In first segment in this five-part series, Stefano Rumi suggested that gentrification has mutated into a remarkably consistent and replicable phenomenon of urban development in diverse cities across the world. In the second segment, below, Rumi further explores this new form of gentrification, entitled “third-wave gentrification,” and its inequitable effects on gentrified populations.

Third-Wave Gentrification

Far from the quixotic conversions of English brownstones by entrepreneurial individuals of Ruth Glass’s time over fifty years ago, the gentrification of today has mutated into a globalized logic of capital investment to reshape entire city landscapes to serve the needs of a newcomer group of middle-and-upper class elites (Davidson and Lees 2005; Wyly and Hammel 2005). Hackworth and Smith (2001) and Shaw (2005), among others, conceptualize this standardized global pattern of urban redevelopment as “third-wave” gentrification, or “state-led gentrification” (Lees 2008; Bridge, Butler, and Lees 2012).

Emerging in the 1990s from the ashes of economic recession, third-wave gentrification distinguishes itself from earlier waves of gentrification by the newly active role of interventionist governments partnered with the private sector to directly encourage and facilitate urban redevelopment (Shaw 2005:183). The role of the state in facilitating gentrification itself is nothing new; first-wave gentrification was often heavily encouraged by the state to improve dilapidated city districts through public funds. Narratives of the time demonstrate a justification of the role of the state through discourses of ameliorating urban decline (Hackworth and Smith 2001: 466). Although the role of the state declined during the laissez-faire development years of second-wave gentrification in the 1980s, it has returned full force in partnership with the private sector today.

Hackworth (2002a) in particular notes the expanded role of corporate agents, not individuals, in initiating gentrification, facilitated openly through heavy state intervention (from both federal and local governments). In a later piece, he notes,

“…the notion that city officials should do everything in their power to placate corporate financial interests that threaten to leave or penalize the locality has become so unquestioned that it is considered commons sense by public administrators and the popular press.” (2007, p. 2)

Newman (2004) and Lees et al (2008) note that the increased privatization of urban space has been formalized in neoliberal public policy (especially at the federal level, where the few remaining barriers to active state participation in gentrification have been dismantled), but continues to informally manifest itself through local policies (such as grants, zoning exemptions, and other tacit forms of assistance) aimed at making gentrification easier.

Central to this narrative of urban “regeneration” and “renewal” taken on by newly active city planners and urban policymakers as a strategy to craft competitive cities ripe for investment and resettlement is the “consummate expression of an emerging neoliberal urbanism” by cities “[that] have become… more-than-willing agent[s] of capital.” (Smith 2002). This narrative is consistent with local governments’ post-Keynesian response to declining post-Fordist urban areas and the devolution of the federal government, specifically its financial assistance to local governments. Harvey (1989) identifies the rise of the “entrepreneurial local state” in response to the reduction of Keynesian federal welfare and social policy initiatives under President Reagan in the 1980s. The subsequent failure of “third way” social policies under President Clinton in the 1990s tarnished the reputation of federal assistance irreversibly. This pullback in federal funding and resources, coupled with the post-Fordist decline of urban industrial centers due to macro-level trends of industrial globalization, created a dire straits economic situation for local governments on the verge of financial insolvency. In a bid to improve the attractiveness of the city for capital investment and retain its middle class residents, local governments abandoned previous policies of laissez-faire renewal and began to play an active role in metropolitan restructuring by partnering with private capital (Smith 1999). As Sharon Zukin (2010) writes,

“With public officials beginning to believe that cities suffered from an image crisis, they reached out to business executives to forge a new strategy for growth. Cities would target investors and visitors – by rebuilding the center and making themselves look as attractive as suburbs.” (p. 18)

States began to actively court private developers to rebuild the city, and systematically removed any barriers, such as zoning restrictions and affordable housing developments. Due to immense economic competition between cities looking to attract more and more private investment, every aspect of the city, including its spending initiatives and creditworthiness, are highly scrutinized by private investors seeking reliable, trustworthy partners and high returns on investment. In this way, private capital indirectly influences the choices a city makes; a city that spends more of its budget on non-profitable affordable housing and equitable development is at risk of losing crucial private investment. In addition, local governments have an internal incentive to maximize property taxes and other revenue increases from redeveloped land. While previous “production-side” gentrification scholars have noted the desire of private interests to maximize the “land-gap” value of cheap, potentially lucrative land (Smith 1979), few have commented on the state’s desire to take advantage of the same value gap to generate revenue to replace lost federal funding. By permeating the decision-making process of city planners and policymakers, state-led gentrification has increased the scope of its effect, encompassing areas far beyond and sometimes unrelated to the traditional disinvested inner cores that previous waves of gentrification redeveloped (Hackworth 2002a).

