When "urban renewal" of lower class neighbourhoods with condos attracts yuppie tenants, driving up rents and driving out long time, lower income residents. It often begins with influxes of local artists looking for a cheap place to live, giving the neighbourhood a bohemian flair. This hip reputation attracts yuppies who want to live in such an atmosphere, driving out the lower income artists and lower income residents, often ethnic/racial minorities, changing the social character of the neighbourhood.
It also involves the "yuppification" of local businesses; shops catering to yuppie tastes like sushi resaturants, Starbucks, etc... come to replace local businesses displaced by higher rents.
The term was coined by sociologist Ruth Glass, who is quoted below.
"One by one, many of the working class quarters of London have been invaded by the middle-classes—upper and lower. Shabby, modest mews and cottages—two rooms up and two down—have been taken over, when their leases have expired, and have become elegant, expensive residences ...
. Once this process of 'gentrification' starts in a district it goes on rapidly until all or most of the original working-class occupiers are displaced and the whole social character of the district is changed."
-Ruth Glass (1964)