Capital City Gentrification and the Real Estate State

Capital City
Gentrification and the
Real Estate State
SAMUEL STEIN
London · New York
First published by Verso 2019
© Samuel Stein 2019
All rights reserved
The moral rights of the author have been asserted
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Introduction
On March 25, 1911, fire engulfed New York’s Triangle Shirtwaist Factory. The bosses had locked the doors and 146 workers
were killed. Two days later, the Jewish socialist newspaper
The Forward printed an impassioned plea from its editor,
Abraham Cahan. After describing the pain felt throughout
Manhattan’s Lower East Side, Cahan wrote that mourners
were beginning to see a figure through their tears: the biblical
Angel of Death. “Who is the Angel of Death? Who is the
thug? Who is the mass murderer? Must we again say it is that
gluttonous ravager of humans—capital?!”1
Just over a century later, a public housing complex in West
London called the Grenfell Tower burst into flames. Though
residents had warned that the building was a firetrap, public
authorities allowed it to deteriorate. When the fire started, it
quickly accelerated due to the highly flammable cladding that
1 Cahan, Abraham. “The blood of the victims calls out to us.” Forverts
[The Forward], March 27, 1911.
2 CAPITAL CITY
management had added to the building’s exterior in order to
make it more attractive to posh neighbors. The fire killed over
seventy tenants.2
Who is the Angel of Death? Who is the mass murderer?
Today, as a century ago, the culprit is capital, rushing in and
out of spaces with abandon in search of profit and growth. In
1911, the arsonist was industrial capital, then the dominant
force in urban politics. In 2017, it was real estate capital.
Around the world, more and more money is being invested
in real estate, the business of building, buying and renting land
and property. You can sense it as you walk through most cities, and feel it every time you pay the rent or mortgage.
Global real estate is now worth $217 trillion, thirty-six times
the value of all the gold ever mined.3
It makes up 60 percent
of the world’s assets, and the vast majority of that wealth—
roughly 75 percent—is in housing.4
There are a number of
reasons why capital is converging on land and buildings: a long
period of financial deregulation, low federal interest rates and
“quantitative easing” in the United States; massive urbanization programs in China, the United Arab Emirates and several
other countries; a proliferation of predatory equity funds
scouring the globe for “undervalued” investment opportunities and finding them in housing; economic polarization around
2 Chen, Michelle. “The economic system that made the Grenfell tragedy
possible.” The Nation, June 26, 2017.
3 Farha, Leilani. “Report of the Special Rapporteur on adequate housing
as a component of the right to an adequate standard of living, and on the right
to non-discrimination in this context.” United Nations Human Rights Council,
January 18, 2017.
4 Ibid.
Introduction 3
the world, with extremely wealthy and somewhat nervous
individuals viewing property as the safest place to hide their
money; and more. When capital gains rise while rates of profit
plummet across many once-dynamic sectors of the economy,
real estate becomes the latest stop on what geographer Cindi
Katz calls “vagabond” capitalism’s eternal search for profitability.5
In the United States, homes are changing hands at a rapid
pace, but homeownership is at a fifty-year low. In 2016, a record
37 percent of home sales were made to absentee investors.6
While some of those buyers were pensionless seniors who
needed a retirement strategy, most of them were banks, hedge
funds and private equity firms like Blackstone—now the
world’s largest landlord.7
As renting rises, so do rents. Average move-in rents in the
United States have more than doubled over the last two decades.8
Prices vary dramatically across the country, but the
trend is clearly upward, with the fastest growth in mid-sized
cities like Seattle, Portland, Denver and Cincinnati.9
Wages,
however, remain stagnant, putting tenants in a bind. There is
5 Katz, Cindi. “Vagabond capitalism and the necessity of social
reproduction.” Antipode 33.4 (2001): 709–28; Rapoza, Kenneth. “Why the
best investment in 2016 might be global real estate.” Forbes, January 5, 2016.
6 Clark, Patrick. “Landlords are taking over the US housing market.”
Bloomberg, February 23, 2017.
7 Marino, Jonathan. “Blackstone is now ‘the largest owner of real estate
in the world.’” Bloomberg, October 7, 2015.
8 US Census Bureau. Housing Vacancies and Homeownership (CPS/HVS).
Table 11A/B: “Quarterly median asking rent and sales prices of the US and
Regions: 1988 to present.” 2018.
9 Clark, Patrick. “The cities where rent is rising fastest.” Bloomberg,
October 7, 2016.
4 CAPITAL CITY
not a single county in the country where a full-time minimum
wage worker can afford the average two-bedroom apartment.10
Rent burdens—the percentage of income tenants put toward
housing—are becoming oppressive, particularly for people of
color in segregated neighborhoods. Around the country, rent
burdens in Black neighborhoods average 44 percent; in Latino
neighborhoods, it’s 48 percent.11 Every month in New York
City, almost two million people pass most of their income to
landlords.12
With wages flat, many people—even those with full-time
jobs—simply cannot afford stable housing.13 Last year, as cities and states continued to pass punitive legislation against the
poor, about 2 million people in the United States went homeless and 7 million more lived in precarious housing
situations—doubled or tripled up, couch surfing or sleeping
in shift beds.14 This opens the door to an entire industry of
private homeless services, with philanthropic and real estate
capital blended to find profits in extreme poverty.15
10 Aurand, Andrew, Dan Emmanuel, Diane Yentel, Ellen Errico, Jared
Gaby-Biegel and Emma Kerr. Out of Reach 2018: The High Cost of Housing.
National Low Income Housing Coalition, 2018.
11 Kurtz, Annalyn. “Black and Hispanic communities are spending almost
half their incomes on rent.” Fortune, March 29, 2017.
12 NYU Furman Center. State of New York City Housing and Neighborhoods
in 2015. 2016.
13 Gay, Mara. “Working but still homeless.” Wall Street Journal, April
11, 2017.
14 Gee, Alastair, Liz Barney and Julia O’Malley. “Outside in America:
How America counts its homeless—and why so many are overlooked.” The
Guardian, February 16, 2017.
15 Willse, Craig. The value of homelessness: Managing surplus life in the
United States. University of Minnesota Press, 2016.
Introduction 5
The force behind these trends is the growing centrality of
urban real estate to capital’s global growth strategy.16 Through
this process, the price of land becomes a central economic
determinate and a dominant political issue. The clunky term
“gentrification” becomes a household word and displacement
an everyday fact of life. Housing becomes a globally traded
financial asset, creating the conditions for synchronized bubbles and crashes.17 Government, particularly at the municipal
level, becomes increasingly obsessed with raising property
values and redistributing wealth upward through land and
rents. Real estate developer Donald Trump becomes first
a celebrity and ultimately a president. Taken together, we witness the rise of the real estate state, a political formation in
which real estate capital has inordinate influence over the shape
of our cities, the parameters of our politics and the lives we lead.
The real estate state is not new, nor is it all-encompassing.
Like the carceral state, the warfare state, the welfare state or
the administrative state, it is an expression of government—a component, a bloc, a manifestation, a tendency—that
has been around in one form or another for as long as states
and private property have existed.18 Landowners have been
determining the shape of cities for centuries, and the idea of
housing as a commodity—even as a financial asset—is not
16 Lefebvre, Henri. The urban revolution. University of Minnesota Press,
2003.
17 Tett, Gillian. “New York property jitters herald declines elsewhere.”
Financial Times, May 24, 2018.
18 King, Desmond and Robert C. Lieberman. “The American state.” In
Valelly, Richard M., Suzanne Mettler, and Robert C. Lieberman (eds). The
Oxford handbook of American political development. Oxford University Press,
2016, 231–58.
6 CAPITAL CITY
exactly state of the art. What is relatively new, however, is the
outsized power of real estate interests within the capitalist state.
As real estate values have risen to absurd heights, so has the
political force of real estate capital.
The real estate state is a feature of government at all levels,
from the hyper-local to the global. It is most firmly grafted
onto municipal governments, however, because that is where
much of the capitalist state’s physical planning is done. City
planners therefore sit uncomfortably at the center of this maelstrom. Planners manage the levers of urban change and make
crucial decisions about land use, transportation, housing, the
environment and more. Though most people have no idea
what they actually do, planners have an immense impact on
both capitalists and workers in cities and suburbs. In most
places, planners are tasked with the contradictory goals of
inflating real estate values while safeguarding residents’ best
interests. Capitalism never made planning easy –organized
money could always thwart the best laid plans—but today’s
urban planners face an existential crisis: if the city is an investment strategy, are they just wealth managers?
This book is about planners in cities run by real estate. It
describes how real estate came to rule, and what planners do
under these circumstances. Planners provide a window into
the practical dynamics of urban change: the way the state both
uses and is used by organized capital, and the power of landlords and developers at every level of government.19 They also
19 Stein, Samuel and Rachel Weber. “Our developer president: A dialogue
between Samuel Stein and Rachel Weber.” First of the Month, June 2018.
Introduction 7
possess some of the powers we must deploy if we ever wish
to reclaim our cities from real estate capital. Understanding
planners is an important way to understand the capitalist state—
how it is built, and what it would take to dismantle it.
While the nexus of planning and real estate is a powerful
dynamic in nearly every city, I mostly focus on the United
States, and often use New York City as a prime example. I realize there is some risk in focusing on New York: for a US city,
it is exceptionally large, dense and expensive. But as the biggest city in the United States, it serves as an example for many
other places. Planners from around the country look to New
York for new patterns and practices. It is also a place where
real estate’s rule is clearly seen and deeply felt. The rents are
outrageous, and the cost of living is among the most persistent
public issues. Most of all, though, I use New York because it
is my home and the place from which I see the world. I know
its gridded streets as well as its crooked politicians, and I’ve
lived here long enough to feel like the city knows me too.20
I am a planner. Though I don’t work for a government
agency and I’m not in charge of managing any physical spaces,
I was trained as a planner and I maintain elements of the planner’s worldview: to be simultaneously abstract and concrete,
utopian and pragmatic; to imagine what doesn’t yet exist while
figuring out how to get there; to care about systems and processes, the way things work and the way they ought to.
Fundamentally, we believe it is a good idea to have a plan—an
20 Whitehead, Colson. The colossus of New York: A city in thirteen parts.
Random House, 2003.
8 CAPITAL CITY
explication of the future. Planning is a way of knowing the
world as well as a way of remaking it.
Like a lot of people, I became interested in planning because
I was mad at planners. I loved my city, but I hated what it was
becoming. I came to know New York at the start of the twentyfirst century, when it seemed like construction cranes were as
common as pigeons and scaffolding was the new streetscape.
Gigantic glass towers were rising all over the place, reflecting
the old city grotesquely through their distorted mirror facades.
I thought the architecture was stupid, but that wasn’t what
really bothered me. I was working for a union, and though we
were winning big victories, there was a growing sense that the
city we were fighting for was disappearing all around us. The
working class people who made the city could no longer afford
to live in it. Rents were skyrocketing and culturally important
spaces were shuttering. I learned the rent laws’ limits when
I was kicked out of a low-cost apartment. It was a stark lesson
in landlord-tenant power relations: my landlord tried to kill
the downstairs neighbors and torch the place, but he got to
keep the building; the lessee had sublet the apartment to me
without registering and we were served an eviction notice.
I was excited by some endeavors that New York City planners were undertaking at the time, like building public plazas
and extending the bike network, but I knew these benefits were
linked to larger plots: rezonings that brought luxury development; mega-projects that turned the urban fabric threadbare;
and management schemes that turned public goods into private
fiefdoms. I pursued planning because I wanted to understand
how the city works, and to figure out how to preserve the best
Introduction 9
parts and change the worst. I believed in planning’s promise
of better spaces and a better society, even if I understood intuitively that planners had not exactly delivered on it. I had two
basic questions: First, how much planning will capitalism allow
in market-based systems? And second, how can we improve
our cities without inducing gentrification and displacement?
I spent two and a half years studying planning history and
theory, quantitative and qualitative methods, public finance,
transportation, housing and more. I learned a little about planning, and a lot more about how planners think. There were
tons of good ideas bandied about, and countless practical ways
to reapportion space and rethink urban infrastructures. But
I had a hard time answering my questions.
It seemed like the system allowed quite a bit of planning
intervention when it benefited business, including massive
infrastructure projects and tax incentives for development, but
it imposed strict limitations on planners who aimed to alter
the balance of power. These limits are especially hard drawn
when it comes to private property and real estate, which meant
answering my second question—how can we improve cities
without sparking displacement?—wasn’t going to be easy,
either. There appeared to be a close link between “good planning” and gentrification, since private property owners could
capitalize on the value the state adds to land. By the end of my
education, I realized that capitalism makes the best of planning
impossible: any good that planners do is filtered through a system that dispossesses those who cannot pay.
Planning today is defined by incredible dreams and stultifying realities. A planner’s mission is to imagine a better world,
10 CAPITAL CITY
but their day-to-day work involves producing a more profitable one. They almost universally espouse a commitment to
pluralism and diversity, but the profession is 58 percent male
and 81 percent White—demographics that are way out of step
with the residents of the cities where most planners work.21
Though most planning offices are structured to build continuity across changing administrations, planners are still beholden
to politicians and their political appointees. Their agendas
almost always tend to favor their most powerful supporters—a group that usually includes some strain of real estate
capital. And while planning is a public function, planners in
capitalist cities are always at the mercy of the market, since
most of what they do is regulate private actions. The money
planners have to work with is largely derived from property
taxes, an arrangement that incentivizes developer and homeowner-friendly policies, and restricts the amount of land that
is given over to truly public uses.
A private land market is essentially a spoils system—whoever owns the land keeps the accrued benefits, whether or not
the owner is responsible for them. Until land is socially controlled, those who possess property, capital and access to power
will shape planning priorities. With so much global capital
invested into real estate, planners are facing enormous pressure to stoke land markets and enable gentrification. Their
charge is to find creative ways to raise property values—either
because they are low and landowners want them higher, or
21 American Planning Association. APA/AICP planners salary survey:
Planner characteristics. 2016.
Introduction 11
because they are already high and city budgets will fail if they
start to fall. Any seemingly technical discussions of growth,
density or urban form are always also shaped by this imperative. Planners are not just shills to real estate, though; they can
and generally want to make spaces more beautiful, sustainable,
efficient and sociable. But without control over the land, the
result of their work is often higher land prices, increased rents
and ultimately displacement.
As some places endure this kind of land market inflation,
others fall prey to disinvestment: their land loses its exchange
value, their residents are shut out of credit markets and their
buildings fall into dangerous disrepair. This leads to a landscape of radically uneven geographical development between
capital-flush cosmopolitan centers, like New York and London,
and investment-scarce cities like Camden, New Jersey and
Blackpool on England’s Irish Sea coast. Even within cities, the
same inequalities are often evident from neighborhood to
neighborhood.22 Gentrification cannot be a universal phenomenon; money tends to come from one place and go to another,
creating chaos on both ends. On the disinvested side, communities face terrible choices. Many want the benefits of good
planning—safe streets, clean air, decent housing—but not the
catastrophic tide of capital it summons. In these places, residents will often reject planners’ interventions out of
a well-founded fear that they will be kicked out of their neighborhoods before they ever enjoy the promised improvements.
22 Katz, Cindi. “On the grounds of globalization: a topography for
feminist political engagement.” Signs: Journal of Women in Culture and Society
26.4 (2001): 1213–34.
12 CAPITAL CITY
One recent example: in March 2017, New York State Governor Andrew Cuomo announced a major new initiative for
the poorest parts of Brooklyn. The plan promised jobs, parks,
health care and housing at a cost of $1.4 billion. But Brownsville resident Dayon Hopkins was skeptical. He had already
been displaced from Bedford Stuyvesant after that neighborhood started to gentrify. Pointing to an ordinary building, he
told a New York Times reporter, “They’ll take this right here,
and put a glass door, a brick wall on one side of the hallway,
and now it’s a loft, and now it costs way more than people are
making around these parts. And I understand: It does get nicer.
