Gentrification

Yves here. I suspect most readers will agree with Dorman’s take on gentrification, and wanted to add some observations.

I’ve lived in New York so long that when I dated artists in Soho, they at best lived in AIR (artist in residence) lofts or were quasi-squatting (as in they’d moved into space zoned commercial and would typically try to pay the landlord, but even then they knew they could be tossed out at any time). They’d make the space habitable by putting in minimalist kitchens (and by “minimalist” I do not mean hip and swanky, I mean “put together with a a few old fixtures, makeshift carpentry, and illegal wiring”). If you went out on a Sunday at 11:00 AM in search of a newspaper (it was a hike), if you saw another person on one of the cavernous blocks, that was a lot of people.

Similarly, in the early 2000s, when I was living in Australia but would come back to New York periodically, two people I knew had offices for their IT businesses in a squat building that took up half of a city block in the meatpacking district (for complicated reasons, my cat Blake was living in one of the offices for a while and made it his mission to get out and investigate every room in this enormous building). In those days, aside from the meat vendors, the sort of famous Western Market and a couple of a couple of coffee shops on 14th Street, a few struggling boutiques and one hugely hip overrated restaurant, Florent, a couple of blocks away, you had trucks rumbling through and very little street life, save the trannie hookers who’d come out starting at 8 PM. You’d be more likely to see used condoms or needles on the pavement than cigarette butts.

Admittedly, I was effectively a tourist in these neighborhoods. But I liked them at their gritty stage when the pioneering types moved in, people who were self employed and needed someplace cheap, and cheap meant seedy. And unlike the typology that Dorman describes below, these situations might seem more benign because these low-end members of the celebrated “creative” class were occupying commercial space.

But that too has a cost. As Robert Fitch explained in his book, The Assassination of New York, the city had had long-term development plan, to push manufacturing out of Manhattan and turn it into an island for the well-off.

At my old gym, I’d sometimes chat with Danny, a gregarious man roughly my age, who’d run a business in the garment district for many years. He was proud of having provided high-paying jobs for his workers, many of whom were highly skilled. His cutters made $60,000 a year in the 2000s and some, first generation immigrants, sent their kids to college.

But even though the garment district (an area between 34th and 42nd Streets on the west side) was zoned for manufacturing only, the city allowed, even promoted, having the loft-like spaces used for offices. When one of the my IT buddies went bankrupt in the dot-bomb era (among other things, he’d had a contract for $2 million due to be signed September 12, 2001 for a project with United Airlines, fall through for the obvious reasons), he moved a skeleton operation to a shabby sublet in the garment district).

The rising rents squeezed manufacturers like Danny. He’d go with other traditional garment center business owners to the Mayor’s office to plead for the zoning rules to be enforced. Not only could they not get a hearing there, but they also had no success in getting media coverage. He reluctantly moved more and more of his operations out of Manhattan and now has hardly any employees here.

And it isn’t just Manhattan that stumbles all over itself to try to attract the rich to drive real estate prices up. On the other end of the spectrum, one of my brothers live in Escanaba, a small town in the Upper Peninsula of Michigan. I lived there for a couple of years in my childhood. Escanaba then was a thriving, largely blue collar town, with two manufacturers driving the economy. The smaller mill closed and the larger, a paper mill that should have remained world-competitive, has suffered greatly under the tender ministrations of private equity. Escanaba’s population has fallen from over 15,000 when I lived there to under 13,000.

My brother has served on the city planning commission for many years. He’s seen Escanaba pay repeatedly for development plans all based on the same premise: build high end condos on the waterfront. The wee problem is that the “waterfront” is already occupied by Luddington Park, a lovely WPA project and one of the city’s most important amenities, the marina, and a large iron shipping port that is going nowhere. Another wee complicating factor is that a city a mere 60 miles away, Marquette, already has successfully gone down the “provide waterfront glam on the cheap” path, despite having even worse weather than Escanaba (Marquette is on Lake Superior and has impressively brutal winters; Escanaba is on Lake Michigan and is in a 60 mile stretch called the “banana belt” despite also having impressively cold winters by virtue of its anomaly of 60-70% winter sunshine) because it has Northern Michigan University as its economic driver, and the things that go with colleges: some intellectual life and bookstores, movies, cafes, and restaurants out of proportion to the population.

Needless to say, my brother’s proposals that were more modest and focused on avoiding being a Marquette also-ran, like building an aquarium to attract more day-trippers, weren’t sufficiently appealing to the local construction industry to get any support. Apparently it’s preferable to nurture fantasies that will never get done.

By Peter Dorman, an economist and a professor at Evergreen State College whose writing and speaking focuses on carbon policy, child labor and the global financial crisis. Originally published at EconoSpeak

This is the bane of urban development, right? Old housing stock, built for yesterday’s working class, is spiffed up and priced far out of reach of today’s regular folk. High end shops replace hardware stores, bric-a-brac recyclers and appliance repair centers; a tide of designer coffee flushes out the cheap, refillable kind. Who can afford to live there?

But wait! Those refurbished old houses are beautiful. It’s a pleasure to peruse delicate artisanal fabrics and custom-designed furniture. The food is fresher, healthier and tastier. And what’s the alternative—to put a blanket over everything old and keep out all improvements? Is gentrification even a problem?

It is. It’s wrong if whole neighborhoods are uprooted, unable to afford housing and services available to them for generations, and the dynamism of city life is crippled if only those who have already made it can make their home there.

Regulations that restrict the development of new housing have rightly come under attack. Encouraging infilling and greater density benefits the environment and keeps housing costs down, but that only moderates the impact of gentrification. The luxury apartments that replace old single family houses are still beyond the means of most of us.

My hypothesis is that the basis of gentrification as an urban problem, rather than a type of broad-based development that benefits everyone, is extreme inequality of income. Gentrified neighborhoods are those outfitted for the upper echelon to spend their money on, and prices are geared to what the traffic will bear. The rest of us can’t afford it.

Imagine that income were distributed much more equally in this country. Maybe a few people would be rich, but there wouldn’t be enough of them to fill up whole cities. And the gap between the better and lesser off wouldn’t be so large as to preclude mixed neighborhoods. As overall incomes rose over time, so would the quality of housing, shopping options and services.

If I’m right, the solution to gentrification isn’t a prohibition on investments that upgrade urban life, but serious measures to reduce economic inequality itself. The test is whether countries without the great divide between the rich and the rest are as subject to gentrification as the US.

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105 comments

  1. HarrisonBergeron

    As a Yooper Marquette is home to Northern Michigan University not University of Michigan. Nitpicky but important to locals. My current location in Chicago’s north side has seen rents nearly double in 10 years. Andersonville is becoming the latest casualty as the 80+ year old Swedish bakery has closed, I’m assuming because of rising rents on a large Clark street footprint.

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  2. Bunk McNulty

    I had a little place on E. 13th St. in the early ’80s. Across the street was an off-off Broadway theatre and a metal-spinning plant (I think they made frying pans). Went back 5 years ago, didn’t recognize anything. To paraphrase Ishmael Reed, it’s now a Center For Wealth Detention.

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    1. Yves Smith Post author

      Yes, I never lived in the East Village but went there regularly (I had a yoga teacher who’d do cheap private classes out of her 300 sq foot tenement one BR). That was in the 1990s when it was getting more twee near NYU but still pretty rough and proud of it.

      Alphabetland was considered not entirely safe (I knew someone who built a building there literally himself; he was self-made, bought some parking lots during the fiscal crisis, saved like crazy, etc) on E 7th. The drug dealers on the block maintained order. They knew who the residents were and effectively gave them safe passage.

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      1. Carolinian

        I lived on St. Marks just shy of Alphabet City in the late 1970s–not long after Gerald Ford told a bankrupt NYC to “drop dead.” My roommate had a mania for paying the rent by money order and on time lest the landlord find out that he wasn’t the rent controlled tenant of record. I like to think of this as the last time you could live in Manhattan and be poor.

        But gentrification–or the “new urbanism” as it is called–seems to have become universal in 2017. My hometown city center of abandoned dime stores and clothing shops is being rather amazingly renovated. This seems like a good thing. But I don’t pay rent.

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      2. funemployed

        Re: “the drug dealers on the block maintained order.” For assorted reasons (in spite of being a white guy who grew up in a trailer in the woods), I’ve spent considerable time in 3 different areas where this was the case. Once I became known to the local power brokers, I always felt very safe. All it took was a friendly public greeting by me, acknowledged by a local captain (presumably a captain – never dumb enough to act like a narc by asking organizational details), and the hostile and suspicious stares completely evaporated. Oddly enough, these have been the places I felt safest in my life (something I was never able to convince my black yet very privileged girlfriend at the time). I honestly believe that had I ever been robbed, a few quick inquiries would have gotten me my stuff back (or cash equivalent, and an apology). (And no, I have never been a member of or worked for a criminal organization, I suppose I must add)

        Three quick points: First, high-level members of criminal networks have an extraordinarily wide organizational network that can rapidly gather a ton of information very quickly, and often cooperate in this regard even with their ostensible rivals (including law enforcement). When I became friends with a friend of a regional distributor, I was vetted, and once I was deemed to be trustworthy, the distributors bodyguards disappeared.

