Causes and mechanisms of gentrification— A process inherent to capitalism

Throughout recent decades U.S. cities have been transformed. Urban demographics are profoundly changing. Historically Black and Brown communities and working–class neighborhoods are becoming whiter and wealthier. Low–cost housing has been demolished and replaced with luxury housing. Economies have shifted, with the demise of mom–n–pop shops and manufacturing, to the opening of tech industries, corporate outlet stores, expensive bars, boutiques and cafes. Entire cultural landscapes have altered, as old informal mutual aid and kinship networks, often found in working–class, immigrant and POC neighborhoods are slowly eroded by displacement.

Blame Hipsters?

The term ‘gentrification’ has entered the popular vocabulary to describe this process of urban change. Encouragingly, gentrification is increasingly deployed in a largely pejorative sense. And while gentrification is most often broadly associated with skyrocketing rents, more are beginning to also associate it with aggressive and racist policing practices as well as austerity and privatization. This is indicative of its prevalence throughout cities, but also of shifting political attitudes towards it.  Yet, gentrification is very rarely successfully repelled, partly because it’s simply a difficult fight to win, but also partly because gentrification is misunderstood by many who seek to oppose it.  Dominant understandings tend to analyze gentrification primarily through an identity/lifestyle lens, emphasizing the role of ‘hipsters’ or ‘yuppies,’ most of whom are white and from middle–class backgrounds. This emphasis reflects a certain reality in that gentrifying neighborhoods/cities are characterized by an increase in whiter, wealthier hipsters and yuppies in places that were formerly home to mostly working–class people of color. However, gentrification involves much more than the individual consumer choices of hipsters and gentrification has been occurring long before the lifestyle category of ‘hipster’ has existed.

Most fundamentally, gentrification must be understood as a process inherent in capitalism. Under capitalism, the dictates of profit determine all economic decisions, including within the realm of housing. How much housing is built, where it is built, and who it shelters are all decisions made in the interest of profit. From this broad picture we can reasonably deduce that gentrification would naturally occur in a capitalist society. However, to fully analyze gentrification in its current form, specific actors and political, social and economic trends within capitalism must be identified.

Causes of Gentrification

Three main causes of gentrification I identify are the 1970s economic and ideological crisis, uneven development and the hyper–commodification of housing. 

First, in the 1970s the U.S. economy suffered a severe crisis. Unemployment skyrocketed and deindustrialization accelerated with industry mechanizing or moving to other parts of the world. The government responded with draconian budget cuts at all levels. This combination of economic collapse and austerity would especially adversely affect cities. Industrial manufacturing had been the economic base of many large cities, providing employment and income for workers, including working class people of color, but also providing tax bases and revenue sources for municipal governments. Moreover cities had relied on federal assistance to provide social welfare services to residents. Budget crisis began to plague municipal governments, epitomized by the 1975 New York City fiscal collapse. In this context cities sought new outlets for economic growth to stabilize their economies and develop new revenue sources. Through material incentives, such as subsidies and tax breaks, cities attracted new white–collar industries that characterize the neoliberal economy, like tech, finance and services, and with them a wealthier and whiter workforce. With a depressed property market, developers and corporations have been able to buy up city blocks on the cheap, fueling displacement.

The crisis cities faced in the 1970s wasn’t just economic, but also social and ideological. The social movements of the 1960s were still strong in resident’s memories, particularly the Black liberation struggle. Displacement fueled by gentrification was thus advantageous to municipal governments because it enforced social order by physically removing groups prone to rebellion.

Second is urban researcher and geographer Neil Smith’s theory of “uneven development.”  Smith contended that gentrification was a component of the broader tendency for the built environment (buildings and physical infrastructure, such as houses, apartment complexes, factories, stores etc.) under capitalism to develop unevenly. Smith showed that making investments in large fixed capital projects also encouraged the subsequent disinvestment in and eventual deterioration of such structures and their surroundings. As investment and subsequent development occur in one region, it eventually becomes cheaper to develop entirely new property or redevelop dilapidated property in other regions than it does to maintain properties in the first region. Investments in the built environment are such immediate expenses that involvement of credit system is guaranteed, adding debt–servicing as an additional cost to development. Consequently, urban development undergoes cycles of renewal and dilapidation as capital flows back and forth between spaces most conducive to profit maximization.