But where’s everybody else going to go? Down south? Where
are we going to go?’”23
Hopkins says what most planners won’t: that as long as
some people’s business is to profit off land and property, most
people will not be able to enjoy the benefits planners promise.
Of course, it doesn’t have to be this way. We can imagine a better world—in fact, we must. First, however, we need to
understand how we got here and how the system works.
I wrote this book for anyone who is frustrated with both
the direction their cities are taking and the alternatives planners are offering. I put planners at the center of the story
because they are uniquely positioned at the nexus of state,
capital and popular power. On their own, however, planners
cannot unwind real estate’s grip over our politics. For that, we
will need organized people: mass movements to remake our
23 Maslin Nir, Sarah. “Cuomo’s $1.4 billion plan for Brooklyn stirs fears
of gentrification.” New York Times, March 14, 2017.
Introduction 13
cities from the ground up, and gain control over our homes
and lives.
Such movements have been a consistent feature of urban
life, and have grown and adapted to face new challenges. Gentrification is brutal, but rarely total—not only because
colonizers always rely on the labor of a local workforce, but
also because people always fight back: as individuals, as families (of birth and of choice), as communities (local and
international), as neighbors and as a class. Even after displacement, people find a way to remake their spatial cultures and
rebuild their social ties—not just to survive, but to fight
back anew.
Gentrification’s apologists will see this and claim displacement is not that bad—people are resilient, they move, they
rebuild, they’re fine. My point is precisely the opposite: human
beings will always resist regimes in which land ownership
gives a small number of people enormous power over the lives
of all others. People will fight back, and I believe that we will
win. I hope this book contributes to that fight. It is made not
only to be read, but to be used.
1
The Rise of the Real Estate State
What is planning?
What exactly do planners do?
Planning is the way we shape space over time. In geographer
Ruth Wilson Gilmore’s terms, the point of planning is “to
have some sense of how to secure the future.”1
It happens on
multiple scales: individuals plan for their own survival and
advancement; households plan ways to make their incomes
stretch and their futures brighter; businesses plan in highly
structured and rigorous ways, creating schemes to eclipse the
competition and increase their profitability; communities and
movements plan strategies for survival and resistance, and
produce “insurgent” plans that chart the way from deprivation to freedom.2
Often, however, what we talk about when we talk about
planning is government. For more than a century, professional
planners have been a crucial element of the state, and have
1 Gilmore, Ruth Wilson. Golden gulag: Prisons, surplus, crisis, and
opposition in globalizing California. University of California Press, 2007, 175.
2 On “insurgent” planning: Sandercock, Leonie. Making the invisible
visible: A multicultural planning history. University of California Press, 1998.
16 CAPITAL CITY
made important decisions about the ways our cities and towns
function. In the United States, planners are usually municipal
employees, but they work in all levels of government and
include outside actors—consultants, designers, nonprofits and
so on—who seek to influence land use decisions. They survey
and map the physical and cultural landscape, plot what can go
where and at what size and shape, design infrastructure systems to move people and products, and channel investment
and development toward certain places and away from others.
The nature of planning in capitalist democracies like the
United States is mercurial and contradictory. No city is entirely
planned, but none is devoid of planning. Our political discourse valorizes the free market in a way that makes planning
seem unnecessary, yet the United States has consistently regulated its urban spaces in important and powerful ways.3
Americans often think of planners as either bureaucratic cogs
or totalitarian tyrants, but planners tend to see themselves as
promoters of fairness and protectors of the common good.4
Throughout the profession’s history, planners have enacted
a pair of opposing tendencies: a pragmatic utopianism, which
aims to bring about a new world from the structures (if not
the ashes) of the old; and a crude commitment to capital, which
divides space by race and seeks ever newer frontiers for private development. US planners are committed to both
3 Klosterman, Richard E. “Arguments for and against planning.” Town
planning review 56.1 (1985): 5–20.
4 Banerjee, Tridib. “Antiplanning undercurrents in US planning education:
Antithesis or ideology?” Environment and Planning B: Planning and Design
20.5 (1993): 519–36; Murphy, Enda, and Linda Fox-Rogers. “Perceptions of
the common good in planning.” Cities 42 (2015): 231–41.
The Rise of the Real Estate State 17
securing social reproduction—or ensuring that people have
the means to survive into the future—and to turning everyone’s space into someone’s profit.5
They are motivated by
the social movements that animate history, as well as by the
economic powers that structure political realities. This assures
that the beauty of urban planning is always accompanied by
its horrors. In the words of planning scholar Ananya Roy,
“planning’s promise of creation and creativity is not possible
without a frontier of destruction.”6
The Rise of Professional Planning
The practice of planning is as old as human settlement, and in
the United States it reflects all the conflicts and contradictions
of this country’s history. Indigenous nations planned both
stable settlements and migratory villages throughout the
Americas, which included residential and commercial areas as
well as open spaces and commons. In a spatial form of primitive accumulation, European imperialists and settler colonists
built on these plans and often superimposed their street grids
over existing native trails.7
By 1573, the Spanish Crown published their Orders of Discovery, New Settlements and Pacification,
which codified decades of colonial town planning practice into
a set of strict standards for spatial segregation, ordered
5 Mitchell, Katharyne, Sallie A. Marston and Cindi Katz (eds). Life’s
work: Geographies of social reproduction. Oxford: Blackwell, 2004.
6 Roy, Ananya. “Praxis in the time of empire.” Planning Theory 5.1
(2006): 7–29.
7 See, for example, McGreevy, Patrick. Stairway to empire: Lockport, the
Erie Canal, and the shaping of America. SUNY Press, 2009, 23–26.
18 CAPITAL CITY
development and efficient extraction.8
Planning scholar Clyde
Woods argues that the United States’ first real plan was for
“the total elimination, marginalization, or exile of indigenous
people.”9
Proto-planners enabled the country’s murderous
westward expansion, and mapped the rail networks and other
infrastructure that made it possible.
The plantations that eventually dotted and dominated the
southern landscape were a highly planned built form, which
in turn created a template for future US urban and suburban
development as well as contemporary “factories in the fields.”10
Within the plantation, however, slaves planned their own
plots—spaces in which to cultivate their own food and practice everyday acts of resistance.11 While early town designs
were largely imported from European models and reflected
Greco-Roman and Enlightenment-era conceptions of order
and environmental control, other essential American forms—
such as the skinny, rectangular “shotgun house” design
common in the south—were derived from longstanding West
African architectural practices.12
The United States’ largest city, New York, was built on
Lenape land as a series of scattered settlements emerging from
8 Lefebvre, Henri. The production of space. Blackwell, 1991 [1974],
151–52.
9 Woods, Clyde Adrian. Development arrested: The blues and plantation
power in the Mississippi Delta. Verso, 1998, 41.
10 Woods, Clyde. “‘Sittin’ on top of the world’: The challenges of blues
and hip hop geography.” In McKittrick, Katherine and Clyde Adrian Woods
(eds). Black geographies and the politics of place. Between the Lines, 2007: 46–81.
11 McKittrick, Katherine. “Plantation futures.” Small Axe 17.3 42 (2013):
1–15.
12 Vlach, John Michael. By the Work of Their Hands: Studies in AfroAmerican Folklife. University of Virginia Press, 1991.
The Rise of the Real Estate State 19
Lower Manhattan. By 1811, city leaders had imposed a rigid
street grid pattern and a standardized set of twenty-five-byone hundred-foot lots, literally paving the way for future real
estate development. (The main exception to the grid, Broadway, was superimposed over a preexisting Native American
trail.13) Long before zoning became common practice throughout the country, New York exerted land use and social controls
through fire codes and nuisance laws.14
While the practice of planning has therefore long been established, the profession of planning is a more recent phenomenon.
Modern urban planning emerged in Europe and the Americas
as a formal art, science and vocation in the mid-nineteenth and
early twentieth centuries, a moment of rapid industrial expansion, massive rural-to-urban and international migration, and
widespread social, economic and political upheaval. In Europe,
the establishment of urban planning followed a series of proletarian uprisings in the major cities of England, France,
Germany and beyond. The most famous case is Barron Haussmann’s reorientation of Paris. In the mid-nineteenth century,
after a series of barricaded rebellions broke out on the city’s
streets—a form of working class insurrectionary planning—
Napoleon III appointed Haussmann to remake Paris’ physical
layout, driving wide boulevards through the city’s neighborhoods and displacing thousands. This reflected not just an
13 Ballon, Hilary (ed.). The Greatest Grid: The Master Plan of Manhattan,
1811–2011. Columbia University Press, 2012.
14 Baics, Gergely, and Leah Meisterlin. “Zoning before zoning: Land
use and density in mid-nineteenth-century New York City.” Annals of the
American Association of Geographers (2016): 1–24.
20 CAPITAL CITY
aesthetic preference for strong sightlines and harmonious
architecture, but the ruling class’s desire to defend their hold
on the city and prevent more working class uprisings.15
In the United States, planning’s formalization tracked not
only with northern industrialization and the burgeoning labor
movement, but also the end of southern reconstruction, which
in 1935 sociologist W.E.B Du Bois characterized as “a revolution comparable to the upheavals in France in the past, and in
Russia, Spain, India and China today.”16 In cities like Chicago,
grand Haussmann-esque plans were drawn up to modernize
the city—ironically by imposing neoclassical design aesthetics—and attract real estate and industrial capital.17 In cities
like Birmingham, planners wrote land use codes to simultaneously attract mining investment and suppress Black labor
mobility.18
In both the European and US cases, the planning profession
arose at moments of extreme social contest and turmoil, which
were expressed in fights for control over land. It is no coincidence, then, that from its onset, urban planning has contained
both reformist strands, which sought to maintain elite control
of urban space while smoothing over capitalism’s rough spots,
and radical visions, which imagined planning as a means to
15 Merrifield, Andy. The new urban question. Pluto Press, 2014.
16 Du Bois, William Edward Burghardt. Black reconstruction in America:
Toward a history of the part which Black folk played in the attempt to reconstruct
democracy in America, 1860–1880. Free Press, 1997 [1935], 708.
17 Abu-Lughod, Janet L. New York, Chicago, Los Angeles: America’s
Global Cities. University of Minnesota Press, 1999.
18 Wilson, Bobby M. America’s Johannesburg: Industrialization and racial
transformation in Birmingham. Rowman & Littlefield, 2000, 163.
The Rise of the Real Estate State 21
overturn the social order and create and maintain a socialist
society.
A Brief History of US Urban Planning
Early US planning history is marked less by bold experiments
in egalitarian design than systematic attempts to juice urban
land markets for private gain. These initial planning impulses
were formulated through three interlocking urban movements,
each of which left a profound legacy on contemporary planning and city life: progressive reformism, City Beautiful and City
Practical.
Progressive reformers tried to reshape the city toward three
simultaneous ends: to ensure the social reproduction of a rapidly growing industrial labor force; to quell the urban rebellions
that were rocking nineteenth- and early twentieth-century
cities; and to boost profits.19 In some cities, this took the form
of “municipal socialism,” in which public monopolies took
control of infrastructure development and maintenance.20 In
others, progressives developed settlement houses, which provided much-needed social services to poor urban migrants,
while also imposing norms of patriarchy and Protestantism.21
Perhaps the progressive reform movement’s most enduring
19 Marcuse, Peter. “Housing in early city planning.” Journal of Urban
History 6.2 (1980): 153–76.
20 Judd, Richard William. Socialist cities: Municipal politics and the grass
roots of American socialism. SUNY Press, 1989.
21 Varga, Joseph J. Hell’s Kitchen and the battle for urban space: Class
struggle and progressive reform in New York City, 1894–1914. Monthly Review
Press, 2013.
22 CAPITAL CITY
legacy in US cities was imposing building codes, which provided minimum construction standards that promoted health
and safety. The New York City tenement laws of 1867, 1879
and 1901, for example, ensured that new residential buildings
would have fire escapes, air shafts, windows and toilets. In so
doing, these laws managed to simultaneously create somewhat
safer housing while driving up property values. The result
was that the poorest families could not live in new tenements
and were relegated to the least safe and worst maintained properties in the city. Meanwhile, rising land and construction costs
centralized new housing development in the hands of a wealthy
elite.22
“City Beautiful” was perhaps the first self-identified planning
movement in the United States, coalescing around the inaugural 1909 National Conference on City Planning and
Congestion and setting a high standard for urban design and
aesthetics. Before all else, however, City Beautiful was a real
estate program that sought to attract investment by building
massive, Beaux Arts-inspired municipal buildings, tree-lined
boulevards and carefully manicured open spaces. The movement is frequently associated with architect Daniel Burnham,
who created the 1909 Plan of Chicago before taking his approach
to Detroit, Washington, DC, and US-occupied Manila, but
its presence is also felt in New York, from the Manhattan
Municipal Building to Grand Central Terminal. Inspired in
part by Haussmann, City Beautiful projects were often built
22 Madden, David and Peter Marcuse. In defense of housing: The politics
of crisis. Verso, 2016.
The Rise of the Real Estate State 23
on centrally located land inhabited by poor people, immigrants
and African Americans, who were treated as wholly incompatible with and undeserving of urban beauty. Central Park,
for example, was built over the largest Black settlement in
Manhattan, Seneca Village, and also displaced large numbers
of Irish and German immigrants who were living on coveted
real estate.23
While local elites desperately wanted a more “beautiful”
city, they refused to either pay for these developments or relinquish control over them. The solution, then, was a system of
municipal planning with strong “public” input: the city planning commission. Established in most US cities in the first half
of the twentieth century, these largely unelected commissions
were often populated by real estate elites, who tried to ensure
that city planning decisions would stimulate profits.24 They
approved monumental projects—grand boulevards, parks,
museums, municipal complexes and more—which resulted in
higher urban property values and were largely paid for by the
public.
Planning commissions marked the shift from City Beautiful
to City Practical. During a time when cities were growing chaotically and radical social movements were gaining steam, this
less famous but profoundly important movement aimed to
formalize and expand the scope of planning in the United
States in order to rationalize urban and peri-urban expansion.
23 Gandy, Matthew. Concrete and clay: Reworking nature in New York City. MIT Press, 2003.
24 Foglesong, Richard E. Planning the capitalist city: The colonial era to
the 1920s. Princeton University Press, 1986.
24 CAPITAL CITY
Though rarely acknowledged, one of the most important forces
behind City Practical was archconservative Herbert Hoover,
who, as secretary of commerce from 1920 to 1928, oversaw the
establishment of the federal Standard State Zoning Enabling
Act (SSZEA) and the Standard City Planning Enabling Act
(SCPEA). These two laws empowered municipal governments
to write “master plans” for their cities, and to create zoning
ordinances that mapped out what kinds of buildings (residential, commercial, industrial, etc.) could be built where and at
what sizes. While some capitalists bristled at the idea of property controls and master planning, Hoover’s Department of
Commerce argued that planning was ultimately in their best
interest for it helped them predict how both residents and
politicians would respond to their proposals, and therefore
increased the chances that a conforming project would be supported.25
Around the country, many master plans would be produced
but few would be strictly implemented.26 Instead, cities like
New York relied on zoning as their primary planning mechanism.27 Zoning, however, is not just a technical planning
technique; as geographer Bobby Wilson argues, “zoning had
been developed as a tool for rational land use planning, but it
became a tool for accommodating the racial order.”28 In the
25 Haar, Charles M. “The master plan: An impermanent constitution.”
Law and contemporary problems 20.3 (1955): 353–418.
26 Boyer, M. Christine. Dreaming the rational city: The myth of American
city planning. MIT Press, 1986.
