The big money behind gentrification

Capitalist real estate schemes drive racist displacement

Protest against gentrification in West Harlem, New York.

This article was published in the 'The battle over housing - Landlords and Banks vs. the People' Edition of Liberation.
View the complete issue.

Because of its super-majority Black population, Washington, D.C. was dubbed “Chocolate City” by the band Parliament Funkadelic, and the nickname stuck for decades. In the past several years, however, the Black population has ebbed to just around 50 percent.

In the “trendy” Shaw-Logan Circle area, the Black population stood at 65 percent in 1990, 53 percent in 2000, and by 2010 it was down to 29 percent. The white population in the neighborhood has grown in inverse proportion to the declining number of Black residents. The change in racial and national composition has had a clear class component. The average family income nearly doubled over the same period, as the area went from mostly Black and poor to mostly white and relatively affluent.

This has happened in dozens of neighborhoods around Washington, D.C. and across the country: from the Mission in San Francisco to the Lower East Side and Fort Greene in New York City; from Techwood Homes in Atlanta to the Cabrini Green Projects in Chicago. This wave of displacing poor and working-class neighborhoods with relatively affluent ones has gone under the name “urban renewal” or “gentrification.”

In each case politicians justified these transformations as a way to provide jobs, greater conveniences, improved services and new investment to areas suffering high unemployment, poverty and neglect. Rundown infrastructure and food deserts (areas where healthy food is inaccesible) were replaced by chain stores, boutiques, expensive coffee shops and popular restaurants. In the process, soaring rents have displaced poor and working-class residents, who have been mainly Black and Latino, along with their venerable community and cultural institutions. Development has come at their expense, not to their benefit.

This trend was especially dominant from the mid-1990s to the housing collapse of 2008 and continues full force today in many cities. As a major issue in working-class and oppressed communities across the country, it is critical that revolutionaries be able to explain how capitalism is driving this process, identify its characteristic features, formulate winning strategies to combat it and put forward another model of urban development to provide jobs and services.

‘Urban decay’

Gentrification developed out of national and local trends in the capitalist real estate market, as well as the government’s economic and “anti-poverty” policies.

It emerged out of the national wave of so-called “urban decay” that took place from the 1970s through the 1980s. Cities faced several major issues. Deindustrialization created a hole in the economic landscape, even in more service-oriented cities. “White flight” to the suburbs, inspired by the “American dream” of homeownership and/or racist fear-mongering, removed a huge share of the cities’ tax bases.

Corporations chased office space closer to their workers, aided by opportunistic tax breaks given by many suburban locales. Central business districts were devastated. Urban infrastructure declined.

Urban populations were increasingly poor, locked out of the growing economic sectors both by geography and the racist labor market. The economy entered a deep recession in the 1970s, the ruling class waged war against social programs in the 1980s, and the city crumbled, often literally. In this context, the illegal drug trade flourished as a means of escapism for some and economic survival for others, accelerating this downward spiral.

A brief history of gentrification

The decayed state of American cities in the mid-to-late 1980s created an interesting collection of champions for urban renewal.

Real estate developers and slumlords who had spent years sitting on vacant properties, chasing suburban profits and stuffing their pockets with Section 8 checks, began to recruit new development, promising to make the cities bloom again.

Their plans often revolved around promoting a new cultural attraction, such as a new sports arena or the expansion of universities and hospitals. Also, proximity to public transportation would increase local land values while adding new consumers. Ultimately, the goal was to attract more affluent residents and bring the upper-middle class, or their children, back from the suburbs.

This was attractive to local politicians looking to renew their tax base, increase their own importance and ingratiate themselves with local elites.

On a national level, President Clinton responded to the decline in homeownership with his National Housing Strategy. This strategy aimed to create 8 million new homeowners between 1995 and 2000, using both government and corporate institutions. In the cities, tax credits and other incentives helped bring a wave of new residents who bought and improved houses and patronized and attracted newer businesses.

The whole process revolved around raising property values. As the housing boom began in the 2000s, everyone from small-time capitalists to the big banks bought up limited urban real estate. They bought at a low price, then used all their political and corporate connections to “revitalize” a neighborhood to sell at higher and higher prices, as new residents brought in demand for new amenities and local housing.

These were the economic and political forces that drove gentrification. Whoever stood in the way of this model of capitalist urban development—most notably the existing residents, who were disproportionately Black and Latino—had to be driven out. Some were simply bought out. Landlords turned the screws on their tenants to make their homes unlivable and rents unaffordable. Abusing “eminent domain” laws, politicians seized entire city blocks, displaced their residents, and sold them off to developers.

Police repression facilitated this process. To provide “security” to the billionaire developers and banks, and the residents they aimed to attract, politicians vastly expanded their police forces, aimed principally at flooding and intimidating “problem areas.”

Racism and gentrification

What is the connection between gentrification, racism and national oppression? Some may boil gentrification down to racism alone, since its racist character is so blatant—with white residents replacing Black residents and other poor people of color.

In cultural terms, new businesses that cater to white affluent professionals often emerge as the most hated symbols of disrespect. More “middle-class” white newcomers, typically fresh out of college, also often bring their own racist assumptions and insensitivity to the local community culture and institutions, sharpening the conflict in racial terms. These new residents become the popularly understood face of gentrification—the “gentrifiers”—towards whom the justifiable hatred of racist displacement is turned.

While often taking the form of racist dispossession, gentrification is at its core a class project aimed at securing profits, and real estate developers and owners have shown little hesitation in displacing tenants of all nationalities who cannot pay up.

These real gentrifiers—those driving and directing the process—often live elsewhere, making their decisions in boardrooms, comfortably far away from the communities they are transforming and the people whose lives they are ruining. While they direct objectively racist “redevelopment” projects, and many of them are undoubtedly racists as individuals, the color they care most about is green. For organizers and revolutionaries to counter gentrification, it is essential to go after these power brokers.

To the extent that there are incidents of crime committed against new white residents, for instance, the developers and politicians use this as an opportunity to intensify police presence and intimidation.

There is a rich tradition, however, of tenant organization and collective action. The “rent strike”—in which all tenants refuse to pay rent until their demands are met—and other forms of organized direct action and labor militancy have stopped evictions and led to the construction of quality and affordable housing developments.

Such campaigns, asserting that housing is a right above the property rights of the landlord, can counter the logic of the capitalists that development requires displacement. Beautiful neighborhoods, full of amenities, jobs and quality housing should be available to all, not just those who can afford to live in gentrified places. Organizing around this positive program—not just to leave the neglected neighborhood as is—has the potential to draw in broad sections of tenants from a variety of backgrounds.

Gentrification often occurs in several waves, attracting low-income college students and graduates early on who move into the only neighborhoods they can afford, but are themselves priced out by the next wave of higher earners. Mass organizations of struggle can be built among tenants, students, communities of color and all workers—all those who have an interest in keeping rents low and will take a stand against community displacement.

Gentrification is also a cycle of capitalist real estate development that depends on the availability of capital to invest and rising property values. Currently, due to the capitalist overproduction of housing units, property values have fallen in many cities. Banks and developers there are less willing to invest in new projects, slowing the pace of gentrification. Many landlords will focus on other means to secure their profits, such as allowing their buildings to deteriorate. Organizers must be able to turn on a dime to respond to these changes.

The ugly process of capitalist development is inevitable so long as the profit system remains in charge—and in the United States it will always have racist implications and consequences—but that does not mean we are helpless before it.

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