The problem with gentrification

First, the problem with complaining about gentrification. People rightly complain that depressed inner city neighborhoods need economic development, not bigger prisons, to address crime and poverty. But as soon as economic development gains traction in a particular neighborhood, the same people rally against “gentrification.” The fact is, “gentrification” and “economic development” are two terms for the same phenomenon, viewed from different vantage points. You can’t wish for one and reject the other. You can’t reject gentrification wholesale unless you’re willing to accept poverty as a better alternative. The sooner this is recognized, the better chance that a neighborhood can get ahead of the curve on its economic growing pains instead of spending time grumbling and shaming.

This is not to say that gentrification doesn’t raise legitimate grievances. Looking at the case of New Orleans* on the 10-year anniversary of Hurricane Katrina, USA Today described how the African-American population declined as post-Katrina ferment ushered in a “stream of educated professionals to the city flush with new ideas and energy.” The displacement of locals is a genuine concern with an impact on the core identity of the city. But if we skip the “complaint” phase and go straight to the question of where to go from here, it really comes down to one choice: either (1) eliminate the “stream of educated professionals to the city flush with new ideas and energy” and go back to pre-Katrina material conditions — which often meant poverty or at least a dearth of economic and educational opportunity — as a permanent plan, or (2) harness the long-term educational and economic opportunities of these passionate young innovators while coming up with housing programs and policies that protect locals in the meantime.

It seems to me that # 2 (“harnessing”) offers more to the next generation of local kids. Sure, you need to do something about skyrocketing rents that price long-term tenants out of the neighborhood. (Long-term homeowners are different, as even those of modest means generally benefit from the increase in their property values.) Some kind of rent control, or at least government freezing of real estate taxes (for participating landlords and resident homeowners alike) and insurance (via vouchers), could help fight the destabilizing process that often accompanies economic development. Likewise, zoning laws need work to prevent architectural character from being wiped out by new-construction cube condos. But other than that, you really have to go with a vibrant neighborhood at the risk of higher rent over a permanently depressed neighborhood with perpetually cheap rent. You might not like the gourmet donut shop or new yoga center, but turning away all enthusiasm and investment in order to keep the rents down does no service to those next-generation kids. By all means protest income inequality and its spawn of social problems, protest the excesses of the 1%, work for greater equality, but don’t vandalize locally owned startups by middle-class entrepreneurs like the St. Roch Market in New Orleans or Cereal Killer in East London. Better to talk to your neighbors, old and new, talk to business owners (most of whom want good relations with neighbors) and to your city council person about how to get through the economic growing pains with minimal damage to neighborhood continuity.

*The Katrina example is of course a broad-brush view of gentrification, which may vary by neighborhood. Typically, artsy types move in for the cheap rent, leading to a bohemian renaissance of sorts, pricing out some of the traditional renters, in turn attracting wealthier professionals who enjoy the cultural arts but are themselves pay grades above the “starving artists” they admire, resulting in an exodus of creative free spirits for the next low-rent neighborhood. But, again, some neighborhoods skip the middle steps or take different paths. (For a somewhat different view by a professional urban geographer, see Richard Campanella’s “Gentrification and Its Discontents: Notes from New Orleans,” in New Geography.)

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26 thoughts on “The problem with gentrification

  1. Nice post Gary. I find your initial paradox “you can’t have gentrification without economic development” particularly interesting as it “exposes” another paradox inherent in capitalism. The problem in this particular vicious circle is the adjective “economic”. When an impoverished neighborhood is crying out for development, society shouldn’t immediately jump on the band wagon and assume that the development has to be “economic”. The equation has to be tragic for the impoverished, because in a Chicago-school of Economics society, economic development will make the poor poorer. Development can take many forms, it doesn’t have to be economic.