27 Angotti, Tom and Sylvia Morse (eds). Zoned out! Race, displacement,
and city planning in New York City. Urban Research, 2016.
28 Wilson, America’s Johannesburg, 163.
The Rise of the Real Estate State 25
United States, zoning was always exclusionary. Modesto, California introduced the country’s first zoning in 1885 as a way
of barring Chinese people from areas of the city.29 It came to
New York in 1916, and among its most vocal proponents were
Fifth Avenue’s high-end merchants, who lobbied the city to
zone out manufacturing in order to keep Jewish garment workers off their streets and away from their customers.30 The
SSZEA and SCPEA gave every city in the United States the
power to enact such programs.
With this political infrastructure in place, state planning
power grew stronger throughout the country, reaching its apex
in the rational comprehensive planning movement of the 1940s,
’50s and ’60s. This movement dovetailed with the massive
expansion of state and military capacity involved in the Second World War and its aftermaths, and built on the planning
theories and engineering systems that both the Allies and the
Axis developed during the war. It also proved an important
Cold War propaganda tool in showing that capitalism was
capable of monumental planned development.31 Rational planners imagined themselves to be efficient, scientific, apolitical
experts, who could collect and evaluate all the relevant data
and interests for a given area, and use complex modeling, land
use controls and state police power to remake central cities.
This claim to objectivity, however, masked a strong ideology
29 Ong, Paul. “An ethnic trade: The Chinese laundries in early California.”
The Journal of Ethnic Studies 8.4 (1981): 95.
30 Schwartz, Joel. The New York approach: Robert Moses, urban liberals,
and redevelopment of the inner city. Ohio State University Press, 1993.
31 Zipp, Samuel. Manhattan projects: The rise and fall of urban renewal in
cold war New York. Oxford University Press, 2010.
26 CAPITAL CITY
that planners knew better than those whose spaces were being
planned, and that the interests of cities were closely aligned
with those of racial capitalism.32
In its radical form, rational comprehensive planning could
also produce awesome feats of “militant modernism,” including large-scale systems of public housing, education, health
and transit produced at the behest of powerful popular movements.33 During this period, many cities adopted rent control
systems, which used intricate formulas to determine how much
rents could rise annually and provided stability for tenants
(and landlords too).34 Such public-spirited planning, however,
was more the exception than the rule. It was rational planners
who oversaw the redlining of central cities—in which bankers
were given free rein to deny loans in Black and immigrant
neighborhoods—as well as the sprawling expansion of Whiteonly suburbs.35 And it was rational planners who enacted
so-called “urban renewal” plans in cities across the country,
which displaced hundreds of thousands of people by demolishing long-standing working class and industrial neighborhoods
and replacing them with highways and high-rise residential
and office towers.36
32 Robinson, Cedric J. Black Marxism: The making of the Black radical
tradition. University of North Carolina Press, 1983.
33 Hatherley, Owen. Militant modernism. John Hunt Publishing, 2009.
34 Hsia, Richard Chi-cheng. “The ABCs of MBR: How to spell trouble
in landlord/tenant relations (Up against the crumbling walls).” Columbia
Journal of Law and Social Problems 10 (1973): 113–76.
35 Angotti, Tom. New York for sale: Community planning confronts global
real estate. MIT Press, 2008.
36 Fullilove, Mindy. Root shock: How tearing up city neighborhoods hurts
America, and what we can do about it. One World/Ballantine, 2009.
The Rise of the Real Estate State 27
These plans met sustained resistance from local communities whose neighborhoods had been written off as “blighted”
and obsolete. Caribbean Brooklynites formed mutual aid societies to combat the economic assault of redlining.37 Puerto
Rican tenants on Manhattan’s West Side refused to leave their
buildings, even as bulldozers gathered to clear the way for
Lincoln Center.38 Fighting alongside them were practitioners
of a confrontational new mode of planning that emerged in
direct response to rational comprehensive planning: advocacy
planning. Advocacy planners rejected the idea that professionals could forge a rational consensus between opposing interests,
or that planners should view the city from on high. Instead,
they believed that neighborhoods should create their own
community-based plans in direct opposition to the state. One
of the most effective advocacy planners was Walter Thabit,
a New York City planner who joined with residents of the
Cooper Square section of Manhattan to stop the city from
demolishing their neighborhood and help envision an alternative. After fifty years of struggle, Cooper Square now operates
as a community land trust, and most of the housing will remain
genuinely affordable in perpetuity.39
Many advocacy planners took their critique directly into
the state and joined city planning departments as equity planners. The most celebrated among them is Norman Krumholz,
37 Wilder, Craig Steven. A covenant with color: Race and social power in
Brooklyn 1636–1990. Columbia University Press, 2001.
38 Muzio, Rose. “The struggle against ‘urban renewal’ in Manhattan’s
Upper West Side and the emergence of El Comite.” CENTRO: Journal of the
Center for Puerto Rican Studies 21.2 (2009): 109–43.
39 Angotti, New York for sale.
28 CAPITAL CITY
who spent decades fighting from inside Cleveland’s planning
bureaucracy, but equity planners also worked in Bernie Sanders’ Burlington, Harold Washington’s Chicago and more,
helping to shift their cities planning priorities leftward while
building institutional mechanisms for popular expressions of
power.40 Advocacy and equity planners’ critique of rational
comprehensive planning was itself attacked from the left by
scholars like Frances Fox Piven, who argued that they were
diverting poor communities from more disruptive and effective forms of protest, but it nonetheless provided a platform
for more confrontational forms of planning.41
Advocacy and equity planning, however, were not the only
responses to rational comprehensive planning. From the right,
the critique took the form of incremental planning. Incrementalists argued that the problem with rational planners was less
their racism than their ambition. Big plans reeked of statepowered social engineering, and of an epistemological
overconfidence in planners’ abilities. Instead, they proposed
that planners practice “the science of ‘muddling through,’” or
a trial-and-error approach that valued stability over transformation.42 While more modest in its goals than its left
counterparts (advocacy and equity planning), incrementalism
had an enormous influence on the profession, which was suffering a crisis of confidence at exactly the moment when
40 Clavel, Pierre. The progressive city: Planning and participation, 1969–
1984. Rutgers University Press, 1986.
41 Piven, Frances Fox. “Whom does the advocate planner serve?” Social
Policy 1.1 (1970): 32–35.
42 Lindblom, Charles E. “The science of ‘muddling through.’” Public
Administration Review 19.2 (1959): 79–88.
The Rise of the Real Estate State 29
conservative political elements were seeking to dismantle its
power.43
In the early 1970s, the United States and much of the world
underwent a number of critical economic and political realignments that are often described as the “neoliberal turn.” The
state ’s function turned from modest welfare toward gross
deregulation; public policy marginalized the industrial sectors
of the economy and elevated finance, insurance and real estate
(FIRE); eventually, the role of city planners devolved from
reshaping space to retaining investment. In many cities, this
transition began with neoliberalism’s close cousin, neoconservatism. In New York, following the fiscal crisis of 1975,
planners—informed by studies produced by the RAND Corporation—instituted a harsh program known as “planned
shrinkage,” in which city services (such as fire houses and
public hospitals) were shuttered in order to encourage poor
people of color to exit the city.44 Former Trotskyite-turnedneoconservative planning commissioner Roger Starr defended
the policies as an attempt to “stop the Puerto Ricans and the
rural Blacks from living in the city … Our urban system is
based on the theory of taking the peasant and turning him into
an industrial worker. Now there are no industrial jobs. Why
not keep him a peasant?”45
43 Slobodian, Quinn. Globalists: The End of Empire and the Birth of
Neoliberalism. Harvard University Press, 2018.
44 Wallace, Deborah and Rodrick Wallace. A plague on your houses: How
New York was burned down and national public health crumbled. Verso, 1998, viii.
45 Real Estate Weekly, February 9, 1976; as quoted in Fitch, Robert. The
assassination of New York. Verso, 1993, viii.
30 CAPITAL CITY
Neoconservative planners starved their cities; neoliberals
begged capitalists to feed off them. “Economic development”
specialists became competitive sales representatives for their
cities, citing low taxes and limited regulation as reasons for
investors to choose their towns.46 By the 1990s, the line between
planners and real estate developers blurred as “new
urbanism”—a movement to make the suburbs great again—
became the vague watchwords of builders and bureaucrats
alike. Public-private partnerships flourished, as planners
increasingly sought profit-oriented entities to do the work of
urban design, construction and maintenance.47 Communicative
planning became the primary professional mode, focusing less
on changing cities (or, in one proponent’s terms, “going beyond
a preoccupation with the distribution of material resources”)
than on listening to all the relevant “stakeholders” and crafting a balanced response.48 While prior planning movements
could be criticized as elitist and in service to capital, they nonetheless produced spaces for large elements of the public to use
and enjoy. In the neoliberal era, the trend in planning became
46 Levy, John M. “What local economic developers actually do: Location
quotients versus press releases.” Journal of the American Planning Association
56.2 (1990): 153–60.
47 Davis, Mike. City of quartz: Excavating the future in Los Angeles. Verso,
1990.
48 Healey, Patsy. “The communicative turn in planning theory and its
implications for spatial strategy formation.” Environment and Planning B:
Planning and design 23.2 (1996), 219.
The Rise of the Real Estate State 31
private development for private accumulation—damn the
public.49
Why Capitalist Cities Plan
Planners tend to be inordinately nice people. They gravitate
to the profession out of a desire to help their cities and improve
living conditions for their neighbors. Most planners do not
seek to line the pockets of wealthy elites or displace the poor.
And yet that is exactly what has happened, again and again, in
city after city, across the United States and throughout the
capitalist world. If the personal motivations of planners cannot explain this dynamic, how do we account for it? What is
urban planning’s role in the maintenance of capitalism, and
all the exploitation and appropriation that system engenders?
The history of capitalism clearly shows that market economies require planning. Despite the protestations of libertarian
absolutists, markets do not emerge from a state of nature, nor
are they the product of simple evolution from prior economic
modes. They are carefully planned, crafted and controlled.50
They rely on massive legal, logistical, infrastructural and technical capacities, all of which must not only be imagined and
developed but likewise maintained and reproduced.51 They
49 Beauregard, Robert A. “Between modernity and postmodernity: The
ambiguous position of US planning.” Environment and Planning D: Society
and Space 7.4 (1989): 381–95.
50 Polanyi, Karl. The great transformation: Economic and political origins
of our time. New York: Farrar & Rinehart, 1944.
51 Preteceille, Edmond. “Urban planning: The contradictions of capitalist
urbanisation.” Antipode 8.1 (1976): 69–76.
32 CAPITAL CITY
require the coercive power of militaries and police, which
themselves require massive amounts of planning to accomplish
such plunder and enclosure.52 And eventually they come to
demand their own regulation, both to establish a predictable
ground on which to operate and to create a suitable barrier
against upstart competition.53 To be sure, planning can also
get in the way of markets, whether by imposing price controls
or by defending public space. But if planners help the state
establish spatial order over time, and if the state under capitalism is fundamentally “the executive committee of the
bourgeoisie,” then planners—whatever their intention—are
working for the maintenance, defense and expansion of capitalism.54
Planners are also responsible for maintaining the spatial
dimension of racial inequalities. Capitalism is always racial—
though the precise meaning and articulation of racial
differentiation and domination varies and changes over time
and place.55 In all instances, however, capitalism produces
powerful racial ideologies, a set of human categories with supposedly inborn and homogeneous traits that legitimate the
system’s inherent inequalities.56 Within the capitalist state,
planners are tasked with reproducing this racist order through
52 Weizman, Eyal and Philipp Misselwitz. “Military operations as urban
planning.” Mute 44 (2003).
53 Graeber, David. The utopia of rules. New York: Melville House, 2015.
54 Marx, Karl and Friedrich Engels. The communist manifesto. League
for Industrial Democracy, 1933 [1848].
55 Hall, Stuart. “Race, articulation and societies structured in dominance.”
In Sociological theories: Race and colonialism. UNESCO Publishing, 1980.
56 Fields, Barbara Jeanne. “Slavery, race and ideology in the United
States of America.” New Left Review 181 (1990): 95–118.
The Rise of the Real Estate State 33
a series of supposedly race-neutral tools that are, in reality,
anything but. The clearest examples are zoning and urban
renewal, two policies whose formal raison d’être is to create
rational and orderly urban landscapes; in reality, however,
these tools are often used to target one racial group for exclusion or expulsion while clearing the way for another’s quality
of life.57 Planning itself is not inherently racist; in fact, it is
central to racism’s negation.58 But racial capitalism asks planners to sort out who will go where, under what conditions and
for whose benefit.
Such actions are intrinsically coercive. Planners often
describe the force underlying their work as “police power.”59
This authority, however, is more commonly expressed through
compelled consent than through overt force. The built environment that planners establish is itself a means of securing
consent; you don’t go where you’re blocked from going,
whether by a road pattern, a fence or a wall.60 Planners also
secure consent by cloaking their power in rationality. While
the capitalist state can be considered a “dictatorship of the
bourgeoisie,” it often operates as a republic with some
57 Freund, David MP. Colored property: State policy and White racial
politics in suburban America. University of Chicago Press, 2010.
58 Woods, Development arrested.
59 Stoebuck, William B. “Police power, takings, and due process.”
Washington and Lee Law Review 20.2 (1980): 298–304; Tilly, Charles. “Warmaking and state-making as organized crime.” In Evans, Peter, Dietrich
Rueschemeyer and Theda Skocpol (eds). Bringing the state back in. Cambridge
University Press, 1985.
60 Huxley, Margo. “Space and government: Governmentality and
geography.” Geography Compass 2.5 (2008): 1635–58.
34 CAPITAL CITY
democratic features.61 For the most part, planners cannot simply foist their plans onto the public, but must convince them
that these plans are in fact the most rational option. As planning theorist Bent Flyvbjerg maintains, however, “power
defines reality” and “rationalization presented as rationality
is a principal strategy in the exercise of power.”62 One of the
main tasks of urban planning, then, is to make capitalist development appear to be in the rational best interests of workers
and bosses alike.63
In order for capitalist development to work, though, planners need to look out for peoples’ survival in a way that
capital cannot—or will not—do. This recalls Fred Moten and
Stefano Harney’s definition of planning as “self-sufficiency at
the social level.”64 The market alone will never fully meet the
working class’ daily needs: wages are too low for food, and
have to be supplemented with welfare or direct provisions;
transportation costs are borne by the individual worker, who
needs mass transit to get around; housing is perpetually beyond
the means of working and poor city dwellers, thus requiring
the state to offer public, subsidized and regulated housing.65
While buildings and bridges are the iconic imagery of cities
61 James, Cyril Lionel Robert. Modern politics. PM Press, 2013 [1960],
47–48.
62 Flyvbjerg, Bent. Rationality and power: Democracy in practice. University
of Chicago Press, 1998, 227–28.
63 Logan, John and Harvey Molotch. Urban Fortunes: The political economy
of place. University of California Press, 1987.
64 Moten, Fred and Stefano Harney. The undercommons: Fugitive planning
and Black study. Minor Compositions, 2013, 76.
65 Castells, Manuel. The urban question: A Marxist approach. MIT Press,
1979.
The Rise of the Real Estate State 35
and planning, the hidden work of social reproduction—housing, health care, education, food, culture, comradery—is what
truly allows capitalist cities to work, and is thus a central preoccupation of city planners.66
Most of this work—production, consumption, social reproduction—takes place on land that is privately owned but
publicly managed. Land is a particularly complicated factor
in capitalism, as it is both a precondition for all commodities’
production and circulation, and a strange sort of commodity
in and of itself. Land is not traded like other products. Instead,
according to geographer David Harvey, land “is a fictitious
form of capital that derives from expectations of future rents.”67
These future rents are highly susceptible to external factors,
such as pollution, zoning or the vagaries of demand.
