Opinion of Gentrification

[© tweed]

I don't understand why people get their knickers in a knot about gentrification by itself.  Gentrification is the market working, it's not possible to stop.  If people are willing to pay more money to buy a house or rent in a neighborhood, how or why stop them?  We're not going to have some utopia where everyone can afford to live wherever they want. 

The debate we should have is about housing codes, zoning, economic opportunity and the environment.  People should realize that the current geography of bad/good neighborhoods is largely the product of failed government policy.  For years government has actively subsidized the suburbs, leading to an inefficient use of urban space and undervalued neighborhoods like those in North, central and South Brooklyn.  The goal ought to be, every neighborhood is livable, with a mix of uses and space for different kinds of people, not the status quo for every particular neighborhood.

Agreed 1,000%.

gentrification only occurs with conscious state involvement, often involving forced evictions and eminent domain, not just 'the market working', if such an ideal even exists, this is not it.

[Filuwaúrdjan]

Gentrification is the market working, it's not possible to stop.

Actually I think you'll find that where housing is concerned it can be remarkably easy to stop anything you want to stop; so long as the political will is there. Housing is about power; housing is power.

Gentrification provides a case in point. Some of the most dramatic gentrification in recent decades¹ has been in inner London, and while much of this can be put down to simple market forces,² much of it owes its occurrence to political decisions and the blatant abuse of the power of the state in the 1980s and early 1990s (class war, if you will, with the bourgeoisie winning, as is their wont). In Wandsworth (which includes the historically - and now very much formerly - proletarian district of Battersea) and Westminster (which includes Paddington) this was done at a borough level (with financial assistance from central government) and in the case of Westminster amounted to a criminal conspiracy.³ This strategy has recently been adopted in Hammersmith & Fulham, an area already largely gentrified through 'market' means. In the old docklands things were done not through local government (because local government in the relevant boroughs was controlled by parties opposed to Thatcher), but through central government, private finance and the open crushing of local democracy; the result being the grotesque totalitarian behemoth known officially as the London Docklands Development Corporation, which forcibly gentrified large sections of the city with fanatical enthusiasm while also (through the eastwards expansion of the financial district at Canary Wharf) laying the foundations for future 'natural' market based gentrification of vast tracts of the former East End.

<sup>1. Along with large scale transformation of many suburban areas into banlieues; Wembley, North Croydon, Ilford...

2.  Except maybe not so simple; consider the importance of the deregulation of the private renting sector in the 1980s, and also the selling off of much social housing stock in the same decade. Even here, at the most innocent level of gentrification, we see state power at work.

3. Dame Shirley Porter and 'Building Stable Communities', aka the 'Homes for Votes' scandal of the early 1990s.</sup>

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Because we are citizens and not only consumers.

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I quite agree. That is one reason why I dislike gentrification. Oh... but that statement does not apply to gentrifiers, does it? For such people the rules are different. Consumer choice is king for those with money; to oppose this is to oppose Nature.

[bedstuy]

gentrification only occurs with conscious state involvement, often involving forced evictions and eminent domain, not just 'the market working', if such an ideal even exists, this is not it.

I don't understand what you mean.  What about when someone sells their house or rents an apartment?  That's not government action.  To me, gentrification by itself only refers to prices and market transactions.  It's true that the price is a product partly of government decisions.  But, the old prices were also a product of government decisions.

Gentrification is the market working, it's not possible to stop.

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Because we are citizens and not only consumers.

So, we should have price controls on real estate and apartments? 

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I quite agree. That is one reason why I dislike gentrification. Oh... but that statement does not apply to gentrifiers, does it? For such people the rules are different. Consumer choice is king for those with money; to oppose this is to oppose Nature.

That's capitalism; because I don't know who ought to have a particular property entitlement we have a market.  If you're concerned about distributional justice, that's best addressed through redistributive taxation and government spending, not through command and control regulation of the market. 

In reference to your London example, I don't know anything about those situations.  If the local government is making corrupt decisions, that's wrong completely apart from gentrification.

[Torie]

Al, was the "war" on London "slums," effected primarily through the muscle of state condemnation of private property for redevelopment purposes ala the Kelo SCOTUS decision in the US, or the change of use of public property into modes more compatible with bourgeoisie taste, or both?

[minionofmidas]

There are no "free" markets in housing. Anywhere in the world. The thing being traded is just too fundamental to survival, and besides there are no "free" markets in credit either - and that is rather fundamental to private gentrification. It's all shaped, directly or indirectly, by government decisions. That is not to say there aren't market mechanisms at work, there are. But they work in the directions they are allowed to work in (though not always intended - politicians don't always understand what they just did.)

