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An introduction to gentrification Part I

By Brian Doucet
May 20, 2008

It doesn’t take much scanning through big city newspapers these days to come across articles about gentrification. From New York to Amsterdam to Toronto and beyond, old formerly working-class inner-city neighbourhoods have been transforming into trendy affluent places very quickly. In recent years, with property price increases and strong economies, the gentrification of the inner city has only accelerated and spread over a wider geographic area within cities.

What exactly is gentrification? The term was first coined by Ruth Glass, a British sociologist, who, in the mid 1960s started observing middle class people moving into poorer sections of London’s inner-city. She noted that “one by one many of the working class quarters of London have been invaded by the middle class…and have become elegant, expensive residences.” (1) She also noted that many of the original lower-income residents become displaced, and the overall character of the neighbourhood subsequently transforms. Despite being written over forty years ago, these are still elements of gentrification that can be witnessed today.

Gentrification traditionally occurs in working-class or lower-income sections of the inner-city. Some of these areas were always working-class quarters, while others began as wealthy areas and experienced decline over the years. As such, the housing in gentrified areas can come in a variety of forms: traditional working-class cottages, or large mansions that had been subdivided and rented out, which, when gentrified, return to their original function. For a variety of reasons, such as suburbanisation, the rise of the automobile, technological changes, and capital flows, these areas became both undesirable to middle and upper-income households, and under-valued compared to their potential worth.

Gentrification is the transformation of these areas to affluent communities. Initial observations of gentrification being led by individual households buying and renovating old properties in undervalued areas (so call ‘sweat equity’) have been expanded to include wider projects that bring affluent residents to the inner-city. In this regard, high-end residential developments, such as loft conversions, or condominiums in the inner-city are seen by many to be part of the gentrification process. Gentrification, therefore, can be led by individuals, developers or even governments. The British-American geographer Neil Smith states that the gentrification “has become the leading residential edge of a much larger endeavour; the class remake of the central urban landscape.”

There are two main theories as to why gentrification has occurred. The first is the supply side, or production theories. The main proponent of this theory is Neil Smith, with his Rent-Gap Theory. It states that in inner-city neighbourhoods, the value of buildings had significantly declined, while the underlying land values remained higher. This gap in the two values enabled a significant profit to be made by renovating properties and putting them to their best potential use (i.e. affluent residences). In this regard, investment, which for many decades was removed from these areas, returned to the inner-city, because of the ability to make a large profit. This theory argues that gentrification is a back-to-the-city movement of capital, rather than people.

(1) Glass R (1964) London; aspects of change. London: MacGibbon and Kee.

The next article will outline the opposing theory, that gentrification is caused by demand, or consumption factors, as well as its impact on neighbourhoods. Re-visit any site soon to continue with Part II of this article.