Verticalization

Verticalization is a phenomenon, typically seen in major cities, where there is a general increase in the population of high-rise residential buildings. As of 2024, there is no agreed-upon definition of verticalization.

Across multiple research papers, verticalization or “vertical gentrification” has been linked with the densification and super-gentrification of urban areas since it generally occurs in neighborhoods that were undergoing gentrification or had been previously gentrified. Densification refers to increasing the population through jobs or housing; super-gentrification refers to the redevelopment of previously gentrified neighborhoods.

High-rise residential buildings and luxury apartments are main contributors to the verticalization of urban areas. The verticalization of neighborhoods with luxury buildings attracts a demographic of dwellers that rent by choice not necessity, labeled as “discretionary” renters by Yardi Matrix.

One research paper from 2020 that is investigating the effects of COVID-19 on luxury markets defined luxury real estate in Boston as $4.50 per square foot or higher in rent or properties that sell for $1,200 per square foot or higher. John Lauermann defines luxury housing as a property that reaches the minimum threshold for the “mansion tax” in his research into vertical gentrification in New York City.

The effects of verticalization are similar to those of gentrification including an increased neighborhood economic value, residential demographic change, and displacement of current residents.