How does housing stock improve in an established neighborhood?
 

Hi guys, something I've been pondering, it's easier to understand how a neighborhood would gentrify if it were in ghetto conditions, where buildings would be torn down for new houses to be put up. But how does a middle class neighborhood with no dilapidated properties improve their building stock? Are modifications just made to the existing homes or are there common examples where affluent people move in and tear down decent homes to make even nicer ones? What encourages people to move into a middle class neighborhood and start pushing it to become more affluent? I imagine businesses can instigate that kind of activity but what beyond that is needed?

I will give you an example in Metro Detroit. Royal Oak was always a fairly nice inner ring suburb of Detroit, but in the past decade it has become the hip place to be. Many of the smaller post war houses have been torn down and replaced with larger homes that take up almost the entire lot. Of course, in American suburbs, there are constant remodles being done to most homes as well. In Royal Oak, the area became a mecca for homosexuals which imporved housing stock. The bar scene also drastically improved which lead to more young professionals moving to the area.

It's more common for the existing stock to basically exist as-is, with some remodeling.

If a suburb full of ranches is built and that area becomes more expensive it's still going to be almost entirely made out of ranches, but with better landscaping and remodeled interiors.

It would take a lot of time for those occasional rebuilds to wholesale replace a neighborhood.

It goes in the other direction too. Rich neighborhoods that are now ghetto are still mostly the older fancy buildings, with newer cheaper ones mixed in.

During the mid-20th century, a lot of older housing styles (especially Victorian, and also Craftsmen-era) simply fell out of style. Due to this, along with the generally smaller lot size, a lot of the older neighborhoods became less fashionable and more downscale, even if they didn't actually become ghetto. More recently the process has inverted again, so that older neighborhoods are desirable, but many mid-to-late 20th century neighborhoods are not.

As to whether neighborhoods see demolition and infill, or mere sprucing up, a lot depends upon the existing housing stock. At least judging by surviving housing stock, pre-1900 homes are a relatively large 1,900 square feet. House size shrunk through to the 1940s, reaching a low of 1,320 square feet, before rising again - ultimately surpassing 19th century values by 1990 or so.

Thus in neighborhoods where you see smaller, less historic, but dated housing stock (say Cape Cods) it isn't uncommon to have them knocked down and replaced with McMansions - provided property values are high enough, and construction costs are low enough, for it to be worth the while of buyers to purchase a house just to trash it. But in many places the homes are old enough, large enough, and charming enough that they can build value through interior renovations, sprucing up of the facade, and possibly an addition in the rear.