Neoliberalism and the Gentrification of Urban Spaces

From UBC Wiki

Gentrification has become a widespread and controversial topic as populations increase in cities. Though there is no one official definition, gentrification generally refers to a process in which a deteriorated, low-income neighborhood experiences revitalization and renovation from an influx of higher-income residents. Gentrification can happen for a variety of reasons, but neoliberal policies often lead to, if not openly encourage, gentrification through their emphasis on deregulation, free market forces, and the avoidance of public sector funding of social programs. The gentrification caused or exacerbated by these policies often disproportionally effects low-income, minority, or otherwise marginalized peoples and can further demographic and class divides. 

Gastown, a region in Vancouver's gentrifying Downtown Eastside neighborhood.


Neoliberalism refers to a collection of political ideology and economic policies that embrace economic liberalism and deregulation. Neoliberal policies generally aim to reduce government spending and regulation to give the private sector to more economic and social power.[1] The premise of this ideology is that human and societal well being will be naturally maximized if the private sector is given free reign to regulate itself. The role of a Neoliberal state is to “create and preserve and institutional framework appropriate to such practices”.[1] Proponents of neoliberalism claim that free market forces are the most efficient way to appropriate resources for their “highest and best use”. [2] Critics on neoliberalism say that these policies are often not effective at improving human well being, instead actually increasing economic disparities and preserving class order. In the context of housing and gentrification, neoliberal policies usually include the deregulation of the housing market and the aversion to public (government funded) social and housing programs such as welfare and public housing projects. [2]

Introduction To Gentrification 

There is no definitive definition of gentrification, and the term is often used differently in different contexts. In its broadest definition, gentrification usually refers to the renovation and “improvement” of a previously low-income and/or deteriorated neighborhood or community space.[3] According to the U.S. Department of Housing and Urban development, gentrification is “the process by which a neighborhood occupied by lower-income households undergoes revitalization or reinvestment through the arrival of upper-income households”.[4] There are certain patterns that are common to many gentrified or gentrifying neighborhoods. Before urban neighborhoods are gentrified, they are usually beat-down, low income areas that are deemed dangerous, dirty, or otherwise undesirable in mainstream opinion, for example being labeled as a “Ghetto” or as a ”slum”.[3] Due to efforts from within the neighborhood, or interest from external markets, neighborhoods may start to improve. Once the neighborhood has gained enough interest and improved to a certain level, the outsider perception of the neighborhood improves. Middle class, often white, gentrifiers are attracted to the neighborhood reasons such as lower rent and cost of living compared to historically middle/upper class areas.[3]Gentrification also usually implies change in an urban neighborhood, and most media and literature has focused on urban gentrification.[4] However, gentrification can also happen in suburban and rural spaces.

Homelessness in Vancouver's Downtown Eastside, a low-income neighborhood pressure by gentrification.

Effects of Gentrification

Beneficial Effects

The gentrification process results in the revitalization and improvement of a neighborhood, which is usually considered a beneficial effect. Gentrified neighborhoods can benefit by decreased crime, improved public spaces, and the flow of more money into local business due to higher income residents moving in.[3] It is hard to quantify the overall social and emotional effects of gentrification on residents. However, at least in some cases residents report satisfaction with gentrification as their neighborhood gains positive infrastructural and material changes.[3] 

Harmful Effects

One of the main effects commonly associated with gentrification is the displacement of the original residents of the neighborhood. The theory is that as rent and cost of living increases as the neighborhood is gentrified, the original low-income residents can no longer afford to live there and must move away.[4] In many cases in North America, the displaced residents are lower class or working-class people of color, while the gentrifers are white and middle class. Because of this, gentrification is usually considered a class and/or race issue in North America.[4] Studies have actually shown that, while displacement still happens to some degree, there is a weaker link between gentrification and displacement overall than previously thought.[4] Possible theories to this are that the cost of relocating is too high for low-income residents to make moving feasible.[4] In addition, the general lack of affordable housing in cities may prevent low-income residents from finding an alternative place to live.[4] Besides displacement, raising costs of living decrease the economic power of low income residents and are detrimental to their quality of life.[3] Gentrification also causes social, demographic, and cultural changes that harm the community and identity of original residents. Residents of gentrified residents often express unhappiness about the departure of friends, community, and the decline of local business and other cultural infrastructure of the original neighborhood.[3]

