Gentrification Phase Zero: Redlining & Urban Neighborhood Disinvestment
In order for gentrification to be possible, there must exist low-income neighborhoods that are “gentrifiable.” For our second post, Wenfei and I explore the question: why do lower-income, disinvested neighborhoods exist in inner city areas? Wenfei began with the question of suburbanization, while I looked into the impact of “redlining.” We had an inkling that they were linked, that they are perhaps even two sides of the same coin. [See Wenfei’s Post Here]
First, I will briefly describe the structure of How to Kill a City (henceforth HTKAC) by Peter Moskowitz, where I began my research on gentrification. It is a little different from both a strictly academic analysis, as well as a longform journal article. I will also share some thoughts on the effectiveness of this book structure for discussing gentrification.
Afterwards, I will delve deeper into Moskowitz’s exploration of this very question that Wenfei and I decided to explore for our second post: why do lower-income, disinvested, inner-city neighborhoods exist? Moskowitz first presents how gentrification progresses with Phillip Clay’s Stage Model of Gentrification. Using Clay’s structure, they then present the existence of low-income, disinvested neighborhoods as a prerequisite to gentrification: a “phase zero” to use Clay’s stage model structure. They then argue, that in the context of the Great Depression, white America used deep-rooted racism to justify prioritizing white economic revival over everyone else’s. “Redlining” was the mechanism used to prioritize white, suburban neighborhoods over black, inner-city neighborhoods, segregate America, and disinvest in inner-city neighborhoods.
To round out the research a bit, I do also look at work by journalist Ta-Nehisi Coates and continue to refer to Lees, Slater, Wyly’s textbook, Gentrification.
My first foray into really trying to unpack gentrification led me to read HTKAC. Journalist Peter Moskowitz explores gentrification through in-depth case studies of four American cities (New Orleans, Detroit, San Francisco, New York City) and personal accounts of people experiencing gentrification on both sides, interwoven with academic research by prominent geographers, historians, sociologists, businesses analysts, and journalists. By looking at gentrification at different scales (global, national, state, metropolitan, neighborhood / community, apartment / house, individual) and different lenses (academic, journalistic, citizen), Moskowitz pumps blood and heartbeat into what would usually remain dense and inscrutable theories.
The most striking aspect of this book for me was how engaging it was.This isn’t to say that I’ve read any work by Moskowitz in the past and expected poor quality writing. Having read a lot of academic articles in the past, I was expecting something dry and abstract, but it was refreshingly relatable and tangible. A gentrification page-turner, if you will. Also, Moskowitz artfully dodges the typical charges leveled against both production and consumption side arguments — presenting gentrification as a deterministic force in which humans have no agency for the former (1), and focusing too much on beneficiaries of gentrification for the latter (2) — precisely because they use real accounts of people suffering the negative effects gentrification: their desires, how they make do with their limited choices, how they fight back. I found this style of writing to be very effective in helping to make gentrification accessible to the general public.
Before discrediting the book as anecdotal stories only, or cherry-picking examples supporting their view, Moskowitz does due diligence to deep, decades-long research by the most important names in the field: Neil Smith, Phillip Clay, Richard Florida, David Harvey, Sarah Schulman, Sharon Zukin, amongst many others. Also, it’s important to remember that arguably the most important and influential urbanist writer of our time, Jane Jacobs, was also a journalist. Even in the only textbook on gentrification available, Lees, Slater, and Wyly admit that in the “[t]heoretical purity in the pages of academic journals,” one can forget the importance of “the lives of the poor and working classes whose homes, communities, and lives are gentrified” (3).
To build their argument for how gentrification becomes produced, Moskowitz first presents the “Stage Model of Gentrification” outlined by MIT urban studies professor Phillip Clay in 1979. In brief: first individuals begin moving into low-income neighborhoods and renovating houses. They are doing so on their own with no backing from the government or large institutions. Second, speculators notice the neighborhood changing and buy up property. Vacancies decrease, and displacement begins. Third, middle-class new-comers take on leadership roles in the neighborhood. Developers replace individuals as primary renovators and builders. Tensions (existing vs. new residents) arise. Fourth, the neighborhood is already gentrified, and the initial gentrifiers (artists, bohemians) begin to get gentrified out. Displacement is rampant (4).
To these phases, Moskowitz and other researchers recommend adding a “phase five,” when neighborhoods become so rarefied that only the absolute global elite can afford to own anything at all. Lees, Slater & Wyly call this derivative both super-gentrification and financification. “This gentrification is driven largely by globally connected workers employed in the City of London or on Wall Street” (5). Appropriately then, Moskowitz explores this further in their chapters on New York City.