Beyond visible changes in the urban landscape, third-wave gentrification triggers a more profound economic, social, and spatial restructuring of the city, in addition to a reinterpretation of the role and scope of the state in facilitating these changes. Among these fundamental restructurings is the new logic of displacement as a mechanism of expansion and redevelopment and the domination of public life by the private market (Marcuse 1993).

Displacement through Gentrification

Displacement is almost implicit in the process of appropriating working class residences and public spaces for a wealthier class (Lees et al 2008). As early as the 1980s, studies demonstrated that gentrification displaced lower-income households and other vulnerable populations (LeGates and Hartman 1986). Even residents of state-sponsored affordable housing, seemingly immune to free market land-value changes, are displaced through federal action, such as the HOPE VI voucher program, or find themselves without a home as Section 8 housing in gentrifying tracts is slowly auctioned off by local governments to be redeveloped into market rate and luxury housing. While some scholars (i.e. Freeman 2006; Kingsley, Johnson, and Pettit 2003) argue that gentrification is a beneficial tool to uplift original residents out of poverty, others like Derek Hyra and Sharon Zukin argue that gentrification objectively makes a place unaffordable to original residents and dismantles the social and cultural life of urban public space, replacing it with spaces of consumption and leisure geared towards gentrifying newcomers (Hyra 2015, 2017; Zukin 2010).

Debates on the physical displacement of individuals through gentrification are still somewhat contentious due to the difficulty of measuring displacement and movement through census data and statistical methodology. However, scholars are less divided on the impact of cultural and social displacement of residents through gentrification. The integration of gentrification with cultural strategies of economic development curated towards newcomers marginalizes and dismantles existing social and cultural identities. A wide body of “consumption-side” gentrification scholars note that newcomer gentrifiers actively seek out urban “grit and glamour” and other forms of new cultural capital to enhance their daily lives. These new spaces of cultural consumption catering to the needs of newcomers are achieved through the increased privatization of public space. In cities, public spaces constitute both the “free” urban space (such as parks, sidewalks, and squares) as well as public spaces of consumption, quasi-free areas like main streets and open-air malls. The state has permitted both the outright privatization of public spaces, as well as the expansion of public spaces of consumption, all geared towards gentrifying agents. Zukin’s The Death and Life of Authentic Urban Places observes the commodification of space in major cities across the United States. She notes in particular the formation of public-private Business Improvement Districts are often thinly veiled guises to transfer ownership of public space to vested private interests, who remake the public space to exclude unwanted residents through private policing and new vagrancy laws.

Derek Hyra’s Race, Class, and Politics in the Cappuccino City notes how decades of reinvestment into Washington’s U Street Corridor has fundamentally changed the social and cultural fabric of the community. Gentrifiers looking to “walk the line” by glamorizing violence and ghetto stereotypes within a sanitized neighborhood bring with them new modes of consumption and leisure, such as expensive bistros and dog parks, that economically outbid former establishments for space. Key hubs of social cohesion and community activism, such as churches, stores, and even sidewalk space are forced to sell their space. Those who resist are often coerced by the state through eminent domain and other eviction policies to make room for private developers. Block by block, historic churches and minority-run businesses are bought out or trampled asunder, dismantling the fabric of social life upheld by these institutions. Ironically, the public spaces of consumption introduced by gentrifiers all pay homage to the “blackness” of U Street, just as they pay homage to the blackness of Brooklyn or the barrio of South Central LA. Yet by introducing outside, simplified interpretations of a community’s rich history, as well as displacing the rightful heirs to this culture, gentrifiers succeed in only establishing a façade of authenticity that obliterates the social and cultural life of the gentrified city. Such large-scale, standardized patterns of displacement and domination of social and cultural life across a wide variety of cities can only be achieved through the tacit collusion of the neoliberal state and uninhibited private capital.

In the third segment, I will offer critical perspectives on current gentrification debates and suggest an alternative one based on cultural theory.

Stefano Rumi studies Sociology and Social Entrepreneurship as a Jefferson Scholar and Echols Scholar at the University of Virginia. He has recently taught Housing and Urban Poverty, a semester-long undergraduate seminar course at the University of Virginia. Stefano is a 2017 Clinton Global Initiative U Scholar and a 2014 U.S. Presidential Scholar, one of the nation’s highest honors for students.