Commodification: a new phase in London’s gentrification? Antoine Paccoud LSE Geography & Environment

OUTLINE Tenure change in gentrification research Tenure in London’s gentrifying areas Commodification in London Commodification and gentrification Conclusions

TENURE IN GENTRIFICATION LIT "One by one, many of the working class quarters of London have been invaded by the middle-classes—upper and lower. Shabby, modest mews and cottages—two rooms up and two down—have been taken over, when their leases have expired, and have become elegant, expensive residences… Once this process of 'gentrification' starts in a district it goes on rapidly until all or most of the original working-class occupiers are displaced and the whole social character of the district is changed." Ruth Glass (1964)

TENURE IN GENTRIFICATION LIT “The reinvestment of capital at the urban centre, which is designed to produce space for a more affluent class of people than currently occupies that space.” Neil Smith (2000) Focus on tenure shift seems to have disappeared since

‘Classic gentrification’ was mostly concerned with a shift to ownership: London : “outcomes of an essentially similar process of tenurial transformation from private renting to owner occupation, the impact of which has varied depending on the initial tenurial and social composition of different areas” (Hamnett 1986: 403) Chicago : “The major potential cause of displacement that could be measured with available data is the conversion of rental properties to owner-occupancy” (DeGiovanni and Paulson 1984: 218) Laska and Spain (1980): ‘renovators’ who ‘purchase inner city housing’ TENURE IN GENTRIFICATION LIT

ONS, A Century of Home Ownership and Renting in England and Wales TENURE IN GENTRIFICATION LIT

Some early realisation that something else could be going on in gentrifying areas: “Three kinds of developers typically operate in recycling neighborhoods: (a) professional developers who purchase property, redevelop it, and resell for profit; (b) occupier developers who buy and redevelop property and inhabit it after completion; (c) landlord developers who rent it to tenants after rehabilitation” (Smith 1979: 546). “Whatever the form of the displacement process, the effect is the same: low-cost privately rented and owner-occupied housing for the working class is converted into high-cost rented and owner-occupied housing for the middle class” (Hamnett and Williams 1980: 474) “On the basis of this evidence it seems fair to conclude that changes in the rental householder population explain much of the ‘emergence of a new gentry class’ in inner Melbourne, particularly in the most traditionally working-class areas and in the early stages of the process of upward social change misleadingly labelled gentrification” (Logan 1982: 86) TENURE IN GENTRIFICATION LIT

But little research that directly engages with the return of private renting. Recent interests in: Role of the state in gentrification (Hackworth and Smith 2001) Differences in gentrifiers (Butler and Robson 2001, 2003) Super-gentrification (Lees 2003) New-build gentrification (Davidson and Lees 2005, Davidson 2007) Geographies of gentrification (Lees 2000); Gentrification and comparative urbanism (Lees 2012), Global Gentrifications (Lees et al. 2015) Focusing on London, has the return to private renting had an impact on the types of tenure shifts occurring in gentrifying areas? TENURE IN GENTRIFICATION LIT

TENURE IN GENTRIFYING OAs Comparison of 2001 and 2011 census data at the Output Area (OA) level – 23,406 comparable OAs. “The defining characteristics of contemporary gentrification should include in the widest sense: (1) reinvestment of capital; (2) social upgrading of locale by incoming high-income groups; (3) landscape change; and (4) direct or indirect displacement of low-income groups” (Davidson and Lees 2005: 1170) “Gentrification is a process involving a change in the population of land-users such that the new users are of a higher socio-economic status than the previous users, together with an associated change in the built environment through a reinvestment in fixed capital” (Clark 2005: 263)

ONS’ Socio-economic Classification (NS-SeC) allocates individuals aged to eight major occupational categories: 1. Higher managerial, administrative and professional occupations 2. Lower managerial, administrative and professional occupations 3. Intermediate occupations 4. Small employers and own account workers 5. Lower supervisory and technical occupations 6. Semi-routine occupations 7. Routine occupations 8. Never worked and long-term unemployed TENURE IN GENTRIFYING OAs Group A Group B Group C Group D

TENURE IN GENTRIFYING OAs Overall social change : 9% decrease in the proportion of group D in London’s OAs 2% increase of A, B and students 3% increase of group C In this context, is gentrification a reflection of replacement rather than displacement (Hamnett 2003)? Focus on areas in which increase in A>19, decrease in D<-19 and both of these changes are twice as large as any other combination of B,C and students: 903 OAs out of 23,406

TENURE IN GENTRIFYING OAs Out of these 903 gentrifying OAs, between 2001 and 2011: -62 had a transition to or increase in ownership (‘O+’, ‘SR to O’, ‘PR to O’, ‘PR and SR to O’) but also 118 OAs with no significant tenure change but a significant social change – as these are majority ownership areas, hypothesis is that owners of group D are selling to group A and moving away (‘O to O’) -340 had a transition to or increase in private renting (‘PR+’, ‘O to PR’, ‘SR to PR’, ‘O and SR to PR’) Signals a shift to a new phase in gentrification – commodification

TENURE IN GENTRIFYING OAs Current situation seems to be a new phase of gentrification, inverse to the one occurring in the 1970s: “As the return on rented property steadily fell behind comparable investment opportunities, landlords by their own volition or by the prompting of their agents sought to gain vacant possession and sell” (Williams 1976: 72) Commodification reflects the realisation that more exchange value can currently be extracted through renting than through owning and reselling