        Second, drug dealers keeping order always depends on cooperation with the local police (and FBI at higher levels, so I hear). There is some exchange of cash, but much more importantly, it requires law enforcement that is genuinely committed to keeping the peace. When someone causes problems, the police and high level dealers cooperate to resolve it. Sometimes they have lengthy negotiations about how to deal with external threats (A specific example – a deal with local police to turn a blind eye to a profitable heroin trade provided it was mostly kept out of white communities in exchange for help suppressing a rival organization trying to import lots of meth. The result, meth was very hard to get, but heavily marked up heroin was readily available. In spite of the relative ease of getting heroin at less than half the price in a municipality 2 hours away, anyone who got noticed importing that to the local population was quickly arrested, as well as meth dealers).

        This is a Faustian bargain for everyone but the cops. All it takes to turn a relatively peaceful and stable neighborhood into a very dangerous and violent one is to replace a police chief, or bribe the right people to set up and arrest the right power brokers, and the whole system falls apart. What has been happening in many parts of Mexico is precisely how violence in urban neighborhoods is manufactured – simply create a power vacuum where victory = wealth, and loss equals you and your family getting killed.

        Third, unknowingly, I became acculturated to a very rigorous set of cultural habits and values. By all outward appearances, I am now a privileged and educated white guy, but it only takes a relatively short conversation to earn the trust of hardened criminals. Oddly enough, I seek this out now. I just feel more comfortable around those people than I do around my highly educated white acquaintances. I am “good people,” which means I can be trusted.

        There is much talk about how police are very reluctant to rat on each other. This is true, but the media, without any exception I’ve ever seen, report on this as a way mostly white cops criminally harm poor people of color. There is a lot of truth to this, but there’s a flip side. The code of silence is also an essential precondition for creating relative peace and stability by negotiating the contradictions between our economic and law enforcement systems. Cops trust me too, and I wasn’t just not worried about being mugged, I also never worried about getting busted for weed (unless I publicly forced them into it, or ran into a naive rookie or messianic idealist, which exist in all police departments and are usually identified and marginalized very quickly if they can’t be compromised somehow). The criminogenic law enforcement culture is not a separate thing from the culture of traditional criminals. Even subtle cultural things often mirror each other exactly. They’re two sides of the same coin, and equally essential to maintain the existing system.

        In short, the same things that enable some neighborhood’s drug dealers to maintain order, also mean that those communities can be easily destabilized by the true power brokers in society, and this happens consciously and intentionally on a regular basis.

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        1. funemployed

          Oh yeah, the connection to gentrification here is that often (though not always), it is accompanied by “law and order” rhetoric, that, in the US, results in the intentional destabilization of poor communities of color that provides very effective political cover for “urban renewal,” which actually just means the shifting of geographic boundaries of race and money. (At least, that’s my conclusion from limited personal experience and hearsay.)

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          1. Colonel Smithers

            Thank you.

            Said communities of colour, sadly, still listen to the siren voices of the family who got rich off three strikes and you’re out.

            The process / strategy that you describe is used on this side of the pond, too.

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        2. PlutoniumKun

          I think its a very common phenomenon that local ‘generals’ keep places quite stable. And as you say, just saying hello to them is a very good way to buy a form of protection. Although only up to a point, as any fan of Goodfellas will know.

          Its one of the ironies of policing that a lot of violence can be generated by ‘successfully’ breaking up criminal gangs. This leads to a breakdown of the informal policing from the local Tony Soprano types. Criminologists often say that lots of gang shootings is often a sign of police success.

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        3. Ulysses

          “The criminogenic law enforcement culture is not a separate thing from the culture of traditional criminals. Even subtle cultural things often mirror each other exactly. They’re two sides of the same coin, and equally essential to maintain the existing system.”

          True enough! My “low-crime” neighborhood in Queens is the result of a longstanding private/public partnership between the Gambinos, local police, and other arms of government.

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        4. rc

          You have written something very penetrating. This describes Chicago. Arrest gang leaders and disband the gang unit. Jail El Chapo whose major distribution hub is in your city. Hamstring the police and reduce their numbers.

          Result: gang warfare and skyrocketing murder rates.

          BTW Trade and urban development policies caused jobs to leave vulnerable neighborhoods a long time ago (See Wilson’s “When Work Disappears”).

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        5. MtnLife

          “Third, unknowingly, I became acculturated to a very rigorous set of cultural habits and values. By all outward appearances, I am now a privileged and educated white guy, but it only takes a relatively short conversation to earn the trust of hardened criminals. Oddly enough, I seek this out now. I just feel more comfortable around those people than I do around my highly educated white acquaintances. I am “good people,” which means I can be trusted.”

          The story of my life. I imagine we’d get along great. I think the reason we both prefer this is that the highly educated white people tend to keep amongst themselves and only make acquaintances with those they see or think are relatively close on the social ladder – those that have the same credentials. The criminal element (outcasts and all those rough around the edges types) seem to care more whether you are a respectable human being or not and less about your position in society.
          I also have a similar local power broker story. I had a bunch of friends in a really bad neighborhood – within 30 seconds after stepping out of the car you would be approached by no less than 4 people selling crack or women. Some other friends introduced me to the guy who ran the area who told me to tell the street dealers that I was coming to see him. Next visit I dropped his name and they scattered like roaches. It only took two more visits for me to be left alone completely. That feeling you describe of being safe in a dangerous area is pretty special.
          I agree with your statement regarding the flexibility of police morality in line with keeping the peace. During my party years the promoters regularly paid 2 off duty cops to sit outside. Ostensibly they were there to help in the event of an altercation but really they were there to keep the other cops out. The promoters brought them the bad drugs they took off people in a show of “look, we are trying to do the right thing” and let the good ones in. In about 5 years of this there were no ODs, no public disturbances, no arrests, and the uniforms only made it in the front door once before the off duties escorted them out. They knew what was going on but was a case of “no harm, no foul”. Win-win.

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          1. funemployed

            “seem to care more about whether you are a respectable human being or not”
            Couldn’t agree more. I think we probably would get along. Funny how that works.

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      3. Lord Koos

        I have an old friend, a musician, who has a small apartment on E 7th between B and C streets. It’s a co-op building and he bought the place in 1979 for $250. Yes, $250, not $250,000! NYC at that time wasn’t too attractive and no one wanted to live on the lower east side. Visiting in the early 80s, it was exactly as you described — there were heroin and coke supermarkets at street level, but all was cool if you were known as a resident or a guest of one. The cops would patrol up to the corner and then turn around. In the early 90s, he was able to buy an identical apartment right across the hall for $60k, not too bad. Today, the neighborhood is hardly recognizable, little blond kids play on the sidewalk unattended, the bodegas are mostly gone, high-priced restaurants and bars are all over the place. The family in the bottom apt is no longer in the drug business. My friend complains about the noise at night, since now there are thousands of partying tourists on the weekends.

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        1. Brian P

          Usually when one neighborhood goes up, another goes down. Where are all the drug dealers and petty criminals hanging out in New York City these days?

          Reply
  3. JBird4049

    Seems like the entire San Francisco Bay Area has gentrified into a combination giant office/theme park with extremely expensive housing. Connecting gentrification and inequality makes sense. It’s pretty convenient correlation otherwise.

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      1. JBird4049

        I am using my memories from the th70s on, and there is big difference from then to now but if I’m off, that’s good, and fine with me.

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    1. Brian P

      The Bay area still has working class people. Those who stock the shelves, do construction, work at the gas station. These people are probably hurting in the Bay Area. Few housing options for them. Lots of people want to leave that region because of the cost of living. Not everyone is an economic winner there.

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  4. Colonel Smithers

    Thank you, Yves.

    As readers and you can probably imagine, it’s the same in Blighty.

    (Blairite / New) Labour run boroughs of London, especially those next to or with good links to the City (Islington, Haringey and Tower Hamlets) are just as bad, if not worse, than Tory ones. The leaders of Haringey (Clare Kober, whose hubby is the borough’s CFO) and Tower Hamlets (Sir Robin Wales) have made it clear that they don’t want the poor (in essence non 10%s) there and are often insulting about the residents. The pair get away with it as they often knife Corbyn over Israel and Brexit.

    The process has accelerated in my home county of Buckinghamshire this decade. There are two bedroom homes going on sale for nearly USD1m. Five bedroom ones on the same gated community, with good rail links to London and road links to London and Heathrow, are going for USD2m. The average salary for those who work locally is about USD25k pa. Therefore, these homes are marketed to Londoners and foreigners.

    From recent visits to France and regular viewing of French TV news at home, I get the impression that France is adopting the malign UK / anglo-saxon obsession with real estate and gentrification is taking hold on neo-liberal run areas.

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    1. Colonel Smithers

      One of the rare journalists employed by the Guardian has written two powerful pieces this year about gentrification and the abuse of power:

      https://www.theguardian.com/commentisfree/2017/jan/19/lives-torn-apart-assets-labour-privatisation-north-london-haringey

      https://www.theguardian.com/commentisfree/2017/jul/03/britain-power-contempt-grenfell-labour-haringey-social-housing

      Mauritius is emulating the mother country. As the sugar industry consolidates, much of the island is being turned into playgrounds for the rich from overseas (mainly French, South African, British, Russian, Chinese and Indian and the odd Angolan). The island’s average salary is about USD10k pa, probably not bad for a developing country. The luxury homes start from USD500k, payable in cash up front. One gets Mauritian residency or citizenship depending on what one wants / pays.

