I guess it would depend on the income level change that accompanies gentrification.

If incomes move from "low" to "middle", I don't think you'd see much of a change in laundromat density. In places like SF and NYC, if you don't have a W/D in your home, a "middle" income isn't going to give you enough cash to get one (most of the time it's a space constraint).

If incomes move from "low" to "high", then yes I could see an effect since if you have enough money, you can do the sometime-needed major renovations to add a laundry room to your home.

Mostly it's not a space constraint, especially in the outer boroughs where there's a bit more space. There are plenty of compact European models that well into small apartments, e.g. http://upload.wikimedia.org/wikipedia/commons/5/5a/Washing_M.... But laundry machines are banned from most NYC buildings due to fears about overflows causing damage.

In NYC, its less of a space constraint and more of being against the rules of the landlord/co-op board because they say the building cannot support so much water usage and they are afraid of leakage into apartments below. Most of these arguments have been proven completely invalid, as washing machines nowadays don't use even close to the same amount of water they did 40 years ago, but they still uphold that silly rule.

I'd expect it to peak with the poor and the rich and dip in the middle. My personal experience (not in NY, though) says it might look like this:

The poor are taking a break on their rent to live somewhere without a washing machine, and therefore need a laundromat.

The middle class have access to in building washing machines, and do their own. Because they're still under some pressure money wise, there's the element of social pressure not to be "extravagant" and get it done for them.

The rich are more time pressured than money pressured, and take advantage of full service options for their laundry.

I was thinking along the same lines. I noticed this when I moved from San Francisco to Atlanta -- people in the middle in San Francisco don't have laundry in their apartments, but in Atlanta they do, because in Atlanta people rent larger places than they do in SF. So in Atlanta the laundromat density probably goes down when you move from "low" to "middle", but in SF when you go from "middle" to "high".

The plumbing systems in a lot of older buildings in NYC (including $3 million brownstones) can't handle washing machines.

This is a myth. There is no special plumbing required for a washing machine.

I have observed that the more money people have they either: 1) have their own washer/dryer and/or 2) have more expendable cash to have their clothes dry-cleaned. Also they tend to value their time vs. money enough to pay the premium vs. go to a laundrymat.

That's a good point. Several places do both.

Also, a lot of commercial places outsource their washing to laundries/laundromats (places that do both)

For kingsize duvets!

The affluent generally own their own washing machine.