Does spatial assimilation lead to reproduction of gentrification in the global city?

By Richard J. Smith

My thinking about gentrification formed as an undergraduate at the University of Michigan at church. After a weekend service trip on Detroit’s west side with Habitat for Humanity, I casually mentioned to our associate pastor how great it was to see all the new investment in downtown Detroit. He responded, “But it’s displacing the poor.” This message stuck with me when I became a Presidential Management Fellow at the US Department of Housing and Urban Development.

My personal experience living in gentrifying cities paralleled my professional career. When I worked for HUD in the Office of Community Renewal, we administered the Federal Empowerment Zone/Enterprise Community program as well as the Renewal Community program. We often wondered if the program, which was designed to direct both public and private resources to high poverty neighborhoods, would really benefit the residents by bringing jobs, or just bring gentrification and force people to move. Many of our grantees, desperate for tax revenues, wanted gentrification and this challenged HUD’s simultaneous mission to both develop cities and provide fair housing protections.

One of my responsibilities in the office was to work with scholars doing research on EZs. I met Marc Wallace just as he was finishing. I helped Kil Huh, now of Pew Charitable Trusts, print out all the strategic plans. I sent Patrick Kline, now an economist at Berkeley, copies of the winning and losing EZ/EC census tracts so he could do a natural experiment. Watching these scholars, I decided to do my own dissertation work and decided to focus on immigrant and minority entrepreneurship. Having published two articles about EZs, I learned that reviewers don’t want to review articles about these programs. When Jeffrey Zak attended one presentation I gave at APPAM, he told me it was a waste time for anyone to study them because incentives would be too small to have an impact, or too large that they just got capitalized in land rents (i.e., gentrified the neighborhood).

It is only fitting that I co-wrote this paper in Detroit, after spending 15 years outside of Michigan. When I came to Wayne State University, I bought the 10th of 76 condo units in a former Jeep showroom using down payment assistance from the state. This condo development was a risky move–it would be several years to get the 15th unit sold. Fallout from the 2008 recession froze many of in the development pipeline, so gentrification looked like an impossible fantasy. Since Federal regulations required random assignment of appraisals, and the only comparable properties were foreclosure sales, banks in Detroit could not lend at the price the developer asked. Further, the Fire Department set a “let it burn” policy for abandoned buildings and each mayor pledged to accelerate demolitions. We are now demolishing over 3500 abandoned buildings a year, a rate that surpasses that of most states.

The Cass Corridor was not the first gentrifying neighborhood I lived in. I thought I was saving the city by contributing to the tax base. But I am also saving someone else money by paying a mortgage by contributing to shareholder value. In Washington, DC, I lived a few blocks from Derek Hyra where he wrote his book about the Shaw Neighborhood. I saw Rev. Fauntroy speak about how he piloted the model cities program in our neighborhood 30 years prior by strategically placing affordable housing, a new library, and other amenities. The last time I visited the neighborhood, I saw my rent controlled house undergoing renovation—presumably being converted to market rate. In Oakland California, I lived behind Novella Carpenter, author of Ghost Town Farms, a book about how she navigated a chop shop, Buddhist temple and local bureaucracy to grow vegetables on a brownfield site. I woke up to the sound of her goats. Her house was Pepto Bismol pink and she would sometimes feed her chickens in the backyard. In one year, I saw each of the four crack houses on the block get shut down as the Friday night art crawls only grew bigger. Artists’ lofts across the street and the Black Muslim Barber Shop down the street held the block together. I can share these anecdotes in a blog.  For two decades now, I’ve lived in places where you can see capital investment advance one block at a time. When I return to these places, I look for vestiges of continuity of place like flyers of resistance. Sometimes those have moved on to the next neighborhood as well.

One puzzle I noticed when putting together descriptive statistics from my dissertation was that the immigrant population increased dramatically from 1990 to 2010 in the EZ/ECs and RCs. The population decline would have been much greater had it not been for immigration. I wondered what local governments were doing to encourage immigration to cities generally, not just in EZ/ECs and RCs. As a follow-up for my dissertation research, I wanted to see if urban neighborhoods were increasing or decreasing immigrant populations. I was able to obtain some internal funding to purchase the new Geolytics Time Series Research Database and a graduate student assistant.