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    2. Clive

      Yes, it’s not just the gentrification of London’s urban neighbourhoods in terms of effects. When I couldn’t drive due to poor eyesight and had to move out the sticks and to somewhere liveable where you weren’t depending on a car for transportation (or else be isolated) about eight years ago, I bought the best option for my budget which was a fixer-upper in one of the many dormitory towns sprawling out of London in North Hampshire.

      It was relatively inexpensive at the time because, at an hour and ten minutes commute to central London, it was considered right at the outermost edge in terms of being commuter land.

      But now, lack of anything remotely describable as “family housing” for even vaguely middle-class earnings budgets has forced the commuter belt ever outwards. The peak time trains starting at Salisbury (90 minutes journey time, and that’s just station to station) are packed by the time they get to Basingstoke. They used to be barely 70% loading on those services at those calling points in the peak.

      The rail operator has reacted by planning on dropping off smaller stations as calling points to bring journey times from the bigger stations to 75 minuets from Salisbury, an hour from Andover and 45 minuets from Basingstoke — which pleases the commuter market and reduces some overcrowding. But small and less frequented stations get no direct London service. So it’s going to become a winner-takes-all outcome where the bigger towns with higher levels of building permits and less onerous Green Belt restrictions prosper but rural communities whither on the vine, denied services, transport links and inward investment from retail or employment.

      This endless stratification distorts a 100+ mile diameter circular area orbiting London and the environment of the 10M people who live there. I see it getting worse, rather than better.

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      1. Colonel Smithers

        Thank you, Clive.

        It’s the same in Buckinghamshire, but the overcrowding is getting worse and peak times longer, 5:20 – 9:05 am out and 15:27 – 19:27 in services. One hears similar from colleagues who live in the other Home Counties or those who are looking to move out and having a look around on week-ends.

        Rural Buckinghamshire seems in worse nick than rural Mauritius.

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      2. a different chris

        Thank you

        …But excuse me, I’m confused – is this continually extending rail trip a really a condition of gentrification, or does population growth have as much or more to do with it?

        If everybody was equal you still couldn’t all live in the same exact spot.

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        1. Clive

          For the specific case of London and the entire southern portion of England, it’s a condition of both population growth (much of the net migration the UK has experienced is centred on this region) and also “residential properties as safety deposit boxes” phenomena. A high proportion of new London apartment building has been bought by Chinese and Russian owners who are looking for both an escape route if needed and also a store of wealth.

          This is the most notorious example in newly gentrified Vauxhall. I go past it on the train; it looks like a steel and glass Marie Celeste.

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          1. Ned

            As a Californian, I have seen the same thing in the San Francisco Bay Area.
            Simple solutions:
            A. Banning new foreign ownership of real estate, limiting title to U.S. citizens only.
            (think of the administrative jobs that would create for strawmen)
            B. An occupancy tax on property owned by people not filing California income tax.
            This would hit the billionaires who live in San Francisco but who use their Nevada ski condos as their “principle residence” to avoid state income taxes. Large numbers of new TeslaPorschCedes with out of state plates seen around the wealth catering Laurel Village Shopping Center and at the Opera/Ballet garage on performance nights.

            Thuto, re Air bnb, and locals being priced out, same thing’s happening in Barcelona, to the point where the mayor is banning all new hotel licensing and using police to shut down private listings. “Tourism destroys neighborhoods!”
            is an often seen poster there.

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            1. lyman alpha blob

              Same here in Maine. My town is under a huge amount of development pressure however the population is not growing and hasn’t significantly for decades. That hasn’t stopped prices from skyrocketing though and since some people are getting rich off the property boom, the city council so far hasn’t even tried to slow things down.

              Part of this is due to people living differently than they did a few decades ago with fewer people per residence – for example the house across the street was owned by a single old widow when we moved to the neighborhood but at one point she, her husband, and their five kids all lived there.

              But I think the larger factor is as described above – parking money in real estate as a safety deposit box. My wife recently went to the hopping local bakery to try to gather some signatures for a petition. It’s jammed every weekend morning and she thought it would be easy to get enough locals to sign. It is one of the nicer neighborhoods and fairly close to the beach though and she wound up leaving early and looking elsewhere for signatures as nobody she approached at the bakery was actually a local resident. Clearly a lot of the people staying in that neighborhood were second home owners or short term illegal renters (aka AirBnB).

              Gentrification can improve things at times, but not if it’s a result of a few people buying up multiple homes in a lot of different cities they have no intention of actually inhabiting. It’s high time to do as you suggested and start taxing 2nd homes with absentee owners at a much higher rate.

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  5. Thuto

    The dark side of Gentrification is a global phenomenon and is hitting cities in the developing world hard. My own city of Cape Town South Africa had the world’s third highest housing inflation in 2016, price gouging has become the norm, the availability of affordable long term rentals is something of a relic from a bygone era. With the exchange rate between the major foreign currencies and the South African Rand being at an all time high, foreign buyers are picking up real estate at firesale prices (i.e. when asset prices are converted into their currencies) and Estate agents (realtors) are relegating local mortgaged buyers, the very few with the stellar credit, to “buyers of last resort” in their frantic race to land rich foreign cash buyers, most of whom are buying to list on air bnb. Simply put, ordinary locals can no longer afford to live on the atlantic seaboard and city bowl areas and have been completely squeezed out of the market. The city authorities meanwhile pander to the need to have Cape Town listed as a “top global travel and real estate investment destination for the well heeled” while completely ignoring the needs of their own citizens.

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    1. Colonel Smithers

      Thank you, Thuto.

      I live in Buckinghamshire and went to school next to Silverstone (the motor racing track). Many F1 teams are based in the area. I have friends who work for the teams and hear that the City and Wall St investors who own the rights to organise grand prix (John Malon’s Liberty Media, plus the former owners led by Bernie Ecclestone) would like Cape Town to host a race, a la Monaco and Singapore. The investment needed for that and the money needed for / to maintain the multi-year contract will cost billions of rands. I can see it happening, though, especially as “the fairest cape of all” rebrands itself, vide the regular features on CNN Travel and marketing as a long week-end destination. The F1 trough will attract many snouts, just like the 1995 and 2010 world cups.

      I am hoping to return in the spring of next year.

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      1. Thuto

        Colonel Smithers, with the proposed track running through parts of Green Point, Moullie Point and the V&A Waterfront, where 2 bedroom apartments are within sniffing distance of $1m, I can imagine “prime” real estate marketers are salivating at the prospect of adding ” on race weekend, watch F1 cars breeze past while you sip champagne on your terrace” to their marketing collaterals. According to the Cape Town F1 company, a private company set up to lobby the various stakeholders needed to ok this proposed move, the initial cost of setting up the track is a projected ZAR 500m, and as you rightly point out, the maintenance costs will likely run into billions. But at least we’ll “get” something in return, the nebulous “exposure” that comes with hosting such events (while the hard cash earned from the event is repatriated to wherever Liberty Media books its profits). How we monetize said exposure, well that’s something we’ll have to figure out on our own…

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    2. Wukchumni

      Here in our little town just before the entrance to Sequoia NP, there are effectively no long term rentals whatsoever, and the way it used to work prior to AirBnB and the like, was seasonal NPS employees would rent in Three Rivers from April to October, but now there’s nowhere to house them, and there is some housing in the NP itself, but nowhere near enough to satisfy the demand.

      Our town isn’t being gentrified so much, but more so to get an older house up to snuff to make it worthy of a short vacation term rental.

      And we too have out of town buyers purchasing homes to rent out, and the effects are interesting in that our school has gone from 250 students to 150 in the past couple of decades. Equity refugees like me sans kids, fleeing the big cities for a richer life are also an aspect of the changes.

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  6. Henry Moon Pie

    While I’d love to see income and wealth inequality attacked head-on with a $1,500/mo/person guaranteed income and 95% tax rates on inheritance over $5 million and income over $1 million/year, we should be looking for other solutions to gentrification as we’re waiting for the Second Coming of Durrutti.

    I’ve always liked Tito’s solution as it was implemented in the former Yugoslavia. Families were given parcels of land on which they could build not only residences but small businesses. In tourist towns along the Adriatic coast, folks would have a bakery or butcher shop or convenience store or cafe-bar on the half-basement floor. They’d live on the 1st floor, rent out the 2nd to tourists and maybe have grandpa living on the 3rd. It made for walkable, fairly self-sufficient neighborhoods and provided income for the families. Flexible zoning, with some control delegated to the neighborhoods themselves, would allow residents to increase their income as the neighborhood “improved.”

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    1. a different chris

      That sounds lovely, but in America, Walmart *is* a bakery, a butcher shop, a convenience store (as we drive everywhere and have apparently no sense of time) and probably has been thinking about a cafe-bar…. our local large grocer has very nice ones.

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      1. JBird4049

        Walmart destroyed much, and in some places all, of the small stores in the local small towns. Driving through some of those towns is blasted depressing. In some places, after destroying the local economy the company leaves, which leaves the locals with no businesses to go too.

        It’s been a few years since I’ve driven up too, but as someone told me, parts of Northern California look almost like the third world. Just bombed out economically. Although that’s not Walmart’s fault.

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        1. Wukchumni

          I shop @ Wal*Mart on occasion, and one interesting thing i’ve noticed is they used to have ‘greeters’ that welcomed you into the store, now they have ‘exiters’ that look at your receipt to verify you paid for whatever is in your shopping cart.

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        2. Lord Koos

          A friend runs a small cafe and coffee roasting facility on Whidbey Island, about 20 miles north of Seattle. They recently expanded the cafe but now can only open it four days a week because they cannot find enough workers to staff it full time. Housing on the island has become so expensive that there are no affordable places for workers to live.

