Suburbanization and rent gap
Suburban development derives from outward expansion of cities, often driven by sought profit and the availability of cheap land. This change in consumption causes a fall in inner city land prices, often resulting in poor upkeep and a neglect of repair for these properties by owners and landlords. The depressed land is then devalued, causing rent to be significantly cheaper than the potential rent that could be derived from the "best use" of the land while taking advantage of its central location.[24] From this derives the Rent-gap Theory describing the disparity between "the actual capitalized ground rent (land price) of a plot of land given its present use, and the potential ground rent that might be gleaned under a 'higher and better' use."[25]
The rent gap is fundamental to explaining gentrification as an economic process. When the gap is sufficiently wide, real estate developers, landlords, and other people with vested interests in the development of land perceive the potential profit to be derived from re-investing in inner-city properties and redeveloping them for new tenants. Thus, the development of a rent gap creates the opportunity for urban restructuring and gentrification.[24]
De-industrialization
The de-industrialization of cities in developed nations reduces the number of blue-collar jobs available to the urban working class as well as middle-wage jobs with the opportunity for advancement, creating lost investment capital needed to physically maintain the houses and buildings of the city. Abandoned industrial areas create availability for land for the rent gap process.
Although gentrification may be known as “process of renovating deteriorated urban neighborhoods”, many will say that this process actually demolishes historical aspects of neighborhoods, raises residential prices too high for current residents to continue living there, and even negatively impacts the food industry by transforming the local eateries into cafes or a restaurants chain. This impact on the food industry, specifically in Oakland, California, is being changed from natural farm grown food into more industrialized sourced products based on consumer preferences.[26] As neighborhoods become gentrified, the consumer need changes; therefore, creating more expensive and modern housing and markets which then run the locals out of town and can be a threat to small businesses because of the raise in renting a store space in a more modern area. As this threatens the small businesses, it becomes harder for most to stay open, although increasing the value of goods which the stores are selling can ensure so that the shops could still be able to survive.[27] This is why organizations such as Planting Justice and Mandela Marketplace strive to resist the acts of gentrification and to form business plans that will work to create living-wage jobs for everyone so that no one must be displaced when such “renovation” takes place.[26]
Gentrification and deindustrialization may also help clean up neighborhoods such as those on the waterfront in Gowanus, New York; however, this clean up tends to draw the attention to commercialized developments which then build and essentially take of the nature of the waterfront.[28] This urbanization creates a tourist attraction and raises value of living in the area to the point where locals have no choice but to move elsewhere. Even though such cleaning of the waterfront would greatly benefit the local community, this would also invite building of an industrialized environment which will ultimately ruin any and all historical value that the neighborhood currently possesses.[28]
London and Palen
There are several approaches that attempt to explain the roots and the reasons behind the spread of gentrification. Palen & London (1984) compiled a list of five explanations:
- demographic-ecological,
- sociocultural,
- political-economical,
- community networks, and
- social movements.
Demographic-ecological
The first theory, demographic-ecological, attempts to explain gentrification through the analysis of demographics: population, social organization, environment, and technology. This theory frequently refers to the growing number of people between the ages of 25 and 35 in the 1970s, or the baby boomer generation. Because the number of people that sought housing increased, the demand for housing increased also. The supply could not keep up with the demand; therefore cities were "recycled" to meet such demands.
The baby boomers in pursuit of housing were very different, demographically, from their house-hunting predecessors. They married at an older age and had fewer children, and their children were born later. Women, both single and married, were entering the labor force at higher rates which led to an increase of dual wage-earner households. These households were typically composed of young, more affluent couples without children. Because these couples were child-free and were not concerned with the conditions of schools and playgrounds, they elected to live in the inner city in close proximity to their jobs. These more affluent people usually had white-collar, not blue-collar jobs. Since these white-collar workers wanted to live closer to work, a neighborhood with more white-collar jobs was more likely to be invaded; the relationship between administrative activity and invasion was positively correlated.[19]
Sociocultural
The second theory proposed by London and Palen is based on a sociocultural explanation of gentrification. This theory argues that values, sentiments, attitudes, ideas, beliefs, and choices should be used to explain and predict human behavior, not demographics, or "structural units of analysis" (i.e., characteristics of populations). This analysis focuses on the changing attitudes, lifestyles, and values of the middle- and upper-middle-class of the 1970s. They were becoming more pro-urban than before, opting not to live in rural or even suburban areas anymore. These new pro-urban values were becoming more salient, and more and more people began moving into the cities. London and Palen refer to the first people to invade the cities as "urban pioneers". These urban pioneers demonstrated that the inner-city was an "appropriate" and "viable" place to live, resulting in what is called "inner city chic". The opposing side of this argument is that dominant, or recurring, American values determine where people decide to live, not the changing values previously cited. This means that people choose to live in a gentrified area to restore it, not to alter it, because restoration is a "new way to realize old values".[19]
Political-economic
The third theoretical explanation of gentrification is political-economic and is divided into two approaches: traditional and Marxist. The traditional approach argues that economic and political factors have led to the invasion of the inner-city, hence the name political-economic. The changing political and legal climate of the 1950s and 1960s (new civil rights legislation, anti-discrimination laws in housing and employment, and desegregation) had an "unanticipated" role in the gentrification of neighborhoods. A societal decrease in acceptance of prejudice led to more blacks moving to the suburbs and whites no longer rejected the idea of moving to the city. The decreasing availability of suburban land and inflation in suburban housing costs also inspired the invasion of the cities. The Marxist approach denies the notion that the political and economic influences on gentrification are invisible, but are intentional. This theory claims that "powerful interest groups follow a policy of neglect of the inner city until such time as they become aware that policy changes could yield tremendous profits".[19] Once the inner city becomes a source of revenue, the powerless residents are displaced with little or no regard from the powerful.
