Totally different setting here (I am in a neighbourhood of Montreal), but our community has been living through that transition.
My neighbourhood was developed right after WW2, so a lot of the original owners have died or gone in assisted living communities in the last decades. In their wake came young professionals eager to build a family (myself included), either in single-unit houses (there are very few of those in Montreal), in the ground floor of triplexes and five-plexes (often joining two small units into one), or in newly built condos. That, of course, brought gentrification, price increases, rent increases, and some social tension. There's been also a lot of renovation going on - one summer, on my street alone, about a third of the wartime houses were having some foundation work done. It's not uncommon to have buildings in such a state of disrepair that they have to be demolished and sold just for the price of the terrain. This has been the sake of many wartime houses where the owners were not in a position to take care of structural problems over time (roof leaks, etc.).
On the positive side, it made our community very vibrant, with lots of children, community organizations, a farmer's market and several CSAs. Main street, which had decayed into a collection of pawn shops and closed down fronts over the years is now very much alive, with a mixture of old standbys which got new customers and new trendy places. And our current municipal administration is investing a lot in active transportation (adding bike lanes and pedestrian zones) and gardening (supporting the greening of back alleys, supporting urban gardening initiatives, giving away trees...). Public schools are good and fairly mixed in terms of economical and cultural backgrounds.
It's not perfect, but I think we've survived the transition better than many other neighbourhoods.