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          1. Schtua

            Same is true on the Oregon coast. There is one very busy pizza restaurant in Manzanita that only does takeout, and can’t staff the dining room any longer.

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    2. Brian M

      Much of this neighborhood control would lead to nothing but absolute stasis, as the older baby boomers who bought in are terrified at anything that would change their suburban dream. Certainly, retail and services that bring outsiders into the cul-de-sac are verboten!

      Reply
  7. PlutoniumKun

    Its a very difficult topic, and as the writer acknowledges, gentrification is largely a symptom, rather than a cause of many problems, most notably inequality, but also (most particularly) issues of tenure. Since the poor are more likely to rent, they are more likely to be the victims, rather than beneficiaries, of gentrification. But where the poor own their property, they can be significant beneficiaries. It has to be acknowledged that some low income people have benefited hugely from being able to sell (or rent) their grotty run down little terraced house to some hipsters. One woman I know, a nurse from a very poor family background, is more or less a millionaire facing her retirement through this process. This is though, a matter of luck.

    It does seem that in the US the combination of inequality and the particular nature of land tenure has ensured that gentrification is mostly negative. Its not always the case. I live in a ‘gentrifying’ area in Dublin, the Smithfield/Stoneybatter area. But in this area its a long term dynamic. It was ‘gentrifying’ in the 1950’s, when it became known as the area favoured by ‘actors’ (at that time, the euphemism for the gay/bohemian community). Its gone through waves of becoming both gentrified, and slipping back into urban poverty. Most recently, to the hilarity of locals, the Guardian announced that it was Dublin’s Williamsburg.

    I have quite an interest in this as my mothers family originated in the area and I’ve traced businesses owned by distant relatives. My great grandfather and his family owned a number of pubs, no doubt profiting from the thirst of the poor who could only find comfort in a warm mahogany lined bar. I’ve traced (through tax records), how those businesses declined gradually along with the local community through the early 20th century, and stuttered through the latter half. My great grandfathers pub is now still a ‘local’s place, although its neighbour is a super hip gastrobar. Of two other pubs his brothers owned, one is now an uber hip hangout (featured at the top of that Guardian article), while the other has rather ominously put up signs promoting its artisan bread sandwiches and IPA’s (the clientele, so far as I can see, has remained firmly elderly, working class and alcoholic). A butchers shop owned by a distant relative is now run by a well known craft designer. Its called… the Old Butchers Shop (but sells handcrafted linens made locally in a community centre).

    But my area is not on a one way trip to hipsterdom. There seems to be a crane on every spare piece of land, but they are now all building ‘student apartments’. These are favoured now by developers to take advantage of high rents. They like students because they can kick them out over Christmas and Easter and triple the rents for tourists. It also gives them an opportunity to build substandard units because, after all, they are just for students. They are grimly referred to by locals as ‘the new tenements’. And it maybe that in a downturn, this is exactly what they will be. While I have mixed feelings about them, at least they will be affordable housing and will bring lots of new people into the city centre area.

    The prime reason why the area is not on a one way trip to becoming Soho is that among all the hipster coffee houses, the area is full of homeless hostels, drug clinics, and public housing used by the most ‘difficult’ tenants. As these are local government or charity owned, they are not going anywhere (much as we’d love to share them with the more leafy suburbs). There are enough of these that the area will never attract hedge fundies or middle class families.

    Its not all straightforward, the issues the changing nature of the area cause are complex. The old Smithfield horse market, which dates back to medieval times, was effectively killed off by apartment home owners in the area. To be fair, the catalyst was someone in the market deciding to settle an old grudge with a sawn off shotgun. But its a sad loss of history to the area and its lost a lot of its grit. The nearby fruit and veg market is in an area of suspended animation as proposals to shift it to the suburbs have been mired in legal difficulties for years. If it goes, it will be a major loss of working class jobs in the area. It will also mean no more Dutch 8-wheelers reversing into residential streets at 3am, and hopefully a lot fewer rats. It may bring in lots of hipsters, but if the local government plans are developed rightly, it will also bring in lots of small businesses in the form of a new retail market modelled on the type that is considered ‘normal’ in most of Europe. You lose something valuable, maybe you gain something valuable too.

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    1. Colonel Smithers

      Thank you, PK. Super, as always.

      Your first paragraph reminds me of anecdotes from dad’s Irish former colleagues in the Middle East. They left London and Dublin to work as nurses in the Gulf and save for a property or bigger property back home. Having got on the housing ladder, they found gentrification made them even more prosperous (at least on paper).

      It’s the same on the north and west coasts of Mauritius. Fishermen of African origin and small farmers of Indian origin sometimes find themselves living next to MacMansions (actually they are much better than that and are kept by “cahier de charge” to French colonial style) and fortresses (much favoured by Thuto’s 10k compatriots on the island, including enough Afrikaners for their language to get some official recognition). Said fishermen and farmers often sell, but a small number have resisted, so Mme de Pompadour or Mevrou Evita Bezuidenhout may often live next to a Rasta.

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    2. Quanka

      Very thought-provoking article and comments — interesting how much of a global phenomenon this is, although not surprising given the rise in inequality the world over. I’m reminded of Jane Jacobs theories on cities — they will fail if you build street after street of the same thing. Cities work, thrive and grow for their residents when the usage of the city blocks is mixed and varied throughout. One gentrified condo building on a city block might work, but an entire city of condo blocks is destined for failure.

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      1. Colonel Smithers

        Thank you.

        It’s happening in London as the river becomes off limits to the public, although that enclosure process is not new. A couple of years ago, a montage of the Thames “canyoned” by shiny condos was published in the Evening Standard. The areas around the former docks, Canary Wharf, and where the US embassy is migrating, Chelsea and Battersea, are like that.

        Life is being squeezed out of these areas. When the 1%s are not in town for the social season and Christmas shopping, there is little sign of life around. There is little passing trade for small traders.

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        1. PlutoniumKun

          I lived in London for two years in the 1990’s (Kentish Town and Mornington Crescent). So I know many parts quite well and on my occasional visits back I like to wander back to places I knew. Superficially, some are ‘better’, in that they look much cleaner and more prosperous. But it is striking at how utterly soulless some parts of London have become – just endless chain shops/restaurants and weirdly quiet in the evening. I used to love wandering around places like Hamsptead or Chelsea/Kensington just to admire the architecture and streetscapes – but now I find them quite chilling places in a way I find hard to articulate.

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      2. PlutoniumKun

        Yes, I think thats a key point. Gentrification is not just related to a wave of hipsters moving in to an area. Its a complex phenomenon, and whether it is negative or positive relies very much on existing patterns of development and tenure. For example, the complex nature of tenure* in my city, Dublin, means that its proven far harder for developers to package up large chunks of land for redevelopment. This has meant they are forced to build lots of smaller developments, which are less profitable, but means change in the city is more gradual and less prone to the whims of politicians and developers.

        *essentially, a cultural tendency to leave property to all your children, combined with emigration, has meant that many individual buildings are ‘owned’ by dozens of people, many of whom live in the US or Australia – this means that buying up a clean freehold can be very difficult.

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      3. Mike Mc

        ^As above. My small rural state capitol/university ‘town’ is pushing 350k population and the ‘future tenement/current student housing-retail’ boxes have invaded every corner across the city. Ridiculous rents being paid by the wealthier classes or those aspiring to join them.

        Frightening but not surprising to discover this is a world-wide phenomenon! The rentier seeking to make even more money transcends borders once again.

        Wondering when Peak College/Higher Ed will be reached? When the wealthy run out of offspring to get credentialed, or when other matters – say, climate change – will make all this striving moot?

        As a techno peasant toiling away in Higher Ed IT services and teetering on the brink of retirement, not sure what to wish for.

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    3. vlade

      This is something a lot of former Soviet-block countries where you can see this. For example, Prague is now officially the most expensive Europen city to buy in for locals. IIRC, average price for square metre in Prague is approx 3k USD, while the median (not average ) salary in Prague is approx 15k USD (annual). Over five times annual salary is considered expensive, and five times salary in Prague would get you 25m2. For a reasonable flat you could raise a family in, you’d need well over 10 times salary.

      Yet, most of the SBC have high to super-high (Romania – 96% – UK has about 63%, US about 65%, for CZ since I mention Prague above it’s >80%) home ownership rates, so any gentrification means a lot of (especially older) pepole are suddenly cash very poor, asset VERY rich (as in they could sell their house for a multiple of expected pre-tax average lifetime earnings). I know of more than one family from the region where selling their family house would allow them to retire very comfortably even while in their 40s, who now struggle when they old second hand car breaks down and they have to get it fixed or god forbid buy a new one.

      This may be a blessing, but also a curse – there’s a lot of “schemes” of various legality to get that money from (especially the older) people.

      Reply
      1. PlutoniumKun

        A big problem of course in eastern Europe is that titles from pre-1990 are shaky legally, so a lot of older people find that ‘their’ apartment or property isn’t as they thought. Plenty of outsiders have bought in countries such as Romania or Bulgaria only to get a rude surprise.

        In China, there is a similar situation with older titles, or to be precise, local governments can pretty much ignore peoples ownership. But on the other hand, when the economy was liberalised in the 1990’s many public sector workers were given title to their homes in compensation for the loosening of the iron ricebowl. Many subsequently became very wealthy as their grimy little flat in Shanghai became worth a small fortune.

