Caveat: I’m not expert in gentrification. I have no degree in sociology or anthropology, so I expect to hold some uniformed opinions, and to misunderstand certain fundamental facets of discussion in this space. I’m white and privileged. I’ve never experienced gentrification except for the benefits it brings to people of my socioeconomic standing. Moreover, my research into this area is nascent. Portland rents are going up as more people move here, this is my first reaction to the situation. I welcome correction and instruction.
All this is by way of saying that I’m almost certianly putting my foot in my mouth.
Problem Statement:
The primary evil of gentrification is that long term residents are pushed out of their communities. They’re pushed out by rising rents and increased costs of living. Why does this happen? Because new younger, whiter, richer people are drawn to the neighborhood by cheaper rent and perhaps a more vibrant community. They gain social caché by living in an up-and-coming, probably grittier neighborhood than the ones they were raised in. Their arrival increases demand for housing and the more bourgeois restaurants, coffee, bars, and grocery stores they are accustomed to. As land owners attempt to cash in on rising property values, they raise rents. Business either go upmarket (selling more expensive product) or elsewhere, where the rents are still cheap. The people who lived there, often individuals who have rented for decades, can no longer afford rising rents, or the increased cost of living the neighborhood has experienced.
This is an interesting cross of economics and our conception of social good. There’s an unquantified public good in a community. When the market value of the land in the community exceeds the capacity of the renting residents to pay for it our values and our economic incentives are in conflict. In particular, the fact that renters have no long term right to the space they inhabit fails to reflect the value we place on communities themselves.
Existing Countermeasures
The most common countermeasures are definitionally market distorting. They’re generally of the formulation:
Increasing rents force residents to move out? Let’s reduce the rents!
Rent controlled apartments allow renters to continue to rent at the prices they used to pay, even as the price of rent around them continues to go up. Rent control fails to allow the community to grow, and dissentivies landlords from maintaing or improving the rent controlled properties. The law and the economic incentives of the owner are in direct conflict.
Subsidized affordable housing attempts to realign developer incentives– to make it more worthwhile to build apartments currnet residents can afford. If done correctly, these subsidies can line up market incentives, but they still don’t give residents agency over the shape of the community they call their own.
Other strategies are outlined here, but the feature they have in common is they assume the economic and governmental power over the community rests with the community, or at least with people who have the communities interests in mind. It offers methods for community members to organize themselves, and is no doubt effective. I suspect a more thorough reading of this paper might render this sogguestion unnecessary.
A proposal
There should be an organization who’s purview is as follows:
Buy land in poor communities likely to gentrify in the next ten years and only make changes with the consent and involvement of the community.
It’s not charity. The organization still owns the land and collects rent. It does not spend it’s own capital to make improvements except as motivated economically and as accepted by the community, with the caveat that it attempts to estimate the externalities of a development in its analysis of economic motivation.
The goal is simply to restore agency to the community under threat of gentrification in a long term, sustainable manner. This means it needs to turn some amount of profit, but profits should be reinvested in the endeavor, so that it can expand the geographic scope of its investments and reduce pressure ignore external bads in favor of profit.
It sells land to community members if they can afford it at market rates, which gives it an exit from communities that “make” it.
It employs community members in its operations in the community.
I’d be glad to know an organization like this already exists. Let me know if it does.
Problems:
I don’t think this scheme is perfect, but I think it’s better than what we have now.
The organization is by its definition paternalistic. It’s making decisions on behalf of grown adults who are already disenfranchised (otherwise there’d be no cause to step in). It’s incentives and those of the community members may not match up. I don’t think this avoidable. Development and land ownership do require expertise. Long term incentives often do not match short term incentives. On the other hand, the for-profit nature of the organization is a counter balance– it need not make decisions against it’s own long term interests.
The organization is for-profit. This means it will make money of the people it purports to serve. The organization is a slum-lord with some pretty policy statements.
There’s probably other issues I haven’t thought of. If a reader brings up a problem and includes a short analysis of its origins, I’ll include it here.
Call to Action
If you have expertise in building businesses or organizations of this type, or have insight into what would be required to bring this about under any auspices (government or no), I’d love to talk about it. Please contact me at andywinterman at gmail.com with “Agency and Gentrificatio” in the subject line.