Cities for profit, not for people

Samuel Stein wanted to know why there was so little housing available to poor and working class people in New York City. To make a longer story short, he went to city planner school, studied the various iterations of that discipline, and looked into patterns of development and displacement in his home place -- all amid the additonal distortions furthered by Donald Trump's rapacious real estate empire. Capital City: Gentrification and the Real Estate State is the product of Stein's investigation.

I found the book interesting -- but was reminded that, though there is a national pattern to housing scarcity, in the end housing fights are local.

The most useful part of Stein's story is his succinct description of what economic realities make the present gentrified cities close to inevitable. Gentrification is what happens when industrial production moved out of US cities, whether to lower wage states or to even lower wage countries. When industry made things in US cities, capital had an interest in having workers living nearby. No longer.

And then in older cities you get gentrification:

By definition, gentrification cannot happen everywhere. It is the third stage in a long-term process of capital flow in and out of space: first comes investment in a built environment; second, neighborhood disinvestment and property abandonment; and third, reinvestment in that same space for greater profits. The key to understanding why some spaces gentrify is the amount of money that a landowner -- who effectively owns a monopoly on all rents from a particular geographic location -- can expect to generate from a given lot and the building atop it. Real estate speculators choose to invest in a particular location because they identify a gap between the rents that land currently offers and the potential future rents it might command if some action were taken, such as evicting long-term tenants, renovating neglected or unstylish properties, or demolishing and reconstructing buildings.

And then you get what Stein calls "the Real Estate State." Developers run the city and it becomes nearly impossible for mere residents to make themselves heard through politics.  Sound familiar to any of my Mission neighbors?

This isn't Stein's topic, but even the business section of the New York Times knows that after gentrification's rising rents (using "rents" not in the economist sense of value extracted but in the everyday sense of what you pay the landlord), homelessness balloons.

... Frustrating as this is for prospective home buyers, the real pain is felt among low-income tenants, a quarter of whom — about 11 million U.S. households — are already spending more than half their pretax income on rent. As rising costs filter through the market and the rent burden gets more severe, food budgets get squeezed, families double up and the most vulnerable end up on the streets.

In city after city, studies have shown that homelessness has a distinct financial tipping point. As soon as the local rent burden reaches the point where renters on average spend more than a third of their income on housing, the number of people on the streets starts to rise sharply, according to researchers at Zillow and elsewhere.

So here we are. It's fashionable these days to say the high price of housing in cities derives from NIMBYism which prevents building of more units whose availability would, in some time frame, drive down prices, reducing the housing price crunch.

Well maybe. I'm convinced that more density would make better cities. But how come, in the real world, developers always target for big projects places where a lot of poor people will be displaced if they are allowed to dig up the community? Because they know who is likely to lack the political power to constrain their drive for unconscionable profits. So cities suffer endless land use fights and little gets built.

I know a little more after reading Samuel Stein -- but I know more from having lived inside this sad dynamic for most of the last 50 years.