Moskowitz also suggests a “phase zero”: some mechanism must produce those low-income neighborhoods in order for phase one to be possible. Before we can discuss what produces gentrifiable neighborhoods, we must understand what makes a neighborhood attractive for gentrification. Moskowitz presents Neil Smith’s “rent-gap” theory to answer this question: when the difference or gap between “Potential Ground Rent” (or potential value) of a neighborhood becomes much higher than its “Capitalized Ground Rent” (or current value), such that developers can purchase, renovate, pay construction loans, then sell with a satisfactory profit on properties within said neighborhood, then gentrification will occur (6). Thus a “gentrifiable” neighborhood is one that has become disinvested (7).
Why did neighborhoods become disinvested? Disinvested neighborhoods are so pervasive that they almost appear to be “natural” phenomena of urban space-making, but Moskowitz argues that very intentional mechanisms were put in place to produce phase zero. They explore this question in chapter 6, “How the Slate Got Blank.” They begin by presenting the “index of dissimiliarity” developed by sociologists Douglas Massey and Nancy Denton in their book American Apartheid, which clearly shows that American cities have become measurably more segregated between 1860 and 2010. Denton and Massey conclude that white America has deliberately segregated America (8).
Using Detroit as an example, Moskowitz illustrates how segregation played out on an urban and local scale. Drawing from historian Thomas J. Sugrue’s The Origins of Urban Crisis, Moskowitz describes how an influx of African Americans in Detroit led to physical violence in the form of riots in 1943. Then, unions tried to bar blacks from the jobs they relocated for, then neighborhood residents violently harassed new black residents by torching lawns and houses, and even stoning them (9). This type of violence was not unique to Detroit, but was in fact a systemic issue across America. Journalist Ta-Nehisi Coates describes similar violence that occurred in Chicago and Levittown, PA in his article, “The Case for Reparations.” (10).
Even more insidious than physical violence were the completely “legal” measures — restrictive covenants — used by neighborhood associations to bar black Detroiters. Moskowitz quotes that one of them “mandated that property ‘shall not be used or occupied by any person or persons except those of the Caucasian race.’” Real estate agents and the mayors were completely complicit (11).
Moskowitz then goes on to show that although local governments and communities were part of the general segregationist mind set of white America, the devastating, structural segregation came directly from the federal government. This began with a desire to restart the American economy after the Great Depression through subsidizing housing, which directly led to redlining, which directly led to the disinvestment of inner-city neighborhoods.
The theory was that promoting home ownership was the best way to stabilize America’s floundering economy. To accomplish this, first, the federal government invented what are now “run-of-the-mill” mortgages which have longer payback periods (prior to this, they were considered too risky). Building on this, in 1933, President Franklin Delano Roosevelt created the Home Owners’ Loan Corporation (HOLC) to refinance the mortgages of families at risk of foreclosure to stabilize the middle class. To reduce the risk HOLC would take on, they devised a system to predict the safety of their investments. The safest neighborhoods were labelled “A” and outlined in green. In order of risk, B-grade neighborhoods were green and C were yellow. The riskiest neighborhoods were outlined in red lines on maps — hence “redlining.” These neighborhoods were deemed zones “where there was a combination of racial integration and poverty” (12). Thus, people of color and low-income people living these zones were deliberately barred from HOLC financial help.
The other two key players in federally-mandated segregation were the Federal Housing Administration (FHA) and the Veterans Administration. These federal programs insured bank mortgages allowing banks to take on riskier investments. This spurred housing construction in the suburbs, and encouraged Americans to move out of cities. White Americans moving into these new suburbs were supported by federal subsidies to “grow their nest egg” (13). Coates quotes Sugrue who summarizes the consequences: “‘In 1930, only 30 percent of Americans owned their own homes; by 1960, more than 60 percent were home owners. Home ownership became an emblem of American citizenship’” (14). Read more about suburbanization in Wenfei’s post [LINK TO WENFEI’S POST].
HOLC, FHA, and VA worked together to bar non-white people from receiving federal aid and to push white people into the suburbs. HOLC specifically had “a clause in the deed forbidding the sale of the property to anyone other than whites”(15). The FHA Manual was very particular in the style of neighborhood it preferred to invest in: uncrowded, newer properties, setbacks from curbs, minimum widths for houses, single-use buildings. Essentially, the FHA Manual is a blueprint for segregated, suburban neighborhoods.