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      2. Wukchumni

        My relatives in Prague sold some of the family real estate that was in communism limbo previously, for a pittance in 1990-91.

        But $3,000 was a lot of money when you consider that it was worth precisely zero, not too long before.

        It must’ve been an interesting time, my dad went to his 50th high school reunion in 1991 and told me that dinner for 15 was $14, prices were so out of whack. When I went the first time in the mid 90’s, a half liter of Pilsner Urquell was 71 cents @ the airport bar, and when my nephew picked me up @ the airport, I remarked how reasonable it was, and he told me I got ripped off, and then we went to his favorite bar and drank 25 cent 1/2 liters, ha!

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    4. Basil Pesto

      I can’t believe I’m saying this but, hipsters are people too!!

      Flippancy aside, this comments section is full of great and insightful posts and this one stands out for its detail and thoughtfulness.

      It’s hard for me to get a bead on what gentrification actually means and how widespread it is in Australia, and that might be because I’m too young and too sheltered. On the one hand, the real estate industry is out of control. House pricing in all the capital cities is exorbitant as is well documented. Aforementioned real estate industry has rebranded the concept of home-ownership as ‘The Australian Dream’, which is just about the peak example of how we take our cultural cues from the US. But it is true that owning a home is kind of seen as the summit of one’s economic life – if you don’t own a home, you haven’t made it. This suits that industry and lenders very well.

      There are definite examples of gentrification in Melbourne’s inner suburbs I think, Fitzroy and Collingwood spring to mind most readily. I think gentrification in parts of Australia, such as it is, might be a gradual process though – people who don’t consider themselves to be especially well off moving to areas a bit further away from the centre of the city because they have been priced out of the closer suburbs, but without realising that in so doing, they might be gradually pushing out those who are even less well off.

      But sometimes I get the sense that people will label a suburb gentrified just because a couple of cafes that sell third wave coffee and smashed avocado have opened up, when it’s not really clear that there has been any meaningful socioeconomic shift in that area. My city, Adelaide, has in my opinion a very broad middle class and in my lifetime, the socioeconomic profile of the suburb I grew up in and its surrounds has hardly changed at all, even as the local amenities have (but not hugely). My Dad grew up poor in a suburb that at the time was probably considered a separate town. Now it’s just a standard, middle class suburb. The furthest suburbs of Adelaide are probably three times as far out from the CBD as that one is (Australian cities tend to expand horizontally, rather than vertically – houses and smaller apartment complexes are much preferred to larger, communal apartment complexes). But this just seems like natural urban expansion commensurate with population growth. My father’s suburb is certainly less poor now, but this seemed to be the consequence of growing prosperity since the 1950s when my father grew up there, rather than the consequence of the poor being shunted aside. This suburb was markedly better off by the 90s, when I was growing up – well before the concept of gentrification had been popularised.

      Then there are I guess the business markers of gentrification – those wanky cafes I was talking about. Old-timey businesses like milk bars and delis (not in the New York sense, more like a no-frills place to get a sausage roll or a donut) are very rare. My father used to know the location of every such business in the city I think. In fact, if you spend some time in Adelaide suburbs, you will often see the buildings that used to house these kinds of corner shops – they used to be smack-bang in the middle of residential areas with apparently no other commercial businesses near them – and they’ve been converted into homes. But these older businesses were well on the way out by the 90s – replaced by relatively innovative ethnic or multicultural eateries that were a bit more expensive maybe. Now in the 2010s it’s craft-coffee and avocado toast (not exclusively, of course), more expensive still but hardly unaffordable for many Australians. I daresay these relative luxuries can be found in almost every suburb in Australia’s capital cities (and the coffee is often delicious, and I’ll take a nice, thoughtfully made beer over some swill produced by some ungodly mega-conglomerate any day – though here I may be outing myself as a hipster!). In fact, the meme now, which I think generated some attention beyond our shores this year, is “young people can’t afford a home because they spend too much money on avocado toast” which is of course utterly facile and exculpates the aforementioned rampant real estate industry.

      There has been recently a more overt case study of what could be considered a classical example of gentrification: It’s a former factory for a prominent electrical goods company, which has now been turned into a market featuring gourmet foods, a bar, a cafe, fashion markets on the weekends – all the stuff that’s very easy to make fun of. It’s a classic example of what one can find in any of the tony Wallpaper magazine city guides: a new business that is in part defined by the ghost of the business that used to be there, even forming part of its marketing pitch (this art gallery used to be a slaughterhouse! this hotel used to be a crematorium!) But the thing is, it’s not clear if the older business moved because it was priced out. It has moved to a factory that is farther away, but is larger and apparently more modern. So while it’s easy to make fun of the new tenants, if the old business wasn’t destroyed, and the urban renewal surrounding the redevelopment isn’t deleterious to existing residents (though I can’t say for certain that this is the case), is it really so bad? And isn’t it folly to fail to acknowledge that cities are constantly evolving in complicated ways driven by forces that aren’t totally understood until after they have taken effect?

      So the urban dynamic in this country’s cities has undoubtedly changed over time, but it’s still not clear to me that this is the direct consequence of sheer avarice, as per some of the USA examples, or subtler and less malign socioeconomic forces.

      Reply
      1. Basil Pesto

        Actually what I would add is that these new small businesses – the craft beer/coffee etc joints – which are almost always run by industrious and enthusiastic people, tend not to last as long as the older businesses that used to be around. Those older milk bars and delis might have been around for 20+ years before they went out of business. Some of the new businesses might have some staying power, but many last for one or two years before going out of business. A new cafe takes its place and the cycle begins anew. The businesses are more precarious than they used to be and this is doubtless because of exorbitant rents from greedy landlords, a consequence of a real estate market that has become ever-harder to buy in to and which heavily favours investors.

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  8. Harry

    ” a few struggling boutiques and one hugely hip overrated restaurant, Florent, a couple of blocks away, you had trucks rumbling through and very little street life, save the trannie hookers who’d come out starting at 8 PM. You’d be more likely to see used condoms or needles on the pavement than cigarette butts.”

    Quite! Although I valued Florent more for actually being open at 4am than for its heartbreaking hipness or the quality of its food. I think the Trannies were also welcomed as local color.

    Of course now, gentrification in NYC is about the L train. Bless the poor people of Bedstuy and Crown Heights for putting up with the ill-brought up kids of New Canaan.

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  9. Basil Pesto

    On the one hand, the streets or lower Manhattan not being strewn with used condoms and needles is probably not toooo awful. On the other hand, it is awful if those condoms and needles are just being swept away and reappearing in the outer, unvisited fringes of the city.

    As an aside, David Simon’s new series The Deuce is offering an interesting view of pre-gentrification Manhattan, specifically focussed around 42nd St/Times Square (“The Deuce”), resplendent with period details.

    Another aside: here is an article I read earlier this year taking a small look at the state of play in the garment district today, with some good photos: https://www.heddels.com/2017/04/made-in-nyc-how-the-garment-district-helps-young-brands-beneath-the-surface/

    It concludes: “Since I started working on this piece, the current Garment District’s future has become endangered by a more local, classically New York challenge – the rising cost of rent. Following the development of new commercial properties for garment manufacturing along the waterfront of Sunset Park in Brooklyn, New York City Mayor Bill de Blasio has recently proposed significant changes to the Garment District’s zoning laws.

    One of its provisions includes the removal of a thirty-year old requirement that helps keep manufacturing rents affordable in a highly desirable commercial real estate neighborhood. The economics of New York City has seldom been sentimental where real estate is concerned, but I’m hopeful for an outcome that will preserve the unique value of the District.”

    I wish I shared his optimism!

    Reply
      1. UserFriendly

        It wasn’t when they were hooking in old school NYC.
        IMO it’s all about context; if someone is using it in a way they shouldn’t it’s rather obvious. Like fag, queer, or nigga I find it much more empowering to take a slur and embrace it rather than police it’s use out of existence. Unfortunately modern PC culture disagrees.

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        1. Clive

          Agreed. When I bought my first house and was a humble cashier earning bugger all money and struggling to make ends meet, I took an evening job for six months or so as a bartender at a gay club which couldn’t get staff, well, because… (this was Britain in 1995 (~ish) and not exactly the paragon of tolerance we are today, ahh, hmm, anyhow, moving swiftly on from that subject as the Daily Mail still sells copies by the tonne)

          The proprietor had a tried-and-trusted approach to entrance security, patron selection and generally keeping trouble out on the street but not having to get heavy handed or getting a bad reputation for public order issues. Which was, as he described it, to “… put the trannies on the door, it tells people what sort of club it is, anything that is too staggie* a party won’t run the risk of fighting to get into a queer place and they (the trannies) know how to use a bit of ribald ribbing to diffuse a load of testosterone and booze fuelled aggression”.

          He was gay, the trannies were, what can I say, trannies and all addressed themselves and each other as trannies, queer, poofs* and so on. You would not dare say they hadn’t got the right, earned in centuries of abuse, to call themselves what they wanted. Nor, however, could anyone (at least not on their home turf), get away with using those labels in any form of a put-down.

          * British English terms for which I am unable and unwilling to provide US English translation!

