Agenda I: Re-Intros II: “Gentrification In the News” III. Opening Discussion IV: Pre-History of Gentrification V: Discussion of Smith/Rent Gap

Ephesus Church, Harlem

What Is Gentrification? From Wikipedia: “Gentrification is a shift in an urban community toward wealthier residents and/or businesses and increasing property values. Gentrification is typically the result of investment in a community by real estate development businesses, local government, or community activists, and can often spur economic development, attract business, and lower crime rates. In addition to these potential benefits, gentrification can lead to population migration, which involves poorer residents being displaced by wealthier newcomers.”

What Is Gentrification?

Who Has a Stake in Gentrification? “The gentrifier as consumer is only one of many actors participating in the process” (Smith 57).

Early History of Gentrification Haussmannization and the Modern City: Response to threat of working class revolt in Europe (1850s) Progressive Era: Reformist response to American Industrialization (1900s to 1920s) Urban Renewal: Massive urban redevelopment projects aimed at “slum clearance” and removal of “urban blight” (1950s to 1960s) “Gentrification Era”: Term “Gentrification” coined in the 1960s to

Haussmannization (1850s) Re: 1848 Revolts Haussmann’s goal: Make Paris less crowded, disease-prone Make revolt more difficult Parks and Public Squares Big boulevards bisecting workers’ neighborhoods Metaphor of sickness used throughout these projects

Progressive Era (1890s to 1920s) Reform movement to improve urban living conditions But, also about mitigating risk of contagion, “Americanizing” immigrants Jane Addams, Jacob Riis, Teddy Roosevelt First building codes, really when the idea of city planning got its start

Urban Renewal Era (1950s-60s) Since 1949, [the urban renewal] program provided local renewal agencies with federal funds and the power of eminent domain to condemn slum neighborhoods, tear down the buildings, and resell the cleared land to private developers at a reduced price. In addition to relocating the slum dwellers in decent, safe, and sanitary housing, the program was intended to stimulate large-scale private rebuilding and new tax revenues to the dwindling coffers of the cities, revitalize their downtown areas, and halt the exodus of middle-class whites to the suburbs. Herbert Gans (1968)

Boston’s West End, From This:

To This:

Legacy of Urban Renewal Neighborhoods Destroyed: 60% of people displaced were people of color Eradicated social/economic capital Created enduring spatial segregation Did not stop white flight (as intended)

Neil Smith: Rent Gap What did you think? What stuck out to you? What’s at stake for Smith? Why is he making this argument? Do you have questions? Were there ideas that felt unclear to you? How does Smith’s argument connect to issues of race/ethnicity? Purpose: “to study causes rather than effects” (51)

The Key Gentrification Debate Neoclassical Economics: Changes to cities are driven by rational, self-interested individuals, acting autonomously, trying to make the best use of their resources “Consumption Side” theory of gentrification Structuralist Economics: Changes to cities are driven by political/economic structures that limit the options available to “rational, self-interested individuals” “Production Side” theory of gentrification

Another way to think about it . . .

Rent Gap theory suggests that “gentrification is not a natural outcome of changes in consumer preferences, but instead the result of structural features of capitalism that produce the array of things we’re allowed to choose from in the first place. Gentrification, in this narrative, thrives because it has become profitable for developers, investors, government agencies, and others . . .” (Gentrification Reader, 82-83)

Key Terms House Value: Sale Price: Capitalized Ground Rent: The amount a house is worth, influenced by factors like the house’s condition, whether it needs renovation, etc. (61) Sale Price: The price a house would actually fetch on the market, based on other factors, like the value of the land it sits on. Capitalized Ground Rent: “The actual quantity of ground rent that is appropriated by the landowner, given the present land use” (62). Potential Ground Rent: “The amount that could be capitalized under the land’s ‘highest and best use’” (62) S

Example I currently own a building in Eugene. It is divided into four studio apartments, which I rent for $600/month. My capitalized ground rent is 2400/month (4 x $600). A real estate developer tells me I could renovate the building into two luxury condos. I could rent each condo for $2000/month. My potential ground rent is 4000/month. This is the rent gap.

This illustrates the process of devalorization that produces the rent gap. It’s worth noting that, as this “devalorization” is taking place, there’s a valorization of suburban property . . .

Society Hill, Philadelphia

Society Hill, Philadelphia: 1940s

Society Hill Towers – 1960s So, society hill is designated for improvement during urban renewal era . . . They cleared out the old market and all the people, and built these giant towers.

Society Hill Neighborhood, Today

Smith’s Thesis “To explain gentrification according to the gentrifier’s preferences alone, while ignoring the role of builders, developers, landlords, mortgage lenders, government agencies, real estate agents—gentrifiers as producers—is excessively narrow. A broader theory of gentrification must take the role of the producers as well as the consumers into account, and when this is done it appears the needs of production—in particular the need to earn profit—are a more decisive initiative behind gentrification than consumer preference“ (57).

Critiques of Rent Gap Theory “Neither explanations based on neoclassical residential location theory nor those based on . . . Marxian rent gap theory provide a satisfactory account of gentrification . . . On the one hand, the Marxian theory . . . Does not explain how historically it becomes profitable to rehabilitate and redevelop inner-city neighborhoods. On the other hand, the neoclassical theory, with its assumption of consumer sovereignty, fails to explore the origins of the tastes that underlie consumer demands” (Bourassa, “The Rent Gap Debunked”)

What did you think? Do you have any critiques? “Real Estate agents exploit racist sentiments in white neighborhoods that are experiencing declining sale prices; they buy houses relatively cheaply, and then resell at a considerable markup to African-American, Latino, or other “minority” families, many of whom may be struggling to own their first home” (66)

Homework For Tomorrow (if you haven’t already): For Tuesday: Send me an email in response to the course questionaire Log in to blogs.uoregon.edu for the first time with your duck id and password so that I can give you access to the course blog For Tuesday: Read Zukin: “Changing Landscapes of Power” First Quiz on Thursday!