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  2. “Gentrification” is the cry of the insecure and has the odor of identity politics. The “only thing constant is change.” Whether that is the removal of civil war monuments, the changing of street names to reflect the deification of our culture’s latest hero, shifting demographics, etc. It reminds me of the complaints of Southern University and other historically back colleges in Louisiana when the move was afoot to merge them with other historically (more) white universities (“We want to be separate but equal” —a stunning reversal of Brown). Using New Orleans as an example, this city is 100% better off now with so called gentrification then it was prior to Katrina. Yes we have rent issues and we have living wage issues (though the city just passed a living wage ordinance) but this is light years ahead of the litany of problems we had before. Let them eat cake!

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    • Good food for thought, Mike. I largely agree, but don’t want to downplay the risks of gentrification to neighborhood and cultural stability. It pulls both ways but most often the benefits, with some steering, outweigh the risks. I too think New Orleans is better off overall and a more promising place for the next generation of local kids, black or white … although street crime (e.g., armed robbery) is one area where it seems at least as bad as pre-Katrina. I share your view on the ironic and “stunning reversal of Brown” at the hands of those whose forefathers (the black and white progressives of the 1950s and 60s) fought so hard to implement Brown. I’ve often complained, as you know, about this wrong turn taken by my liberal friends and allies.

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  3. I agree entirely, apart from the rent control part. Do I need to re-state the logic that rent controls lead to short-term gains benefits and long-term harm? Just in case, the logic goes – artificially lowering rents below market prices leads to fewer properties being built, fewer properties offered for rent, a consequent reduction in supply of rental properties, and those at the bottom of the ladder being left homeless.

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    • Thanks, Steve. Although my post cautiously approves “gentrification,” I’m not as “free market” as you when it comes to letting things fly. When developers come in and start displacing large numbers of locals who may have no other place to go, I do believe government (the collective “us”) has an interest in stepping in to preserve some semblance of stability for the neighbors and the neighborhood, at least to get them through an adjustment period. I guess this means I am promoting “gentrification” when coupled with some policies to mitigate the immediate damage done to real people and historical/cultural/
      architectural formations – i.e., to get the innocent bystanders through the growing pains of the neighborhood. Rent control was one suggestion. If there are better ways to accomplish this end, I’m open to suggestion. But I can’t just abdicate and say that the needs of the free market trump the needs of these people.

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      • The free market has no needs. It is a tool to help people.

        Gentrification, as I understand it, is simply allowing people who want to improve their homes, or build new ones, or improve infrastructure, to do so. One alternative would be to not allow people to do those things, which is in nobody’s interest.

        So, we are stuck with the system that allows people to make improvements … call it gentrification. You are saying that if the quality of housing is improved, rents go up, to reflect the fact that the properties are of a higher standard, or are more desirable in some way. The people who lived in them might not be able to afford the new rents, and so they move out and find somewhere cheaper.

        I actually don’t see the problem. Yes, people move house. They do so all the time, in my experience, whether rich or poor. My own financial situation has moved up and down throughout my life and I have adapted accordingly. I find it hard to believe that anyone wouldn’t.

        So, some areas are improved. Some new housing is built. In other places, nobody wants to spend money and the quality of housing declines. There are sound economic reasons for all these changes, and they are not because of the free market, they are because of the millions of micro-decisions that real people make every day. The free market enables those changes to take place. It gives people choice about their own lives, instead of some government body making decisions for them. People know their own lives best, after all.

        If rents in a newly-gentrified area become too expensive for a resident to continue to live there, they will need to make a choice about what they do. The free market enables them to make that choice freely, and enhances the number of choices they can make, because more new houses will be built (provided that rent controls and other similar restrictions are not preventing the building of new houses.)

        Change happens whether we like it or not. Trying to stop change is like trying to stop a kettle from boiling. Rent control stops new houses being built. Rent control stops existing houses from being improved. How can that ever be a good solution? Better to allow people the freedom to adapt to changing circumstances. If rent control is used as some kind of short-term solution, then it needs to be done on a fixed timescale so that it doesn’t turn into a long-term policy. But policy makers who impose it must realise that it will create long-term harm for the very people it is supposed to be helping.