1976 San Francisco Protest against evictions and for affordable low-income housing.

Gentrification and Demographic Change in Urban Spaces

Gentrification is often associated with demographic change in urban spaces. As stated previously, one reason for this is displacement of original residents due to increased cost of living. Demographic change is also affected by the influx of people moving into a neighborhood. A 2005 study of gentrifying urban neighborhoods across the United states found that being college educated, White, and high-income people have an increased likelihood of moving into gentrifying neighborhoods, while poor, non-college educated African Americans have decreased likelihood.[4] A prominent example of gentrification and demographic change is San Francisco. In recent years, San Francisco (and the neighboring Silicon Valley) has become a major hub for technology companies. This tech boom has coincided with the gentrification of many neighborhoods as well skyrocketing housing costs. In 2012, the median single-family house price was around $650,000, while in 2018 this cost has increased by 143% to $1,700,000.[5] With this tech boom has come a large influx of highly educated, highly paid, and white and Asian tech workers, and an outflux of lower class black and Hispanic people.[6] Between 2010 and 2014, 60,000 people migrated into San Francisco while 60,000 people migrated out.[6] Within the influx of people there was a net increase of almost 7,000 people with college or pos-graduate degrees per year.[6] Within the same time period there was also a net out migration of around 2,000 African Americans each year.[6] This reflects the long-term trend: in 1970 San Francisco was 13% African American, while in 2016 it was less that 6%.[6] In addition, between 2005 and 2014, the wage gap between incoming and outgoing San Francisco migrants increased from $1,000 to $4,000. [6]

Apple Headquarters in Silicon Valley, a region near San Francisco, CA.

Neoliberalism as a Driver of Gentrification

Neoliberal policies can facilitate and exacerbate gentrification and the displacement of the original residents during and after gentrification. Neoliberal policies that promote unregulated development often fail to protect the socially and economically disadvantaged peoples undergoing gentrification. One major impact of neoliberal policy is that without government regulation of the rental market, or control of rent prices, as the neighborhood becomes more desirable to higher income outsiders rent quickly increases. As the rent increases, many residents are forced to move out of the neighborhood as they cannot afford the rent prices anymore. An example of this is the redevelopment and gentrification of Santa Monica, California neighborhoods after the 1994 Northridge earthquakes damaged and destroyed housing, especially low-income housing, in the area.[7] Previously, Santa Monica had rent-control legislation designed to protect tenants from being priced out of their residences.[7] However, in an effort to stimulate new housing development after the earthquake, the Costa Bill was introduced which allowed rents to be determined by the free market rate once the housing was vacated.[7] This had the effect of making housing more expensive, as well as incentivising landlords to evict tenants as they could make more money if new tenants were paying the market rate.[7] From 1994 to 1997, the amount of rental housing considered affordable to “very low income” households dropped by 24%.[7] This legislation, as well as other neoliberal factors in the redevelopment of Santa Monica, led to non-negligible demographic shifts. Between the 1990 Census and the 2000 Census, Santa Monica had a 40% increase in the city’s median income, while also experiencing a 23% population decline in African Americans, a 4% decline in Hispanics and a 16% decline in households earning below the country median income.[7]

Gentrification in the Fort Greene neighborhood.

Higher rents also indirectly affect the composition the neighborhood. For example, during the white gentrification of the Fort Greene neighborhood in New York (a historically black neighborhood) in the 2000s, about 75% of black owned stores in the neighborhood closed. A large reason for this was gentrification pressure through the unregulated rental market.[3] Many businesses were forced out when landlord increased rent to levels unaffordable to small business.[3] For businesses that owned the buildings they were in, owners found that it was more profitable and economically secure to just close their business and rent out the building as residential space.[3]

Another example of neoliberal policy driving gentrification is how government subsidized or public housing is not consistent with neoliberal values (which theorizes that the free market should provide enough low-income housing). These programs provide a vital service to economically vulnerable peoples in these communities and ending public housing programs under neoliberal economics to allow for the free market rental of these buildings, directly forces these peoples out of the neighborhood.

