Spatial centralization and decentralization of capital
De-industrialization is often integral to the growth of a divided white collar employment, providing professional and management jobs that follow the spatial decentralization of the expanding world economy. However, somewhat counter-intuitively, globalization also is accompanied by spatial centralization of urban centers, mainly from the growth of the inner city as a base for headquarter and executive decision-making centers. This concentration can be attributed to the need for rapid decisions and information flow, which makes it favorable to have executive centers in close proximity to each other. Thus, the expanding effect of suburbanization as well as agglomeration to city centers can coexist. These simultaneous processes can translate to gentrification activities when professionals have a high demand to live near their executive workplaces in order to reduce decision-making time.[24]
Falling profit and the cyclical movement of capital
This section of Smith's theory attempts to describe the timing of the process of gentrification. At the end of a period of expansion for the economy, such as a boom in postwar suburbs, accumulation of capital leads to a falling rate of profit. It is then favorable to seek investment outside the industrial sphere to hold off onset of an economic crisis. By this time, the period of expansion has inevitably led to the creation of rent gap, providing opportunity for capital reinvestment in this surrounding environment.[24]
Changes in demographic and consumption patterns
Smith emphasizes that demographic and life-style changes are more of an exhibition of the form of gentrification, rather than real factors behind gentrification. The aging baby-boomer population, greater participation of women in the workforce, and the changes in marriage and childrearing norms explain the appearance that gentrification takes, or as Smith says, "why we have proliferating quiche bars rather than Howard Johnson's".[24]
Consumption-side theory
In contrast to the production-side argument, the consumption-side theory of urban gentrification posits that the "socio-cultural characteristics and motives" of the gentrifiers are most important to understanding the gentrification of the post-industrial city.[30] The changes in the structure of advanced capitalist cities with the shift from industrial to service-based economy were coupled with the expanding of a new middle class—one with a larger purchasing power than ever before.[31] As such, human geographer David Ley posits a rehabilitated post-industrial city influenced by this "new middle class".[32] The consumption theory contends that it is the demographics and consumption patterns of this "new middle class" that is responsible for gentrification.
The economic and cultural changes of the world in the 1960s have been attributed to these consumption changes. The antiauthoritarian protest movements of the young in the U.S., especially on college campuses, brought a new disdain for the "standardization of look-alike suburbs,"[33] as well as fueled a movement toward empowering freedom and establishing authenticity. In the postindustrial economy, the expansion of middle class jobs in inner cities came at the same time as many of the ideals of this movement. The process of gentrification stemmed as the new middle class, often with politically progressive ideals, was employed in the city and recognized not only the convenient commute of a city residence, but also the appeal towards the urban lifestyle as a means of opposing the "deception of the suburbanite".[33]
This new middle class was characterized by professionals with life pursuits expanded from traditional economistic focus. Gentrification provided a means for the 'stylization of life' and an expression of realized profit and social rank. Similarly, Michael Jager contended that the consumption pattern of the new middle class explains gentrification because of the new appeal of embracing the historical past as well as urban lifestyle and culture.[31] The need of the middle class to express individualism from both the upper and lower classes was expressed through consumption, and specifically through the consumption of a house as an aesthetic object. A study in Portland confirm the views that the opening of craft breweries is associated to early gentrification and may reinforce the trend.[34]
These effects are becoming more widespread due to governments changing zoning and liquor laws in industrial areas to allow buildings to be used for artist studios and tasting rooms. Tourists and consumption-oriented members of the new middle class realize value in such an area that was previously avoided as a disamenity because of the externalities of industrial processes. Industrial integration occurs when an industrial area is reinvented as an asset prized for its artists and/or craft beer, integrated into the wider community, with buildings accessible to the general public, and making the neighbourhood more attractive to gentrifiers.[9] Areas that have undergone industrial integration include the Distillery District in Toronto and the Yeast Van area of east Vancouver, Canada.
"This permanent tension on two fronts is evident in the architecture of gentrification: in the external restorations of the Victoriana, the middle classes express their candidature for the dominant classes; in its internal renovation work this class signifies its distance from the lower orders." [35]
Gentrification, according to consumption theory, fulfills the desire for a space with social meaning for the middle class as well as the belief that it can only be found in older places because of a dissatisfaction with contemporary urbanism.[31]
Economic globalization
Gentrification is integral to the new economy of centralized, high-level services work—the "new urban economic core of banking and service activities that come to replace the older, typically manufacturing-oriented, core"[36] that displaces middle-class retail businesses so they might be "replaced by upmarket boutiques and restaurants catering to new high-income urban élites".[37] In the context of globalization, the city's importance is determined by its ability to function as a discrete socio-economic entity, given the lesser import of national borders, resulting in de-industrialized global cities and economic restructuring.