About thirty years ago, planning scholar Richard Foglesong
examined leftist theories of land in relation to urban planning
during the first 300 years of what would become the United
States, and produced perhaps the most elegant explanation of
planning’s function in capitalist cities. He noticed that the central conflict in this history was between the “social character
of land”—or its value as “a collective good, a social resource”—
and its private ownership and control. From this conflict arose
two contradictions—the property contradiction and the
66 Katz, Cindi. “Excavating the hidden city of social reproduction: A
commentary.” City & Society 19.1 (1998): 37–46.
67 Harvey, David. Rebel cities: From the right to the city to the urban
revolution. Verso Books, 2012, 28.
36 CAPITAL CITY
capitalist-democracy contradiction—and it fell on professional
urban planners to handle them.68
The property contradiction describes the unhappy tension
between capitalists’ desire for certain types of planning interventions and their antipathy toward anything that restricts
their operations. They need government to undertake certain
functions to secure both their own profitability and their workers’ survival; they demand that the state build the infrastructure
that makes their land usable, such as roads, train tracks, water
and sewer systems; and they demand that the state care for
their employees through basic welfare functions, such as emergency health care and public education, in order to ensure
a reliable source of labor.
Different types of capitalists, however, make different
demands on the state. Industrial landholders reject environmentally strenuous zoning that restricts the location of their
operations in the city; real estate capitalists would welcome
such regulations because pollution diminishes their property
values. Industrial capitalists might demand affordable housing
for their workforce in order to stave off demands for raises;
real estate capitalists would object to any constraint on their
ability to maximize rental or sale profits.
While capitalists need a lot from planners (even if they can’t
agree among themselves as to what, exactly, they want), they
are also fiercely protective of their property rights. They know
that private property laws are the only thing keeping their
workers or tenants from expropriating them out of business,
68 Foglesong, Planning the capitalist city, 20–24.
The Rise of the Real Estate State 37
and therefore tend to be broadly suspicious of state interventions that could theoretically impinge on property rights. They
know their land would be useless without planners, but they
reject planning as such as an expression of government overreach. This, in short, is the property contradiction.
A second key phenomenon, the capitalist-democracy contradiction, is borne directly out of liberal governments’ attempts
to deal with the property contradiction. In a nominally democratic capitalist republic, the state and its planners have to
perform a delicate balancing act: planners must proceed with
enough openness and transparency to maintain public legitimacy, while ensuring that capital retains ultimate control over
the processes’ parameters. The people must have their say, but
their options must be limited. If the system is entirely opened
up, people might demand the full socialization of land, the
abolition of private property and all the rest. If the system is
completely closed, however, they might revolt against an unjust
and unaccountable government. Planners are therefore tasked
with creating public processes that are open but rigged. From
this capitalist-democracy contradiction arises the familiar
landscape of “participatory planning”—public comment periods, community boards, planning commissions, design charettes
and a host of other interventions.69
According to this model, urban planners’ main job is to
contain these two contradictions; neither can be resolved, but
both can be managed. This puts city planners in a complicated
69 Arnstein, Sherry R. “A ladder of citizen participation.” Journal of the
American Institute of Planners 35.4 (1969): 216–24.
38 CAPITAL CITY
bind. They are encouraged to make certain land use interventions, but are prevented from making more sweeping changes.
Planners operate in a system that must appear open to the
public, while simultaneously guaranteeing that ultimate power
resides in the hands of propertied elites. It can be a really
shitty job.
The Real Estate State
Three decades after Foglesong presented his contradictions,
many of these conditions are still in place: planners still have
to balance capitalists’ demand for intervention and fear of
domination; and planners still must uphold a precarious equilibrium between public participation and private control. But
one key factor has changed. Throughout the 300-year period
covered by Foglesong in Planning the Capitalist City, manufacturing capital was a serious player in municipal politics; and
yet, by the book’s publication in 1986, US industry had already
undergone remarkable central-city contractions, with its urban
political influence diminishing in turn. Today, in much of the
country, manufacturing capital is not a leading force in urban
politics. In most cities and towns, real estate rules.
Of course, other strands of capital make important claims
on the city and its management. Finance continues to be a major
force in New York City politics, but it is so thoroughly integrated with real estate—and has been for so long—that it is
The Rise of the Real Estate State 39
hardly an independent influence.70 Technology firms are at the
heart of San Francisco’s new political economy, but their vision
of the city is all about private property and profitability and
thus retains a central role for real estate.71 (In the case of Airbnb,
big tech and real estate capital are one and the same.72) Although
Ford and General Motors still make some cars in Detroit and
Dearborn, their presence there is also felt through corporate
headquarters and downtown real estate holdings. Financial
offshoots like Ford Credit and General Motors Financial are
now among the most profitable aspects of the auto industry.
Even though manufacturing capital is less of a force in US
urban politics than in the past, the industrial sector has certainly not disappeared. The world is more industrialized than
ever, and the United States still produces plenty of goods. In
fact, manufacturing remains the most important sector of the
US economy in terms of total output.73 What has happened is
a major geographical reorganization in production and distribution. Over the past seventy-five years, the United States has
gone through three major industrial shifts: a movement of
parts and assembly plants from older northern cities to newer
southern cities and rural areas from roughly 1947 to 1973;
70 Willis, Carol. Form follows finance: Skyscrapers and skylines in New
York and Chicago. Princeton Architectural Press, 1995.
71 Maharawal, Manissa. “San Francisco’s tech-led gentrification: Public
space, protest and the urban commons.” In Hou, Jeff and Sabine Knierbein
(eds), City unsilenced: Urban resistance and public space in the age of shrinking
democracy. Routledge, 2017.
72 Stabrowski, Filip. “‘People as businesses’: Airbnb and urban microentrepreneurialism in New York City.” Cambridge Journal of Regions, Economy
and Society 10.2: 327–47.
73 Scott, Robert E. “The manufacturing footprint and the importance
of US manufacturing jobs.” Economic Policy Institute, January 22, 2015.
40 CAPITAL CITY
a deeper set of national and international production relocations from 1973 through the 1980s and 1990s; and finally, in
the 1990s and 2000s, an expansion of logistics clusters that
coordinate the flow of goods into and out of population centers around the country.74
As a result of these relocations, much of the United States’
industrial activity today takes place outside the big cities: giant
food processing plants in exurban areas; energy extraction
centers on Appalachian mountaintops and Gulf coast outposts;
and, most importantly for big cities, growing import/export
processing zones in major metropolitan areas.75 These distribution hubs employ enormous numbers of workers but, because
of their demand for fast access out of central city traffic, their
sprawling size, and the high cost and regulation of central city
land, they tend to be located outside the political boundaries
of the main cities they serve.76 Crucially, this means they make
fewer land- and housing-based demands of city planners in
places like New York, Los Angeles and Chicago than centrally
located urban factory owners would. When these logistics
clusters are located inside the political boundaries of major
cities—like New York’s Hunts Point Market and JFK Airport—they often operate on public land, meaning the
companies that depend on them are not particularly bothered
by the cost of urban land and housing (particularly if they
74 Moody, Kim. On new terrain: How capital is reshaping the battleground
of class war. Haymarket Books, 2017.
75 Cowen, Deborah. The deadly life of logistics: Mapping violence in global
trade. University of Minnesota Press, 2014.
76 De Lara, Juan. Inland shift: Race, space, and capital in Southern
California. University of California Press, 2018.
The Rise of the Real Estate State 41
assume their workers will live in cheaper suburbs or exurbs).
In fact, since publicly operated logistics clusters are largely
financed through municipal bonds, city governments may see
inducing gentrification—something bond buyers generally
interpret as a sign of urban health and future wealth—as key
to financing this increasingly important form of urban industry.
The United States’ most important urban industrial sector,
then, does not act as a powerful counterweight to real estate
in central city planning and development politics. Real estate
does not itself constitute a new urban economy; its locational
value is still dependent on proximity to other productive economic forces, usually in the expansive service sectors. Still,
real estate’s gargantuan growth manages to overdetermine
cities’ economic, political and demographic futures, pricing
out certain actors and industries while encouraging others.77
In the absence of any major competition, real estate dominates
contemporary urban planning.
This is not a uniquely American phenomenon; as the global
1 percent reaps the majority of the world’s economic growth,
they have formed what one analyst calls “a Niagara of capital
into real estate” and shifted the bulk of their investments toward
property over all other forms of economic activity.78 Building
booms are eating up cities around the world, from London to
Mumbai to Nairobi to São Paulo and, of course, New York,
where enormous, expensive and largely uninhabited investment properties float menacingly above scenes of homelessness
77 Angotti, New York for sale.
78 Downs, Anthony. Niagara of capital: How global capital has transformed
housing and real estate markets. Urban Land Institute, 2007, 1.
42 CAPITAL CITY
and deprivation.79 Vancouver planner Andy Yan labels this the
“hedge city” phenomenon, or the way the world’s wealthiest
are transforming urban high-rises from “machines for living
in” to machines for money laundering.80 Such cities have seen
their housing prices balloon over 50 percent in the past five
years; in some places, far more.81
This is an extremely precarious position. Each of New York’s
previous periods of massive skyscraper construction tracked
with spectacular speculative booms and subsequent busts—
1929, 1973, 1987, 2000 and 2008.82 With every cycle, the
number of high-rises climbed higher, monuments to the growing price of real estate that underwrote their elevation. After
the crash of 2008, however, US property values only dropped
momentarily before restarting their steady uptick. Even as
single-family homes around the country were foreclosed, they
were often resold to private equity firms and rented for significant profit, contributing to a nationwide spike in evictions.
With planners’ help, real estate capital has been able to turn
such crises into new opportunities.
The opportunity to benefit from property booms, however,
is never universal. In the United States, real property has
always been patterned by racism and sexism, its most brutal
expressions being “manifest destiny” and slavery. While the
real estate industry exploits people of all backgrounds,
79 Graham, Stephen. Vertical: The city from satellites to bunkers. Verso,
2016.
80 Surowiecki, James. “Real estate goes global.” New Yorker, May 26,
2014.
81 Leilani, “Report of the special rapporteur on adequate housing.”
82 Harvey, Rebel cities, 32–34.
The Rise of the Real Estate State 43
long-standing racial inequities have allowed White wealth to
be passed down generationally through inherited housing and
the profit from its sale.83 Where wider opportunities for ownership have arisen, the real estate industry has repeatedly tested
its most exploitive innovations—from contract housing to
subprime lending—on women and people of color, who were
long shut out of standard credit markets.84 Imani Henry of
Brooklyn’s Equality for Flatbush sees in the current property
boom “a whole new wave” of exploitive real estate practices.
“In Flatbush, real estate agents have told me they aren’t even
allowed to rent to Black people anymore. Landlords want to
flip everything here and kick us out to New Jersey.”85 Real
estate’s rise is not a tide that lifts all boats, but a force that feeds
off long-standing structural inequalities.
It also presents serious and specific problems for planners.
In a private land market, all planning interventions will impact
land and property values either positively or negatively. Where
there is an inter-capitalist feud between manufacturers and
developers, a number of possibilities arise. The presence of
industry, for example, means there is a capitalist—not only
a labor—demand for government-sponsored affordable
83 Harris, Cheryl I. “Whiteness as property.” Harvard Law Review 106
(1992): 1707–91.
84 Burd-Sharps, Sarah and Rebecca Rasch. “Impact of the US housing
crisis on the racial wealth gap across generations.” Social Science Research
Council, June 2015; Dymski, Gary, Jesus Hernandez and Lisa Mohanty. “Race,
gender, power, and the US subprime mortgage and foreclosure crisis: A meso
analysis.” Feminist Economics 19.3 (2013): 124–51.
85 Joseph, George. “Developers are ‘very, very excited to pioneer’ new
neighborhoods under de Blasio’s affordable housing plan.” Gothamist, March
22, 2016.
44 CAPITAL CITY
housing and rent control. It also means there is a powerful
constituency that values lower, not higher, land values, since
industrialists tend to see land and buildings as costs rather than
assets. With the decline of urban industry, as well as the real
and aspirational rise of homeownership among working and
middle class people, the demand for lower land values comes
only from organized renters. While urban tenant movements
have secured important victories, they face a constant struggle against difficult odds. Assessing this political landscape,
many nonprofits, unions and community-based organizations
have determined that the most likely way to secure gains is
through political programs that align with factions of real
estate capital, such as development schemes that pair the construction of luxury housing with a modicum of affordable units,
or labor peace deals that secure union status for workers in
upscale developments. In manufacturing’s absence, real estate
holds something approaching monopoly power to shape the
narrative around urban planning and urban futures.86
At the same time, essential public services in most municipalities are funded through property taxes. The fate of public
education, public libraries and public transit are therefore
directly linked to the value of property and its rate of taxation.
Places with high property values are able to maintain palatial
public places, while cities with low property values suffer the
indignities of crumbling buildings and broken services.87
86 Logan, John R. and Harvey Molotch. Urban fortunes: The political
economy of place. University of California Press, 2007.
87 Katz, Cindi. “Accumulation, excess, childhood: Toward
a countertopography of risk and waste.” Documents d’anàlisi geogràfica 57.1
The Rise of the Real Estate State 45
Cities are incentivized to drive out anything that is understood
to reduce property values: types of buildings, businesses, land
uses or even people. While this has long been the case for suburbs, where industry and commerce are expected to be
subordinate to residential land uses and segregation has long
been a defining characteristic, it is increasingly true of cities,
where real estate is becoming the primary commodity, revenue
stream and political priority.
Under these conditions, planners managing the property
contradiction are being asked to intervene in only one way: to
do everything in their power to make land more expensive,
and to do nothing that would challenge its status as a commodity rather than a commons. Central business district
transportation and park plans? Great. Industrial retention and
universal rent control? Maybe not.
Planners managing the capitalist-democracy contradiction are
facing planning commissions and review boards comprised
almost entirely of people whose futures are tied to real estate.
To take New York as an example, at the time of this writing
the Planning Commission is made up of four members with
backgrounds in commercial real estate promotion, two luxury
developers, two development consultants, a realtor, a nonprofit
developer, a corporate lawyer, a business improvement district
president and the building engineer behind Trump Tower.
This is the real estate state, a government by developers, for
developers. It is not monolithic; there are plenty of disputes
within it. Builders’ desires are not always the same as owners’,
(2011): 47–60.
46 CAPITAL CITY
as reflected in the presence of separate developer and landlord
lobbies in New York. Nonprofit developers follow a somewhat
different model than for-profit builders. And of course government is still accountable to voters, who are by and large
either renters or mortgage holders and continue to organize
collectively against real estate’s rule.88 But the parameters for
planning are painfully narrow: land is a commodity and so is
everything atop it; property rights are sacred and should never
be impinged; a healthy real estate market is the measure of
a healthy city; growth is good—in fact, growth is god.
It is a horrible atmosphere for planners interested in social
reproduction, let alone social transformation. Planners are
allowed to do little that won’t raise property values. Often
they do so directly and intentionally, by initiating rezonings,
targeting tax breaks or gutting protective regulations in order
to stimulate development. Just as often, however, increased
property values are the result of genuine, socially beneficial
land improvements. Public improvements become private
investment opportunities as those who own the land reap the
benefits of beautiful urban design and improved infrastructure.
Those who cannot afford the resulting rising rents (or, in the
case of homeowners, rising property assessments) are expelled:
priced out, foreclosed, evicted, made homeless, or, in the best
case scenario, granted a one-time buyout that will not afford
them a new home in the neighborhood, or even the city.
88 Fields, Desiree. “Contesting the financialization of urban space:
Community organizations and the struggle to preserve affordable rental
housing in New York City.” Journal of Urban Affairs 37.2 (2015): 144–65.