[All Along The Watchtower]

To left-wing opponents of gentrification: What alternatives do you have in mind?

(I'm genuinely curious).

[greenforest32]

To left-wing opponents of gentrification: What alternatives do you have in mind?

(I'm genuinely curious).

It's an interesting question, I wonder about other people's alternative ideas too.

What I don't like about gentrification (or the 'housing market' in general) is the idea of subjecting living space, chiefly land, to market forces by treating said space as a traded commodity as this means non-rich/wealthy people already there would be priced out via higher land values/rents and there is an obvious message that money trumps all when the neighborhoods and cities where people live are treated as things to be auctioned off to the highest bidder and controlled for profit with blatant landlordism.

Most people would favor protecting themselves against private costs if they can I think, that's why they support things like Prop 13 in California that restrict the rate and ceiling of property tax payments when the 'value' of the house they own increases significantly and would probably be in favor of decoupling said tax rates from the market value of the land entirely and base them instead on fixed tax payments needed to fund government services.

I think public ownership of land distributed via indefinitely long (until the person moves or dies or something) public leases would, among other things, enable a cheap positive right to housing by removing the added profit cost/incentive from private land and also ensure people wouldn't be financially constrained or forced out because someone else is willing to pay more for it though you could still retain the idea of private consenting buyouts between individuals except implement it in a way that doesn't negatively impact others like high land values and market rate rents do by allowing for direct 'trading' of public land/apartment leases between two parties (the incumbent party and the party that wants their spot).

I'm not sure what you'd call such a system but it was something I started thinking about after I read about a kind of similar idea: http://www.ied.info/books/economic-democracy/land

[Okay, maybe Mike Johnson is a competent parliamentarian.]

To left-wing opponents of gentrification: What alternatives do you have in mind?

(I'm genuinely curious).

Like many problems of urbanities, it isn't something I've given a huge amount of thought to, but I imagine programs to help the people who already live in the slums and have formed natural communities there would be better than 'improving' the neighborhoods by just importing rich yuppies and, in many cases, scattering to the four winds those who haven't been so lucky.

[minionofmidas]

To left-wing opponents of gentrification: What alternatives do you have in mind?

(I'm genuinely curious).

Governments should never have stopped building council housing virtually entirely. (And before that, they oughtn't ever have built them without any input from the people intended to move into them, but that's a different story.)
Even the housing the ABG (the city owned corporation that is the biggest landlord here in Frankfurt and that has roots in building coops of a long time ago) now builds is not in any ways means-tested and too expensive for the genuinely poor - though cheaper than similar will be on the private market.
At least local protest and city politics managed to get them to abandon their plan of tearing down much of the Mainfeld estate. Not that the Mainfeld is a nice place to live.

[TJ in Oregon]

I guess the thing I don't understand in the mindset of the people who oppose gentrification is where should the rich people live? If they live in the city it's gentrification but most of the people who'd oppose that also oppose suburban development.

[minionofmidas]

I guess the thing I don't understand in the mindset of the people who oppose gentrification is where should the rich people live? If they live in the city it's gentrification but most of the people who'd oppose that also oppose suburban development.

That's what we have prisons for.

It's not as if their numbers are rising, anyways; there's no reason why they shouldn't just stay where they are. (Actually there's some very good reasons. Beyond a certain income level relocations stop to seriously hurt your finances, so the rich tend to move around a lot until retirement age. Though so do the very poor.)

[bedstuy]

To left-wing opponents of gentrification: What alternatives do you have in mind?

(I'm genuinely curious).

It's an interesting question, I wonder about other people's alternative ideas too.

What I don't like about gentrification (or the 'housing market' in general) is the idea of subjecting living space, chiefly land, to market forces by treating said space as a traded commodity as this means non-rich/wealthy people already there would be priced out via higher land values/rents and there is an obvious message that money trumps all when the neighborhoods and cities where people live are treated as things to be auctioned off to the highest bidder and controlled for profit with blatant landlordism.

Most people would favor protecting themselves against private costs if they can I think, that's why they support things like Prop 13 in California that restrict the rate and ceiling of property tax payments when the 'value' of the house they own increases significantly and would probably be in favor of decoupling said tax rates from the market value of the land entirely and base them instead on fixed tax payments needed to fund government services.