To wit, the American urban theorist John Friedmann's seven-part theory posits a bifurcated service industry in world cities, composed of "a high percentage of professionals specialized in control functions and ... a vast army of low-skilled workers engaged in ... personal services ... [that] cater to the privileged classes, for whose sake the world city primarily exists".[38] The final three hypotheses detail (i) the increased immigration of low-skill laborers needed to support the privileged classes, (ii) the class and caste conflict consequent to the city's inability to support the poor people who are the service class,[39] and (iii) the world city as a function of social class struggle—matters expanded by Saskia Sassen et al. The world city's inherent socio-economic inequality illustrates the causes of gentrification, reported in Booza, Cutsinger & Galster (2006) demonstrating geographical segregation by income in US cities, wherein middle-income (middle class) neighborhoods decline, while poor neighborhoods and rich neighborhoods remain stable.
Effects
Gentrification has been substantially advocated by local governments, often in the form of 'urban restructuring' policies. Goals of these policies include dispersing low-income residents out of the inner city and into the suburbs as well as redeveloping the city to foster mobility between both the central city and suburbia as residential options.[31] The strain on public resources that often accompanies concentrated poverty is relaxed by the gentrification process, a benefit of changed social makeup that is favorable for the local state.As rent-gap theory would predict, one of the most visible changes the gentrification process brings is to the infrastructure of a neighborhood. Typically, areas to be gentrified are deteriorated and old, though structurally sound, and often have some obscure amenity such as a historical significance that attracts the potential gentrifiers.[24] Gentry purchase and restore these houses, mostly for single-family homes. In some cases, two or more adjoining property parcels are consolidated into a single lot. Another phenomenon is "loft conversion," which rehabilitates mixed-use areas, often abandoned industrial buildings or run-down apartment buildings to housing for the incoming gentrifiers.[24] Such stabilization of neighbourhoods in decline and the corresponding improvement to the image of such a neighbourhood is one of the arguments used in support of gentrification.[40]
Rehabilitation movements have been largely successful at restoring the plentiful supply of old and deteriorated housing that is readily available in inner cities. This rehabilitation can be seen as a superior alternative to expansion, for the location of the central city offers an intact infrastructure that should be taken advantage of: streets, public transportation, and other urban facilities.[31] Furthermore, the changed perception of the central city that is encouraged by gentrification can be healthy for resource-deprived communities who have previously been largely ignored.[31] Gentrifiers provide the political effectiveness needed to draw more government funding towards physical and social area improvements,[40] while improving the overall quality of life by providing a larger tax base.[41]
A change of residence that is forced upon people who lack resources to cope has social costs.[31]
Social changes
Many of the social effects of gentrification have been based on extensive theories about how socioeconomic status of an individual's neighborhood will shape one's behavior and future. These studies have prompted "social mix policies" to be widely adopted by governments to promote the process and its positive effects, such as lessening the strain on public resources that are associated with de-concentrating poverty. However, more specific research has shown that gentrification does not necessarily correlate with "social mixing," and that the effects of the new composition of a gentrified neighborhood can both weaken as well as strengthen community cohesion.[49]
Housing confers social status, and the changing norms that accompany gentrification translate to a changing social hierarchy.[24] The process of gentrification mixes people of different socioeconomic strata, thereby congregating a variety of expectations and social norms. The change gentrification brings in class distinction also has been shown to contribute to residential polarization by income, education, household composition, and race.[24] It conveys a social rise that brings new standards in consumption, particularly in the form of excess and superfluity, to the area that were not held by the pre-existing residents.[24] These differing norms can lead to conflict, which potentially serves to divide changing communities.[49] Often this comes at a larger social cost to the original residents of the gentrified area whose displacement is met with little concern from the gentry or the government. Clashes that result in increased police surveillance, for example, would more adversely affect young minorities who are also more likely to be the original residents of the area.[49]
There is also evidence to support that gentrification can strengthen and stabilize when there is a consensus about a community's objectives. Gentrifiers with an organized presence in deteriorated neighborhoods can demand and receive better resources.[49] A characteristic example is a combined community effort to win historic district designation for the neighborhood, a phenomenon that is often linked to gentrification activity.[31] Gentry can exert a peer influence on neighbors to take action against crime, which can lead to even more price increases in changing neighborhoods when crime rates drop and optimism for the area's future climbs.[31]
Economic shifts
The economic changes that occur as a community goes through gentrification are often favorable for local governments. Affluent gentrifiers expand the local tax base as well as support local shops and businesses, a large part of why the process is frequently alluded to in urban policies. The decrease in vacancy rates and increase in property value that accompany the process can work to stabilize a previously struggling community, restoring interest in inner-city life as a residential option alongside the suburbs.[31] These changes can create positive feedback as well, encouraging other forms of development of the area that promote general economic growth.