Community networks
The community-network approach is the fourth proposed by London and Palen. This views the community as an "interactive social group". Two perspectives are noted: community lost and community saved. The community lost perspective argues that the role of the neighborhood is becoming more limited due to technological advances in transportation and communication. This means that the small-scale, local community is being replaced with more large-scale, political and social organizations.[20] The opposing side, the community saved side, argues that community activity increases when neighborhoods are gentrified because these neighborhoods are being revitalized.
Social movements
The fifth and final approach is social movements. This theoretical approach is focused on the analysis of ideologically based movements, usually in terms of leader-follower relationships. Those who support gentrification are encouraged by leaders (successful urban pioneers, political-economic elites, land developers, lending institutions, and even the Federal government in some instances) to revive the inner-city. Those who are in opposition are the people who currently reside in the deteriorated areas. They develop countermovements in order to gain the power necessary to defend themselves against the movements of the elite. An excellent example was the turned around gang in Chicago who fought for years against the Richard J. Daley machine: the Young Lords led by Jose Cha Cha Jimenez. They occupied neighborhood institutions and led massive demonstrations to make people aware. These countermovements can be unsuccessful, though. The people who support reviving neighborhoods are also members, and their voices are the ones that the gentrifier tend to hear.[19]
As an economic process
Two discrete sociological theories explain and justify gentrification: one as an economic process (production-side theory); the other and as a social process (consumption-side theory). Both occur when the suburban gentry tire of the automobile-dependent urban sprawl style of life. These professionals, empty nest aged parents, and recent university graduates perceive attractiveness in the city center earlier abandoned during white flight—especially if the poor community possesses a transport hub and its architecture sustains the pedestrian traffic that allows the proper human relations impeded by (sub)urban sprawl.[21]
Furthermore, proximity to urban amenities such as transit stops has been shown to drive up home prices over time. A survey of Northwest Chicago conducted between 1975 and 1991 showed that homes located directly in the vicinity Red Line and Brown Line stops of the "L" rail transit system saw a huge price jump during these years, compared to only modest increases for area outside the zone. Between 1985 and 1991 in particular, homes near transit stops nearly doubled in value.[22]
Professor Smith and Marxist sociologists explain gentrification as a structural economic process; Humanistic Geographer, David Ley explains gentrification as a natural outgrowth of increased professional employment in the central business district (CBD), and the creative sub-class's predilection for city living. Ley (1980) describes and deconstructs the TEAM committee's effort to rendering Vancouver, BC, Canada, a "livable city". The investigators Rose, Beauregard, Mullins, Moore et al., who base themselves upon Ley's ideas, posit that "gentrifiers and their social and cultural characteristics [are] of crucial importance for an understanding of gentrification"—theoretical work Chris Hamnett criticized as insufficiently comprehensive, for not incorporating the "supply of dwellings and the role of developers [and] speculators in the process".[23]
Production-side theory
The theory of urban gentrification derives from the work of human geographer Neil Smith, explaining gentrification as an economic process consequent to the fluctuating relationships among capital investments and the production of urban space. He asserts that restructuring of urban space is the visual component of a larger social, economic, and spatial restructuring of the contemporary capitalist economy.[24] Smith summarizes the causes of gentrification into five main processes: suburbanization and the emergence of rent gap, deindustrialization, spatial centralization and decentralization of capital, falling profit and cyclical movement of capital, and changes in demographics and consumption pattern.[24]