FOR ABOUT A DECADE NOW, SCATTERED BATTLES between settled homeowners and wealthy newcomers have been heating up. The construction of so-called McMansions—ostentatious million-dollar (or multi–million-dollar) homes—in old neighborhoods feels like a personal attack to many residents.

The latest clash is under way in Davidson County, Tenn. These aren't the big Toll Brothers production homes of yesteryear, however. According to The Tennessean, a local newspaper, while many are built as $700,000 spec homes, some are custom homes with more than 9,000 square feet of floor space costing well over a million dollars.

Arguments against these conspicuous shows of wealth suggest a negative impact on other homes' values in the neighborhood—or the opposite effect, raising property taxes sky-high. Realtors and builders counter that market demand is crying out for these homes, and that most are well built and beautifully designed.

HUD has found that while such gentrifications often cause displacement, if the current occupants are allowed an active part in planning for changes, they can float up with the area's rising fortunes.