Gentrification is in the news. Protesters against Google buses in San Francisco who object to the fact that mobility allows high-paid Silicon Valley workers to gentrify San Francisco neighborhoods have been joined by Seattle anti-gentrification protesters who object to Microsoft buses for the same reason. In Portland, Trader Joe’s has backed out of plans to build a store on Martin Luther King, Jr. Boulevard because protesters believed the store would contribute to the area’s gentrification.
Photo by Owen G. Richard.
Meanwhile, New York magazine argues that gentrification can actually be good if it is the “more natural, humane kind” rather than the “fast-moving, invasive variety.” Similarly, NPR points to studies claiming that gentrification can actually be good for long-term residents.
The Antiplanner suggests that the nature of gentrification heavily depends on the amount of land-use regulation in a city and region. In regions with little regulation, neighborhoods go through cycles of wealth, decline, and revitalization. Since there is little regulation, most housing is inexpensive and if one neighborhood gentrifies, that is, people buy homes, evict the renters, fix them up, and move in, the renters just move to another low-cost neighborhood. This is the “natural, humane” sort of gentrification.
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Gentrification is quite different in regions with lots of land-use regulation. The regulation drives up land and housing prices. Young professionals, eager to buy a home with a yard that they can afford, move into what were once low-income minority neighborhoods. The renters have no affordable place to move because all of the housing in the region has become expensive, thus leading to all sorts of distress. This becomes the “fast-moving, invasive variety” of gentrification.
In short, I suspect there is a strong correlation between areas where gentrification generates protests and areas that have lots of land-use regulation, just as there is a strong correlation between areas where researchers find that gentrification actually benefits existing residents and areas with little land-use regulation.
Until a few decades ago, race was the big obstacle to gentrification. White were not willing or comfortable with moving into and trying to gentrify neighborhoods dominated by blacks or other minorities. The authoritarian solution was urban renewal, also known as negro removal.
Fortunately, a lot of the racism that prevented natural, humane gentrification has disappeared. On the other hand, urban-growth boundaries and other land-use regulation can effectively serve the same purpose as color lines once served: keeping the minorities out. As California political writer Joseph Perkins (who is black) once said, “smart growth is the new Jim Crow.”
In short, I suggest that gentrification is only a significant problem in places where government regulation creates artificial housing shortages. For this reason, while I completely sympathize with people who want to keep high-density “affordable” housing out of their neighborhoods, I have no sympathy at all for people who want to keep housing prices high through the use of strict growth boundaries and similar policies. Such policies hurt everyone who is not already a homeowner and fall hardest on low-income families.
Saw this on the news about SF’s Tenderloin district. Laws (land use, zoning, rent controls) “protect” this “working-class” (read: crime-ridden, filthy, and populated by homeless) neighborhood from gentrification. Who wants to live in this area and deal with this? I certainly wouldn’t want to and would prefer to make a lot less and pay a lot less living in rural Napa or the Central Valley. I don’t know. Maybe msetty would enjoy living in the Tenderloin.
I don’t understand the controversy. Crime is bad. Drugs are bad, m’kay? Garbage is bad. Feces and urine in the street is bad. Dilapidated buildings are bad. Urban blight is bad.
Gentrification is good.
Great post today. I don’t agree with the conclusion but I love the question. While I agree that the primary culprit of gentrification is government regulation, I disagree that “planning” represents the primary regulations responsible. Property tax valuation mostly responsible for the dilemma. People exposed to gentrification pressures don’t moved because their neighborhood is increasing in value (for whatever reason) they move because they can’t afford to pay the government enough to live there.
Weather gentrification is good or bad is a semantics question. Property is “increasing in value” or it’s “getting expensive.” I don’t argue that planning doesn’t affect the value of property. So does speculation and “investment” housing (see: exchange value vs. use value). The American housing market is a system of multiple variables. If you remove one variable, say growth management, it doesn’t end gentrification it shifts gentrification pressures down the price scale. The place where Antiplanners go where they die, Houston TX, has several neighborhoods that have and are experiencing gentrification pressure. There have been documentaries made about it.
Gentrification is both good and bad depending on where you are standing. One thing is for sure though… the way property tax is levied, gentrification is inevitable.
The regulation drives up land and housing prices [because it makes the land more desirable].
