Neoliberalism and the Gentrification of Vancouver's Downtown Eastside

Neoliberalism

Overview

Neoliberalism is a combination of ideology and policies that emphasize the value of free market competition and laissez-faire economics. It was developed to limit the state's influence on the market by reducing their spending while promoting privatization, deregulation, and fiscal austerity to give the private sector more economic and social power. It is centered on the belief that human beings are naturally driven by self-interest leading them to create a balanced system of production and exchange benefitting both parties when there is no interference with their economic activities.

Criticisms

The changing face of neighbourhoods in an age of gentrification

Critics argue that neoliberalism indirectly increase economic disparity and help to maintain class order. For example, in regard to housing, neoliberalism calls for deregulation of the housing market and for a shift away from government funded social programs, such as welfare, and public housing projects.

Gentrification

Definition

Gentrification is the restoration and transformation of undervalued neighbourhoods, often previously seen as dirty and dangerous, resulting in improvements in the area's private housing stock and public infrastructure. This process turns the previously working-class neighbourhood into a wealthier, middle-class dominant area that is now unaffordable to the lower class due to significant increases in housing values and contract rents. Gentrification can be seen in a positive light as it is good for investors helping to address housing shortages, however, it also displaces and marginalizes low-income groups, like the homeless, mentally ill, and addicts of the Downtown Eastside.

Vancouver's Downtown Eastside

Gentrification of Vancouver's Downtown Eastside

"We’ve basically got a Third World country stuck in the middle of downtown Vancouver"

There is no clear boundary as to where the Downtown Eastside starts and ends, but most data likes to take on a smaller geographical area within the Downtown Eastside to avoid underestimating numbers as you move into residential and commercial districts. This neighbourhood is notoriously known for having high rates of crime, homelessness, mental illness, substance abuse, disease, and prostitution. The area did not always face social problems – the Downtown Eastside was once the center of commerce and trade. Slowly, businesses and transit moved west leaving many failing businesses behind with the decline in tourism in the area. Hotels were converted into low-income housing and the area began to get the reputation that it is now faced with.

Demographics of Vancouver's Downtown Eastside (2016 Census)

	Vancouver's Downtown Eastside	Province-Wide in BC	Nation-Wide in Canada
Average Income for a Single Person, 15yrs+	$6,282	-	$21,000+
No High School Diploma	38%	<19%	-
Unemployed	5% (underestimated)	-	~5%
Working/Looking for Work Population	38%	66%	67%
Registered "Status" Indians as Percent of Population	9%	3%	2%

As the population able to follow the businesses out west moved to the more expensive areas, disabled workers and the not as financially 'well off' people were left behind. The Downtown Eastside slowly began to repopulate, but this time it was concentrated with people who have been marginalized by society such as the homeless, alcohol and drug addicts, people with mental illnesses, and Indigenous peoples. For many, the low-income housing of the Downtown Eastside is the only place they can afford.

Neoliberalism as a driver for Gentrification

Neoliberal policies, such as ones that promote unregulated development, facilitate gentrification and the displacement of the original residents of the neighbourhood as they fail to protect the socially and economically disadvantaged people.

Lack of Affordable Housing and the Rent Gap Theory

Without governmental regulation of the rental market, something neoliberals are fighting for, rent prices are no longer controlled. Therefore, as the desirability of the neighbourhood increases via gentrification, so does the price of rent. The working class residents are forced to move from the neighbourhood as they can no longer afford the new rent prices, and middle-class citizens move in. This difference between the income of a neighbourhood and its potential value after redevelopment that many residents can not afford is called "the rent gap theory".

Another neoliberal policy driving gentrification and the lack of affordable housing is that neoliberals want to abolish government-funded or public housing. Neoliberals theorize that the free market will provide enough low-income housing for these individuals, but the truth is, there already isn't enough housing. Without these programs, the vulnerable lower-class citizens who are not economically disadvantaged will be forced from their neighbourhoods.

Self-Attribution Fallacy

With the competetive nature of neoliberalism, the self-attribution fallacy has been created, described by George Monbiot as: "just as we congragulate ourselves dor our success, we blame ourselves for our failure, even if we have little to do with it." For example, this belief can explain the harsh approach taken against the population of the Downtown Eastside that uses drugs. Neoliberalism breeds the ideology that we need to blame these people that do wrong, and uses this wrong-doing as reasoning for punishment - it is their own fault, not the fault of society. We have been shifting away from these views and are working towards decriminalization to help this marginalized population to find access to a safe supply of drugs and end our fentanyl crisis. This self-attribution fallacy, however, applies to many other social issues found in the Downtown Eastside; it is the individual's fault that they are homeless, abusing drugs, prostituting, etc.

Poverty Tourism: the financially well-off come to see first-hand those living in poverty on the Downtown Eastside

Poverty Tourism

Known as the "poorest postal code in Canada" poverty tourism has been attracted to the impoverished neighbourhood of the Downtown Eastside. Financially privileged individuals visit this neighbourhood in order to get a first-hand experience of what poverty looks like. Businesses, particularly restaurants, use this type of tourism to bring in customers. In order to keep poverty tourism abundant, businesses need to be sure that the population stays marginalized and the power imbalance remains; therefore, the local businesses exploit the population of the Downtown Eastside's reliance on social assistance and low-wage service-sector jobs and feed off of the customers employing these low-paid employees drums up. Gentrification forces people from their homes, but the poverty tourism makes the low-income, working-class, impoverished people of the Downtown Eastside reliant on the gentrification of the area in order to get a small paycheck.