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        • Hey Steve, remember that my original post suggested that the market forces at work in gentrification were mainly good, but they had some immediate negative impacts on some innocent bystanders. (And New Orleans is small enough that I know some of these old-timers/innocent bystanders; they are not just numbers.) I believe the only difference in our positions is that I believe that neighborhood organizations, and by extension local government, should try to alleviate the pain while accommodating the market “gentrification” as a whole, whereas your position just says “tough luck” for retirees on fixed incomes who’ve lived all their lives in a neighborhood — the market says they’re priced out so our hands are tied (by our blind faith in the market, that is) and we cannot help them. Those retirees might feel that your “free market” doesn’t “enhance the number of choices” for all, but rather enhances or diminishes the number of choices in proportion to your wealth. I.e., if they’re on a fixed income and their rent just tripled, they may not feel as warm and fuzzy about their new range of choices (i.e., I can choose to move out or I can choose to be evicted). They may be ignorant enough of economics to think that the “free market” somehow leaves the big developers moving in with a wider range of choices.

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          • By the way, Steve, I’m very mobile, like you, having moved at least 25 times since reaching adulthood. But I know others who are very rooted, and I figure there might be times that we can accommodate within reason when their means are limited and they’re hit with trends beyond their control. Were you and I on a local council, I suspect we could figure out a compromise somehow.

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            • Yes, I’m sure that if we were politicians we would arrive at a compromise. Politics is full of them. We find a way to muddle through. Most economies in the developed world are compromises between different views. They incorporate some hard economic policies that generate economic growth and they incorporate some mitigating policies that slow growth but seek to help those in greatest need.

              My argument is that ultimately these compromised solutions help the poor less, but in ways that are harder to see.

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          • I understand that. Call me heartless, but I do understand. But many people the world over find that when their kids have grown up, then moving to a smaller, cheaper house or apartment is inevitable. Many are forced to sell their homes to pay for care in their old age. My own parents and my wife’s parents have faced this exact situation. Life is tough and full of difficult decisions.

            Rent controls have consequences. Someone owns the house or apartment. They may depend on the rental income themselves. A market rent is another way of saying a fair rent. If the rent is lowered, it becomes an unfair rent for the owner. This can only lead to a bad outcome somewhere else in the local economy, probably damaging the prospects of the children of the old-timers.

            Rent control isn’t the solution. It only causes more problems, which are perhaps less visible but just as much of a problem. Damage to the economy will hurt someone, and my guess is that it won’t be the developers or the incoming rich who get hurt. As always, it will be the poor. It’s just harder to see the direct effects.

            The effects of rent control are always real. It just takes a heartless bastard like me to say so.

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            • OK, heartless bastard. I may not agree with you, but I know there is a logic to your position as well as mine. I think both of our positions need to be on the table for negotiation. To bad you and I aren’t joint kings of the world. We could hash this out.

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              • We should definitely be in charge, Gary. Except that my first act would be to resign, as I believe that nobody should have power over others. That would leave you to do whatever you wanted 🙂

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                • Your view of government is that it is essentially fascist — a way for one group to consolidate all power and crush all resistance; my view is more friendly and democratic — government is essentially a pool of resources (human and material) through which a community addresses collective issues that are of compelling interest for the common good but not manageable by isolated individuals. Of course, in the real world, any government is corruptible (hence the great effort at “checks and balances” in post-Enlightenment body politics), and governments form at both extremes and everywhere in the middle. Your ideal would probably be Somalia, where there is essentially no government to exercise power over anyone. My ideal is probably the quasi-socialist democracies of Western Europe. (In this regard, I’m more of a germanophile than an anglophile, but when that day comes that you abdicate your half of the crown to me, I will buy you a pint of good British ale and promise to rule as an enlightened philosopher-king worthy of the inimitable Plato.)

