Unraveling the role of freight facility development in the dynamics of gentrification

Abstract

The demand for freight facilities has expanded substantially due to a surge in e-commerce demand, which significantly impacts land development and the built environment. The locational shift of such facilities leads to growing concern over gentrification due to its externalities and results in changes in socio-economic attributes and land values. Using the Spatial Durbin Model and the Structural Equation Model, this study explores how the locational behavior of freight facilities can influence local socio-economic changes, including gentrification. By using data from the Los Angeles region between 2011 and 2021, the study found that when freight facilities were relocated, gentrification could happen as a result of sociopolitical differences across places. A decrease of 1 freight facility per square kilometer is associated with an increase of $125 in median household income. Moreover, the move-out of freight facilities and the rise in land values are self-reinforcing in the long term. The findings provide insights into the balance between economic growth and community well-being regarding freight infrastructure development.