Nonetheless, I agree in general with Randal today, especially wrt the type of LU regulation. San Francisco has lots of American Dream-type single-fam (usu. attached), and that’s great! but it limits the number of dwelling units that can be built for everyone moving in.
I have activist friends in both SFO and SEA that want the LU regulations loosened so developers can come in and build up right away, yesterday, 5 years ago!!! and they don’t like to hear me say where are the current residents going to go? Also, if you want the current residents to stay (the current residents often want to stay), you often have to build affordable housing for them. That turns a lot of people off, including developers, who often need taxpayer money to make up the difference.
There aren’t easy solutions here, else we’d have done the easy solutions long ago.
DS
I’d be curious to hear the Antiplanner’s opinions on whether land use regulation is always bad or if it’s sometimes good. In the Bay Area, a lot of land use regulation is the result of NIMBY’s wanting to preserve the quaint character of their town, or, as Frank pointed out earlier, nonprofits in the Tenderloin welcoming building height restrictions to protect their working class residents.
Are the citizens of Marin wrong to not want to live next door to high density buildings? Are the nonprofits wrong to want to keep the land their buildings stand on undesirable for gentrifying developers?
You know, Frank, you often do make a lot of sense, but then you spoil it with stupid and irrelevant personal attacks that undermine your credibility. “Joke” fail!
Of course, such conditions on the streets of the Tenderloin are “bad.” Doh! Homer! No one but the criminals or a few stupid left wing “activists” such as the RCP loons from Berkeley “advocate” it.
For the record, I can also give you the nickel tour of the bad neighborhoods in Sacramento or Vallejo next time you’re in Northern California–all in low density areas dominated by single family houses. In fact in San Francisco, places like Russian Hill, Nob Hill and Pacific Heights have the highest residential densities and also are among the richest neighborhoods in the U.S. The Upper East Side in Manhattan is by far the richest part of that city and also the densest, facts always missed by those making knee-jerk claims against density, and that people “don’t like” density though real estate prices dramatically disprove such lies.
Thank you for the compliment.
My speculation that you might enjoy living in the Tenderloin wasn’t meant as a personal attack. My apologies that you chose to take it as one. I thought you might like living in SF, especially in a more affordable neighborhood with character.
I’ve seen the ghettos of Vallejo and Sacramento. I wasn’t saying that there aren’t bad places outside of SF; just making the comment that laws “have impeded progress and created a museum of depravity in the Tenderloin.” As for no one advocating to “protect” the Tenderloin, the article I linked mentioned non-profits that advocate for laws that have allowed those terrible conditions to exist, so I don’t know if they’re “criminals or a few stupid left wing ‘activists”” you claim to know about. BTW, I’ve never heard of an RCP loon. Is that one of the local waterfowl species?
Also BTW, I didn’t even mention density in my comment. I believe that is what is known as a straw man and/or a red herring, the later possibly part of the diet of the local waterfowl species you mentioned.
Well, Frank, with all the snark you’ve tossed at me over several recent threads, it is hard to know exactly what you mean. Your consistent sarcasm is evident, however.
Regarding the “RCP loons” I was referring to the “Revolutionary Communist Party” located in Bezerkely, with their bookstore under the Channing/Telegraph parking garage. Count on them to actually believe drug dealers and homeless people will be important parts of the “revolution” led by the RCP and their Fearless Leader Bob Avakian, of course.
I can also see why many nonprofits advocate short-sighted policies to “preserve” low cost housing, considering how some developers, and the City of San Francisco, have screwed them in the past. It is slowly becoming obvious to Mayor Lee and others that only massive new housing construction will put a significant dent in the problem (http://www.sfexaminer.com/sanfrancisco/leveling-sf-housing-field-could-take-100000-new-units/Content?oid=2703869.)
I mentioned density to point out that higher densities are required in places like San Francisco in order to meet some of the problem, but also that there is no relationship between crime, poverty and density per se unlike some of the more ideologically-blinkered posters here. And of course The Antiplanner continues to ignore the cumulative impact of downzoning on housing prices (which is what Krugman was talking about a few years ago with his colorful label “The Zoned Zone”), exacerbating the housing price problem in San Francisco, San Mateo and Santa Clara Counties, where high growth in tech also pushes against the fact that most of the area is “built out” within almost no usable open land left.
Most open country remaining in the Bay Area is in the North Bay, which is much too far away from the S.F Peninsula corridor to have much impact on housing prices there. Not too much in the East Bay, either, that isn’t 35-40 miles away, or more.