The Rise of the Real Estate State 47
Preservationist Michael Henry Adams has chronicled this
dynamic as it unfolds in Harlem, where he has fought to maintain the tremendous record of Black history and culture that
is contained in both the neighborhood’s architecture and the
memories of its long-term residents. He recounts a conversation between young people in the neighborhood, who were
coming to terms with the greening of their block. After speaking with the children about his activism, Adams recalls one
telling the others, “‘You see, I told you they didn’t plant those
trees for us.’ It was painful to realize how even a kid could see
in every new building, every historic renovation, every boutique clothing shop—indeed in every tree and every flower in
every park improvement—not a life-enhancing benefit, but
a harbinger of his own displacement.”89 In the real estate state,
planners can create marvelous environments for rich people,
but if they work to improve poor peoples’ spaces they risk
sparking gentrification and displacement. Rich communities
can lobby for all sorts of planning improvements, but many
poor neighborhoods fight planning interventions they would
otherwise embrace out of a very real fear that any enhancement will trigger displacement.90
The promise of planning—of creating more beautiful cities; of imposing order on capital’s chaos; of undoing the
exploitive relations between people and land, and between city
89 Adams, Michael Henry. “The end of Black Harlem.” New York Times,
May 27, 2016.
90 Checker, Melissa. “Wiped out by the ‘greenwave’: Environmental
gentrification and the paradoxical politics of urban sustainability.” City &
Society 23.2 (2011): 210–29.
48 CAPITAL CITY
and country—is virtually impossible to realize under these
conditions. Instead, the forces of property present two options
for cities: gentrification or disinvestment. Other modalities
surely exist, but they are made to feel increasingly unlikely
under real estate’s rule, which pushes cities toward this binary.91 Urban planners’ main task is ensuring that the former,
rather than the latter, represents their city’s lot.
91 Defilippis, James. Unmaking Goliath: Community control in the face
of global capital. Routledge, 2004.
2
Planning Gentrification
What is happening to our cities?
Why are they becoming so impossibly expensive?
Healthy cities exist in a state of flux.1
Change is necessary and
good: people come and go, are born and die; industries are
carefully harnessed, but almost never become permanent fixtures. A city that never changes is probably not a city at all.
But a particular kind of change is taking hold in many cities
and towns around the world—one that presents itself as neighborhood revitalization but results in physical displacement and
social disruption for the urban working class. In geographer
Ipsita Chatterjee’s terms, it represents “the theft of space from
labor and its conversion into spaces of profit.”2
This change
is generally known as gentrification, the process by which
capital is reinvested in urban neighborhoods, and poorer residents and their cultural products are displaced and replaced
by richer people and their preferred aesthetics and amenities.
1 Inam, Aseem. Designing urban transformation. Routledge, 2013.
2 Chatterjee, Ipsita. Displacement, revolution, and new urban politics:
Theories and case studies. Sage, 2014, 5.
50 CAPITAL CITY
Every time it happens it looks somewhat different. Spatial
transformations are always premised on local political-economic conditions and shaped by particular narratives and
ideologies that are specific to each location. But there are some
features that occur again and again.3
Low rents become high. Landlords and speculators profit
from the eviction of long-term tenants, who are forced to live
farther and farther from their jobs and communities. As spacetime contracts for wealthier people moving closer to their
central city jobs, it expands for those pushed to the geographical limits of metropolitan areas.4
Bankers walk to work while
debtors endure super-commutes.
The people of color and immigrants who built up neglected
neighborhoods are recast as outsiders in their own homes and
expelled in favor of White newcomers. Neighborhoods and,
eventually, cities become places only the rich can afford, with
environments designed according to their desires.
The commercial fabric turns over and replaces itself. Existing bars, restaurants, coffee shops, supermarkets, hardware
stores and other everyday urban spots are deemed deficient,
and are replaced by new bars, restaurants, coffee shops, supermarkets and hardware stores deemed superior largely because
they charge higher prices and pay higher rents.5
3 Lees, Loretta. “The geography of gentrification: Thinking through
comparative urbanism.” Progress in Human Geography 36.2 (2012): 155–71.
4 Katz, Cindi. Growing up global: Economic restructuring and children’s
everyday lives. University of Minnesota Press, 2004.
5 Moss, Jeremiah. Vanishing New York: How a great city lost its soul.
Harper Collins, 2017.
Planning Gentrification 51
Municipal investment follows real estate investment. After
years of complaints about failing schools and subpar parks,
new funding suddenly manifests. Though residents used buses
and bicycles before, new lanes dot the landscape once new
money arrives. These benefits appear as long-term residents
are priced out and have to find homes in other divested communities.
All this change does not just happen on its own. It requires
investors, developers and landlords—the “producers” of gentrification—to buy and sell land and buildings at ever higher
costs. It also requires wealthier homebuyers, renters and shoppers—the “consumers” of gentrification—to valorize areas
they would have previously ignored. Neither side alone makes
gentrification a reality, since economic value is only realized
when both production and consumption demands are fulfilled.
If producers build but consumers don’t bite, the market busts;
likewise, if consumers are prepared to purchase but producers
don’t invest, the result is unmet demand.
Part of what planners do, then, is ensure that both sides of
the relationship are present by luring gentrification’s producers with land use and tax incentives, while inviting its
consumers through race- and class-inflected neighborhood
initiatives. The state is a central actor, marshaling investment,
boosting land values, attracting desired residents and industries, chasing away threats to profits and rolling out the welcome
mat for developers and investors. Gentrification, then, is
a political process as well as an economic and social one; it is
planned by the state as much as it is produced by developers
and consumed by the condo crowd. Planners did not invent
52 CAPITAL CITY
gentrification, but they helped foster its development and
transform it from a local phenomenon into a global business
model.6
Why Gentrification?
While land ownership, property development and speculative
investment have always been part of the capitalist economy,
until recently, real estate represented a smaller and more specialized business than industrial production. Like real estate,
industry requires investments in land, infrastructure and buildings, but in an industrial context those features’ worth tends
to be a function of their productivity—if a factory were not
productive, its buildings would not be considered valuable in
and of themselves. Historically, as buildings aged their property values tended to drop, not climb, over time. The central
city was the site of production and distribution, and those who
lived closest to it usually could not afford to live farther away.
A number of changes in local, national and international
political economies during the second half of the twentieth
century, however, led investors away from industrial production in first-world cities. Global treaties among capitalist
countries in the postwar era established organizations like the
World Bank, the International Monetary Fund and the World
Trade Organization to facilitate low-cost global production
6 Smith, Neil. “New globalism, new urbanism: Gentrification as global
urban strategy.” Antipode 34.3 (2002): 427–50.
Planning Gentrification 53
and distribution of goods with minimal taxes and tariffs.7
Labor
unions were attacked and marginalized, undermining their
ability to act as a counter-hegemonic force for urban industrial
retention.8
Advances in transportation technology and the
standardization of containerized shipping made the exchange
of goods across space a much simpler and cheaper proposition,
and required a different spatial layout than most central city
planners and politicians were willing or able to provide.9
Real
estate-minded city planners actively pushed industry out with
land use changes and redevelopment projects meant to marginalize manufacturing while driving up land costs.10
As a result of these and other changes, during the second
half of the twentieth century industry decamped from many
first-world central cities in search of lower wages, looser environmental standards and wide-open spaces in northern suburbs,
rural towns and international “free trade zones.” New York
City is an extreme but telling example: from the 1950s to the
1990s, the city lost 750,000 manufacturing jobs while its land
values soared from $20 billion to $400 billion.11
As the complex process of deindustrialization unfolded,
capital became both more mobile and, ironically, more
grounded: tariffs dropped, firms internationalized and corporate globalization took hold while, at the same time, investments
7 Peet, Richard. Unholy trinity: The IMF, World Bank and WTO. Zed
Books, 2003.
8 Aronowitz, Stanley. The death and life of American labor: Toward a new
workers’ movement. Verso: 2014.
9 Levinson, Mark. The box: How the shipping container made the world
smaller and the world economy bigger. Princeton University Press, 2006.
10 Fitch, The assassination of New York.
11 Fitch, The assassination of New York, 40.
54 CAPITAL CITY
in land and buildings filled the literal and figurative space left
by urban industrial flight. Real estate went from being a secondary to a primary source of urban capital accumulation.
This switch is the genesis of gentrification in the United States.12
US urban property investments were patterned by two prior
federal programs, redlining and urban renewal. During the
postwar era of rational comprehensive planning, the primary
project of real estate capital was suburbanization. Massive
amounts of public and private money poured in to create segregated residential enclaves located outside central cities and
connected by new highways and railways.13 In the 1950s and
’60s, city governments responded with “urban renewal” programs, in which entire working class and industrial
neighborhoods were bulldozed to make way for central business district expansions and infrastructure projects.14 While
some low-income developments were produced through these
programs—including much of the country’s public housing—90 percent of new residential construction was designed
for middle- and upper-class households.15 Robert Fitch called
it “real estate Stalinism.”16 With markers of poverty cleared,
12 Harvey, David. “The urban process under capitalism: A framework
for analysis.” International Journal of Urban and Regional Research 2.1-3 (1978):
101-131.
13 Jackson, Kenneth T. Crabgrass frontier: The suburbanization of the
United States. Oxford University Press, 1985.
14 Teaford, Jon C. The metropolitan revolution: The rise of post-urban
America. Columbia University Press, 2006.
15 O’Connor, James. The fiscal crisis of the state. St. Martins Press, 1973,
147.
16 Fitch, The assassination of New York, 141.
Planning Gentrification 55
more city space was produced and coded for urban real estate
investment and development.17
Even before bulldozers cleared the way for cranes, bankers
and planners had set out on a stealthier form of urban neighborhood clearance, which established the preconditions for
gentrification.18 In 1934 New Deal legislation established the
Federal Housing Administration (FHA) to standardize, regulate and insure home mortgages. Not everyone, however, could
access these loans. Along with the FHA, the federal government empowered bankers and developers to lead the Home
Owners’ Loan Corporation (HOLC). HOLC was tasked with
quantifying the risk bankers would take in giving loans to particular people in particular places. This would allow the federal
government and the banks to agree on rates for FHA loan
insurance. To make these decisions, HOLC sent surveyors out
to every residential block in just about every city in the country; those surveyors would look at a neighborhood and grade
it on a scale from A (very safe) to D (very unsafe).19
There were three main criteria HOLC used to determine
risk: 1) the age of the building stock; 2) the density of housing; and, by far most determinately, 3) the racial composition
of residents. Jews were considered communistic and likely to
go on rent strike. Italians were characterized as dangerous
gangsters. African Americans were written off entirely, and
17 McKittrick, Katherine. Demonic grounds: Black women and the
cartographies of struggle. University of Minnesota Press, 2006, 130–31.
18 Aalbers, Manuel B. “The pre-histories of neoliberal urbanism in the
United States.” In Pinson, Gilles and Christelle Morel Journel (eds). Debating
the Neoliberal City. Taylor & Francis, 2017, 96–118.
19 Jackson, Crabgrass frontier.
56 CAPITAL CITY
virtually any block with any Black people was given a low
grade. Following real estate industry “best practices,” the FHA
made segregation and suburbanization the United States’ de
facto housing policy. Over time, as property owners in Black,
immigrant and racially mixed neighborhoods were shut out
of the finance system, many of their buildings declined, rents
fell and some landlords resorted to abandonment.20
One landlord’s abandonment, however, is another buyer’s
opportunity, and in the 1960s, ’70s and ’80s many young urbanites, as well as a few farseeing financiers, saw an opportunity
to grab low-cost properties and renovate them.21 “Brownstoning” and “loft living” became touchstones for young artists
and professionals seeking urban “authenticity” and alternatives to the dominant pro-suburban narratives of the 1950s
and 1960s.22 Although many considered themselves architectural preservationists, few paid much attention to preserving
their neighborhood’s social character. Many these new brownstone owners evicted all of their tenants and converted their
buildings into single-family homes, while loft landlords actively
pushed out their remaining industrial tenants in favor of residential converters.23
20 Wilder, A covenant with color.
21 Marcuse, Peter. “Gentrification, abandonment, and displacement:
Connections, causes, and policy responses in New York City.” Washington
University Journal of Urban & Contemporary Law 28 (1985): 195–240.
22 Ley, David. The new middle class and the remaking of the central city.
Oxford University Press, 1997.
23 Osman, Suleiman. The invention of brownstone Brooklyn: Gentrification
and the search for authenticity in postwar New York. Oxford University Press,
2011; Zukin, Sharon. Loft living: Culture and capital in urban change. Rutgers
University Press, 1989.
Planning Gentrification 57
In several cities, these trends coincided with a severe round
of fiscal crises and capital strikes—moments when a state cannot raise the capital it needs to maintain its budgets and bond
investors refuse to buy shares in its future.24 New York’s late1970s recovery from the brink of bankruptcy was led by banks,
real estate interests and municipal unions, who disciplined the
city through a process of privatization and disinvestment from
social services that continues to this day.25 Municipal wages
and benefits were slashed; welfare payments fell by one-third;
the city’s public universities started charging tuitions. Meanwhile, stock taxes were dropped, income taxes were halved
and real estate taxes fell to historic levels.26 This became
a model for neoliberal governments throughout the country
and around the world.27
During this process, gentrification presented an alternative
way for cities to continue redeveloping their housing stock
and boosting land values without (at first) spending much
money. Over time the model proved effective, and local governments, banks and major real estate firms got into the
business of financing gentrification, either through loans to
high-income homeowners in places that were previously redlined, or by building luxury landscapes in neighborhoods that
had long been considered unsafe for investment.
24 Phillips-Fein, Kim. Fear city: New York’s fiscal crisis and the rise of
austerity politics. Metropolitan Books, 2017.
25 Moody, Kim. From welfare state to real estate: Regime change in New
York City, 1974 to the present. The New Press, 2007.
26 Fitch, The assassination of New York.
27 Freeman, Joshua. “If you can make it here.” Jacobin, Issue 15/16,
Fall 2014.
58 CAPITAL CITY
Gentrification, then, was a “spatial fix” for capitalism’s urban
crisis: a way to profit from previous disasters and to find new
places for investors to turn money into more money.28 Deindustrialization created the space for real estate’s revival, and
redlining and urban renewal set the spatial patterns for disinvestment and reinvestment. What first appeared as an
opportunistic venture for middle class movers and profitseeking landlords—a building-by-building, block-by-block
phenomenon—became a way to transform entire cities from
places into products.
The Economics of 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 places gentrify
is the amount of money that a landowner—who effectively
holds 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
28 Harvey, David. The limits to capital. Verso, 1982.
Planning Gentrification 59
long-term tenants, renovating neglected or unstylish properties, or demolishing and reconstructing buildings.
Geographer Neil Smith proposed this thesis in 1979 as the
primary driver of gentrification at the building level. Gentrification, he theorized, “occurs when the gap is wide enough
that developers can purchase shells cheaply, can pay the builders’ costs and profit for rehabilitation, can pay interest on
mortgage and construction loans, and can then sell the end
product for a sale price that leaves a satisfactory return to the
developer.”29 Smith formulated this theory during a period
of urban disinvestment, when the rent gap described the space
between falling actual rents and stable or slowly rising potential rents. In today’s context, the rent gap in hyper-invested
cities like New York is more likely to be between slowly rising
actual rents and exploding potential rents.30
Under these conditions, rent gaps exist at more than just
the building scale. When enough individual buildings in an
area are brought up to their full potential rents, the remaining
surrounding properties exhibit a rent gap (as does the entire
neighborhood). The rent regulations that govern prices and
tenure rights for nearly half the private rental apartments in
New York have tenuously kept hundreds of thousands of apartments at below-market rents. This creates a citywide rent gap
29 Smith, Neil. “Toward a theory of gentrification: A back to the city
movement by capital, not people.” Journal of the American Planning Association
45.4 (1979): 538–48, 545.
