The gentrification of some urban neighborhoods has been catalyzed by gay villages. Certain patterns of residential development are particular to the community.

The gentrification is linked, in part, to changing national and global economies, and in particular to the social and spatial restructuring of labor processes. Heavy industry has been leaving North America for developing countries or leaving central business districts (CBDs) for suburban areas, seeking, in both cases, cheaper land, labor, and tax costs. Conversely, the service sector has been steadily expanding, and investment in high-tech industries has increased. Much of the new corporate-managerial and service-sector investment has tended to be, not insignificantly, in the CBDs of large cities, and these sectors have also tended to employ large proportions of low-wage and/or part-time labor, much of it female. The expansion of these jobs in CBDs has constituted a significant part of the economic pull-factor to urban areas for lesbians and gay men, complementing the attraction of the cities as centres of gay life.

Lauria and Knopp, professors at the University of New Orleans and University of Minnesota respectively, tie these processes to the spatial nature of the urban renaissance which was occurring at the time. They argue that the "first wave" of low-wage gay residences in these urban centers paved the way for other, more affluent gay professionals to move into the neighborhoods; this wealthier group played a significant role in the gentrification of many inner city neighborhoods. The professors also noted that the presence of gay men in the real estate industry of San Francisco was a major factor facilitating the urban renaissance of the city in the 1970s.

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