Frank, you deserve credit for acknowledging this problem, and ignoring the Wendell Cox/Joel Kotkin/Randal O’Toole fiction about urban growth boundaries being mainly responsible for the housing price crisis/bubble. But you’re still a snarky wiseass.
Thank for the credit and the background info on the SF situation.
And to paraphrase Samuel L. Jackson, my ass might be wise, but I ain’t no wiseass. đ
msetty – I think the point is that “planning” and smart growth do more to create urban blight, than mitigate it. There is more urban blight, homelessness, and joblessness since we adopted Land Use Laws, and Smart Growth’s “planned outcomes”, and it seems planners like yourself refuse to question those assumptions that have clearly failed at making things better. Let’s face it Wal-Mart’s – minimum wage jobs – would pay more than enough IF we didn’t have these artificial restrictions inhibiting those seeking to achieve Maslow’s Hierarchy of needs.
Tombdragon, it would help if you offered some evidence of your assertion that Smart Growth = blight, even if just a few links to credible sources. Then we could assess the veracity of your claims, which are without content unless supporting evidence is offered.
According to The Antiplanner, Joel Kotkin, Wendell Cox and others of their ilk, Smart Growth causes high housing prices and gentrification, hardly the sort of “blight” you’re claiming.
So which is it?
There is more urban blight, homelessness, and joblessness since we adopted Land Use Laws, and Smart Growthâs âplanned outcomesâ,
Wow. Kudos for that superduper conflation and bonus scare quotes.
DS
The only part of gentrification that deserves sympathy is caused by the brutal and dehumanizing practice of property tax. Even if you have hatred for the 10%, the idea that government ultimately owns what you think you own, unless you pay the government for a right to own it every year, makes humans just a slave to the government.
msetty – Portland! Specifically East Portland, that was annexed to provide property tax income needed to develop the central core of Portland – the Pearl District, and South Waterfront, while the promise of Parks, Sidewalks, road expansion, and maintenance go without being fulfilled. Areas of East Portland had infill housing forced on them, in fact parts are the most dense in the region, yet they are so low income business has left, and neighborhood cannot support grocery stores, and public transit no longer serves the area.
http://topics.oregonlive.com/tag/broken%20promises/index.html
“The only part of gentrification that deserves sympathy is caused by the brutal and dehumanizing practice of property tax. Even if you have hatred for the 10%, the idea that government ultimately owns what you think you own, unless you pay the government for a right to own it every year, makes humans just a slave to the government.”
That was the point I was trying to make. Sandy said it better. If it wasn’t for property tax there would be no gentrification. However, while the 10% probably laments property taxes, it is what keeps “those people” out of their neighborhood.
I totally agree with Sandy’s assessment. There truly is no private property if it must be rented from the government.
I’m skeptical of bennett’s assertion that without “property tax there would be no gentrification.” Perhaps you can further support why property tax is the primary driver of gentrification. It seems like real estate investors looking to profit from renovating and re-renting at higher rate, or converting empty warehouses to lofts, or converting single-use properties to mixed use, or flipping properties would be a major driver, and this would occur with or without property taxes. Is it that some cities give property tax breaks to encourage gentrification? If so, why wouldn’t gentrification occur anyway absent those incentives?
Thanks in advance.
the brutal and dehumanizing practice of property tax. Even if you have hatred for the 10%, the idea that government ultimately owns what you think you own…
The bank owns it, the gummint doesn’t own it, unless you think the banks own the government, and you may be right. Nevertheless, you are merely paying property tax for the provision of government services and rights of way to your property. Are property taxes too high? Undoubtedly in many areas property taxes are too high.
DS
Maybe my assertion was a little too bold. I do believe that property tax is the primary driver of gentrification though… for property owners. Here in Austin we are seeing tremendous gentrification pressures on the east-side. Most of the long time (several generations) residents own their homes. There is a lot of redevelopment, speculation, new mixed-use projects and flippers in the area. The current residents feeling the gentrification pressures aren’t being forced out by the development in the area, they’re being forced out because the value of their property is increasing and they can’t afford the taxes. They would be more than happy to stay in the area with all the new development but they can’t afford the taxes. Their mortgage payments are reasonable if the house isn’t already paid off. If it wasn’t for property tax there would be no pressure on these people to sell out. Interestingly enough the cohort that has been able to withstand the gentrification pressures in the area are senior citizens who under TX law are able to freeze their property tax amount when they hit 65. For those in the 75+ year old range the taxes aren’t forcing them out.