30 Hackworth, Jason. The neoliberal city: Governance, ideology and
development in American urbanism. Cornell University Press, 2007.
60 CAPITAL CITY
that landlords are working hard to close through evictions and
demolitions as well as political lobbying.31
In some markets, real estate firms try to profit from the
potential value of their properties by selling rather than renting them. This can take the form of townhouses being converted
from apartment buildings to single-family homes, or individual apartments in larger buildings being sold as co-ops or
condominiums. As the market for such housing rises in cities
around the world, the value gap between the income they generate as rental properties and their potential sale price expands
and the potential for gentrification rises.32
A similar dynamic exists in places where a property’s current use masks the potential income that property could
generate if it were given over to another activity. The clearest
example of this functional gap would be the remaining factories in central city locations.33 In Manhattan’s Chinatown, for
example, the garment industry—which by the 1980s employed
roughly 20,000 people in 500 shops—has now nearly vanished,
not only because of competition from cheap imports but also
because of a widening functional gap: the difference between
current manufacturing rents and potential residential or commercial rents became so great that building owners were
willing to evict their industrial tenants to make room for higher
31 Teresa, Benjamin Francis. The new tenement landlord? Rent regulated
housing and the financialization of urban change. Dissertation, Rutgers UniversityGraduate School-New Brunswick, 2015.
32 Ley, The new middle class and the remaking of the central city.
33 Sykora, Ludek. “City in transition: The role of the rent gap in Prague’s
revitalization.” Tijdschrift voor Economische en Sociale Geografie 84.4 (1993):
281–93.
Planning Gentrification 61
paying alternatives.34 By now, most of Chinatown’s factories
have been converted into offices, hotels or condominiums,
forcing the workforce that sustained them to shift to servicesector jobs, while enabling the industrialists who ran them to
move on to other, more profitable pursuits.35 John Lam, one
of the neighborhood’s most infamous garment titans, went
from owning fifteen factories, employing 1,200 workers and
doing over $40 million in business annually to being one of
the “undisputed titans of Manhattan’s hotel scene.”36
By the twenty-first century, real estate developers and city
planners learned how to identify and exploit these opportunities, turning grit into gold. They developed housing, policing,
education and design strategies to identify rent, value and
functional gaps, and encouraged speculators to close them.37
This has given rise to new and peculiar forms of gentrification. Rich neighborhoods that never truly experienced
disinvestment have become “super-gentrified,” with homes
in places like New York’s Greenwich Village and Brooklyn
Heights selling for astronomical figures to finance titans, and
34 Chao, Eveline. “A Makeover for Chinatown’s Garment Industry.”
Open City, January 7, 2014; Hum, Tarry. “Chinatown and the decline of
immigrant garment clusters in the fashion capital of the world.” Progressive
Planning 190, Winter 2012.
35 Hum, Tarry and Samuel Stein. “Gentrification and the Future of
Work in New York City’s ‘Chinatowns.’” In Leong, Russell C. (ed.). Asian
American Matters: A New York Anthology. Asian American Research Institute,
2017.
36 Kwong, Peter. The new Chinatown. Hill and Wang, 1987; Schram,
Lauren Elkies. “Ex-Partners Sam Chang and John Lam Are the Undisputed
Titans of Manhattan’s Hotel Scene.” Commercial Observer, October 8, 2015.
37 Hackworth, James and Neil Smith. “The changing state of
gentrification.” Tijdschrift Voor Economische en Sociale Geografie 22 (2001):
464–77.
62 CAPITAL CITY
unregulated rents pricing out even relatively wealthy households.38 Far from central cities, some rural towns are moving
through the phases of gentrification, with rent gaps making
historic barn houses and ranch-side cottages alluring sites for
speculative investment.39 Some rural areas, like billionaire
Ted Turner’s sprawling 2 million-acre ranches in Montana and
New Mexico, are gentrified virtually overnight and send their
effects rippling outward through the local land market.40 Meanwhile, billionaires like Warren Buffett and Sam Zell are buying
up trailer parks and raising rents for tenants, many of whom
are displaced urbanites.41 Beyond housing, global media corporations like Disney, Universal and Sony have worked with
city planners to transform commercial areas such New Orleans’
French Quarter and Manhattan’s Times Square into gentrified
tourist traps.42
As much as the process mutates, it always retains its core:
landlords and developers identify gaps and act to close them.
In most cases, however, it’s not just capitalists initiating the
process, but also local state actors who, in responding to the
38 Lees, Loretta. “Super-gentrification: The case of Brooklyn Heights,
New York City.” Urban Studies 40.12 (2003): 2487–2509.
39 Darling, Eliza. “The city in the country: Wilderness gentrification
and the rent gap.” Environment and Planning A: Economy and Space 37.6 (2005):
1015–32.
40 Wiener, Jon. “‘Hell is other people’: Ted Turner’s two million acres.”
In Evil paradises: Dreamworlds of neoliberalism. New Press, 2007.
41 Rivlin, Gary. “The cold, hard lessons of Mobile Home U.” New York
Times, March 13, 2014.
42 Gotham, Kevin Fox. “Tourism gentrification: The case of New
Orleans’ Vieux Carre (French Quarter).” Urban Studies 42.7 (2005): 1099–
1121; Sagalyn, Lynne B. Times Square roulette: Remaking the city icon. MIT
Press, 2001.
Planning Gentrification 63
changing economic landscape as well as the demands of specific landholders, aim to lure investors and developers to
particular areas.43 The politics of gentrification are therefore
just as important as the economics.
The Politics of Gentrification
The emergence of gentrification in the late 1960s and ’70s
tracked closely with important political changes at the national
and local levels. For gentrification’s advance, the most significant was a shift in US cities’ governing coalitions.
When manufacturing firms exited post-war urban centers,
they left behind not just a tremendous amount of property but
also a political vacuum. Since the industrial revolution took
hold, cities had been governed by the political party that could
best bridge the divide between the needs of industrial capital
and its workforce. But with the flight of manufacturing from
cities, real estate and finance became the remaining major
urban power bloc and the key to rebuilding local economies.44
Real estate was an especially potent force in urban politics,
because while finance can be ephemeral, real estate is always
place-based.45
This economic restructuring forced local governments to
seek out new coalitions for securing political power. Being
43 Sites, William. Remaking New York: Primitive globalization and the
politics of urban community. University of Minnesota Press, 2003.
44 Mollenkopf, John H. “The post-war politics of urban development.”
Politics & Society 5.3 (1975), 247–95.
45 Logan and Molotch, Urban fortunes.
64 CAPITAL CITY
a friend of industry and a champion of industrial unions was
no longer a viable strategy for winning (or financing) elections. By the late 1960s, it was becoming much more important
to be a friend of real estate capital and the service and building
trades unions.46
This new growth coalition looked little like the old, and as
a result some of the elected officials who rose to prominence
during this transitional period—like New York’s mayor, John
Lindsay—were branded as refreshing reformers. They made
common cause with the nascent community development
movement, which, with support from federal anti-poverty
programs and the Ford Foundation, was encouraging reinvestment in central city neighborhoods that had long been redlined
or targeted for “urban renewal” clearance. They tweaked city
land use laws to allow for a balance of renewed commercial
development and historic preservation. They recognized that
the country was moving toward social liberalism, and spurned
overt racism and bigotry (without fully addressing the structural racism embedded in their policies and programs). They
embraced art and cultural production as ways to bring people
with money to their cities; when artists began renovating industrial lofts and middle class professionals were renovating
brownstones, they saw a smart strategy for redevelopment
that was simultaneously edgy and posh.47
New regional blocs in New York City, along with Philadelphia, Pittsburgh, Baltimore, Washington, DC, and a number
46 MacDonald, Ian. “Beyond the labour of Sisyphus: Unions and the
city.” Socialist Register 50 (2013).
47 Zukin, Loft living.
Planning Gentrification 65
of other deindustrializing cities with historic housing stocks,
made it part of their mission not only to encourage downtown
construction, but to create policies that would hasten gentrification.48 The City Planning Commission’s 1969 Plan for
New York City stated, “If brownstoners have done what they
have done in the face of major difficulties, it is staggering to
think of what could be done if the difficulties were removed.”49
The plan proposed guaranteed mortgage loans for one- and
two-family home purchases, long-term loans for renovations
and tax abatements for home improvements.
Loft conversions were legalized and encouraged in sections
of the city where planners wanted to spark industrial flight
and residential reuse. Some housing leaders were initially
bemused by the fury over “obsolete” loft buildings. Union
co-op developer Abraham Kazan joked sardonically that
“a finer collection of fire traps would be hard to find anywhere.”50
Over time, however, many policymakers came to embrace the
idea and were relieved to be dealing with artists demanding
live-work spaces rather than impoverished tenants demanding
livable conditions. In her book Loft Living, sociologist Sharon
Zukin quotes a SoHo resident recalling a crucial public hearing on a proposed artists’ district:
48 Smith, “Toward a theory of gentrification.” On regional blocs in
planning history, see: Woods, Development arrested; and Woods, Clyde.
Development drowned and reborn: The blues and Bourbon restorations in postKatrina New Orleans. Verso, 2017.
49 “Plan for New York City 1969,” as quoted in Whyte, William H. City:
Rediscovering the center. Doubleday, 1988, 327–28.
50 Freeman, Joshua. Working class New York: Life and labor since World
War II. New Press, 2000, 188.
66 CAPITAL CITY
[T]here were lots of other groups giving testimony on other
matters. Poor people from the South Bronx and Bed-Stuy
complaining about rats, rent control, and things like that.
The board just shelved those matters and moved right along.
They didn’t know how to proceed. Then they came to us.
All the press secretaries were there, and the journalists. The
klieg lights went on, and the cameras started to roll. And
all these guys started making speeches about the importance
of art to New York City.51
Early gentrification was a boon to politicians who were both
hamstrung by shrinking municipal budgets and unwilling to
take on serious problems of entrenched poverty and structural
racism. To their relief, the face of early gentrification was
a group of middle class, mostly White liberals looking to add
value to the city’s building stock—just the kind of constituents
they were seeking to cultivate. In many cities, these newcomers took over neighborhood associations, asserted their power
within party clubs, and steered the work of local governance
and planning bodies that had recently been created in response
to the urban civil rights struggles of the 1960s. In so doing,
they exerted power far disproportionate to their actual
numbers.52
By the 1970s, conditions were in place to promote gentrification as a spatial fix for capital and a political fix for cities in
crisis. It would take planners, however, to scale up
51 Zukin, Loft living, 117–18.
52 Tissot, Sylvie. Good neighbors: Gentrifying diversity in Boston’s South
End. Verso Books, 2015.
Planning Gentrification 67
gentrification from a neighborhood phenomenon of renovation and reinvention to a larger process of displacement,
demolition and development.
Planners for Gentrification
Real estate fortunes are cyclical. The job of planners, then, is
to keep business booming as long as possible, and when land
and property values ultimately fall, to get them back up as
quickly as possible. In order to do so, planners and policy elites
have developed a wide range of mechanisms, which they put
to use in various forms depending on particular local
circumstances.
Local property tax cuts are one of the main incentives cities
use to lure and retain real estate investment. They come in
two main forms: those for renovation, and those for construction. In 1955, New York lawmakers created the J-51 tax
abatement, which gives landlords a fourteen-year tax break
for repairing their properties. In 1975 they expanded it to
encourage industrial-to-residential conversions. At a cost of
over $250 million per year in lost revenue, building owners
continue to use J-51 to gut and renovate old buildings and
drive up rents, or convert their rental properties into condominiums.53 In 1971, to spur new apartment construction, the
city created the 421-a tax incentive program, which gives
enormous tax breaks to luxury developers in gentrifying
53 Waters, Tom and Victor Bach. Upgrading private property at public
expense: The rising cost of J-51. New York: Community Service Society, 2012.
68 CAPITAL CITY
areas.54 By 2016, the program was costing the city $1.2 billion
per year in lost property tax revenue; it was subsequently
tweaked to extend the tax break at an estimated cost of $2.4
billion per year.55
Critics call this “geobribery”—the way planners use public
finances to lure private investment into specific areas.56 Among
the most direct examples of geobribes are Payment In Lieu of
Taxes (PILOT) projects, which have become commonplace
in municipalities large and small. Under these schemes, developers pay a low annual fee to the municipality rather than a full
tax load. Sometimes these deals are negotiated for deep-pocketed nonprofits or developers building on publicly owned (and
therefore tax-exempt) land, but many cities—like New Jersey’s
Jersey City—have found ways to apply them more generally
in order to incentivize downtown development.57 In some
cases, in order to pay PILOTs instead of ordinary tax bills,
for-profit developers will pay nonprofits to buy a piece of land,
then lease it back to them. Cities get a little bit of cash from
these deals, but they are often legally bound to use those funds
to upgrade nearby infrastructure. In this sense, the developers
54 Bernt, Matthias. The ‘double movements’ of neighbourhood change:
Gentrification and public policy in Harlem and Prenzlauer Berg. Urban Studies,
49.14 (2012): 3045–62.
55 Waters, Tom. “Governor Cuomo’s flawed 421-A proposal.” New
York Slant, November 29, 2016.
56 Roy, Ananya. “Why India cannot plan its cities: Informality,
insurgence and the idiom of urbanization.” Planning Theory 8.1 (2009): 76–87.
57 Wharton, Jonathan. “Abatement addiction: A case study on Jersey
City’s municipal tax abatements, urban gentrification and the politics of rights.”
Conference presentation, American Political Science Association, Seattle, 2011.
Planning Gentrification 69
win twice—they pay lower fees over time and they get
improved public services.
An even grander geobribe is Tax Increment Financing (TIF),
a widely used development incentive. Under TIF, planners
usually start by designating an area as “blighted”—terminology borrowed directly from “urban renewal” planning.58 Next,
the city issues bonds for new infrastructure development in
the district. After making improvements to the land and raising its value tremendously, the city hands the land to
a developer, who builds private commercial or residential
buildings. If their property values rise, their tax revenues are
“captured” and used first to pay off bondholders, and then for
renewed investment inside the TIF zone; if property values
are stagnant or fall, the city is on the hook to pay back the
bondholders. Risk is thus transferred from the private sector
(real estate developers) to the public sector (the rest of us).
When they fail, TIFs blow up budgets; when they are successful, they magnify uneven development. In such “successes,”
TIFs can generate more revenue than an entire city’s municipal budget, reinforcing the disparity between gentrified and
disinvested neighborhoods.59
In addition to geobribery, planners have taken steps to surrender public ownership of land and buildings. One important
manifestation is selling off tax-foreclosed properties acquired
during recessions. In the wake of its mid-1970s fiscal crisis,
New York City seized thousands of buildings when their
58 Gans, Herbert J. Urban villagers. Simon and Schuster, 1962.
59 Weber, Rachel. From boom to bubble: How finance built the new Chicago. University of Chicago Press, 2015.
70 CAPITAL CITY
owners stopped paying property taxes. In severely disinvested
neighborhoods, this represented an enormous transfer of property and wealth; a 1983 study showed that 19,588 buildings
had been taken in Harlem, representing more than a third of
the total housing stock and nearly as many buildings as were
owned by private landlords.60 Some of these foreclosed buildings were turned into limited-equity co-ops and controlled by
former squatters.61 Most of them, however, were sold cheaply
or given away to landlords who wanted to upgrade them.62
Years later, Obama’s Housing and Urban Development secretary, Shaun Donovan, would look back on these actions as
“the largest privatization of housing anywhere in the country.”63
This form of strategic liquidation played a large part in the
gentrification of disinvested neighborhoods.
