

The Art of Gentrification - applecore
http://www.dissentmagazine.org/article/the-art-of-gentrification

======
mturmon
The concept of gentrification is typically used in a sloppy and unhelpful way.
It is used as a slur, as if gentrification is prima facie bad. But reuse of
urban contexts, turnover of neighborhoods, is a fact of life. Cities outlive
people and industries.

The legitimate grievance, I think, is where public money is used to subsidize
neighborhood transformation. (As was done in SoHo with forgiveness of back
debt on properties and other give-aways.) This tends to be highly non-
democratic, a process in which wealth is concentrated in the hands of well-
connected land developers.

The article touches on this briefly, but to me this is the key problem.
Everything else is just people on the sidelines grouching about how others got
lucky by buying in to SoHo (or wherever) early on. Reductively put, just sour
grapes.

~~~
yourapostasy
In context of the US property market, I believe the situation is slightly more
nuanced than "sour grapes" (though there is certainly some of that for some
detractors).

A key feature of the US property market is credit leverage, and one aspect I
see not discussed a lot is that leverage is very unevenly (please note, I did
NOT say "unequally") distributed. Property developers can access far more
leverage than retail customers, and this is arguably a feature, not a bug.

This becomes an issue however, when the leverage prices out the long-time
residents who want to stay, because the urban amenities are far more walkable
and generally accessible than an equivalently-priced suburban location has
access to. Property tax increases on these long-time residents over a period
of 10-15 years of gentrification are very unforgiving. There is a legitimate
concern that these long-time residents (many of whom are elderly or multi-
generation households) are involuntarily pushed out by the increased property
taxes, and are disproportionately able to capture the latent profit of
selecting a desirable location far in advance. There are arguments to be made
about disincentivizing really long-term delayed gratification and very high-
density living arrangements for the multi-generational settings when these
types of externalities to gentrification are dealt with. Knock-on effects can
also be brought up, like the disincentives to establishment of large, multi-
generational households to mitigate the adverse financial impact of early
stage eldercare on lower economic families (that is, large, multi-generational
households can more easily self-provision amongst family members early stage
eldercare, leading to higher quality of life overall). On the other hand, you
definitely want developers to continue urban development and densification for
its generally-accepted benefits (on energy utilization if nothing else).

There are no good solutions to this dilemma, short of revamping credit
leverage rules, which has its own set of thorny negative externalities. An
interesting approach I saw operating first-hand in China in a third tier city
was the developers of one high-rise complex offered to not only buy out the
family's property (I think in China it was some right-of-use leased from the
central government that was being purchased, and not the land itself), but as
part of the buyout guarantee to sell enough apartment unit bedrooms to house
the family at one-for-one replacement plus an additional separate two-bedroom
apartment unit, all at a steep discount to what was offered to retail unit
buyers, on top of subsidizing the temporary housing of the family in nearby
leased apartments during the construction phase.

This was a very long time ago; I doubt very much this still happens in the
China of today. It had the effect of gracefully transitioning the lower
(relative to the new residents) socioeconomic family unit that did not want to
vacate the land at first, give them access to the urban amenities they wanted
to stay close to in the first place (and denser available amenities at that,
as the area filled in around the high-rise after completion), kept the family
together as no one had to split up for different commuting arrangements, and
give them a unit to rent out for income to compensate for increasing property
taxes and utility expenses in the future. If this took place in the US, it
would also give them an extremely low basis to pay property taxes upon so the
arrangement could be quite sustainable for the transitioned family even with
sharply-increased property taxes (I'm not familiar with how property taxes
work in China, so I don't know what happened property tax-wise in the
situation I saw when I spoke with the developer and resident family's
patriarch). While some might see this kind of offer as expensive to the
developer, the developer had sufficient permitting to dramatically densify the
same plot of land that the bought-out families were on such that it had only a
very minor impact upon profitability, while earning PR points with the locals
that spread good advertising he couldn't have bought even if he wanted, and
avoiding any rancor over the development that typically arises from
gentrification-displaced residents (the developer recognized he couldn't help
the neighbor residents who were adversely affected by his development pushing
up their shelter costs, but that was understandably out of his control).

~~~
azernik
About the Chinese solution you referred to: to a certain extent this is
practiced in San Francisco, but it's not widespread. See for example this
article [1] about the ParkMerced redevelopment, where existing tenants' rent
control was grandfathered in to replacement units, with the developer getting
their profit out of the remaining units.

A similar (maybe more interesting from the public policy perspective) is the
TAMA 38a/b system in Israel. For background, this is a market in which
ownership of individual apartments in a condo arrangement is very common.
Developers are allowed to renovate buildings to add floors and sell off the
new units for their own profit, under the condition that they pay for
renovation of the building to new safety standards (earthquake and bomb
shelter), and usually whatever other upgrades the existing owners can squeeze
out of them. It's kind of a use of the government's virtual "asset" of the
economic benefits of easing zoning/height restrictions in order to pay for
public safety/infrastructure improvements.

------
barce
At first I thought the piece would be an ironic how-to on gentrification, but
instead it is a play on the word, "art." A certain building from New York's
pre-gentification era in Soho has become art because of gentrification.

------
jedanbik
You'd think if it were so beautiful, there would be some photos in the
article?