For renters it’s a little different. Yes renters are exposed to gentrification pressures, but that’s the nature of the game. You have a contract, and once the contract is up the terms of a new contract are going to change. Se la vie.
I should also state that I don’t advocate for the ending of property tax but would like to see a change in the way property tax valuation is done. I don’t really have a solution but some ideas include:
– A flat property tax
– A greater sales tax on real estate in lieu of property tax or in conjunction with a flat property tax (this way your not taxed for establishing a home for several years or generations, but you are taxed for selling out, flipping, speculating etc.)
– Property tax means testing. Though the bureaucracy this would create is scary to think about. In many states a version of this is already done for seniors on “fixed income.”
– If some sort of metric can be established to determine the increase in value due to growth management, why not subtract that from the property tax value. Again, bureaucracy.
Just spit ballin’.
Thanks for the reply, bennett. I see how higher taxes would force people out, especially if their mortgage has been paid and they’re retired or have a more limited income.
And, Dan, if one owns property outright, with no mortgage, the bank does not own it. The government does. One is not “merely paying property tax for the provision of government services and rights of way to … property.”
When I rented a house in Seattle, the property tax was $4k a year, and yes, as a renter, I paid that tax through rent. (And in my current neighborhood, property tax bills for some houses are as much as $10k/yr.)
The distribution of taxes:
47.45% — schools
32.23% — city
13.93% — county
2.95% — EMS
2.26% — port
1.14% — flood
0.04% — ferry
One could argue that as a teacher, I got benefit from the school tax, but one could also argue that it was simply a salary reduction. As a childless person, I certainly didn’t benefit from that government service, and given my experiences in government schools, I don’t think anyone really benefits from that service.
It’s quite dubious what services I received from the city and county through property taxes, and it’s questionable how efficiently provided were any services I was forced to use. I’ve repeatedly shown how terrible the roads are here, some of the worst in the nation. Not sure where the tax money was going, but it certainly wasn’t for “the road in front of my house” or the arterial roads I used to get to it. Utilities are billed directly, no?
A small pittance to EMS, that I did not use, but for which I could subscribe in a free market.
The Port of Seattle? I guess that’s a tax on the cheap Chinese stuff I bought from Target and Fred Meyer. Like I have a choice to buy stuff made in Amurica.
Flood? Huh?
Ferry? Didn’t take it that year. Subsidized highway system.
In short, property tax can be seen as rent to government, especially when the taxpayer doesn’t even use services which add up to more than half the billed taxes.
“I donât advocate for the ending of property tax”
Why not? Why shouldn’t people pay directly for the services they use?
Since about half of property taxes go to education (at least in WA and Oregon—probably elsewhere, too), shouldn’t parents be directly responsible for the education of the children they chose to bring into the world? (Before anyone accuse me of being anti-education, please don’t conflate school with education.) Isabel Patterson sums the issue of taxation for schooling aptly: “Do you think nobody would willingly entrust his children to you to pay you for teaching them? Why do you have to extort your fees and collect your pupils by compulsion?”
Then there’s the matter of privacy. Because of property taxes with someone’s address—for the sake of argument, let’s say Dan’s—one can go online with that address where the government publishes the value of that house, how much the owner pays in taxes, the size of the house, number of bedrooms and bathrooms, how its heated/cooled, photos of the house, in some cases a floor plan. Property taxes are a violation of a right to privacy. On that basis alone, they should be eliminated.
If one believes that one should not pay directly for the goods and services one uses and should for some reason subsidize others who use services one does not, perhaps bennett’s idea of a sales tax on property would be the best alternative. However, there could be major unintended consequences.
Of course, I don’t believe property taxes are going away. This is only about ideals and what should be, not what is or will actually be.
And, Dan, if one owns property outright, with no mortgage, the bank does not own it. The government does. One is not âmerely paying property tax for the provision of government services and rights of way to ⌠property.â
Yes, if someone owns their property free and clear of the bank, then that person/corporation/entity owns it. That is true. But if you own it, the government does not own it unless it has seized it for unpaid debt/taxes.
If you need to feel the government (you and me) owns it always under all circumstances, that’s great!