I hired Catherine Schmitt-Sands, a computer scientist turned political scientist, and we spent a year and a half data mining 13,000 local government websites to categorize local government initiatives. She also did the analysis and wrote up the first draft of this paper. At that time, I met Theodore Pride, a sociologist, when he was doing some work on the United Way’s Neighborhood Network program evaluation. He asked me to serve on his dissertation committee because he was interested in gentrification in a working-class neighborhood on the west side of Detroit. He had grown up in a public housing development nearby and he returned from studying out of state, he did not recognize the neighborhood that he had grown up in. I hired him as a part-time research assistant to work on this project. This experienced showed me the benefits of putting together an interdisciplinary team whose personal histories lead them to approach the research in different ways.

Ted wasted no time being provocative. He argued that any kind of immigrant welcoming initiative would be a form of gentrification. He suggested that gentrification was a by-product of spatial assimilation (i.e., people of color moving into privileged white neighborhoods in suburbs) He argued that Whites would be more comfortable moving to inner city neighborhoods if they lived in suburban that were experiencing spatial assimilation. It turns out that the two processes are correlated at the level of the metropolitan area, but Ted was wrong about the Whites—in 2010 on average they are still leaving gentrifying neighborhoods.

Our big take away was that the number of gentrifying neighborhoods has doubled since 1980, and it appears to be accelerating. Spatial assimilation, on the other hand, has plateaued. Upon reflection, the mechanism is very complex, and reviewers were quick to point this out. By using a color-blind definition of gentrification, we might actually be seeing capital flows in other ways—incumbent upgrading, funds transfers to residents to fix up homes, or empty nesters returning to the neighborhood they grew up in. In Ted’s dissertation research, he found that in one low-income neighborhood, property values doubled in one year after an aggressive marketing campaign by the local community organization. We both agree that gentrification research could look very different in 2020, if we still have Census data to analyze.

These are the sorts of personal reflections I can say in a blog, but don’t come from our data per say. Ted challenged me to think critically as I look outside my window and see the new kind of development partially block my skyline view of my luxury apartment I learned how fast the phases of gentrification can flow when excess capital has too little desirable places to chase after. Detroit and is currently planning a fourth publicly financed stadium for soccer. The financing for Little Caesars Arena, new home to the Red Wings and Pistons, came in the form of a loan taken from the local school budget during emergency management. Michigan places localities and school districts under emergency management if they do not have a balanced budget. The law authorizes EMs to sell anything, break any contract except repayment of bonds. After some regulatory changes and the world’s largest municipal bankruptcy, Wall Street was more or less forced by the courts to dump capital into the city. Bondholders were given land in exchange for a “haircut” with the condition that they develop the land, rather than hold it. One development is a new basketball and hockey arena gentrifying the neighborhood between Wayne State and downtown Detroit. This development triggered an intense community benefits movement in the city. As part of negotiation with local residents, Chris Illich agreed to restore the Historic Park hotel, hire city residents, care for local Cass Park, set aside retail space for local businesses, and create an internship program with the public schools. When making these commitments publicly, he said that he did so because he knew that his company was the custodian of a sacred legacy and that the Tigers and Red Wings belonged to all of us. Consequently, the City of Detroit became the first city to codify a community benefits process in an ordinance, a process that is still contested.

I would like to thank the UAA Awards Committee and chair Kirk McClure for their hard work. I would also like to thank George Galster for not submitting a paper for the conference award that year as well as serving as a faculty mentor. I went to San Diego with Ted to accept the award. Catherine couldn’t make it, but she is currently a Senior Lecturer at the Mike Illich School of Business, soon to open at the Little Caesars Arena with a new sports management concentration.

Our study does not test any hypotheses about the impact of gentrification on residents. For that you’ll have to see some of my other work co-authored with Amanda Lehning and Kyeongmo Kim. We look at age old question: Does gentrification make us sick, or are we just sick of gentrification?

Richard J. Smith, MFA, MSW, PhD
Associate Professor
School of Social Work
Wayne State University

The article “Does spatial assimilation lead to reproduction of gentrification in the global city?” by Richard J. Smith, Theodore Thomas Pride & Catherine E. Schmitt-Sands, was published in Volume 39, Issue 6 of the Journal of Urban Affairs. It is currently available to read for free without a subscription. 







Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s