CommentsGENTRIFICATION AND THE REAL ESTATE STATE--Samuel Stein, who has no relationship of me, has written an amazing book Capital City: Gentrification and the Real Estate State that explains why housing in U.S. cities is becoming too expensive for millions of people.
In his excellent introduction Stein, who is an urban planner, explains why rent is so high: “In 2016 U.S. homeownership is at a fifty-year low,” and “37 percent of the home sales were made to absentee investors”—banks, hedge funds, and private equity firms like Blackstone “now the world’s largest landlord.” The author describes how absentee investors of Big Real Estate control much of U.S. housing causing average move-in rents to double in the last two decades while wages have been flat over the last 20 years. By 2017 rents have become so high for low-wage workers that the U.S. had about two million homeless people. Stein argues the Real Estate State now dominates all levels of government.
Stein’s first chapter gives a fascinating history arguing how urban planners are always supposed to help Big Real Estate make profits and to quell rebellion. Stein argues that the U.S. has been planned from the beginning from the plans to exile Native Americans to the plans for laying of the railroads across the country. He describes how the profession of planning appeared in mid-19th century Europe and America in reaction to urban uprising, industrialization, and rural-to-urban migration. After the 1848 rebellion in Paris, France, with barricades in the narrow streets, Napoleon III appointed Barron Haussmann to carve out wide boulevards making rebellion difficult.
Progressive reformers, the first U.S. urban planners in the late 19th century, established settlement houses for the urban poor and created building codes for N.Y. tenements—both drove up property values. City Practical urban planners like Herbert Hoover established zoning codes adopted in cities to help builders set up racial segregation, and after World War II they had “urban renewal” that destroyed working-class neighborhoods so developers could then make profits rebuilding.
Stein has a brilliant analysis of the Real Estate state uses gentrification to make huge profits in the cities. Until the 1980s manufacturing capital had previously wanted affordable housing in cities and often rent control so its workers could live nearby in urban housing. After manufacturing left the city such as New York by the mid-1970s, New York almost went bankrupt while Detroit did go bankrupt. Then banks, real estate, and municipal unions “disciplined the city through a process of privatization and disinvestment ….” including a “planned shrinkage” shutting fire house and public hospitals. In N.Y. from the 1950s-1990s the city “lost 750,000 manufacturing jobs.”
In the 1980s neoliberal city planners cited “low taxes and limited regulation as reasons for investors to choose their towns.” Cities lowered or abandoned rent controls, giving huge tax breaks and zoning changes to developers. City planners changed zoning to help developers gentrify. Stein’s fine analysis shows how cities tried do everything to help developers build to raise property values, and city planners asked only to “make land more expensive and to do nothing that would challenge its status as a commodity rather than a commons.” Stein calls the real estate state “a government by the developers, for the developers.”
The author tells how being a champion of industry or industrial unions no longer helped politicians win city elections, so politicians turned to real estate for money to finance elections. So-called urban “revitalization” through expensive buildings has both a politics and an economics. The state and its city planners welcome the Developers with tax breaks, giveaways, and zone changes so the “investors, developers and landlords” will buy land, evict renters, and develop expensive housing. The developers in turn give money to finance politicians’ elections.
Stein also gives an excellent chapter on the Trump family, and he analyzes Trump as the developer president of the Real Estate state. Trump’s grandfather Friedrich made money off colonialist planners when he followed the railroads west to Seattle where he bought and sold brothels. Trump’s dad Fred made his fortune by using federal loans like Federal Housing Act (FHA) to build many segregated housing projects from the 1930s through the 1960s.
Donald Trump in the 1970s quickly learned that national and local governments were ending direct subsidies of affordable housing such as the FHA loans, so he chose to get rich off neoliberal governments’ new offers of tax breaks and giveaways. Starting out, Donald got huge breaks on property taxes, changes in zoning, and giveaways in buying the Commodore Hotel in mid-town Manhattan as well as his building N.Y.’s Trump Towers and also Trump Plaza. By the early 1990s Trump had made huge profits but he also had big debt.
After the 1990s recession, Donald changed from builder to international brander, putting the Trump name on other builder’s developments in over 20 countries. In 2006 Trump also started selling predatory home mortgages. President Donald choose Ben Carson, who had attacked fair housing laws, for the job of head of HUD, “giving license for racist landlords to discriminate more openly,” and Trump’s HUD budget proposed a 15% cut that would “increase rents and deny repairs for public and subsidized housing …. “ Trump chose for Treasury Secretary Steven Mnuchin, who had worked for Goldman Sacks developing their mortgage program that “helped rob millions of their homes and savings.” Stein argues that Trump’s policies and appointments as Real Estate President “enrich the entire class of transnational real estate capitalists and advance the project of real estate rule.”