COMM. AND DISPLACEMENT Analysis of tenure shifts in gentrifying OAs isolated four major tenure changes: ‘PR+’ subdivision, minor new construction (145) ‘O to PR’ buy-to-let (97) ‘SR to PR’ marketization (77) ‘O to O’ group D selling to group A (118) Are these tenure shifts in gentrifying areas all accompanied by displacement? Commodification

COMM. AND DISPLACEMENT Displacement can only be identified (at this London-wide scale using census data) in relation to the tenure shifts Broaden the focus to identifying all London OAs in which either ‘PR+’, ‘O to PR’ or ‘SR to PR’ has occurred (‘O to O’ excluded because census data cannot distinguish forced from voluntary departures) ‘PR+’ 4,289 OAs ‘O to PR’ 4,173 OAs ‘SR to PR’ 1,148 OAs ‘O to O’ 1,750 OAs Commodification: 9,610 OAs (41%)

SR TO PR

O TO PR

PR+

O to O

COMM. AND DISPLACEMENT Displacement occurred between 2001 and 2011, if OA experienced: -‘SR to PR’ with a significant decrease in D: 698 OAs, 18,627 residents -‘PR+’ with a significant decrease in D and where ownership was not the majority tenure in 2001: 307 OAs, 8,625 residents This estimate of 27,252 residents displaced by commodification does not take into account those displaced from projects that involved population numbers large enough to render OA level comparison impossible

COMM. AND DISPLACEMENT High risk of displacement if OA experienced: -‘SR to PR’ without change in large D population and low number of social rented dwellings (D in PR): 116 OAs, 9,448 residents -‘PR+’ without change in large D population and a high number of social rented dwellings (property price pressure on SR): 764 OAs, 56,153 residents -‘O to PR’ with significant decrease in D and a high number of social rented dwellings (property price pressure on SR): 617 OAs, 52,311 residents

COMM. AND GENTRIFICATION Even though there has been a major shift in tenure at the London-wide scale, displacement is still a key issue Commodification as a new phase of gentrification in London that follows that associated with home ownership Both phases characterised by different mechanisms to extract exchange value from property Return to the debates about production and consumption sectors?

COMM. AND GENTRIFICATION “The main cleavage is that between property owners and non-owners” (Saunders 1984: 208) “The fact of being an owner of capital or a wage earner does not itself determine whether or not one is in a position to gain access to particular private modes of consumption, for lines of class cleavage do not correspond to lines of sectoral cleavage in the sphere of consumption, and those who are exploited in one sphere may occupy an exploitative location in another” (Saunders 1984: 216) “Tenants, in other words, are not only economically disadvantaged relative to owners, but they lack the control over their immediate environment which owners generally take for granted” (Saunders 1984: 220)

COMM. AND GENTRIFICATION How should the position of incoming renters in commodifying areas (such as ‘O to PR’ or ‘PR+’) then be understood? In a sense, some of them may be closer in consumption terms to those who are displaced (or at risk of displacement) than to their absentee landlords. Some precedent here: “This is not to paper over the conflicts that also undoubtedly exist, but merely to stress that, if we analytically lump together what I have called marginal gentrifiers with their wealthy namesakes, we are preventing any recognition of the possibility of forming alliances between the former groups and the groups likely to be displaced” (Rose 1984: 67-68)

COMM. AND GENTRIFICATION Reinforces the idea that the term ‘gentrifier’ obscures more than it illuminates: “Two striking recent research trends in the gentrification literature, particularly in British contexts, have shifted attention away from the negative effects of the process. The first, and perhaps most prevalent, is research which investigates the constitution and practices of middle-class gentrifiers” (Slater 2006: 742) “It is very revealing that no-one seems to have conceived producers of gentrified properties builders, property owners, estate agents, local governments, banks and building societies as 'gentrifiers'. In a quite selective and ideological way, the term 'gentrifiers' is generally reserved for those middle class individuals endowed with identities and consumption preferences and definitively distanced from production in the built environment. The label is never extended to other kinds of individuals responsible for the actual physical transformation of urban landscapes” (Smith 1992: 113)

COMM. AND GENTRIFICATION In contrast, this analysis has shown that issues of definition are crucial if research is to keep up with this new phase of gentrification: “The second research trend serving as a screen that obfuscates the reality of working-class upheaval and displacement via gentrification is the infatuation with how to define the process” (Slater 2006: 744) “The problem with re-hashing these old debates is not just epistemological, that it just precludes widespread agreement that gentrification is a multi- faceted process of class transformation that is best explained from a holistic point of departure” (Slater 2006: 747)

CONCLUSIONS Commodification as the current phase of London’s gentrification: new tenure shifts but displacement continues Focus on tenure central to identifying displacement but may make international comparisons more difficult How is commodification intertwined with welfare reform? To what extent does commodification signal a deepening and expansion of the mechanisms developed under the ‘ownership’ phase of gentrification?

CONCLUSIONS

A focus on tenure may complicated attempts at comparison as places have seen different tenure trajectories: New York: Homeownership relatively constant between 2000 (30.2%) and 2012 (31.7%), with change in the distribution of rental stock: +7.1% market rate and -6.8% Rent Stabilised or Rent Controlled Greater Melbourne: Homeownership at 66.8% in 2011, down from 70.4% in 1991, private renting at 23.1% 2011 (+4.6% since 1991), social renting at 2.9% (-1.3%) Greater Toronto: After surge of private renting between 1951 and 1971, ownership and renting split halfway until CONCLUSIONS