DS
If property can be taken away through legal force for not paying the government, then the ultimate owner of that property becomes clear.
I don’t see why that’s so hard to grasp.
The Antiplanner wrote “Fortunately, a lot of the racism that prevented natural, humane gentrification has disappeared”.
It was disappearing but has come back in reverse. The Trader Joe’s protestors were none too subtle about not wanting white people to move in. But that is okay as long as the code word “gentrification” is thrown in. Remember when using code words to keep certain people out was considered a bad thing?
Frank:
If property can be taken away through legal force for not paying the government, then the ultimate owner of that property becomes clear.
Frank, I think your concepts of how things are muddled at best. “Private property,” “human rights” and other such ideas and similar constructs are socially-constructed, e.g., created by human society. These things do not come down from God, or “natural rights” or any other non-human source. This is simply a non-negotiable fact, e.g., it is what it is; every libertarian I have argued with has never gotten this point, oftentimes I think deliberately.
Another way of stating this is that, for example, most people in the U.S. are in agreement with the fact that the U.S. Constitution is the supreme law of the land, e.g., something that was created by a very dynamic and unique set of men who met in Philly in the late 18th Century and sometimes wore powdered wigs. If most people lose faith in the Constitution (which I often fear is the direction we’re heading), the U.S. as a concept evaporates.
Similarly, there needs to be some mechanism to acknowledge and record the fact that various individuals own “property,” whether land, vehicles, and other moveable goods. This is usually the County recorders office, DMV and similar government-operated institutions, supplemented by private businesses such as title companies to ensure that the records are accurate and consistent with the way those government institutions do things. More extreme libertarians often claim there are “private” (sic) alternatives to such government functions, but nothing convincing in how such alternatives would obtain social (and political) legitimacy. If there are realistic alternatives I haven’t seen them yet.
To better understand how the “construction of social reality” works, all libertarians including Frank should read conservative philospher John Searles book, The Construction of Social Reality for a guide to how society creates such “realities” as government and various kinds of social institutions “public” or “private.”
http://www.amazon.com/Construction-Social-Reality-John-Searle/dp/0684831791.
So Frank, your tone appears to indicate you’re not happy that the “government” controls things like property records, and demands taxes on property to fund its operations.
If you think there is a good alternative to the current system, I suspect the audience here would be interested (I don’t expect a long-winded post, just some idea of what you think might be good alternatives, backed up by a few credible links).
some idea of what you think might be good alternatives, backed up by a few credible links).
Fizzbin!
DS
I’m convinced that Portland area property taxes, and home values would be half what they are today if we didn’t have the artificial Urban Growth Boundary. Oregon’s median household income is about $50K/yr, and our 865sq ft home on a 5K sq/ft lot in a middle/lower income area of Portland is about $3,500/yr, our home’s “Value” according to Multnomah County is about $250K. Our new – government required – Health Care, now consumes all but about $30 per pay period of my wife’s pay check. Yes we are now insured, but we couldn’t afford to go to the Dr. if we had to. Before we could pay for medications and doctor visits out of pocket, but not anymore. So our income has declined significantly since the beginning of the year, yet property taxes go up 3% a year, not including additional taxes approved by the electorate. Oh, and water/sewer cost is $100-$150 per month. The cost of government is out of control, we get poor value for our dollar. Most you who have cushy government jobs, who make a living directing the behavior of those like me, couldn’t do it, and you resent people like me who do. Your answer would be, “If you don’t like it move” – well where? Leave our jobs, and home, for what? Do you expect that I live off subsidies, and welfare, that you direct to justify the bureaucracy you direct?
Probably walking into a trap and the goal posts will be moved based on the fact that some bias will be discovered therefore rendering any “credible link” invalid but…
But here’s one possibility people have thought up as a possible alternative:
Voluntarism.
Here’s a book about it:
The Voluntary City: Choice, Community, and Civil Society
David T. Beito, Peter Gordon, Alexander Tabarrok
University of Michigan Press, 2002
Again, I don’t expect things to change. There are too many people with a vested interest in massive government intervention in the economy. This is all a cerebral exercise. Blah blah blah.
This made me look at Alex Tabarrok’s CV. I didn’t know he went that far back.
DS
Frank, you’re not immortal, so what possessions you own right now won’t be yours forever!
You off your meds, Andrew Dawson (the highwayman)? Still making comments from your work computer at Bouclair?