“Welcome to Fear City - A survival guide for Visitors to the City of New York”. This was the title of the pamphlet you were kindly given as you entered the cultural capital of the world in the 1970s from the NYPD. New York was bankrupt, unemployed and rife with crime, leading to 10% of the residents leaving the city during the 1970s. Across the world, the same story was playing out: there were two million fewer Londoners in 1981 as there was in 1939, rioters were running amok in Paris and most notably the Toxteth Riots of 1981 led Tory Chancellor Geoffrey Howe to recommend the “managed decline” of Liverpool. The urban decay led by deindustrialisation and a lack of investment was believed to be an inevitable part of the future - cities belonged in the early 20th century world with slums, unskilled factory work and poverty whereas the new suburbs were for the middle-class families of the future.
Since this low watermark, cities have had a resurgence and they are now seen as the economic and cultural powerhouses of the world, whether they be San Francisco, London or Sydney. This transition from post-industrial, shrinking cities to thriving, cosmopolitan centres has occurred due to three primary causes: globalisation, policy and social movements. Globalisation has built a new economic framework where global cities have pulled ahead of their national counterparts as they leverage their advantage bringing in the world’s most skilled workers and exporting their products across the world. San Francisco’s experience of the dot-com boom shows this effect: it’s seminal position in the technology industry has brought in the most productive workers in the world. Partnering this with the increased freedom to move capital globally has led to a surge in investment in the city causing a huge demand on San Francisco’s assets, in particular its housing. The rise of neoliberal policies has led governments to have a more laissez-faire view on protecting social housing. Indeed Berlin has sold off over half its social housing allowing investors to renovate the old, utilitarian flats into luxury apartments for the new urban middle class. This new metropolitan class have a distinct social attitude out of step with their compatriots - they are socially liberal, pro-globalisation and are cosmopolitan. London is made up of Labour Remainers, Bill Clinton won 85% of the vote in San Francisco and Parisians backed the internationalist Macron more than any other French region. It is these cities that have become cultural hubs for those who want to join the young, global world. In these metropoles has grown a global culture and a thriving economy, yet not all citizens have been victorious in this transformation: the regeneration of these cities has led to gentrification. This is where incumbent working-class citizens have been priced out of their own homes as they see their communities transformed to suit the new middle-classes that have taken over their original neighbourhoods.
Many citizens in these cities have been rooted for decades and the upheaval caused by gentrification causes, at worst, unaffordable rents and eviction or, at best, a loss in the sense of community and an identity they’d prided themselves on. Most notably this can be seen in Harlem, synonymous with Black culture, it has been gentrified over the last twenty years as urban middle-class people move in. To build the community which the new middle-class citizens want Harlem to be, Harlem has had to be renovated and cultural symbols have been removed. Indeed, the church where Malcolm X’s funeral was held has been demolished to be replaced by an apartment block. To add further insult to injury, many of the white middle-class newcomers see Harlem’s history as a quaint and interesting backdrop to their new community, relegating the identity of the incumbents to nothing more than a mere historical curiosity. This story of the economically, politically and socially disadvantaged being displaced by the new powerful urban middle-class can be seen throughout the world, Soweto attracts both tourists and the middle class by renovating the old segregated townships into a showcase of the South Africa they want to project. Strikingly, a museum out of Nelson Mandela’s old house has been made while the effects of aparthied are still tangible in the city’s ghettos. The commodification of housing in these cities has led to communities being bought by developers, transformed into a place quite different and sold onto a new people. Without the consent of its citizens, communities have been put up for sale, exemplifying the callous nature of capitalism.
Those moving into these neighbourhoods would not recognise the account given of Harlem and Soweto above. The urban middle classes would point to the increased investment in the region, the improvement of public services and therefore the reduction of crime and an increased opportunity for children as positive changes. There is no better place in the UK to be a disadvantaged child than in London and gentrified Lambeth comes 17th out of 324 local authorities for social mobility. Regeneration and improvements has always been a cycle of life - those who reject the improvement to the living conditions in these regions are akin to Luddites rejecting technological improvements. Identity is necessary but we cannot preserve poverty or stop time from moving forward, and indeed some cities have not managed to regenerate. Detroit is an example of a city that fails to move on and entice inward investment, it remains as the Motor City but frankly this identity means very little as it has faced an exodus of citizens, jobs and investment. It has a population of about one third of its 1950 census count, it has the highest poverty rates in the country and a crime rate ten times that of New York. As emotional and stirring the loss of identity can be, it must be remembered that without the new investment many of these neighbourhoods would reflect Detroit’s inaction and decline. In contrast, studies have found that gentrified districts lead to better living conditions for the original habitants, this increases the chances of their children going to university, makes the streets safer and if they are homeowners, can lead to sharp increase in their wealth.
The challenge policy makers face is to both maximise the economic gains that come through regeneration while minimising the effect of it’s by-product: gentrification. They have focussed on trying to regulate renovators to ensure that a mix of properties are available in regeneration, where working-class people still have access to their communities. This light touch regulation is abused by developers, in the UK they simply have to fill in a viability assessment explaining that if they were to build affordable housing they would not be able to make sufficient profit for the redevelopment to take place. Fundamentally, those forming policies need to recognise the special nature of housing as a good in a free-market. Unlike most goods, housing is inextricably linked to community, identity and is a necessity for individuals. Alas, this has been ignored in favour of profit-maximising for councils and private investors leading to a saturation of luxury apartments and a missing market for those in low income as they are pressured out of the neighbourhoods they identify with.
Policy solutions must focus on correcting this, first by focussing on the balance of housing a community needs rather than trying to attract the highest incomes. It should be recognised that a mix of incomes is desirable to create an equitable, inclusive society. Similarly, to ensure that all citizens have access to housing in the neighbourhood they call home, the state must rebuild their housing stock. Britain built 5,000,000 council houses from 1945 to 1981 but since then only 250,000 have been built. This slowdown has neglected those not satisfied in the free market, namely low-income workers without the luxury of relocation to a cheaper location. Thirdly, planning needs to be more reflexive to changes in demand. While house prices are soaring in cities such as Boston, London and Berlin, the production of houses has not kept up with this demand due to rigid planning regulations. For instance, London’s famed green belt was made with the intention of halting urban sprawl in favour of regenerating the centre of the city, yet currently the opposite is occurring. By relaxing these regulations, investment can be pulled into the green belt and away from the over saturated market in central London allowing rent-payers some respite. To create neighbourhoods which are both prosperous and rooted in a sense of identity and community, policy makers need to understand the nuances of housing and intervene to protect the community against the detrimental effect of regeneration.
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