Home ownership is a significant variable when it comes to economic impacts of gentrification. People who own their homes are much more able to gain financial benefits of gentrification than those who rent their houses and can be displaced without much compensation.[50]
Economic pressure and market price changes relate to the speed of gentrification. English-speaking countries have a higher number of property owners and a higher mobility. German speaking countries provide a higher share of rented property and have a much stronger role of municipalities, cooperatives, guilds and unions offering low-price-housing. The effect is a lower speed of gentrification and a broader social mix. Gerhard Hard sees gentrification as a typical 1970s term with more visibility in public discourse than actual migration.[11]
A 2017 study found that gentrification leads to job gains overall, but that there are job losses in proximate locations, but job gains further away.[51] A 2014 study found that gentrification led to job gains in the gentrifying neighborhood.[52]
A 2016 study found that residents who stay in gentrifying neighborhoods go onto obtain higher credit scores whereas residents who leave gentrifying neighborhoods obtain lower credit scores.[53]
Voter turnout
Gentrified communities see significantly less voter turnout during election years when compared to neighborhoods that are not.[54] During its deep stages, as more wealthy people move into lower-middle-class neighborhoods, the ties to the "old neighborhood" are quickly severed. Areas that are not experiencing extreme forms of gentrification are able to maintain this concept of "old neighborhood" ties that represent the familiarity and culture within a community. The social interaction within neighborhoods helps foster greater voter turnout overall. Those that interact within their community, usually from one neighbor to another, will begin to develop not only a better understanding of the neighborhood around them, but the changes that are necessary to benefit the majority in a neighborhood. This usually occurs when less educated neighbors, especially those in low-income areas, are able to interact with those who are more educated and benefit from sharing opinions. This communication results in a positive correlation with voting within the neighborhood.[55] A community will feel closer when they all vote for similar change, fortifying the idea of "people who talk together, vote together," allowing communal bonds to be strengthened.[56]
| Positive | Negative |
|---|---|
|
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| Source: Lees, Slater & Wyly (2010)[pages needed] ; Atkinson & Bridge (2005, p. 5) | |
Public schools
“School gentrification” is characterized by: (i) increased numbers of middle-class families; (ii) material and physical upgrades (e.g. new programs, educational resources, and infrastructural improvements); (iii) forms of exclusion and/or the marginalization of low-income students and families (e.g. in both enrollment and social relations); and (iv) changes in school culture and climate (e.g. traditions, expectations, and social dynamics).[57]
Of the urban schools in the U.S. that were eligible for gentrification (that is, located in structurally disinvested neighborhoods) in 2000, approximately 20% experienced gentrification in their surrounding neighborhood by 2010. “In other words, the persistence of disinvestment—not gentrification—remains the modal experience of urban schools located in gentrifiable neighborhoods.”[58]
School gentrification does not inevitably accompany residential gentrification, nor does it necessarily entail academic improvements. In Chicago, among neighborhood public schools located in areas that did undergo gentrification, schools were found to experience no aggregate academic benefit from the socioeconomic changes occurring around them,[59] despite improvements in other public services such street repair, sanitation, policing, and firefighting. The lack of gentrification-related benefits to schools may be related to the finding that white gentrifiers often do not enroll their children in local neighborhood public schools.[58]
Programs and policies designed to attract gentrifying families to historically disinvested schools may have unintended negative consequences, including an unbalanced landscape of influence wherein the voices and priorities of more affluent parents are privileged over those of lower-income families.[60] In addition, rising enrollment of higher-income families in neighborhood schools can result in the political and cultural displacement of long-term residents in school decision-making processes and the loss of Title I funding.[61] Notably, the expansion of school choice (e.g., charter schools, magnet schools, open enrollment policies) have been found to significantly increase the likelihood that college-educated white households gentrify low-income communities of color.[
There is also the argument that gentrification reduces the social capital of the area it affects. Communities have strong ties to the history and culture of their neighborhood, and causing its dispersal can have detrimental costs.[4]