On the flip side, while the federal government was investing in these new, white, suburban communities, they were draining resources from existing inner-city neighborhoods and the African-American families and communities inhabiting them. These neighborhoods were “‘cut off from sources of new investment[, and] their homes and communities deteriorated and lost value in comparison to those homes and communities that FHA appraisers deemed desirable.’” (16) As Moskowitz sums up, “With a few lines of anti-density, racist planning policy, the federal government essentially forced the creation of the suburbs and the near-complete disinvestment of the inner-city” (17).
Two structural forces, late-stage capitalism and racism, are at work in what is now called “redlining,” which led to neighborhood disinvestment. Capitalism has winners and losers, and the winner is not who you might think. It’s not even a “who” in fact. As Lees, Slater, and Wyly explain: “the negative consequences of gentrification … are symptoms of the fundamental inequalities of capitalist property markets, which favor the creation of urban environments to serve the needs of capital accumulation, often at the expense of the needs of home, community, family, and everyday social life” (18).
The federal government certainly had a hard task at hand, of reviving the American economy from the worst economic depression ever experienced to that date, but it did so at the expense of the most vulnerable populations: people experiencing low-income, and frequently that meant people of color. The second force at work, deep-rooted racism, can be seen in how the HOLC, FHA, and VA were structured. They used race as a justification for prioritizing one population of people over another. Racism is still present today in gentrification. As Moskowitz points out, “[o]ver and over again, media organizations, hipsters, and artists refer to Detroit as a ‘blank slate.’ That ignores not only the 700,000 other people who still live there but also the historical reality that the ‘blank slate’ was created through decades of brutal racism” (19).
With what I’ve learned about the violence that has led up to gentrification, It’s hard to believe that gentrification was first first posed to me in a positive light, framed as neighborhood improvement. In the beginning, as I became aware of existing residents getting displaced through rising prices, I began to feel a mounting sense of anxiety, but I still thought the problem was a relatively benign one born of folks preferring suburbs over cities (what I now know can be considered a “consumption-driven” perspective). I thought vaguely that perhaps it was American Manifest Destiny taking modern form, the American Dream packaged nice and neatly in a detached, suburban house. Having read Moskowitz’s HTKAC and other research on HOLC, FHA, and the VA, I’m appalled to learn of the systemic segregation mandated by the US federal government. That our very own government so intentionally discriminated against people of color breaks my heart for all the suffering endured by them, but also frustrates me that what I had naively thought were issues solved in the 60s are still very present and still very much causing trouble. As Moskowitz concludes in their chapter on redlining, “[g]entrification is not integration but a new form of segregation” (20).
My one hope is the recent groundswell of interest on gentrification. Not only the publication of HTKAC (2017), but also Gentrifier (2017) and even ‘Gentrified,’ a series released in March 2018 by WHYY exploring its history and current experience by folks living in Philadelphia. We may not have an answer yet, but I hope we’re asking the right questions.
(1) Loretta Lees, Tom Slater, and Elvin Wyly. Gentrification. (New York: Routledge, 2008), 75.
(2) Ibid, 121.
(3) Ibid, 76.
(4) Peter Moskowitz. How to Kill a City: Gentrification, Inequality, and the Fight for the Neighborhood. (New York: Nation Books, 2017), 32–34.
(5) Lees, Slater, Wyly; 130.
(6) Ibid, 38.
(7) Moskowitz, 38.
(8) Ibid, 107.
(9) Ibid, 108.
(10) “‘On July 1 and 2 of 1946, a mob of thousands assembled in Chicago’s Park Manor neighborhood, hoping to eject a black doctor who’d recently moved in. The mob pelted the house with rocks and set the garage on fire. The doctor moved away.” And also: “Daisy and Bill Myers, the first black family to move into Levittown, Pennsylvania, were greeted with protests and a burning cross.” Ta-Nehisi Coates, “The Case for Reparations,” The Atlantic June Issue (2014), accessed April 14, 2018, https://www.theatlantic.com/magazine/archive/2014/06/the-case-for-reparations/361631/.
(11) Moskowitz, 109.
(12) Ibid, 111.
(13) Ibid, 112.
(14) Coates (2014).
(15) Coates (2014).
(16) Coates (2014).
(17) Moskowitz, 113.
(18) Lees, Slater, Wyly; 73.
(19) Ibid, 116.
(20) Ibid, 117.