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  10. The Rev Kev

    First, kudos to HarrisonBergeron for that Onion article. On the surface this gentrification article seems to be part of the class war in that the wealthier class has staked out which parts of the cities they want to have for themselves and are using their ties with businesses and local governments to get their way.
    Upon reflection, there may be much more going on here with what I call the “churn” factor. If these places stay the same then the only profit to be had is from local taxes and the like. Once an area is gentrified, however, then it is like a bonanza. As old places are rebuilt or totally renovated, then the land values goes up as will future local taxes on the properties as they are churned over.
    The real money is to be made in real estate sales as properties are sold and resold with each sale being of more value than the previous one. We get the same down under. Several years ago I was reading the irritation that local governments, real estate developers and real estate salesmen had with old age pensioners in Brisbane. Why old people? It seems that these people thought it not fair that the oldies had been living in their homes for 30, 40 or 50 years. The suburbs these oldies lived in were cheap when they built there but because they were close to the city, their value had become potentially much more valuable.
    An idea floated was that the local councils should raise their taxes astronomically so that the oldies would be forced to sell. Then they could go away and move into an old age home or go die. Their houses then would be available for sale and resale to wealthier middle-class people who really deserved it. That way, everybody would win, right?

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  11. ebr

    Lord do I have some mixed feelings about gentrification.

    Let’s start by calling gentrification another form of social change, or maybe of neighborhood or demographic change. Other examples of social/demographic change might be ‘the Great Migration’ of poor whites & african-americans to the Northeast & Upper Midwest, or white flight out of Detroit for Oakland & Macomb counties, or the darn complex change in NYC neighborhoods, or even when the Potawatomi & Ojibwa met the first Europeans and said ‘these guys are nothing but trouble’

    But hey, we are all citizens together yeah? A ‘neighborhood’ isn’t a tribe, it doesn’t have a membership roll, you don’t need to pledge an oath of loyalty to NYC to move from Montauk to Manhattan? What does it matter if you choose to live & vote in Oakland county or Wayne county or Macomb county? But then again, maybe it does. That ‘citizenship’ thing has always been a bit more ideal (and fictive) than I would like, and it exists in competition with other ways to organize your social circle, such as close family or extended family or ethnic group or religious affiliation. ‘Neighborhoods’ as a way to organize society is such a fuzzy definition — in part because ownership of the buildings doesn’t exactly overlap with those that live in them (well, more so in NYC with its many renters) but as humans we also need a sense of place & to say ‘this familiar place & people are mine’ (even if I am just a renter)

    I just don’t have any good way to sort these definitions. Any policy that prevents gentrification can very easily be repurposed to keep ‘the other’ out (I am biased against gingers) I should really like gentrification — hey it is my people doing the gentrifying ! And once the poor & precariat are gone I don’t need to think about them anymore. But I have spent too much of my life cleaning up someone else mess (the opiate crises & all) to think like that. Also, hardly anyone is so rich that they are not three bad days away from joining the precariat (unemployment, divorce & illness)

    Maybe instead of ‘gentrification’ we should talk more about citizenship — who is a citizen, who gets to become a citizen, what we owe to one another as citizens, how often do we talk to one another as citizens. With the new American class structure we don’t talk to each other cross class anymore (or need to talk) and so how easy it is to make the precariat invisible, or look at their manners & claim that they deserve their poverty (see infamous Amy Wax essay example) — but I honestly don’t know how to fix that.

    Aside on Escanaba: yeah it is nice up there. The summer between high school & college I worked as a carny, traveling around the midwest to various county fairs & the UP State Fair in Escanaba was my favorite job (mostly for how cool it was in August) so yes it is beautiful & well worth a visit

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    1. Colonel Smithers

      Thank you for “or even when the Potawatomi & Ojibwa met the first Europeans and said ‘these guys are nothing but trouble”. I imagine that is what the Welsh said when the world’s original illegal immigrants arrived from Germany and Scandinavia.

      Reply
  12. Croatoan

    Small town gentrification IMHO is worse than urban gentrification. These smaller towns usually have less resources to care for the displaced. One prime example is Port Townsend,WA (pop. 9000). Most definitely became a boutique town in the last five years; farmers market, a festival every other day, artisan everything. And now the majority of people working in a paper mill or tourism cannot afford the rent. The closest homeless shelter is on Seattle.

    The same can be said of Carrboro, NC. Although it is a university town which in the past meant cheaper rent, now it is populated with “luxury” apartments paid for by student loans and upscale bars and restaurants. Ya know, a foodie town where everyone instagramming their food.

    But I disagree that it is separation of wealth that is causing the problem. Several of my friends who live in both of these areas have the “nice life” but they are saddled with debt and could not squeeze a dollar out of their wallet for the homeless.

    So instead I have been calling it “The Separation of Debt”. The changes I have seen in these two towns has begun in 2008. Debt is the new wealth. Orwellian to say the least.

    Reply
    1. Lord Koos

      Yes it hits small towns hard, but it affects a smaller number of people than in the cities. I live in Ellensburg WA, which is experiencing a real estate boom as people flee super-expensive Seattle. You can sell your 3 bedroom rambler in Seattle for $700,000, come here, buy a nice little hobby ranch for $400k, and then have enough left over to buy a couple of rental properties (it’s a college town). Housing has become tight and now over 60% of the town are rental properties. This doesn’t lead to stable neighborhoods.

      Reply
  13. perpetualWAR

    After 30+ years of homeownership in Seattle, and 10 yrs of fighting unlawful foreclosure, I am moving out. Seattle and Amazon can have each other. I’m out.

    My street of cute little bungalows has slowly changed to many storied city McMansions. It is absolutely gross. And outside these 5000 sf homes, is parked an electric or hybrid car, cuz ya know Seattle is liberal and into “green” pursuits. They can’t even see the irony…..cuz they are new Amazonians trying to fit in. They have ruined our formerly great city.

    Reply
    1. justanotherprogressive

      One of my sons was recently hired by company in Seattle at a salary three times what he was making as a college professor. The irony? He can’t find a decent place to live that he can afford. He is currently living with his brother…..

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  14. Andrew Grahm

    I have been reading this site and your contributions to it for a few years now. This gentrification piece caught my eye today because it jibes with my experience in NY. I moved here in 85 and worked for years as a bike messenger. Your description of the meat packing district and trannie hookers matches my memory perfectly. Although I am happy for the lower crime rate now, I have much nostalgia for that time. I was able to pay my way through CUNY paying cash for my classes ($500 a term) and my rent in Brooklyn. This would be impossible now.

    Since then I have come to manage a courier and logistical company that has been forced through the gentrification process to move from Tribeca twice and then to the garment district where the loft building we were in for 10 years is now being turned into loft apts and a similar building next to it was turned into a boutique hotel. Now we are further west in an old carriage house. We survive.

    But what really amazed me was your mention of Escanaba, The town where I grew up in the 1970’s. I also have a brother who remains there and your comments are a match of how I describe the area to friends who do not know it. My brother has been involved in city government as well and owned a business on Ludington St for many years. I would assume that my brother knows your brother. If you were there in the 70s and 80s my father owned a pizza restaurant downtown called Mr. Eds. It was the best pizza in town.

    I would close by saying that Escanaba was a great place to grow up in during that time and that the gutting of the economy through de-industrialization coupled with an ideology that seeks to drown government created a noxious tide that has swamped all boats and left the survivors bereft.

    Reply
    1. Huey Long

      Since then I have come to manage a courier and logistical company that has been forced through the gentrification process to move from Tribeca twice and then to the garment district where the loft building we were in for 10 years is now being turned into loft apts and a similar building next to it was turned into a boutique hotel. Now we are further west in an old carriage house. We survive.

      You wouldn’t happen to be with Breakaway would you? If so, hats off to you guys for your support with the recent NYC Century bike ride I partook in recently.

      But what really amazed me was your mention of Escanaba

      Me too! The ship I was stationed on in the USCG was the Escanaba.

      Reply
      1. Andrew Graham

        Yeah, that’s us. We have helped with the TA Century ride for many years. Our owner was on the board of TA for a long time. We are bikers. I also miss how crazy it was to be a biker in NY in the 80s before things got all bike friendly! Thanks a lot TA. The Escanaba? I did not know the USCG named a ship after my hometown.

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  15. B1whois

    Maybe a few people would be rich, but there wouldn’t be enough of them to fill up whole cities.

    The sentence from the article confused me because I thought the idea of income in equality is that there were fewer people of wealth. If income in equality is where greater wealth is concentrated into fewer hands, then how are there enough of them to fill whole cities?

    Reply
    1. Lord Koos

      There is greater inequality, while at the same time a larger percentage of people have become a lot richer, although they are still a minority. Simply put, there are a lot more people with a lot of money now than their used to be, at the expense of all the others who are falling out of the middle class and into poverty and debt. These charts help explain: http://apps.urban.org/features/wealth-inequality-charts/

      Reply
  16. SerenityNow

    I think the gentrification discussion is incomplete without peeling back the price appreciation issue to examine in which ways our system commodifies land and pushes housing as the most significant asset for a huge number of people. We bemoan rising rents yet love when we’ve bought low and can sell high–we are incentivized to keep the gentrification machine running even when we don’t like the noise it makes.

    Very interesting to read about land use in the UK in the comments here, and about selective zoning enforcement in NYC. Thanks everyone!