Take for example the Urban Revitalization Demonstration program, or the HOPE VI program, in the United States, which was first developed in 1993 and is still running today.[8] The purpose of the HOPE VI program was to revitalize and improve public housing projects and communities in “severe distress”.[8] HOPE VI reflected neoliberal ideology growing at the time by decentralizing the control of public housing projects to the local level by using a system in which local entities and organizations would competitively apply for grant money, and then redeveloped or demolish public housing sites.[9] The program had other neoliberal policies such as encouraging involvement with the private sector and redevelopment of public housing into “mixed-income” communities (with the idea that gentrification would bring money into the community and raise quality of living overall).[9] HOPE VI has been criticized for a great number of reasons. For example, in the mid-1990s auditors found that the program often targeted sites with the greatest potential for higher-income redevelopment, instead of targeting public housing with the greatest need as it was intended.[8] It has also actually decreased the amount of low-income public housing available, as many housing structures were demolished and rebuilt with less low-income units and more “mixed-income” units.[8] According to data collected by the U.S. Department of Housing and Urban Development (HUD) which runs the program, once HOPE VI public housing sites are redeveloped, only 11.4% of the original residents return to the neighborhood.[8]

Neoliberal policies regarding the deregulation of housing and development markets such as these make housing unaffordable to the original residents, and contribute the influx of new, higher income residents. This in turn increases the desirability of the neighborhood to outsiders, which drives up the rent, and further drives the original residents out. Because of how gentrification displaces poor, often minority residents, and benefits affluent, often white residents, gentrification perpetuates racial and class divides in society. This is consistent with how neoliberal policies in other contexts perpetuate these divides. As seen in gentrification, the lack of government regulation, and the fact the private sector is mainly profit driven, results in neoliberal policies failing to protect and support vulnerable and disadvantaged peoples. 

Gentrification in Vancouver's Downtown Eastside

Vancouver’s Downtown Eastside (DTES) is the poorest neighborhood in the Canadian city of Vancouver, and has become one of the most marginalized urban neighborhoods in all of Canada.[10] The DTES was the original townsite of Vancouver when it was just a gateway town for loggers, fisherman, railway workers, and other blue color workers in the 1800s.[10] As Vancouver grew, the middle and upper class moved away from the region and the DTES retained its concentration of industry working class residents. However, the neighborhood began to decline after World War II as industry (like warehousing and manufacturing) moved out of the downtown core of the city.[10] In the latter half of the 20th century, the DTES was predominantly inhabited by retired industrial workers (many of them handicapped by industrial accidents) and was increasingly drawing residents otherwise marginalized by society, such as drug and alcohol addicts, people with mental illnesses, homeless people, indigenous people.[10] Today, the DTES is made up of residents such as these, who are also generally low education and low income, further contributing to their marginalization (see Table 1).

Table 1: Demographics of Vancover's DTES Neighbhorhood (From the 2006 censes) [11]
Residents Within the DTES National Average
Income of single people over 15yrs who live alone (excluding government subsidies) $6,282 $21,000
Population without high-school diploma 38% ~
Indigenous Population 14% 2%
Economic Participation Rate (population working or looking for work) 38% 67%
Non-migrant movers (Population moving from one area of city to another) 36% 21%

These residents are forced to seek housing in the DTES because of its concentration of low-income housing in a city of skyrocketing housing costs. Vancouver is notorious for its high costs of housing. In the past decade, the cost of a detached homes in Vancouver have increased by 159% to a cost of $1.8 million in 2018.[12] In this context, the DTES provides a low-income space. In 2001, the DTES was comprised of almost 80% of the low-income housing in downtown Vancouver, and in 2003 the DTES was comprised of about 50% non-market housing (meaning housing with rents regulated to be below the price).[10]

While the DTES provides housing for many of Vancouver’s most disadvantaged people’s, neoliberal policies by the province’s long ruling neoliberal BC Liberal Party, and the resulting gentrification, have steadily restricted and eaten away at the neighborhood. Starting in the 2000s, under the BC Liberal government, the provincial government has greatly cut taxes and spending on social services over the past couple decades.[13] For example, since 2007 even though inflation has increased by 1.7% per year, welfare rates have stayed the same, with recipients receiving only $375 per month for housing costs.[13] The government has also pursued a strategy of “urban revitalization” to increase the economic and social appeal of the city, often to the detriment of low-income and marginalized peoples in the city.[10]