While cities were giving away their seized properties, many
were also demolishing much—if not all—of their public housing. In conjunction with federal and state governments, cities
across the country—from Atlanta to Chicago to Baltimore to
New Orleans—severely underfunded their public housing and
allowed projects to fall into dangerous disrepair. Building off
architectural analyses and social science fads, many planners
claimed the problem was bad design and a concentration of
poverty—a problem they never seemed to associate with a
60 Schaffer, Richard and Neil Smith. The gentrification of Harlem?
Annals of the Association of American Geographers 76.3 (1986): 347–65.
61 Starecheski, Amy. Ours to lose: When squatters became homeowners in
New York City. University of Chicago Press, 2016.
62 Mele, Christopher. Selling the Lower East Side: Culture, real estate
and resistance in New York City. University of Minnesota Press, 2000.
63 Hevesi, Dennis. “Transforming city’s housing: Act 2.” New York
Times, May 2, 2004.
Planning Gentrification 71
concentration of wealth elsewhere.64 Financed by the federal
government’s HOPE VI program, these cities developed plans
to destroy their public housing complexes and build smallscale, mixed-income, subsidized private housing wherever lots
were available. The numbers of new apartments rarely came
close to the number of homes destroyed, and they often cost
significantly more to rent, but the process freed up coveted
central city land for new development and gentrification.65
As cities destroyed their public housing, they chipped away
at rent controls or abandoned them altogether. This helped
cement the relationship between planning and gentrification.
With strong rent controls in place, urban planning interventions like new parks, schools and transit do not necessarily
produce elevated housing costs; while public investments in
neighborhoods might widen rent gaps, rent controls would
prevent landlords from closing them. With rent controls diminished or removed, however, landlords could more easily raise
rents based on new neighborhood improvements; they market
these planning interventions as amenities for their property,
and thus immediately turn inclusionary public investments
into exclusionary private gains. Today a weak form of rent
control still stands in some California, DC, Maryland, New
York and New Jersey cities, but these systems have been systematically undermined by landlord-backed legislators and
64 Slater, Tom. “Expulsions from public housing: The hidden context
of concentrated affluence.” Cities 35 (2013): 384–90.
65 Arena, John. Driven from New Orleans: How nonprofits betray public
housing and promote privatization. University of Minnesota Press, 2012.
72 CAPITAL CITY
under-enforced by regulators. Many US states have passed
ordinances outlawing further controls.
In addition to straightforward land giveaways and deregulation, planners have overseen a subtler but more systematic
privatization of urban spaces.66 Historic gathering places have
been turned over to private developers for the creation of festival markets—an economic development strategy that rarely
benefits city residents as much as it does tourists and developers. Such projects, like Harborplace in Baltimore and South
Street Seaport in New York, were especially popular among
neoliberal planners in the 1970s and 1980s.67 Management of
many older parks has been handed over to conservancies, who
raise private funds for improvements and impose new rules
that often target the poor.68 Newly designed public spaces are
often privatized from the start. Not only do they come with
conservancies attached to them, they are even sometimes private property—as in the case of New York City’s privately
owned public spaces. In cities throughout the country, commercial main streets are encouraged to form business
improvement districts (BIDs), self-taxing entities run by and
for landlords that collude to raise rents, bring in big box stores,
and impose new security regimes on streets, sidewalks and
66 Low, Setha and Neil Smith (eds). The politics of public space. Routledge,
2006.
67 Frieden, Bernard J. and Lynne B. Sagalyn. Downtown, inc: How America
rebuilds cities. MIT Press, 1989.
68 Katz, Cindi. “Whose nature? Whose culture?” In Braun, Bruce and
Noel Castree (eds). Remaking reality: Nature at the millennium. Routledge,
2005, 56.
Planning Gentrification 73
public parks.69 Reflecting on the impact of one such BID on
a strip of immigrant-owned small businesses, Tania Mattos of
the group Queens Neighborhoods United recalled, “it used
to be Calle Colombia. Now it’s Calle Corporate.”70
Likewise, planners have increasingly used zoning to facilitate gentrification. Zoning holds an outsized place in US
municipal politics because of the particular dynamics of political devolution during the neoliberal period: responsibilities
have been pushed to the local level, while control over policies
and purse strings is held at higher governmental scales.71 For
planners, this is a catch-22: cities are responsible for solving
their own housing crises but the federal government restricts
their abilities to build public housing and states often preclude
them from enacting rent controls. Incentivizing development
through zoning, then, becomes key to many municipal housing plans.72
Both upzoning (which increases building density and development capacity) and downzoning (which limits it) can be used
to channel investment to particular areas, and either open up
new rent gaps or close them where they remain.73 More than
almost any other tool in the planners’ kit, zoning has tremendous impact on both land and property values. When a city
69 Chronopoulos, Themis. Spatial regulation in New York City: From
urban renewal to zero tolerance. New York: Routledge, 2011.
70 Elstein, Aaron. “Shaping a neighborhood’s destiny from the shadows.”
Crain’s New York Business, September 18, 2016.
71 Gilmore, Golden gulag, 42.
72 Viteritti, Joseph P. The pragmatist: Bill de Blasio’s quest to save the soul
of New York. Oxford University Press, 2017.
73 Willis, Carol. Form follows finance: Skyscrapers and skylines in New
York and Chicago. Princeton Architectural Press, 1995.
74 CAPITAL CITY
upzones a particular lot, it makes that land far more valuable
by increasing the amount of rent-producing units a developer
can build. Upzoning can therefore encourage developers to
buy existing properties, knock down the buildings and build
something bigger. When planners downzone, they can dramatically raise property values for existing buildings, which
may be bigger than the zoning allows for future developments.
Downzoning can therefore encourage developers to reinvest
in older properties and derive higher rents from existing buildings. In either case, planners produce enormous value with
the stroke of a pen, and hand it over to land and property
owners.74
Rezoning can thus facilitate a vertical enclosure movement,
which privatizes the air above and the ground below.75 In the
case of upzonings, planners allow developers to own a new
piece of the sky, turning everyone’s airspace into someone’s
property. In the case of downzonings, planners can drive such
schemes underground. In parts of central London, for example, where strict zoning caps limit building heights, property
owners are allowed to create enormous and luxurious basements that elongate the boundaries of private property deep
below the pavement.76
Rezoning does not equal gentrification; under the right circumstances, zoning can be used to slow or even prevent
gentrification. It can also be used to undo exclusionary land
74 Angotti and Morse, Zoned out!
75 Graham, Vertical.
76 Watson, Angus. “Going underground.” Financial Times. August 6,
2010.
Planning Gentrification 75
uses, like the giant single-family home zones that keep working class people out of sprawling, segregated suburbs. What
zoning does is change the economic calculus of present versus
future land uses. In conditions prone to gentrification—hyperinvested cities run by the real estate state—any rezoning will
likely alter conditions such that landlord or developer incomes
rise, and public benefits shrink.
Under these circumstances, even planners’ provision of
public goods—such as investments in schools, parks, transit
and technology—tends to contribute to gentrification. The
relationship, however, is complex.
Sometimes planners channel new services toward neighborhoods that are already gentrified, giving the wealthy the most
resources even though their taxes go into a common municipal
fund. This is the case, for example, when wealthy neighborhoods get better trash pickup than poorer ones, even though
they are all served by the same sanitation department.
Sometimes planners invest in currently gentrifying areas in
order to speed along the process. For example, when planners
fix up the streets as rents start to rise, they are signaling to
potential investors that these neighborhoods will no longer be
neglected by the city.
And sometimes they focus their attention on areas that are
not yet undergoing gentrification in order to attract real estate
capital. This is the case when working class strongholds in
gentrified cities are suddenly lavished with public attention—
as in New York Governor Cuomo’s plans for Brownsville,
Brooklyn discussed in the Introduction. In all three cases, planners end up stimulating and compounding uneven development.
76 CAPITAL CITY
This lose-lose-lose situation is one of the main reasons so many
residents caught in the violence of gentrification are deeply
skeptical of urban planners.
This violence is real and material: despite legal protections
for tenants, landlords and their hired hands regularly seek to
close rent gaps by force, using harassment, intimidation, eviction, and sometimes even arson, assault and murder. But it is
not only owners who inflict this pain. Just as gentrification’s
violence is no metaphor, neither is planners’ “police power.”
Urban police forces act as the armed wing of the real estate
state: what planners and policy makers enact, police enforce.
Planning and police departments are separate entities, with
separate leadership, budgets and institutional cultures. Their
missions are nevertheless often aligned around protecting
property and encouraging gentrification.77 Rising real estate
values are a crucial performance metric for many urban police
departments, who point to gentrification as proof that their
ballooning budgets represent money well spent.78 With
increased resources, police are mirroring planners by speaking
the language of data-informed decision-making and adopting
the tools of geographic information systems to target their
activities. Using quality of life and broken windows campaigns,
police aggressively stop, ticket, arrest, beat and even kill people accused of low-level infractions like loitering, unpermitted
77 Maharawal, Manissa M. “Black Lives Matter, gentrification and the
security state in the San Francisco Bay Area.” Anthropological Theory 17.3
(2017): 338–64.
78 Beck, Brenden and Adam Goldstein. “Governing through police?
Housing market reliance, welfare retrenchment, and police budgeting in an
era of declining crime.” Social Forces 96.3 (2017): 1183–1210.
Planning Gentrification 77
vending and turnstile jumping, particularly in gentrifying
neighborhoods.79 This geographical targeting is neither incidental nor accidental: aggressive policing clears the terrain for
future investment and makes wealthier households more comfortable with the idea of living among poorer people.
Planners do not encourage gentrification out of some undying commitment to violence, displacement or inequality; rather,
gentrification is what happens when real estate rules and planners follow. Even if planners understand their work as
promoting livability, growth and sustainability rather than as
enabling inequality, as geographer Loretta Lees argues, “we
need to see gentrification as mutating, as parasitic, as attaching to and living off other policies.”80 Whatever else they are
working toward, planners in the real estate state are also planners for gentrification.
Justifying Gentrification
Mainstream planners recognize that gentrification presents
both moral and economic problems for their cities. In rhetoric,
they attest to the importance of balanced growth, inclusion
and increased opportunity; in practice, however, most planners facilitate uneven development and measure their progress
79 Vitale, Alex S. City of disorder: How the quality of life campaign
transformed New York politics. NYU Press, 2008; Laniyonu, Ayobami. “Coffee
shops and street stops: Policing practices in gentrifying neighborhoods.” Urban
Affairs Review 54.5 (2018): 898–930.
80 Lees, Loretta. “The geography of gentrification: Thinking through
comparative urbanism.” Progress in Human Geography 36.2 (2012): 155–71,
163.
78 CAPITAL CITY
against rising land values.81 To bridge that gap, planners need
theories and ideologies that let them feel altruistic while undermining the urban working class.
One of the most important is highest and best use. This concept turns land use planning into real estate appraisal, positing
that the best use for any piece of land is that which derives the
greatest value at the lowest cost and allows buildings to actualize their full potential rent.82 Measuring this, however, is
nearly impossible, and always contested. Parks, for example,
do not necessarily bring in much money, but they result in
increased property values for the surrounding areas, which in
turn deliver higher property tax revenues. The benefit of the
park, then, is measured not just by its use and enjoyment, but
by its value as a real estate amenity.83 Low-cost housing in the
central city will rarely be a “higher” use than luxury housing,
even if it is what most people in the city need. According to
the theory, however, if planning is done according to highest
and best use, then more money will land in the city’s coffers
and can be used for the social good. In the end, however, the
copious real estate tax breaks that accompany this sort of planning ultimately rob the city of the very revenue that
development is supposed to generate, creating little opportunity for income redistribution.
81 Wolf-Powers, Laura. “Up-zoning New York City’s mixed-use
neighborhoods: Property-led economic development and the anatomy of
a planning dilemma.” Journal of Planning Education and Research 24.4 (2005):
379–93.
82 Angotti and Morse, Zoned out!
83 Krinsky, John and Maud Simonet. Who cleans the park? Public work
and urban governance in New York City. University of Chicago Press, 2017.
Planning Gentrification 79
Often planners openly admit that they are trying to lift land
values, but justify this action with attempts at value recapture—
using tools that reclaim some social benefit from publicly
generated private profits. Whenever cities upzone an area, for
example, they create a rent gap out of thin air. In exchange,
planners sometimes create mechanisms to “recapture” a portion of this value by demanding a public benefit from the
landlord: an accessible open space in exchange for more development capacity (in the case of “privately owned public
spaces”); a set of affordable apartments in new and bigger
developments (in the case of “inclusionary zoning”); payment
into a fund for nearby infrastructure improvements (in the
case of PILOTs and TIFs); or a dedicated funding stream for
transit that boosts property values (as in the case of New York
City’s proposed streetcar).84
These policies are often considered progressive, since they
make explicit demands on landlords and force them to pay
their “fair share.” This framing, however, has three major
flaws. First, it assumes that planners must always give away
value if they ever hope to win anything for the public. Actions
that do not make money for landlords are therefore deemed
worthless because they do not create any value to recapture.
Second, it engages a sort of magical thinking whereby it is the
landlords who actually pay these costs. Landlords’ incomes
84 Mahoney, Ella. “From Zuccotti Park to Trump Tower.” Jacobin,
December 12, 2016; Stabrowski, Filip. “Inclusionary zoning and exclusionary
development: The politics of ‘affordable housing’ in North Brooklyn.”
International Journal of Urban and Regional Research 39.6 (2015): 1120–36;
Weber, From boom to bubble; Stein, Samuel. “The streetcar hustle.” Jacobin,
February 19, 2016.
80 CAPITAL CITY
come from tenants, so in the absence of very strong rent controls, the cost of these fees are more likely to be borne by
renters than they are to cut into landlord profits. Third, it fails
to account for the effects of increased property values in a private land market—i.e., gentrification. Even if some public
benefits are secured at the site of the deal, residents who hope
to enjoy them are at risk of displacement. As Marina Ortiz of
the anti-gentrification group East Harlem Preservation admonishes, planners frame these value capture projects as “‘looking
toward the future,’—and that future will not include us.”85
Whereas value recapture tends to add new regulations to
the urban environment, other programs seek to remove regulations from working class districts. In these cases, planners
seek to unlock what economist Michael Porter calls the competitive advantage of the inner city.86 Porter argues that working
class neighborhoods are underexploited markets that represent
major opportunities for national retailers, and prescribes planning policies that clear the way for big box stores and large
chain operations: lax zoning codes, loosened labor and environmental laws, and lower corporate taxes. The Clinton
administration used this logic to promote “empowerment
zones,” a planning model derived from Margaret Thatcher’s
“enterprise zones” and recently rebranded and expanded by
the Trump administration as “opportunity zones.” In the name
of increasing competitive advantage, these programs slash
85 Savitch-Lew, Abigail. “4 months after rezoning, East Harlem
stakeholders remain vigilant.” City Limits, March 19, 2018.
86 Porter, Michael E. “The competitive advantage of the inner city.”
Harvard Business Review 73.3 (1995): 55–71.
Planning Gentrification 81
taxes and induce investment in areas that have not yet gentrified.87 In Harlem, the Clinton-era Empowerment Zone provided
subsidies and protections to a host of incoming big box stores.
Most of the decades-old Black-owned small businesses were
pushed out of Harlem’s main street, 125th, and several storefronts were replaced with a Harlem-themed shopping mall.88
Another way planners carve out a competitive advantage is
by luring the so-called creative class. This is a slippery social
category that can mean anything from artists to tech workers
and tends to focus more on high-end consumption habits than
actual creative output. The language comes from planning
theorist and consultant Richard Florida, who argues that cities today compete for their ability to attract and retain artists
and idea creators.89 Appeals to creativity do not automatically
constitute gentrification; Floridian language aside, creativity
is not actually a class trait and working class neighborhoods
are always home to working class artists.90 What most planners take away from the concept, however, is that yuppies like
artists, so cities should promote arts-based gentrification as
a means to attract both.91 Planners then use lifestyle amenities
87 Davila, Arlene. Barrio dreams: Puerto Ricans, Latinos, and the neoliberal
city. University of California Press, 2004.