An example of this uneven development was the process of U.S. suburbanization. Beginning in the late 1940s investment began to flow to the peripheries of major cities, where land was cheap and larger profits could be reaped. Suburbanization was facilitated by government intervention which subsidized highway construction and home loans for middle–class whites (only). Eventually, as development in the suburbs became less profitable, investment began to return to urban areas where dilapidated property could be bought cheaply in the 1980s, helping to ignite the current wave of gentrification.

Third is the hyper–commodification of housing that has occurred over the last few decades. A commodity is a product bought and sold on the market for a profit. Housing, as a commodity, has a dual and contradictory character as being both dwelling space for residents as well as a source of money and profit for landlords, banks and real estate companies. Though the latter characteristic has generally dominated housing throughout the history of capitalism, only recently have virtually all regulations pertaining to the housing market been discarded. As investment has poured into the housing sector, prices have become completely dislodged from local wage levels. Developers build luxury housing and the wealthy buy and sell luxury units simply because the prices are increasing. Meanwhile much of this luxury housing sits empty, while contributing to skyrocketing property values in the given area.

While these three phenomena certainly don’t explain gentrification entirely, they make clear that gentrification is indeed a process innate to capitalism itself and can’t be reduced to the actions of lifestyle groups like hipsters or yuppies.

Gentrification and Racism

Gentrification is a highly racialized process. In many neighborhoods and cities subject to gentrification, the overwhelming majority of those experiencing displacement are people of color.  In quickly gentrifying Washington D.C. the black population has decreased from 70% in 1980 to 49% in the 2014 census; during the same years the white population increased from 26.5% to 36%. In other cities, such as New York, overall racial composition has remained stable while neighborhoods have seen dramatic demographic shifts, with people of color frequently displaced to the peripheries of cities.

Gentrification is disproportionately displacing people of color because many cities and neighborhoods currently experiencing gentrification have been the same places where people of color have historically been relegated through forms of residential segregation. Racist housing policies that incentivized the “white flight” phenomenon in the 1950s and 1960s, redlining, exclusionary zoning practices and the geographic placement of public housing have all served to institutionalize racial segregation.

The displacement of people of color is not, however, the only component to gentrification’s racialized dimension. The advent of the current wave of gentrification has intersected with interrelated, highly racist developments within policing and the criminal justice system. These includes “Broken Windows” policing, a method of policing developed by the NYPD that targets petty crime, the war on drugs, and mass incarceration. Though certainly separate from gentrification to a degree, these practices help facilitate gentrification by criminalizing marginalized residents of gentrifying neighborhoods, making them more vulnerable and thus susceptible to displacement. Research, such as in San Francisco, has shown that police harassment and violence is especially concentrated in gentrifying areas.

The Policing of Public Space

Public spaces (including parks, public square, sidewalks, benches, public bathrooms etc.) experience severe tensions under capitalism. One the one hand are the interests of private business and governments (which owns and manages public space) who believe public space should be utilized only to facilitate commerce; public space should be of benefit only to consumers in the formal economy. On the other hand, public space is an important site of survival, subsistence and enjoyment for demographics and cultural groups on the margins of capitalist society. Houseless people use public spaces, such as benches and parks as dwelling space, subcultural groups use public squares as sites of lifestyle experimentation, and street vendors, sex workers and drug traffickers and others in the informal economy use sidewalks as sites to procure an income.

During the process of gentrification the conflicts over the contradictory uses of public space tend to come to a fore. City governments craft policies prohibiting loitering, skateboarding, public camping and sleeping in cars. Curfews are enacted in parks, public bathrooms are closed and dividers are erected on benches to prevent people from sleeping on them. Police aggressively target and criminalize houseless people, drug users, sex workers, street vendors, people with mental health challenges and subcultural people in an effort to displace them from public spaces.

To get involved in local anti–gentrification efforts, check out the following groups and organizations:

Just Housing
Weekly Meeting: Monday 3–5PM
United Churches 110 11th Ave SE, Olympia

Olympia Solidarity Network:  

Olympia Assembly

Robert Gorrill is involved in many local social movements. He recently presented on gentrification at Economics for Everyone’s event “Understanding and Fighting Gentrification: Olympia and Beyond.”


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