Which process can lead to increased property values in urban areas?

Gentrification is a process that leads to increased property values in urban areas as it involves the transformation of neighborhoods through the influx of more affluent residents. This process often occurs when wealthier individuals or groups move into a previously lower-income area, leading to the renovation of homes and the opening of new businesses. As these changes take place, the demand for housing rises, which drives up property values and can also increase rents.

Gentrification can enhance the local economy by attracting investment and improving infrastructure, but it can also displace long-term residents who can no longer afford rising costs. The overall effect is a significant alteration in the character of the neighborhood, influencing both its physical landscape and demographic profile, which ultimately contributes to an increase in property values in those urban areas.

In contrast, urban decay involves the decline and deterioration of an area, leading to reduced property values; suburbanization typically moves people away from urban centers, which can result in decreased urban property values; and urban shrinkage refers to a reduction in the population and economic activity in cities, which further contributes to falling property values.