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
smithrichardj@wayne.edu

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. 

 

 

 

 

 

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Do I Still Think Detroit is Dying?

By Peter Eisinger

Wandering through a museum exhibit some years ago on art from the cradle of civilization, I came upon a map of the ancient Middle East with the names of scores of cities that no longer exist, and I was suddenly struck that the world is indeed full of sites of once vibrant cities that died. Thinking about the phenomenon of urban death, it became clear that there are multiple causes—wartime destruction, desertification or jungle encroachment, natural disasters, and so on—but that the common factor in urban death, theoretically, is that for one reason or another the city is no longer able to fulfill its essential urban functions. I wondered if cities in a modern society like the United States could die, that is, if there came a point where they were no longer doing the things that cities do that make them cities. Detroit seemed like a good place to begin an exploration of that possibility.

Elsewhere I posit three fundamental urban functions, each so crucial to the sustainability of a city that the failure of any one of them may set a city on the path to death.1 These include governance (the management and financing of common public responsibilities), an economic function that I call the maintenance of the marketplace (the fostering of employment, investment, and trade), and cultural production and preservation. In “Is Detroit Dead?” I subject the city to an examination akin to that which a doctor conducts on an ailing patient and conclude that the city is no longer fulfilling either its governance or its economic functions and thus appears to be dying.

As that article was in the works and in the few years since publication, downtown Detroit (approximately 5 percent of the land area within the city’s boundaries and 5 percent of the total population) has experienced a $9 billion building boom of mostly repurposed and revitalized commercial property, 16,000 new jobs, and some 3000 new or renovated housing units. City boosters point to this as a sign of the city’s resurgence. Yes, but…. I would suggest that such a judgment is premature.

Detroit is still largely a city in despair, particularly for much of its black population. Little of the downtown activity has had discernible spillover benefits for the vast neighborhoods beyond the downtown. Population continues to decline (though the rate of loss slowed in the last year or two); the school system is in a perpetual state of grave crisis; poverty remains higher in Detroit than in any other big city in the U.S., with the rate for African Americans more than three times that for whites. Furthermore, the rate of concentrated poverty is higher in Detroit than in any other large metro area, and Detroit is the second most racially segregated city in the country. The median per capita income even in the apparently prosperous downtown is less than half the national average.

The city has steadily relinquished its governmental functions, greatly diminishing the scope of municipal capacity. Partly this a function of the formal reallocation of various functions—street lighting, social welfare programs, the convention center, water and sewer, the crown jewel of the public park system and so on– to other levels of government (special authorities, Wayne County, the state of Michigan). But the reduction of municipal capacity is also the product of the virtual abdication of development functions to the private sector, and in particular to just a few individuals, unaccountable to local government or the city’s citizens. Detroit is no longer a fully self-governing city within the context of American local government expectations and possibilities.

The city is also still falling short as a magnet of economic opportunity, one of the most central aspects of the so-called vital marketplace urban functions. There is a limited array of economic activities, most of which are not accessible to people with little education.  No other big city in the U.S. has so few foreign born immigrants. Although some college-educated young people have moved to the city in recent years—artists, entrepreneurs, tech specialists—the city is not a destination for small town domestic migrants nor high school graduates seeking work. Unemployment is still more than two and half times the national rate.

So is Detroit dead? Not yet, but I still think it is hovering on the verge.  There is a core with an aura of vibrancy—a Whole Foods grocery opened in the center a couple of years ago and is often touted as evidence of resurgence–that belies its vulnerability. But much of the rest of the city continues to be a dead zone, still with abandoned houses, empty fields, long-shuttered factories, and a public school system that has lost more than two-thirds of its students since 2002. Detroit still seems to me to be the American way of urban death.

Peter Eisinger is Professor Emeritus at the Milano School of Management and Urban Policy at the New School in New York City.

The original article, “Is Detroit Dead?” was published in Volume 36, Issue 1 (2014) of JUA, and is included in the May 2016 Virtual Issue on Global Urban Change. It can be accessed without a subscription for a limited time.

1. “Theorizing Urban Death,” in Robert Scott and Stephen Kosslyn, eds., Emerging Trends in the Social and Behavioral Sciences: An Interdisciplinary, Searchable, and Linkable Resource. 2015: 1–9..