    Reply
  17. justanotherprogressive

    I’m so glad Yves mentioned the plight of small businesses in her article. Gentrification isn’t just about moving the poor and working class out of neighborhoods, it is also about removing small businesses from those same neighborhoods. I know of a few small business people who lost their leases for their small shops due to “development”. They try to find other spots that are cheap, but mostly impossible any more near large cities, or work out of their homes, but gentrified neighborhoods just won’t allow the increased traffic (like if you try to run a hair salon out of your home) or the parking of work vehicles (like small landscapers or plumbers or owner-operater truck drivers). So where do they go? Here they are being forced farther and farther out of town where they can find land or homes without all the “gentrification ordinances” which means they are farther and farther away from where their work is done, which eventually leads to the end of their businesses……and they end up working for some “chain” with low pay and no control…..

    Reply
    1. Huey Long

      Gentrification isn’t just about moving the poor and working class out of neighborhoods, it is also about removing small businesses from those same neighborhoods.

      Spot on!

      I work on 57th St in western Manhattan and over the past decade or so we’ve been losing all of our existing small businesses. Sometimes a new, swankier business or chain opens up right away, but quite a few of these storefronts have remained vacant for years:

      https://www.yelp.com/biz/kennedys-new-york

      https://www.google.com/maps/place/327+W+57th+St,+New+York,+NY+10019/@40.7673968,-73.9843946,3a,75y,98.36h,82.11t/data=!3m6!1e1!3m4!1sQVtcxLJs-hzXHb9kH7F2NA!2e0!7i13312!8i6656!4m5!3m4!1s0x89c25858618844cb:0xc057b3c3082c5d85!8m2!3d40.7674983!4d-73.9841113

      This is a phenomenon known as “high rent blight” and it can be observed all over Manhattan and in some of the gentrifying neighborhoods in Brooklyn and Queens.

      http://vanishingnewyork.blogspot.com/2017/04/dressing-up-high-rent-blight.html

      Reply
      1. Schtua

        As always, the gems are often in the comments. In that high-rent blight link you provided, I found this:

        “I don’t understand why the IRS or the AG isn’t putting busloads of landlords in jail for tax fraud. These landlords are content to leave the spaces vacant because they simply fabricate a “fair market rent” that is 10x the existing lease, and then deduct it as a loss. Eventually, they have a year where they don’t need the loss or are over their carryover limit, and they rent the space for 1/4 of what they were asking. It’s really simple to execute, and requires only the creation of a single shell company that magically converts non-deductible loss of income into a bad debt. There is no muster to high rent blight; it is the byproduct of fraud.”

        Which if true, explains the Nothing but Noodles restaurant that left its location in my city, only to remain empty for what might be close to a decade now, on an otherwise stable and prosperous retail section.

        Reply
  18. Huey Long

    But that too has a cost. As Robert Fitch explained in his book, The Assassination of New York, the city had had long-term development plan, to push manufacturing out of Manhattan and turn it into an island for the well-off.

    Yves,

    Thanks for mentioning this book! I read it a few years back and thought it was absolutely fascinating. I had no idea just how much influence the Rockefeller family has had over the urban planning and development of Manhattan until I read Fitch’s book.

    I’d recommend it over Caro’s excellent The Power Broker for anybody looking to learn more about the history of 20th century New York City.

    Reply
  19. Chris

    Thank you Yves and those commenting before me. I think we are all seeing gentrification, whether here in Cairns, as the older, inner city homes make way for condos, or in Sydney, Cape Town, London, Mauritius…

    Inner city life is not for me. I’ve tried it and prefer a bit of land under my feet. Yet, many do like it and the working class’ ability to live close to major city centers has been deteriorating for a long time as our cities’ populations increase and economies grow. This growth typically displaces poorer folks who need places to rent, preferably close to where they work. So, the anecdotes and other evidence about the resulting longer commutes is something I have seen and experienced.

    Gentrification means more people per square mile in our city centers and the lack of planning for infrastructure (trains, roads, hospitals schools) is seen in inner city schools unable to cope with enrollments (see Sydney in particular) and packed trains as more and more people move outwards so as to afford to buy a home.

    I was in Sydney recently and know it well, having lived there. There were always a few old fellas sleeping rough, but now whole families – and being brazen and pitching tents in parks.

    Pretty rough seeing all this happen over one’s life (if one has empathy) and the feeling that the past may have been better is a persistent one, but it’s definitely past.

    Reply
    1. JBird4049

      “I was in Sydney recently and know it well, having lived there. There were always a few old fellas sleeping rough, but now whole families – and being brazen and pitching tents in parks.”

      In the Bay Area, not only are there floating, and semi permanent encampments and plenty of people on the streets, there are also plenty of cars, vans, and such with the locals complaining about this. But people have to live somehow, somewhere. The horror of it is that many of the people living in vehicles are also locals, many with full time jobs.

      Christ, I miss the old Bay Area. This gentrification has killed it.

      Reply
    2. Wukchumni

      I was backpacking a 60 mile stretch of the PCT from Big Bear to Interstate 15 in May with a friend, and about 35 miles in is Deep Creek hot springs, and i’d been there a number of times, but not recently The easier way to get to it is a 2 mile walk in from a place called Bowen Ranch.

      Well, we saw our first wilderness-homeless interface ever there, at least 5 long term tenants had set up a classic hobo jungle that screamed don’t touch!, nor would you want to, with trash strewn everywhere, and they kept on pestering us for handouts. A few of em’ looked like meth-odd actors.

      We’d planned to camp overnight there, but ixnay on that. It was disgusting.

      Reply
  20. Jean

    Where inequality is not abetting gentrification quickly enough for the real-estate overlords of NYC we have city government stepping in. A few examples:

    Giuliani, with Albany’s help, providing for the de-regulation of rent-stabilized apartments after the rent crosses a certain threshold ($2000/mo I believe it was, subsequently adjusted slightly).

    Bloomberg rezoning Williamsburg’s industrial area despite concerted neighborhood action to stop it.

    Under Giuliani and Bloomberg, the Fire Department acting as sheriff/bouncer for landlords by putting padlocks on the non-AIR-protected artists’ lofts (in one instance locking people out on a bitterly cold Christmas Eve).

    Small hitches in the get-along smoothed by council-members like David Yassky, a Schumer trainee, who achieved the removal of Landmark designation of a McKim Mead and White warehouse near the waterfront so that it could be knocked down. This, while the Williamsburg waterfront was listed among the most endangered architectural areas in the country.

    DeBlasio paying landlords of rent-stabilized buildings a higher rent for sheltering homeless than rent-stabilization would allow (giving the shove to tenants who don’t want to live in an apartment building cum homeless shelter, and setting up the transition to the over $2000 threshold when the market is ready).

    And throughout, the violations of building codes and abuse of self-certification of architectural plans which saw more footage built than had been approved by the obscenely corrupt NYC Department of Buildings.

    Reply
  21. PKMKII

    My neighborhood can’t really gentrify in the traditional sense; too many rich people here already for anyone to get displaced. However, there is a trend when it comes to single and double family houses that’s creating a cultural divide. It was always a nicer neighborhood than the surrounding ones, but it used to be, prior to the late 90’s, the kind of place where you could buy a modest house on a blue collar salary, or maybe go in on a double family house with a family member if you both earned said amounts. Now though, the prices have gotten so drastic and keeping going up, that unless you’re making health six figures and/or get help from your parents, fuggetiaboutit if you’re trying to buy a one family. So you get this divide where you have youngish white collar professionals who’ve moved from elsewhere in the city, living next to blue collar old timers. And the old timer’s kids are just living with their parents, because they can’t afford to buy their own place on their blue collar salary. So you’re getting multiple generations who are dependent on their parents, and sometimes grandparents, wealth in order to remain in their community.

    Irony being that a lot of the remaining blue collar types think it’s the Mexicans and Chinese moving in that are “changing” the neighborhood, but it’s really the mostly white white collar transplants that are changing it.

    Reply
  22. Tomonthebeach

    If you look at gentrification from the viewpoint of macro economics, it appears to be new technology pushing people whose skill set no longer serves a useful purpose back into the rural America from which their forefathers migrated. Of course, the Catch-22 is that there is no longer anything for them in the farmlands either.

    In high school, the counselors regularly reminded us that the challenge of adolescence (aside from puberty) was to find that niche in the world of work where we uniquely fit. The majority of us chose a niche, and that was that. It was as if once we graduated, found a job and a spouse, life went on full automatic – perseveration became the postwar norm for most people.

    In prosperous times, that model often works. It worked for my dad and the dads of many others. My dad did not understand my path in life because I kept changing jobs. He was sure I was doomed – where was my corporate security? my old-age pension? Not until age 75 or so did he acknowledge that my model had more favorable consequences than his did.

    Thus, I think that a lot of people even today have bought into my late dad’s model without realizing a new reality: Life never has been on full automatic – it just seemed that way.

    Reply
  23. Peter Dorman

    All these comments are fascinating, much more interesting than my original post.

    I grew up in Racine, Wisconsin, once a thriving blue collar town. It was home to lots of small machining shops as well as a number of large factories—Western Publishing (Little Golden kids books), Massey-Ferguson (tractors), etc. There was a big American Motors plant just down the road in Kenosha, and lots of their workers lived in South Racine. Deindustrialization destroyed Racine, although the response of the city elites didn’t help matters. They gutted whatever areas of charm and grit the city still possessed (I was heartbroken over the destruction of the Venetian Theater) and tried to reinvent themselves as a Lake Michigan boating destination. I haven’t been back in many years and actually dread the prospect. I suspect there’s too little wealth in Racine too support much gentrification, but of course I could be wrong.

