How to kill a city: A warning to Portland?

Journalist Peter Moskowitz describes the process of gentrification:  it is “not a fluke or an accident. Gentrification is a system that puts the needs of capital (both in terms of city budget and in terms of real estate profits) above the needs of people.”

A sign of gentrification in Brooklyn, New York.

At a recent conference on international urban issues in Amsterdam, we were struck by the parallels between other cities around the world and our own home town of Portland.  Around the world, capital is surging into real estate, the hottest commodity of the day, and greatly inflating housing prices in their cores.  The result is runaway loss of affordability, displacement, inequality — and ultimately, negative economic impacts for everyone.

At a session that we co-organized at the Placemaking Week conference, we heard from Professor of Geography Loretta Lees of the University of Leicester, Professor of Social Anthropology Dimitris Dalakoglou of Vrije University of Amsterdam, activist Catherine Greene, president of Arts East New York, a local arts non-profit in Brooklyn, and Juliet Kahne,  Education Manager for the Project for Public Spaces.

It was journalist Peter Moskowitz whose book, How To Kill a City, set the stage.    As he wrote in the book:

In every gentrifying city there are always events, usually hidden from public view, that precede street-level changes. The policies that cause cities to gentrify are crafted in the offices of real estate moguls and in the halls of city government. The coffee shop is the tip of the iceberg…

In [the four case studies of the book], specific policies were put in place that allowed the cities to become more favorable to the accumulation of capital and less favorable to the poor. New Orleans, Detroit, San Francisco and New York gentrified not because of the wishes of a million gentrifiers but because of the wishes of just a few hundred public intellectuals, politicians, planners, and heads of corporations…

When we think of gentrification as some mysterious process, we accept its consequences: the displacement of countless thousands of families, the destruction of cultures, the decreased affordability of life for everyone… I hope to make clear that gentrification is not inevitable, that it is perhaps even stoppable, or at the very least manageable….

Late 19th Century theorist and activist Rosa Luxemburg hypothesized that under capitalist economies, cities would inevitably be used as a way to absorb capital – that in systems in which there is surplus money floating around, cities become a mechanism, like luxury goods, to open the pockets of the rich…

Those features of cities were the first version of Richard Florida’s urban amenities.  We’re still doing the same thing with coffee shops and art galleries.  They’re all just ways to boost the value of the land and convince people with disposable incomes to come spend their money.

Moskowitz concluded the book with six recommendations for cities:

  1. “Expand, protect and make accessible public lands.”  The cities that best manage problems from gentrification are often those that retain public ownership of large areas of land, including land for affordable housing.
  2. “Give people an actual say in what happens in their city.”  That means empower and respect them – an approach that seems to be on the decline in Portland.  It also means, don’t stack their stakeholder panels with overwhelming numbers of real estate professionals and architects.
  3. “Heavily regulate housing. “ Treat it not as a freely traded commodity, but what it is — a common asset that everyone needs.  Those who speculate in this commodity should be expected to compensate those who are harmed by their actions — like people who are evicted from their homes to make way for more profitable development.
  4. “Implement a new New Deal.” This may be more politically difficult in our era — but the ultimate economic advantages of doing so are becoming more evident.  So is the ultimate penalty for growing inequality.
  5. “End protectionism, and add infrastructure.”  Broadly speaking, create more housing in more places. This doesn’t mean that we should jam it in wherever we can — in tall buildings downtown, for example, which create their own unintended effects, as we have written before.  As the UN’s Undersecretary-General has pointed out, there is more to affordability than a simple-minded “supply and demand.”  On the other hand, this does suggest that we should create more “complete communities” in more parts of the region —  including the suburbs, where most of the region lives, and where increasing numbers of people have been forced to relocate.
  6. “Raise taxes, raise wages, spend on the poor.”  We spoke previously about the potential of a “land value tax” to damp down commodity speculation in real estate – and the “Vienna model” that our friend Patrick Condon described for Vancouver, B.C.  Essentially, a land value tax soaks up the excess capital that would otherwise fuel land speculation, and the familiar spiral of higher prices.  In addition to serving as a damper on land speculation, the money raised from this tax is then used to fund affordable housing on public land.

This last point is part of a broader transition that needs to happen with so-called “Georgist” economic policies.  Essentially, we should treat resources as part of our commons that must be be conserved, shared and protected.  We should require that significant taxes be paid on consumption, while at the same time, taxes are reduced on creative development that uses fewer resources.

This is an essential path to a “repletion economy” – one that conserves resources, and rewards more creative growth that consumes fewer resources– or better yet, that actually regenerates (“repletes”) resources, in the same way that, say, good farmland practice can produce good crop growth while also regenerating the soil.

But right now, we’re doing the exact opposite.  We’re operating a “depletion economy” – one that is fundamentally unsustainable.  We’re rewarding  those who are stripping our resources out from under us, drilling and burning and uglifying the landscape, with results that are increasingly toxic to people and other living things.   It’s happening in the wilderness, in the countryside, in the suburbs — and yes, in the city cores.

It’s tempting to apply the formulas of speculative real estate to the core of our own city.  It’s tempting to be lured by the short-term profits of “voodoo urbanism” as we have called it.  But as Moskowitz points out,  “gentrification is a system,” he says, “that puts the needs of capital (both in terms of city budget and in terms of real estate profits) above the needs of people.”  This is how to kill a city.