Because of these neoliberal policies restricting government spending and aid for low-income peoples, the private sector provides much of the low-income housing.[13] The lack of regulation of the private housing sector in the DTES has led to terrible housing conditions, where residents live in derelict and dangerous buildings because they cannot afford to live anywhere else.[13]

Shopping in Vancouver's Gastown.

At the same time, the neighborhoods in and around the DTES are becoming increasingly gentrified and encroach on the low-income, affordable areas of the neighborhood. For example, the sub-neighborhoods of Gastown and Victory square have undergone intense gentrification after the government targeted them for redevelopment, resulting in the eviction of long-time, low-income residents.[10] This gentrification has further decreased the amount of affordable housing, with more that 50% of single-room occupancy rental units in the DTES renting higher than a welfare recipient can afford.[14] In addition to housing issues, this gentrification is also detrimental to the sense of community and inclusion of the marginalized peoples in the DTES. As higher income residents increasingly move in, policing of public spaces has increased, along with feelings of judgement by newer residents.[14] 

Lack of Affordable Housing and Violence Against Women

Poor and marginalized women in Vancouver are further marginalized and disempowered by the decreasing supply of affordable housing in Vancouver. For these women, who are economically or socially vulnerable, and may be fleeing gender-based violence, the low income housing in the DTES may be the only available housing option for these women.[15] The primary source of low income housing in the DTES to low income people is single-room occupancy (SRO) housing, where a person rents a single room and often shares a communal bathroom or kitchen.[15] SRO housing is notorious for being dilapidated and unmaintained by their owners, to the point where living in one is dangerous.[15] A 2015 survey by the British Columbia Centre on Substance Use of drug-using women who were evicted from SROs in the DTES show that women are especially vulnerable in these sites.[15] For example, rules such as curfews and surveillance by building staff restrict the movement of women and may lead to them sleeping or working outside their building. There were also reports of sexual abuse by staff, for example withholding mail from female residents unless they gave sexual favours.[15] In addition, a lack of proper security in the building (like functional locks and doors) made women more vulnerable to violence.[15]

The Balmoral, one of Vancouver's DTES single residence occupancy housing buildings.

Gentrification and Post-Colonialism in North America

Gentrification is often compared to colonialism, as both involve white peoples forcibly displacing the original inhabitation from a space. In North America, urban indigenous people face a disadvantage because of this “double” colonization.[16] Indigenous peoples were first displaced from their ancestral lands by white settlers. As indigenous people migrated to urban spaces, they again face discrimination, dispossession,  and loss of space in urban environments.[16] In his book, Unsettling the City, Nicholas Blomley posits that “The creation of a settler society usually requires the dispossession of others..[occurring through] military violence, forcible removal, legal fraud, state expropriation, forced extinguishment, treat abrogation, and the nonenforcement of protective legislation”.[16] In contemporary times, gentrification could be considered a post-colonial form of this dispossession, as a continuation of the model of the settler city. Today, many indigenous people move to or live in lower income, less developed neighborhoods. For example, in Vancouver’s Downtown Eastside neighborhood, about 14% of the population is indigenous, while in the rest of Vancouver the percentage is only 2%.[11] Indigenous people may move into these neighborhoods because of the affordable housing, or for the sense of community with other indigenous or marginalized people. The gendered aspects of colonialism also work to displace many indigenous women to urban areas such as Vancouver’s DTES. Because of discriminatory colonial laws such as legislation that takes away women’s indigenous status if they marry a non-status indigenous person, indigenous women are more likely than to be displaced from their communities and reserves.[16] These women then move to urban or inner-city areas where they face new levels of vulnerability as low-income women in an isolating environment, where many are forced into the sex trade and experience extreme sexual and physical violence.[16] The continual gentrification of these areas further restricts indigenous people’s spaces and again puts them at risk of displacement.[16] 


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