Stein does a fine comparison of two N.Y. mayors—1st Bloomberg and then de Blasio—that is very helpful for activists in other cities. Bloomberg, mayor from 2002-2013, supported only luxury housing apartments and expensive housing complexes. Bloomberg’s administration rezoned much of the city: poor neighborhoods were upzoned with new expensive housing gentrifying them while rich neighborhoods were downzoned to provide “livability”: no construction cranes building new housing.
De Blasio got elected criticizing Bloomberg’s emphasis on endless new luxury housing, but his approach was actually quite similar to Bloomberg’s. The new mayor promised more upzonings also known as ‘mandatory inclusionary housing’ or MIH that supposedly would provide market rate housing including a small percentage of affordable house. But De Blasio’s MIH built new expensive housing with a small number of affordable apartments in poor neighborhoods while tearing down many rent-controlled apartments. The result was “a net loss of low-cost apartments” and more gentrification. De Blasio also gave away much public land to big private developers.
Oddly enough right after Trump was elected, Los Angeles has huge debate over Measure S that would institute a two-year moratorium on changes in the zoning code and that would have restricted development. Trump was very unpopular in L .A, and both sides leading up to the March, 2017, Measure S election called their opponent “Trumpian” and both sides said the other would restrict affordable housing. The city’s Mayor Garcetti, its business establishment including Big Real Estate and its political establishment as well as some homeless advocates and progressive groups were opposed to Measure S and defeated it. Only two years later after Mayor Garcetti’s Measure HH had spent over $400 million dollars with not one apartment for the homeless built and two epidemics among the homeless who by 2019 numbered 59,000 in Los Angeles County that Angelenos finally let out a howl of criticism of Garcetti.
Activists could learn much from Stein’s study of two New York mayors. An easy solution is just to get rid of the old mayor in other cities like Los Angeles’s Garcetti who supports gentrification. A petition to recall Garcetti has just been filed with L.A. City Hall. But L.A.s new mayor could be a de Blasio-like mayor who doesn’t talk gentrification but never delivers on the alternative. The harder course is to both change the mayor and eliminate real estate’s dominating city politics.
In the last chapter Stein argues that the real estate state “was formed by historical forces and can be unmade by political movements.” His message of hope is when people organize in buildings, neighborhoods, and cities, they can change urban plans, influence planners to change, and recreate urban space. But he gives only a few examples of tenants’ movements successes: tenants in NY’s Cooper Square district fought for 50 years until they finally got the city’s first community land trust in which residents own the land. If he had included a much longer history of tenant activism such as New York’s early 20th century huge tenants’ strikes or 1930s eviction battles to stop evictions, his argument would be much stronger.
Stein also suggests his activists can work to “freeze out luxury developers and promote public or non-commoditized housing alternatives,” but he only has a few good suggestions such which wouldn’t solve the problem for L.A. or N.Y. Stein advocates for the first time in New York’s putting affordable housing in rich neighborhoods and also to establish preservation districts not just for the rich but for public housing as well as 40,000 co-op apartments that unions built in the mid-20th century protecting them both from predatory destruction. He has an excellent idea that city should keep its public lands public, never selling or giving away its land to developers, but these few suggestions will not get us to the needed affordable housing.
The author also advocates for city, state, and federal governments to start repairing existing public housing and starting new public housing projects, but that needs massive federal dollars for more housing projects. Trump wouldn’t provide those dollars. Stein believes in a democratic government would make decisions, and not decisions by just the rich or Real Estate Moguls. He reminds us that in NY 68% of the population are tenants, so a tenants’ movement can “an unbeatable bloc.” But Stein needs to formulate more how the tenants’ majority can affect local, state, and national politics. His goals need a massive national movement as well as strong state and city reform movements. He neglects to deal with how national, state, and city housing movements could be built.
Descriptions of housing movements in other parts of the globe would help Stein’s book. Barcelona, Spain, elected an anti-gentrification mayor Colau, head of a housing rights group El Comu opposing gentrification, tenant eviction, city services privatization, and inequality of neighborhoods. Colau and El Comu have connected with housing activists in 50 cities in 18 countries. Two years ago, El Comu had an international housing conference with 700 people.
Besides Spain, how did Hong Kong and Singapore build over a million public housing apartments? And how did Finland become the only EU country with declining number of homeless from 20,000 in the 1990s to about 1500 in 2016? Finland is unusual in that the nation state politicians and the Helsinki government worked together with the help of non-government organizations in a program called Housing First in 10 Finnish cities to buy apartments, build blocks of new apartments, and converted old shelters into permanent, comfortable homes for the homeless. The Helsinki government owns 60,000 apartments as well as 70% of land within city limits, and one in seven residents live in city-owned housing. A more global and also historical approach how to radically change housing would present myriad alternatives to U.S.’s presently gentrified cities with their millions of homeless.
(Julia Stein is a poet, novelist, literary critic and CityWatch contributor, now living in Los Angeles. She has published five books of poetry: Under the Ladder to Heaven, Desert Soldiers, Shulamith, and Walker Woman, and What Were They Like? Stein is also co-author of the book "Shooting Women: Behind the Camera.)
-cw