I think public ownership of land distributed via indefinitely long (until the person moves or dies or something) public leases would, among other things, enable a cheap positive right to housing by removing the added profit cost/incentive from private land and also ensure people wouldn't be financially constrained or forced out because someone else is willing to pay more for it though you could still retain the idea of private consenting buyouts between individuals except implement it in a way that doesn't negatively impact others like high land values and market rate rents do by allowing for direct 'trading' of public land/apartment leases between two parties (the incumbent party and the party that wants their spot).

I'm not sure what you'd call such a system but it was something I started thinking about after I read about a kind of similar idea: http://www.ied.info/books/economic-democracy/land

I would call that system ridiculous.  I guess you don't believe in the economic benefits of private property or markets?  But, you have to admit that's not a workable proposal in the United States or any non-Communist nation.  That proposal would ruin the economy in order to help poor people.  Do you think ruining the economy would help poor people?  I don't.

[greenforest32]

I would call that system ridiculous.  I guess you don't believe in the economic benefits of private property or markets?  But, you have to admit that's not a workable proposal in the United States or any non-Communist nation.  That proposal would ruin the economy in order to help poor people.  Do you think ruining the economy would help poor people?  I don't.

The basic idea of it is to treat land like a public utility so as to keep the costs as low as possible for everyone. I think what it would lead to is a massive shift of resources in the economy away from the land element of 'housing' and away from private rent costs/income flowing upwards to other things. It would be a big change from the current system but I don't think it would be ruin as things aren't being destroyed, especially if you try to implement it incrementally in terms of geography and low population areas first to test the results.

I don't think it's a realistic proposal in terms of being implemented out of nowhere and all at once but I do like to think about the underlying fundamentals and I'm skeptical of private ownership of everything being inherently superior. I usually make a distinction between personal property (things like electronics, cars, etc) and commons/public services (things like roads, fire/police, utilities, etc). Privatized public services like utilities and health insurance strike me as a way to allow a small minority to profit at the expense of the needs and living standards of the many so that's why I generally oppose them.

[bedstuy]

I would call that system ridiculous.  I guess you don't believe in the economic benefits of private property or markets?  But, you have to admit that's not a workable proposal in the United States or any non-Communist nation.  That proposal would ruin the economy in order to help poor people.  Do you think ruining the economy would help poor people?  I don't.

The basic idea of it is to treat land like a public utility so as to keep the costs as low as possible for everyone. I think what it would lead to is a massive shift of resources in the economy away from the land element of 'housing' and away from private rent costs/income flowing upwards to other things. It would be a big change from the current system but I don't think it would be ruin as things aren't being destroyed, especially if you try to implement it incrementally in terms of geography and low population areas first to test the results.

I don't think it's a realistic proposal in terms of being implemented out of nowhere and all at once but I do like to think about the underlying fundamentals and I'm skeptical of private ownership of everything being inherently superior. I usually make a distinction between personal property (things like electronics, cars, etc) and commons/public services (things like roads, fire/police, utilities, etc). Privatized public services like utilities and health insurance strike me as a way to allow a small minority to profit at the expense of the needs and living standards of the many so that's why I generally oppose them.

I don't think you have any understanding of the economics of this situation.  Suffice to say, your idea would lead to massive problems with housing quality, taxation, housing development corruption and capital markets.  Why would anyone build new houses in this scenario or even maintain their current home?  How would we decide who gets to live in a mansion and who lives in a shotgun shack? 

But, just think about this.  In order to change the ownership scheme of this land, government is going to have to buy property/ take it through eminent domain.  Basically, the government would spend trillions and trillions of dollars.  These trillions of dollars would go to the owners of residential real estate.  John McCain would get millions of dollars for his seven houses and he would still get to keep them?  This just seems insane. 

[greenforest32]

I would call that system ridiculous.  I guess you don't believe in the economic benefits of private property or markets?  But, you have to admit that's not a workable proposal in the United States or any non-Communist nation.  That proposal would ruin the economy in order to help poor people.  Do you think ruining the economy would help poor people?  I don't.

The basic idea of it is to treat land like a public utility so as to keep the costs as low as possible for everyone. I think what it would lead to is a massive shift of resources in the economy away from the land element of 'housing' and away from private rent costs/income flowing upwards to other things. It would be a big change from the current system but I don't think it would be ruin as things aren't being destroyed, especially if you try to implement it incrementally in terms of geography and low population areas first to test the results.