    My grittiest living situation was in my early 20s, when I rented a house with a changing assortment of cohabitors in the skid row district of Madison, WI. For $33 a month I got walls, a roof, and an alarmingly sagging floor. Cheap food was to be had at Dolly’s on Williamson St., where you could see winos groggily peeling potatoes in the mid-afternoon. (They were shut down for tax violations, I think.) This leads me to speculate about the dynamics of gentrification.

    The dilapidated state of each property pulled down the value of its neighbors. The whole neighborhood was like a chorus of bottom end values, making cheap rents possible but also denying the owners any appreciation. These owners, or at least the ones I knew about, were themselves working class folks who had graduated out of the bottom end and were living in peripheral lower middle-class areas. They had inherited these properties, or they were the only properties they could afford, and they saw them as a source of steady income, modest but worthwhile. Of course, being at the bottom of the food chain on skid row, they didn’t come with much in the way of maintenance obligations. It was a somewhat self-reproducing system, at least for a time.

    I’ve thought about the criticism of Piketty that the most dynamic chunk of the rich world’s wealth portfolio is urban real estate. This is obviously connected to gentrification. It’s a system of interlocking inducements and supports, based on neighborhood spillovers. Investments that exchange a low for a high income clientele pay off if there’s enough of that clientele to go around (my original point), but they also ramp up the value of neighboring investments. Word goes around that a particular neighborhood will be the focal point for this kind of self-validating investment (a modern version of the boosterism William Cronon analyzed in Nature’s Metropolis), and the money pours in. The sudden assault of so much investment whose whole point is to replace the existing set of residents and shoppers with a new one, is what rightfully drives people crazy about gentrification. The old self-reproducing arrangement of lower-end owners/renters/shop owners disappears, and we get a new upscale equilibrium, virtually overnight. A mottled, more liveable intermediate pattern isn’t on offer. My hypothesis was that the juxtaposition of gentrified moneytopias and postindustrial hellholes reflects the underlying economic decoupling we are all undergoing, but of course there are specific dynamics around urban real estate values.

    One irony: in my day job I have sometimes taught students about the econometric methods for quantifying neighborhood spillovers. My purpose was to see how urban amenities like parks and community gardens could fit into a viable development/planning model, but what I was missing was the preponderant role played by private investments for private consumption. The spillovers are still there, but only for those who can buy their way in.

    Reply
    1. Joel

      Serious question: what do you think someone from Racine is supposed to do?

      If they move to Madison or Manhattan, they will be decried as privileged gentrifiers by the locals who had the very real and valuable privilege of having been born into communities where the economy has been kinder meaning they don’t have to move somewhere else.

      Reply
  24. Anonymous

    California’s generally effective solution (p’haps w exc of San Francisco) was Prop 13. Because property taxes are keyed to the price paid for the property, gentrification has a much harder time forcing owners out of their property. As a result neighborhoods and communities are incredibly stable.

    Reply
    1. JBird4049

      That’s not what I’ve seen. Prop 13 was supposed to, and did, save small home owners being taxed right of their homes, which did reduce the churn. It also cut even more the property taxes of businesses. Ever since it past, the funding for everything at all levels since the state used to subsidize the counties, especially for schooling, again at all levels.

      Most of it would revert to the previous funding levels, if just the the problematic is oversized property tax cuts that prop 13 for businesses and not homeowners were overturned.

      Reply
    2. Kaleberg

      Proposition 13 did two things. It destroyed California’s educational system. It convinced townships not to authorize new dwellings which would have fixed tax rates as opposed to businesses which could be reassessed. Basically every town wants businesses, not homes.

      Reply
  25. C Heale

    I think gentrification, or overdevelopment (they are both parts of the same issue) around the world (this is a global issue, since it is happening all over the world) are consequences of the massive increase in inequality and also of quantitative easing. There is a lot of money sloshing around the system at the higher levels of society, and the richer members of society (and enterprises) are using this to buy up areas of property and rent them out, or buy up land, build on it and sell it. There are two extremely damaging consequences to this. The destruction of local communities, also known as gentrification – and this is not a few ‘hipsters’ opening bars – this is far more systematic, and the destruction of the natural environment for this new building, not only in use of materials, fuels and resources, but also in paving over green areas.

    This is also happening in my small town in Korea, and it’s not being driven by demand. In my town, there is effectively very little demand, since it is not an attractive area to live in – too many small factories and factory workers, and a lack of local facilities. The nearby towns are much nicer. However, more than 30 small apartment blocks have been built over the last five years (most of which are not completely occupied) as well as two or three larger scale developments.

    However, I also think this is going to come to an end, since we are on the the brink of a massive global recession.

    Reply
  26. Anonymous

    An issue I always have with discussions of gentrification is, what is it, really? If a bodega is replaced by a corporate, unhealthy fast-food restaurant, is that gentrification? Or are we just talking about cute coffee shops here?

    I’ll probably get flamed for saying this, but I sort of wish my neighborhood would gentrify. I live in the last part of Manhattan that hasn’t, and the litter and noise are at third world levels here, despite the fact that we get as many pickups as the Upper West Side. I do realize that higher rents push the poor out, but really, why is it so hard for people to walk to the end of the block in order to put their refuse in the garbage can on the corner? Of course we do have the conscientious people who put their lit cigarettes in the trash, always a charming sight to see.

    I can’t help but wonder sometimes how many of those who deplore gentrification would enjoy living with some of what I see every day. People who complain about the changes in the East Village should come and live here, but they won’t.

    Nor is it as if we have CBGB’s to lose. Lots of hookah bars, though.

    Reply
    1. Huey Long

      Hmmmm, lots of litter and noise, not gentrified, Manhattan…

      Sounds like you live in Inwood/Washington Heights, east of Broadway.

      My wife used to live up that way. I kinda dig the litter and noise as it keeps the yuppies out, however you’re still vulnerable to students/hipsters/artists looking for a deal on rent.

      My beef with that neighborhood was always the dog poo. Everybody seemed to have these giant dogs that took giant poops, and they left piles everywhere. Nasty, nasty NASTY!

      Reply
      1. Anonymous

        You are correct, but I live west of Broadway. Still plenty of dog poop over here.

        Nice to know that someone recognizes that Manhattan extends above Harlem.

        Reply
    2. Jean

      If you think gentrification is linked to less litter on the street, my friend, walk down N 7th Street in the uber gentrified Williamsburg any day of the week. It is over the top. It was not this way in the 90s or oughts.

      Reply
  27. CalypsoFacto

    NC readers may be interested in this series of posts from Strongtowns.org regarding my city of residence, hipster gentrification enclave Portland, Oregon: link

    The author’s theory is very neatly summarized by this image, from the second post in the series: image

    The proposed solution is unsexy (downzoning) and politically/socially, erm, provocative (the goal is to reduce speculative land valuations due to development based on increasing density which would likely crater housing values where it was implemented). The author also has some strong feelings about the need for density (in that it is overplayed) which is discussed in depth as well. This directly contradicts the Gospel of Improved Transit. Highly recommended reading!

    Reply
  28. Kaleberg

    Gentrification isn’t a problem in the sunbelt where the land is flat and the economy was kept in a politically and climatically induced coma into the late 20th century. It seems to mainly be a problem in areas that have been economically viable for a long period and have run into geographical and political limits. Since we stopped paying for new transportation infrastructure in the 1970s when the interstate highway was finished, things don’t look promising.

    One big factor is the collapse of manufacturing as much due to automation as anything else. I worked for a summer in a metal shop owned by a friend of my family in Sunnyside, Queens. Northern Boulevard was lined with factories. The Bulova building was a watch factory. The Accutron was outsourced to Biel, Switzerland where they brought in cheap Italian labor. The west side of Manhattan was lined with print shops where the ground was solid enough for the presses. I remember when Soho was a manufacturing district. I used to buy electric motor parts there. I think the last factory was over the Film Forum and made anti-icing boots for airplanes.

    All those places are gone, and the handful that still exist employ next to nobody. China might be full of manufacturing employees right now, but they are automating too. China is going to be in crap shape in 10-20 years.

    What happens to the real estate when manufacturing leaves? It either turns into blight as in much of the mid-west or it gets gentrified. It might wind up a bit sterile, but economically viable. Who has a job that pays moderately well? Probably a white collar worker.

    New York City is probably in better shape than many cities. I grew up in Jackson Heights. We couldn’t afford to live in Manhattan. We took the subway. You can buy an apartment in the building I grew up in for less than $300K. The mortgage and maintenance would be about $20K a year, so you could swing it on a $60K income. That’s above minimum wage, even if two people are working as my parents were, but it’s not insane.

    Reply
  29. some lurker

    A. Banning new foreign ownership of real estate, limiting title to U.S. citizens only.
    (think of the administrative jobs that would create for strawmen)
    B. An occupancy tax on property owned by people not filing California income tax.
    This would hit the billionaires who live in San Francisco but who use their Nevada ski condos as their “principle residence” to avoid state income taxes. Large numbers of new TeslaPorschCedes with out of state plates seen around the wealth catering Laurel Village Shopping Center and at the Opera/Ballet garage on performance nights.

    This might help in the Puget Sound region, also a victim of “real estate as safe deposit box/speculation.”

    Q for the OP, if he comes back around: would a Georgist land value tax make this less of a problem? Assuming some carveouts for the oldsters who might be priced out of their home if the land taxes go up (they rarely seem to: commercial real estate pays the bills, from what I have seen), would this help?

    Reply

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