Verticalization is a phenomenon, typically seen in major cities, where there is a general increase in the population of high-rise residential buildings.[1] 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.[2] Densification refers to increasing the population through jobs or housing;[3] super-gentrification refers to the redevelopment of previously gentrified neighborhoods.[4]
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.[5]
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.[6] 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.[2]
The effects of verticalization are similar to those of gentrification including an increased neighborhood economic value, residential demographic change, and displacement of current residents.