I don't think it's a realistic proposal in terms of being implemented out of nowhere and all at once but I do like to think about the underlying fundamentals and I'm skeptical of private ownership of everything being inherently superior. I usually make a distinction between personal property (things like electronics, cars, etc) and commons/public services (things like roads, fire/police, utilities, etc). Privatized public services like utilities and health insurance strike me as a way to allow a small minority to profit at the expense of the needs and living standards of the many so that's why I generally oppose them.

I don't think you have any understanding of the economics of this situation.  Suffice to say, your idea would lead to massive problems with housing quality, taxation, housing development corruption and capital markets.  Why would anyone build new houses in this scenario or even maintain their current home?  How would we decide who gets to live in a mansion and who lives in a shotgun shack?  

But, just think about this.  In order to change the ownership scheme of this land, government is going to have to buy property/ take it through eminent domain.  Basically, the government would spend trillions and trillions of dollars.  These trillions of dollars would go to the owners of residential real estate.  John McCain would get millions of dollars for his seven houses and he would still get to keep them?  This just seems insane.  

That would be the most expensive way of structuring the proposal if it turned out to work well in the initial sites and people wanted to take it everywhere in the purchase scenario. Buying all the land like that would be a boon to the real estate industry. With current prices it'd probably be much cheaper to start in less populated areas and have people move there over time so the real estate values of the existing owned areas go down from the reduced demand and if the new developments are so successful, it wouldn't even be necessary or important to relocate again. Those reduced land values would make things pretty hectic, sure, but it's not like the status-quo is free from its own problems so I would consider the net balance.

As for the questions about new houses or existing house maintenance, I'm not sure I understand the concern? It's not like we're talking about it being illegal to build and own the home, just about decoupling the land ownership from it and basically swapping land market-value property taxes with some other tax (could be something like based on the size of the lot and structures) to fund local services. People would still get loans for buildings and homes to build/own them on lots but you could keep the costs of everything that happens on top of the land down by restricting that underlying commodity market of space so that increased population density doesn't mean inherent increased costs of living because the city is on top of a scarce and traded resource. The basic idea doesn't seem so foreign considering the de facto land leases situation we already have honestly. It's not as if there's already an absolute negative right, free of political influence, to private land with a legal society and government, right? What happens to land ownership titles today when you don't pay property tax?

You would have to be careful of corruption like on any project this big as not everything will go 100% smooth/neutral and the decisions about land distribution are interesting to think about. Right now it's pretty much by price and you could maintain that partially even with a lease system by subjecting the leases within more desirable areas like waterfront sites to bids so as to raise more tax revenue without raising the cost of space for everyone else outside those areas but how to decide on which or what percent of sites are zoned like that would be another issue, potentially up to the people to decide directly. For the initial distribution decisions, there are plenty of choices from simple FIFO to random selections to merit or need scales to other things that would all shift around with time. I think that would be the most dynamic element of any public ownership proposal when you consider all the options and combinations available.

[bedstuy]

Those aren't solutions.  Essentially, you're just remaking the real estate laws in a more convoluted way at enormous cost for no apparent reason.  Or, if you're only saying nobody should have fee simple absolute title and instead should have fee title, that's essentially meaningless in terms of combating the problem.

The cost issue?  It is cost prohibitive for every local government to buy a large amount of the residential property in their jurisdiction.  There's no way around that.  If you take people's property, you have to give them just compensation.  The only way to pay that compensation would be taxes that would redistribute money from the poor to the rich. 

Also, saying you'll fix it by focusing on rural areas is no answer.  Gentrification is a "problem" in urban areas. 

As to your land/housing distinction, that also makes no sense.  The problem is a high price of housing in urban areas, not a high price of raw land somewhere.

Do you really think randomly assigning people housing or having the politburo decide who merits better housing is more efficient or fair than a market? 

[greenforest32]

The high/increasing cost of housing (ownership or rent) in urban areas stems from the increased 'demand for land' in a fixed space which drives up the cost of land and the activity on top of it so I was thinking of an idea to allow for density without that associated increased cost which in theory would give residents a shield from and a say on new costs that could price them out. Of course it's not there already and unless you want to buy or freeze all of the urban land in an area, I don't see what way there is to stop the displacement of gentrification so that's why I mentioned starting in other areas.

For fairness, I'm thinking of increased standards of living to people from the lowest cost on basic services which is something I don't think market efficiency is necessarily interested in when it comes to public services. Lucrative is what comes to mind when I think of basic public services being run by for-profit entities.

