Of all the neighborhoods to gentrify in Manhattan, the Lower East side is one of the most controversial. Not because the Lower East Side is any more important than say Bedstuy or Williamsburg. Mainly, because the forces that gentrified the Lower East side perfected their process in the Lower East Side first before applying this to another neighborhoods. I saw the changes first hand, as a New York City resident. And as a historian, I enjoyed noting and documenting the various changes.
The Lower East side was a working class neighborhood, full of various immigrant groups as East European, some African Americans, Puerto Ricans, and by the '90s, other Latino groups such as Colombians and Mexicans. Issues with poverty hit the neighborhood hard, as crime, drugs and AIDS devastated this community. But its tenement housing provided cheap living space for artists, students, and gays who were brave enough to deal with the Lower East Side's problems. The area also attracted a number of intellectuals, activists, and community organizers. When the neighborhood was considered ghetto, it attracted a number of bars and had a thriving nightlife.
But the real estate industry used the bars, the gays, the artists, and the hipsters to market the neighborhood. Particularly under Bloomberg, this marketing was used to attract investors. Investors purchased tenement housing, kicked out poor people, and build massive condos. Other tenements were converted into mansions for individually wealthy families. Major retailers, such as Whole Foods and Trader Joes, entered the neighborhood. More bank branches and big drug stores like CVS and Walgreen's appeared. While it;s great to have much better food options and choice in retail, it's not great to have this at the expense of all small businesses. Obviously, the coolness of the Lower Ease Side not only was used to attract major residential developers, it led to the development of commercial real estate as well. With escalating prices, many of the gays, students, and artists were priced out of the Lower East Side. They moved to Williamsburg, until they got priced out of that by the exact same developmental forces which tear down of run down real estate to build expensive luxury housing and corporate retail businesses. The hipster crowd is now in Bedstuy.