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Using Big Data to Identify Gentrification and the Need for Skilled Trades

Much has been made of the concept of “gentrification” in recent years. In general, the term refers to higher income individuals (usually white) moving their homes and businesses into low-income minority neighborhoods. While some consider gentrification to be a necessary form of urban renewal that strengthens local economies, others feel that gentrification ultimately displaces long-time residents and changes the fundamental dynamics of a city.

Some proponents of the gentrification model of urban renewal say that data supports the idea that gentrification is a positive concept. Governing Magazine reports that the individual credit scores of original residents rose in the gentrifying areas of 55 U.S. cities. This economic boost is often accompanied by lower crime rates and higher overall property values.

By reviewing data from cities that have experienced significant gentrification and growth in recent years, such as San Francisco and New Orleans, analysts can determine the true impact of gentrification as well as aid in reliable decision making within several key industries.

That’s where big data comes in. And considering that the private U.S. real estate market is valued at around $30 trillion, the stakes are high.

Urban Renewal By the Numbers

Gentrification and urban renewal may also be responsible for the re-emergence of the construction industry, which significantly faltered in the wake of the Great Recession. After reaching a low point in 2011, the industry has bounced back particularly well. In 2016, private construction spending totaled about $899 billion, according to Statista. Further, new construction is on track to bring in at least $1.4 trillion by 2021.

And when commercial real estate (CRE) data is factored in to the equation, the need for accurate, viable data becomes even more pronounced. CRE is a $24 trillion industry and is expected to spread to myriad other business sectors across the world.

Despite the explosive growth in the housing market and construction industries in recent years, many regions are still fighting to catch up. In Wheeler County, Oregon, where the timber industry once fueled the local economy, widespread urbanization across the rest of the state hasn’t been enough to revive the rural community. Wages have decreased 40 percent since 1978, causing the county’s residents to flee towards nearby metropolitan areas such as Bend and The Dalles in order to find sustainable employment and pursue higher education.

The Truth About Skilled Trades

With the growth of the construction industry and an ever-changing employment landscape, do hands-on, skilled trades hold the key to economic success in 2018 and beyond?

The Trump Administration certainly thinks so. In July 2018, Congress passed H.R.2353, the Strengthening Career and Technical Education for the 21st Century Act. The Act increased education funds, at both the state and federal level, for low-income students pursuing skilled trades.

Further, the bill seeks to promote the “development, implementation, and adoption of programs of study or career pathways aligned with state-identified in-demand occupation or industries.” As such, in-demand industries may vary widely between states. In California, Florida, and Texas, the auto repair industry is a major source of employment, accounting for around 137,000 jobs.

Elsewhere, real estate and construction reign supreme. The largest job gains within the construction industry in the years between 2011-2017 were among specialty contractors, including HVAC technicians, welders, and electricians. Those skill sets are also an asset to those  .

Many contractors and laborers earned certification in their industry via trade schools, where the curriculum eschews traditional core academic classes in favor of more practical, skill-based learning.

Final Thoughts

Urban renewal involves countless moving parts, from city planning to quality of life and economic growth numbers, and big data puts all the pieces together. The real estate and construction industries are evolving in tandem, as one can’t exist without the other.

As for personal economic growth, it pays to master the skilled trades related to the real estate market. Big data exists in part to tell a story — by identifying market trends in home building and calculating the demand for commercial space in a particular city or neighborhood, industry professionals can make informed decisions about potential real estate investments and construction-based job opportunities.

About the Author

Avery Phillips is a freelance human based out of the beautiful Treasure Valley. She loves all things in nature, especially humans. Leave a comment down below or tweet her @a_taylorian with any questions or comments.

 

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