88 Kelley, Robin D.G. “Disappearing acts: Harlem in transition.” In
Hammett, Jerilou and Kingsley Hammett (eds) The suburbanization of New
York: Is the world’s greatest city becoming just another town? Princeton
Architectural Press, 2007, 63–73.
89 Florida, Richard. Cities and the creative class. Routledge, 2005.
90 Peck, Jamie. “Struggling with the creative class.” International Journal
of Urban and Regional Research 29.4 (2005): 740–70.
91 Tochterman, Brian. “Theorizing neoliberal urban development: A
genealogy from Richard Florida to Jane Jacobs.” Radical History Review 112
(2012): 65–87.
82 CAPITAL CITY
and place-making strategies to attract capital—creative, as
well as the more common kind.92 According to visual artist
and Take Back the Bronx member Shellyne Rodriguez, “artists have this lingering stench that follows us around… It’s
a trojan horse tactic. You place art events in the middle of the
community and then this shit starts to happen.”93
Wrapped up in this “creative class” discourse is the notion
of livability, or the idea that cities should be human scaled,
environmentally sustainable and just plain nice. “Livability”
can mean many things and can be a way to frame planning
issues around the needs of people over profit.94 Most of the
time, however, planners use “livability” to describe every
urban nicety except the two most closely aligned with people’s
ability to live—the prices of labor and shelter.95 Like many
planners, Amanda Burden, director of the New York City
Planning Department under former mayor Bloomberg, used
the word “livable” as a substitute for “gentrified.” Referring
to a neighborhood undergoing severe gentrification, Burden
told the New York Times, “We are making so many more areas
of the city livable. Now, young people are moving to neighborhoods like Crown Heights that 10 years ago wouldn’t have
92 Brueckner, Jan K., Jacques-Francois Thisse and Yves Zenou. “Why
is central Paris rich and downtown Detroit poor? An amenity-based theory.”
European Economic Review 43.1 (1999), 91–107.
93 Maleszka, Jamie. “Did Swizz Beatz’s ‘No Commission’ art fair benefit
the Bronx?” Mass Appeal, August 17, 2016.
94 Evans, Peter (ed.), Livable cities? Urban struggles for livelihood and
sustainability. University of California Press, 2002.
95 Etienne, Harley. “Response to progressive planning in the American
south.” Progressive Planning 196, Summer 2013.
Planning Gentrification 83
been part of the lexicon.”96 No “livability” improvements are
actually specified, other than the presence of “young people,”
a euphemism for White people with disposable income.
One of the names most commonly associated with urban
livability is Jane Jacobs, a paradoxical hero of both leftist advocacy planners and libertarian market urbanists. In her 1961
book The Death and Life of Great American Cities, as well as
in her later work, Jacobs pilloried the planning profession for
creating sterile environments based on flawed ideas about how
people should interact with their environments. As a writer as
well as an organizer, she lashed out against highway projects
and modernist developments, and advocated instead for the
slow, organic growth of cities, centered around vital and lively
neighborhoods, short blocks, medium-to-high densities, mixed
uses, and a combination of new and old buildings. She shook
up the thinking around cities and neighborhoods, and brought
a feminist, street-level perspective to urban analysis.
The main lesson many planners pull from Jane Jacobs, however, is that gentrification is the best way to make cities more
livable. Planners around the country cite Jacobs when they
are tearing down housing projects or encouraging industrial
conversions. Airbnb, a firm targeted by tenant movements for
contributing to housing crises in cities around the world, has
sponsored “Jane’s Walk NYC,” a set of walking tours in Jacobs’
honor.97
96 Satow, Julie. “Amanda Burden wants to remake New York. She has
19 months left.” New York Times, May 18, 2012.
97 Gallagher, Leigh. “Airbnb cozies up to cities.” Fortune, March 26, 2014.
84 CAPITAL CITY
Jacobs, for her part, did not want to be associated with gentrification planning. In a note buried in her final book, she
wrote that the fight against gentrification was “unwinding
vicious spirals” that had resulted from well-intentioned projects:
By the end of the 1990s, gentrification was under way in
what had been even the most dilapidated and abused districts of Manhattan. Again, the poor, evicted or priced out
by the higher costs of renovating, were victims. Affordable
housing could have been added as infill in parking lots and
empty lots if government had been on its toes, and if communities had been self-confident and vigorous in making
demands, but they almost never were. Gentrification benefited neighborhoods, but so much less than it could have
if the displaced people had been recognized as community
assets worth retaining. Sometimes when they were gone
their loss was mourned by gentrifiers who complained that
the community into which they had bought had become
less lively and interesting.98
This analysis is at once prescient and deficient. It presents an
alternative vision of economic development in which social
preservation is as coveted as landmark preservation and livability is actually measured by people’s ability to live in a place.
But Jacobs unfairly faults communities for not fighting back
and thus ignores the myriad examples of forceful activism that
were contemporaneous to her argument. At the same time, she
98 Jacobs, Jane. Dark age ahead. Vintage, 2004, 214.
Planning Gentrification 85
locates the problem in a government that was not “on its toes”;
the issue was not that the state was unprepared for the developers sneaking into neighborhoods, but rather that it was
functioning at a high capacity to invite them there. When
Jacobs claims that “gentrification benefited neighborhoods,”
she presumably means that they became more livable for those
who could afford to live there, and the physical qualities of the
neighborhood—its buildings, shops and schoolhouses—were
reinvested and upgraded. True as this might be, it elides the
central lesson of Jacobs’ work: that cities are their neighborhoods, and neighborhoods are their residents. To say that
gentrification benefited neighborhoods while displacing its
people flies in the face of this notion. When she writes that
gentrification benefited neighborhoods “much less than it could
have,” she implies that the alternative should have been
a friendlier form of gentrification, rather than another mode
of urbanization altogether.
While Jacobs dreamed of a more livable gentrification, others argued that the standard mode was already livable enough.
In the first decade of the twenty-first century, several prominent researchers produced studies claiming that gentrification
was, on the whole, a positive force for cities and their residents.
Geographer Tom Slater compiled an infuriating list of such
studies and their media coverage, including New Urbanist
planner Andres Duany’s triumphalist “Three cheers of gentrification: It helps revive cities and doesn’t hurt the poor” and
Jacob Vigdor’s 2002 Brookings Institute paper entitled “Does
gentrification harm the poor?” (Answer: not particularly).
Another report by economists Mckinnish, Walsh and White
86 CAPITAL CITY
called “Who gentrifies low-income neighborhoods?” claimed
that, in general, “it looks like gentrification is a pretty good
thing.” That report was picked up by Time magazine, who
titled their article on the findings, “Gentrification: Not ousting the poor?”99
Using a version of the neighborhood effects thesis, or the idea
that social outcomes are highly influenced by environmental
factors, planning scholar Lance Freeman has presented research
arguing that gentrification, while potentially disruptive, is not
that bad for poor people.100 Moreover, Freeman argues, gentrification does not actually cause much displacement; poor
people move more than anyone else, he argues, but they are
actually less likely to leave gentrifying neighborhoods because
they enjoy the benefits that reinvestment brings. Many scholars disagreed with this analysis, as did many of those most
vulnerable to gentrification, but it nonetheless fascinated planners and the press.101 Freeman’s output became some of the
most reported academic work on gentrification, landing news
99 Slater, Tom. “Missing Marcuse: On gentrification and displacement.”
City 13.2 (2009), 292–311; Duany, Andres. “Three cheers for gentrification:
It helps revive cities and doesn’t hurt the poor.” The American Enterprise, April
2001, 37–39; Vigdor, Jacob L. “Does gentrification harm the poor?” BrookingsWharton Papers on Urban Affairs, 2002, 133–82; McKinnish, Terra, Randall
Walsh and T. Kirk White. “Who gentrifies low-income neighborhoods?”
Journal of Urban Economics 67.2 (2010): 180–93; Kiviat, Barbara. “Gentrification:
Not Ousting the Poor?” Time, June 29, 2008.
100 Freeman, Lance. There goes the ‘hood: Views of gentrification from the
ground up. Temple University Press, 2006.
101 Newman, Kathe and Elvin K. Wyly. “The right to stay put, revisited:
gentrification and resistance to displacement in New York City.” Urban Studies
43.1 (2006): 23–57.
Planning Gentrification 87
stories with headlines like “Studies: Gentrification a boost for
everyone” and “Exploding the gentrification myth.”102
Most planners are ultimately (and sometimes jubilantly)
resigned to the idea that gentrification is a necessary outcome
of urban change. From this standpoint, working class displacement is the price a city has to pay for improvements to
neighborhood schools, parks, streets and housing. Robert Yaro,
a longtime planner with New York’s influential Regional Plan
Association, represents this hand-wringing wing. In an interview with geographer Scott Larson, he characterized
gentrification as “a real quandary. You preserve character and
preserve the quality of life and people with money buy in, and
people without are pushed out. How do you deal with that?
Subsidies? Direct investment? New York has had a housing
crisis since the 1940s. [Gentrification] is one of the constants,
one of the results of the success of the city.”103
Dan Doctoroff, who served as New York City’s deputy
mayor for economic development under Mayor Bloomberg
and oversaw his redevelopment efforts, represents the unapologetic wing. Invoking his then-boss, Doctoroff once told
a reporter, “As the Mayor says, ‘if you want to solve the problem of gentrification, you should have crime go up, the schools
get worse, the parks dirtier.’ Gentrification is a natural product
of market forces.”104 Under this school of thought,
102 Hampson, Rick. 2005. “Studies: Gentrification a boost for everyone.”
USA Today, April 20, 2005; Chamberlain, Lisa. “Exploding the gentrification
myth.” New York Observer, November 17, 2003.
103 As quoted in Larson, Scott. “Building like Moses with Jacobs in mind”:
Contemporary planning in New York City. Temple University Press, 2013, 24–25.
104 As quoted in Larson, “Building like Moses with Jacobs in mind,” 145.
88 CAPITAL CITY
gentrification is an unassailable public good and a feature as
basic to urban development as commerce is to capitalism.
In recent years, the hand-wringing approach seems to be
winning out, with even boosters like Richard Florida waving
the red flag and penning critiques of urban inequality.105 Nonetheless, this viewpoint still sees gentrification as a symptom of
success and often prescribes private development as its cure.
Taken together, these narratives—highest and best use, value
recapture, competitive advantage, creative class, livability and
neighborhood effects—represent some of the most potent ways
planners legitimate displacement. They help reframe dispossession as development and popularize the notion that
gentrification is something to be desired, not disparaged. Ultimately, according to these theories, gentrification is the outcome
of good city planning.
Coercing Compliance
Beyond self-justification, planners are compelled by external
forces to reshape their cities for investment. While real estate
is a lead actor in cities’ transformation, its costar is finance. By
directing flows of money into and out of places and projects,
banks and investors act as capitalists’ own private planners. As
economist J.W. Mason explains,
105 Florida, Richard. The new urban crisis: How our cities are increasing
inequality, deepening segregation, and failing the middle class—and what we can
do about it. Basic Books, 2017.
Planning Gentrification 89
the financial system is also where conscious planning takes
its most fully developed form under capitalism. Banks are,
in Schumpeter’s phrase, the private equivalent of Gosplan,
the Soviet planning agency. Their lending decisions determine what new projects will get a share of society’s resources,
and suspend—or enforce—the “judgment of the market”
on money-losing enterprises.106
Property development is a big, intensive fixed-capital investment, and as such it requires enormous amounts of debt for
both the builder and the buyer. That capital is provided by
banks, which package bonds and mortgages into securities and
sell them off in pieces to investors.107 The result is a net of
finance that stretches across most of the world, and places
enormous power over city governance in the hands of financiers, bondholders and debt speculators.108 Politicians and
planners who try to challenge this historical bloc are frequently
frustrated by its sheer power and control, and those who persist are often punished.109
In the international sphere, this disciplining usually comes
from global development organizations like the World Bank
and the International Monetary Fund (and, as in Chile or the
Congo, the CIA). On the local level, neoliberalism’s enforcers
106 Mason, J.W. “Socialize finance.” Jacobin, November 28, 2016.
107 Katz, Alyssa. Our lot: How real estate came to own us. Bloomsbury
Publishing, 2009.
108 Weber, Rachel. “Selling city futures: The financialization of urban
redevelopment policy.” Economic Geography 86.3 (2010): 251–74.
109 Polin, Robert. Contours of dissent: United States economic fractures and
the landscape of global austerity. Verso, 2003.
90 CAPITAL CITY
are much more banal: municipal credit rating agencies. Three
companies—Moody’s, Standard & Poor’s and Fitch Ratings—
control just about every city’s ability to access capital through
the bond markets by grading them based on their likelihood
to repay their debts or default. These agencies look at each
city’s economic mix, finances, debt level and management, and
they come to a decision about whether or not it is safe for
investment. As creatures of finance, they look for the markers
of neoliberalism: a small state making limited expenditures
targeted at bringing in investment; public policies that support
the FIRE sectors; weak unions, especially for public-sector
workers; public-private partnerships to manage major urban
projects; and business-friendly political regimes that fight the
class war from the bankers’ side. Where they find these traits,
they mark a city as safe: AAA. Where they do not, the city’s
grade suffers.
Credit rating agencies are not hands-off investigators or
passive reporters of economic prospects. They are ideologically driven activists who meet regularly with municipal
governments in the United States and around the world to
ensure capital’s expanded reproduction. In New York, credit
rating agencies rewarded the city for granting tax abatements
and exemptions to developers in the 1980s, and for reducing
benefits for government workers in the 1990s. In Detroit,
despite the signs of an impending collapse of the city’s primary
industries, municipal credit ratings rose during the 1980s
because its government was willing to pursue gentrification
as a planning strategy. In the early 1990s, the city of Philadelphia was rewarded for a program of government shrinkage,
Planning Gentrification 91
municipal employee wage freezes and health care cuts. After
improving the city’s credit rating, Moody’s wrote, “The only
test for the city is to keep up the momentum.”110
While many planners wish to opt out of this trap, they are
left with few options. As federal spending on local projects
declines, cities are on their own to pay for programs and close
their budget gaps. Their ability to raise taxes is also often constrained by state and federal guidelines (as well as voters’ will),
and they are legally prevented from deficit budgeting. The
remaining vehicle is the bond market, and both the amount of
bond issuances and their value has grown rapidly since the
1970s, with an especially sharp upturn from 2000 to 2010.111
Under these conditions, the consequences of a bad credit score
can be severe. Not only will many private investors back away
from poorly rated cities, but pension funds, money market
funds and insurance companies—all major bondholders—
generally will not invest in anything but top-graded bonds.
The city that rejects gentrification planning is therefore taking
a significant financial risk.
By choice or by force, planners use gentrification to create
the physical environments for capital to thrive. It is the process by which cities seek capital, and capital seeks land. Its
endgame is a city controlled by bankers and developers, run
like a corporation, designed as a luxury product and planned
110 Hackworth, Jason. The neoliberal city, 37.
111 Peck, Jamie and Heather Whiteside. “Financializing Detroit.”
Economic Geography 92.3 (2016): 235–68.
92 CAPITAL CITY
by the finance sector.112 What was public becomes private;
what was common becomes enclosed; what was cheap becomes
expensive; what was shared becomes traded. Through the real
estate state, the city becomes gentrified. Through gentrification, the city becomes neoliberal.
112 Aalbers, Manuel. B. “Introduction to the forum: From third- to fifthwave gentrification.” Tijdschrift voor Economische en Sociale Geografie, forthcoming.

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