GRSJ224/neoliberalism&urbanchange

Neoliberalism

Overview

Neoliberalism is an ideology and policy model that emphasizes the value of free market competition and laissez-faire economics. Economically, it was developed to limit the state’s influence on the market, promote deregulation, privatization and fiscal austerity. Any attempt to from the state to encourage these phenomena will result in worsened economic performance. This is centered on the belief that human beings are naturally motivated by self-interest and when they are not interfered with in their economic activities, it becomes a balanced system of production and exchange that benefits both parties. Recently, there has been an increase in attention towards neoliberalism not only in economic terms, but as an ideological project that emphasizes all aspects of the individual, society and life in general. One major criticism that neoliberalism faces is that this form of economics is not improving human well-being but is inadvertently increasing economic disparity and maintain class order.

Urban Change

The influx in Vancouver's population

When considering neoliberalism and its effect on urban change, it is important to take a glance at how the population of cities has changed in the past. Until recently, the rural population had always outnumbered the urban population. This massive influx of people to cities since the neoliberal turn in the 1980s in turn shifted the significance of cities as political, cultural and financial power centers. As a result of this new urban growth, there are massive side-effects for cities such as over-urbanization and an increasing wealth-gap between the rich and the poor. When considering the free movement and self-regulating market, neoliberalism has increased the influence of large corporations. Rather than the laissez-faire economic ideology benefitting all members of society, it has in reality created large multi-national corporations with economic and political power. This neoliberal and post-industrialized society has positive and negative effects, specifically gentrification, which will be explained in further detail.

Gentrification

Definition

Gentrification is a general term for the arrival of wealthier people in an existing urban district, a related increase in rents and property values, and changes in the district’s character and culture. This urban change causes extreme social injustice for the existing community. Wealthy newcomers are congratulated for “improving” a neighbourhood whose poor, minority residents are displaced by increasing rents and economic change. Gentrification tends to occur in districts with particular qualities that make them desirable and ripe for change. This creates economic effects such as the arrival of new investment, new spending power and a new tax base which all contribute to the gentrification. Furthermore, there are other factors that become part of the picture such as rehabilitation, housing development, new shops and restaurants, and new high-wage jobs. All of these contribute to the displacement of original residents due to an increased cost of living.

Example

Vancouver residents protesting gentrification in Vancouver.

There is currently significant pressure of gentrification in Vancouver’s Downtown East Side (DTES). This leads to the term “zones of exclusion” which describes businesses with increased security and surveillance, and in which low-income people aren’t able to afford to eat, drink or shop. A report from the Carnegie Community Action Project (CCAP) maps out 156 businesses that are considered to be in the zone of exclusion. Out of these 156 businesses includes shops which are selling $11 juice bottles, $138 for “real mink” eyelashes and even a store selling $3,000 furniture. Having shops such as these are adding to the injustices that lower-income individuals face by not allowing them to feel welcome in their own neighbourhood and being stigmatized when entering these shops.

Neoliberalism driving Gentrification in Vancouver

Neoliberal policies have a major impact on gentrification and end up exacerbating the problem. The policies that promote unregulated development tend to exclude the well-being of socially and economically disadvantaged individuals. It results in further marginalization of the poor and growing exclusion from low-income households. An example of neoliberal policy that has shown to have a major impact in Vancouver is poor regulation in the housing market. Referring back to Vancouver’s DTES, the neoliberal policies have been continuously impacting the area. The lack of regulation of the private housing sector in the DTES has led to terrible housing conditions, where residents do not even feel safe or comfortable in their own homes. The rehabilitation of areas in the DTES and Chinatown decreased the amount of affordable housing available to individuals, resulting in the eviction of the low-income residents. All of this contributes to Vancouver’s homelessness population which is continuously on the rise.