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                • “Your view of government is that it is essentially fascist.”
                  I am only teasing when I say I would resign. And Somalia is certainly not my idea of an ideal state – it is a complete disaster!
                  My view of government is that most people who enter politics believes that they would, in your words, “rule as an enlightened philosopher-king worthy of the inimitable Plato.” The evidence is that this doesn’t happen.
                  A strong government is needed to protect the population and ensure that basic laws are enforced. I am also in favour of welfare. But my government would do a lot less than typical governments. It would seek to allow people to live their own lives, as long as they don’t prevent others from living theirs. It wouldn’t look much like Obama’s government, nor would it be a Trump.

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  4. The poor have always had to work around the wealthy, regardless of the system of governance. Nothing seems likely to alter that parameter of human existence… though I heartily agree with Gary’s goals of comprehensive integration.

    Folk Festival Man says it far better than I ever could:

    Bone

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  5. Re-reading your article, you have identified the key problem, and pointed out the contradiction. You want the “stream of educated professionals to the city flush with new ideas and energy” but you lament the “skyrocketing rents that price long-term tenants out of the neighborhood”. One thing causes the other. They will both happen, or neither. The only way you can reduce rental costs is by allowing the building of more properties. Rent control will stop that from happening.

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    • “One thing causes the other. They will both happen, or neither.” This nicely summarizes the point of my original post. Thank you. I’m not sure yet that replacing historic single family dwellings with dense cube condos is the only answer. For one thing, in New Orleans’ case, the population is still smaller than pre-Katrina. The endgame may not be a larger population more densely packed, but a more evenly educated and economically capable one. The most visible here case is the African-American demographic, which had disproportionately lived for generations in poorer areas and is disproportionately vulnerable to the dislocations of post-Katrina gentrification. My hope is that with a rapidly changing education and economic infrastructure, the kids from these heretofore depressed neighborhoods will be better educated and employed and be able to pay the higher rents commensurate with economically vibrant neighborhoods. But many families are not ready for the sudden leaps in rent. So do we push them all out now, “while the getting’s good” for the investing class, do we bulldoze historic old homes and put up cube condos, or do we try to accommodate some long-term cultural stability and long-term hope for these families who have not had much of it? To me, collective groups – whether neighborhood groups or local government – have an interest in neighborhood/cultural stability/continuity as well as in economic and cultural development.

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      • I’m sorry to hear that historic buildings are being replaced by new condos. Here in Oxford, the owners of older houses are selling their gardens to developers to build apartment blocks.

        You and I may lament that, but I think this is an example of what economists call “revealed preferences” where people say they want one thing (historic buildings) but actually make a different choice (affordable housing) when confronted with the reality. People aren’t willing to make the sacrifice required to preserve the thing they value, because they value something else more.

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        • The psychology of “revealed preferences” sounds exactly right. And you may be right that the changes they portend are inevitable, but (paradoxically) it may not follow that all resistance is futile. Some resistance — perhaps pressing consciously chosen cultural/social norms against those “irresistible” economic ones — might alter the “inevitable” trajectory just enough to get a more positive result. (Does this mean I need to come to Oxford before its medieval character is lost?)

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          • There is an obvious solution to this problem, and that is to remove planning restrictions on areas of land outside the historic core. Every economic problem always comes back to scarcity and supply/demand. In Oxford, the local council imposes rigorous restrictions on the surrounding “green belt” areas (because of the environmental lobby), which inevitably puts more pressure on the premium city centre land. So the competing interests here are affordable housing vs historic preservation vs environmental concerns.

            A lot of the medieval core has already been redeveloped, although of course the old university buildings are still here. You should definitely visit Oxford if you get the opportunity. I would be delighted to show you around!

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            • I’m glad that the historic core at least is not vulnerable to economic forces without check. In Boulder, Colorado, I saw the same problem, where the green belt secured the natural beauty of the region but at a high cost in terms of affordable housing. But you really do need to balance your three interests (affordable housing, historic preservation, environmental concerns) and it’s not easy. I’ve seen other places in suburban New Orleans where green space was simply obliterated for strip malls and fast-food joints with no oversight or interference and the result is certainly not more felicitous than that of Boulder. Thus we need to balance multiple points of view (e.g., yours and mine on “how much oversight”) going forward.

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