point about how you’re the average of the 5 closest people around you – most people just sort of live where they think they’re supposed to live, and that’s usually just decided by the people you’re around. There’s a big advantage in living in a less fancy neighborhood in that you’re just able to stay more humble and avoid lifestyle inflation.

    Also, love seeing a fellow bike-share enthusiast. Ours is called NiceRide here in Minnesota, and it’s my primary mode of transit from April to November (they put them away during the winter for snow purposes). A while back, I did the math on how much it cost me to commute with bikeshare and it was something like a quarter per trip.

    1. I’ll admit, a friend pulled me into the gentrification neighborhood when I heard the returns and rents here. Truly an average. I’m trying to pull in my best friend but I don’t know how that’s working out! She doesn’t seem to want to FIRE, but she’s happy and that’s all that matters. Avoiding lifestyle inflation is incredibly important, for sure.

      Yay for bikes! They’re so much cheaper and you save time and actually exercise during the day. The subway here is $2.75 which is kind of ridiculous. Spending $5.5 a day on the subway?! I try to ride during the winter, but sometimes the wind when I’m biking makes it way too cold but I’ll overheat in my winter coat. I need to get one of those ski masks.

      I think the next step would be to get an actual bike, but worrying about whether someone will steal it and having to always make a round trip makes me just pay the $160 a year. Plus, the analytics telling you how much you’ve burned/biked are way cool :).

  10. Looks like you live not to far from my neck of the woods if I’m judging the pictures right. I’m off Adam Clayton Powell. It’s a little further along the gentrification curve than where you are (if I’m guessing correctly) so not quite as cheap but still very reasonable by Manhattan standards. I’m glad you feel safe where you are, my wife didn’t feel comfortable walking the dog by herself if we ventured much further east. And I don’t have to cram onto the 4/5/6 each day!

    1. Ah, the photos are stock photos 🙂 I am not sure where they point to. But yes, always be safe when you’re deciding where to live!

      1. Well nevermind then! The last stock photo looked a lot like the construction going on in East Harlem. Since you mentioned Manhattan and gentrifying I thought that would fit the bill. But now that I look closer at it the elevated track in the background wouldn’t be there in East Harlem. I think that’s actually a stock photo of the Manhattanville campus of Columbia being built on the West side and the elevated track is the #1 line.

        1. You have a keen eye! This is why I don’t post real photos of where I live haha. I am not quite ready to give up anonymity :).

  11. The ski masks are called ‘balaclavas’ in case you get to searching for one. 😉

    I lived in the gentrifying East Village years ago. It was a great time, a good location, and reasonable (for HCOL NYC) rent. It’s not a place I wish I lived now, but I’m very glad I spent some time out that way.

    1. A friend brought over all his extra gear for me to borrow lol. We made it all the way to Hunter mountain and now I’m just sitting here with my laptop because I’m still not ready to go skiing lol.

      Also, very interesting blog. Have you considered building a stochastic model? I’ve never built one in Excel, not sure if they have the integrals built in.

  12. I hear you. We moved to the South Bronx from Harlem when that gentrifyer broke the camel’s back. Friends still look at us like we are crazy because, well it’s the Bronx. I wish they would see the historical beauty, cheap prices, and the literal best convenience into midtown Manhattan, but oh well. The only problem is that it is not convenient by bike because all of the upper part of NYC is effectively The Heights, aka ridiculously hilly. I would die on my way to work.

    1. As long as it’s safe :). Glad you found a great place! Haha, sounding a little like SF problems. Citibike can only go so far if it’s a flat ride!

  13. I think you need to be very careful about what you write here. There’s a terrible connotation with the word “gentrification” and what you’re proposing is exactly why people think poorly of the word. Gentrification is the ruin of a neighborhood, it’s pushing all of the locals out in favor of big landlords and commercial properties. That stewed lamb that you love won’t be there soon, because the family that owns the shop won’t be able to afford the rent. But you know who can afford the rent there? Starbucks, or McDonalds or H&M or those restaurants from downtown who think it would be great to expand to multiple locations. If you want speak on the virtues of living a local life and exploring your neighborhood for value, that’s one thing, but to vocally support Gentrification is in very poor social taste.

    1. I’m supporting people trying to move to cheaper locations due to rent in NYC being so astronomical. If not me or you, there are plenty of others who would move into the place. In NYC rent is pegged to inflation (or something even less) if you have rent control/stabilization. It’s why you have places where a 4 bedroom giant apartment is renting for $1k when the market rate is $10k. Everyone else subsidizes that and messes up the market.

      I do mention the downsides of gentrification at the end.

      1. I think the point is that if someone really wants to move to a place that is changing rapidly to take advantage of the lower cost of living, he/she needs to do it with care and a lot of self awareness.

        I understand that this blog focuses on personal finance, but maybe don’t advocate for everyone to move to places that are undergoing rapid, destructive change so that those individuals can benefit from all their neighborhood has to offer without also drawing attention to things that people CAN do to mitigate the adverse effects of newcomers. You mention that you draw attention to the downsides but I think saying “it’s a downside that people are afraid of being displaced, but I can’t stop gentrification” is not sufficient. I am not saying that it is bad in itself to move someplace to save money (as a former resident of NYC I am familiar with the crazy costs) but I am suggesting that it is irresponsible to tout all the personal benefits that newcomers get from the neighborhood without also talking about how these benefits also come with responsibilities.

        A few sentences acknowledging this and linking to this guide or this one could suffice for a post like this. Both are from a few years ago but still relevant.

  14. Change is the only constant they say. And I have to agree that a “gentrifying neighborhood” is a study in contradictions. Older and long-term residents and businesses struggle and finally give up. Newer and up-and-coming residents and businesses find it exciting… until it also gets too expensive for them too.

    As a (former) New Yorker, I smiled when I saw your picture of Katz’s Deli on Houston Street. I knew the area well.

    1. But there’s rent control/stabilization! We subsidize them staying where they are, making the city more expensive for newcomers.

      🙂 We’re planning on moving from NYC when we FIRE because you just get so much value in another city.

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