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Gentrification is the investment of commercial or residential capital in less affluent neighborhoods to encourage redevelopment for middle-and high-income inhabitants. Traditionally, the term gentrification” refers to the displacement of working class residents from inner-city zones and the gradual entry of new gentry” of well-off professionals. Early work explored the role of gentrification in accelerating the displacement of blue-collar jobs from the urban core during the 1950s and 1960s. Since the 1960s and 1970s, scholars have noted that processes of gentrification have become more widespread throughout US and European cities, especially, following the global economic recession of the 1970s, as capitalists sought new opportunities for profitable investment in the real estate sector. Thus, between the late 1970s and the early 1990s, a second phase of gentrification unfolded. During this period, inner-city reinvestment articulated with extra-local socio economic processes such as deindustrialization, globalization, and the rise of the so-called FIRE” (finance, insurance and real estate) industrial cluster as an important engine of urban economic growth. The intense recession of the early 1990s witnessed predictions of an end to gentrification” as investor capital evaporated. By the mid-1990s, however, a third wave of gentrification had began to crystallize, as additional neighborhoods, located ever further from the urban core, experienced significant capital-led redevelopment. In the US context, government mortgage policies, securitization, and globalization of finance supported and encouraged this third-wave gentrification (Smith 1996).
In a comprehensive survey of the literature, Hackworth (2002) argues that four novel changes distinguish third-wave gentrification: corporate developers are now the leading initiators of gentrification, federal and local governments are more open and assertive in facilitating gentrification; anti-gentrification movements have become more marginalized than in earlier decades; and, gentrification is diffusing to more remote neighborhoods. Overall, according to Hackworth (2002: 839), gentrification now is more corporate, more state facilitated, and less resisted than ever before.”
In elaborating on the third wave of gentrification, Gotham (2005) has developed and applied the concept of tourism gentrification as a heuristic device to explain the transformation of a middle-class neighborhood into a relatively affluent and exclusive enclave marked by a proliferation of corporate entertainment and tourism venues. As local elites use tourism as a strategy of economic revitalization, tourism services and facilities are incorporated into redevelopment zones and gentrifying areas. In this new urban landscape, gentrification and tourism amalgamate with other consumption-oriented activities such as shopping, restaurants, cultural facilities and entertainment venues. This blurring of entertainment, commercial activity and residential space suggests an implosion of culture and economics in the production and consumption of urban space.
More recently, the crisis of the subprime mortgage sector and the global recession have dampened investor confidence in real estate investment thus slowing down gentrification in many US and European cities. Nevertheless, a key feature of recent research on gentrification is the attempt to situate gentrification within larger economic and political processes, including the deregulation of national markets, shifting patterns of global finance and the power of transnational corporations (TNCs) and global production networks. Simply identifying a transition in housing stock or class composition of a neighborhood is, of course, no longer novel given the variety of causes and multilevel processes affecting gentrification. As many scholars have pointed out, gentrification is not an outcome of group preferences nor a reflection of market laws of supply and demand. Consumer taste for gentrified spaces is, instead, created and marketed, and depends on the alternatives offered by powerful capitalists who are primarily interested in producing the built environment from which they can extract the highest profit. Furthermore, gentrification reflects and is a product of an intricate intertwining of state and financial institutions.
- Gotham, K. F. (2005) Tourism gentrification: the case of New Orleans’s Vieux Carre (French Quarter). Urban Studies 42 (7): 1099-1121.
- Hackworth, J. (2002) Postrecession gentrification in New York City. Urban Affairs Review 37 (6): 815—43.
- Smith, N. (1996) The New Urban Frontier: Gentrification and the Revanchist City. Routledge, New York.