[bedstuy]

The high/increasing cost of housing (ownership or rent) in urban areas stems from the increased 'demand for land' in a fixed space which drives up the cost of land and the activity on top of it so I was thinking of an idea to allow for density without that associated increased cost which in theory would give residents a shield from and a say on new costs that could price them out. Of course it's not there already and unless you want to buy or freeze all of the urban land in an area, I don't see what way there is to stop the displacement of gentrification so that's why I mentioned starting in other areas.

For fairness, I'm thinking of increased standards of living to people from the lowest cost on basic services which is something I don't think market efficiency is necessarily interested in when it comes to public services. Lucrative is what comes to mind when I think of basic public services being run by for-profit entities.

I don't really feel that sorry for people who say they can't pay their property taxes because their neighborhood is gentrifying. 

For example, I have a bunch of neighbors who bought their 3 family brownstone for less than $30k and now it's worth $700k and they have $5k a month in rental income.  Those homeowners aren't being pushed out.  Some of them choose to cash in, some of them want to live elsewhere, and that's totally their right.  But seriously, they can cry me a river.

On the other hand, renters, are being priced out of neighborhoods where they had deep roots and a real community.  That's certainly unfortunate.  NYC has a bunch of protections like rent stabilization (many apartments in my historically black neighborhood are rent stabilized, including mine).  We could argue about whether those laws actually produce any net benefit for poor people.  But, they do help some poor people and some not poor people like myself.

[Filuwaúrdjan]

I need to post more here, (later maybe), but in the meantime, it should be noted that you can have gentrification in rural areas as well. And it is an Abomination Unto The Lord.

[Torie]

I need to post more here, (later maybe), but in the meantime, it should be noted that you can have gentrification in rural areas as well. And it is an Abomination Unto The Lord.

All those "farm houses" lived in by MD's, CPA's, and solicitors south of London in Kent and Sussex Counties come to mind.

[minionofmidas]

For example, I have a bunch of neighbors who bought their 3 family brownstone for less than $30k and now it's worth $700k and they have $5k a month in rental income.  Those homeowners aren't being pushed out.  Some of them choose to cash in, some of them want to live elsewhere, and that's totally their right.  But seriously, they can cry me a river.

They are agents of gentrification, not victims. Presumably they put some borrowed money in to drive up the rental income and value, too.

[Okay, maybe Mike Johnson is a competent parliamentarian.]

I need to post more here, (later maybe), but in the meantime, it should be noted that you can have gentrification in rural areas as well. And it is an Abomination Unto The Lord.

My all-too-recent realization of which is a large part of why I would dearly like to understand the problem of gentrification a lot better than I currently do.

[bedstuy]

For example, I have a bunch of neighbors who bought their 3 family brownstone for less than $30k and now it's worth $700k and they have $5k a month in rental income.  Those homeowners aren't being pushed out.  Some of them choose to cash in, some of them want to live elsewhere, and that's totally their right.  But seriously, they can cry me a river.

They are agents of gentrification, not victims. Presumably they put some borrowed money in to drive up the rental income and value, too.

Not really.  They borrowed money years ago to buy their house and spent money to do routine maintenance.  But these are just middle class people who purchased from the 60-90s pre-gentrification.

[Serenity Now]

For those interested in gentrification in the context of England and Wales please note the following map.  For details see the same image in the 'demographic maps' section of the gallery.  Bluer areas are those which have become comparatively more managerial/professional etc.  Note the trends in certain rural areas compared to certain outer-suburban areas in and around London.

[Filuwaúrdjan]

That's capitalism; because I don't know who ought to have a particular property entitlement we have a market.  If you're concerned about distributional justice, that's best addressed through redistributive taxation and government spending, not through command and control regulation of the market.

Throwing your hands up in the air and bleating 'that's capitalism!' and acting shocked that anyone should question The Market (hallowed be its name) is not an answer, particularly when (as has now been pointed out in the thread) there is no such thing as a natural market in housing. Indeed, not only is their no such thing, there isn't really anything resembling one. Housing is about power, not ineffable laws of pseudo-nature. Attempts to claim otherwise are really just attempts to justify class war.

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How could the open abuse of state power in those cases be considered to be 'completely apart from gentrification' when without that very abuse of state power those particular cases of gentrification could not themselves have happened?

And all of this without remembering that the blueprint for all ultra-aggressive gentrification everywhere (and the subsequent creation of the banlieues) is what Haussmann did to Paris in the 19th century.