The Class Battle Over Land

“Capital City – Gentrification and the Real Estate State,” by Samuel Stein, 2019

This book discusses the role city government, city planners, finance companies and the real estate industry have on increasing gentrification.  Stein lives in New York, so most of the book is focused on how New York gentrified – by running industries out of town, by giving huge tax breaks and rezoning to developers and landlords, by changing laws and by lying to the public. In New York this has been done by both Bloomberg and de Blasio, though with different tactics.  Stein has a chapter on the role of the Trump family, as Donald Trump is not only a sleazy real estate capitalist but president.  Stein seems to have a thin understanding of single family homes in smaller cities and so focuses on tenants and landlords.  He does include a section on certain reforms that can slow gentrification.

Stein is a city planner by training.  He points out that U.S. real estate has become a major repository for wealth, as 60% of world assets are in real estate.  As a capitalist economy fails to profit from production, it moves assets into either market speculation (finance capital) or the rentier economy (real estate capital).  In this it is closely aided by the state.  These are mainly politicians who sit on city councils, mostly Democrats at this point. This is what he identifies as the ‘real estate state.’ 

I’m going to bullet-point this one, as the book is loaded with facts that fighters against gentrification can use:

1.     “Affordability” is never defined at a level that is actually affordable for many.  Mixed-class developments allow many more higher-end units to be built while being billed otherwise.

2.                ‘Density’ as practiced has not cured affordability and sometimes not even increased density!  Like building an extra lane on the freeway, it just increases traffic on that road, including big trucks. 

3.                Cities and residents lose large amounts of money in tax giveaways for ‘development.’  This is corporate welfare or in his term, ‘geobribery.’

4.                Mega-projects always displace working-class and darker-skinned residents.  As do large density projects.

5.                Hedge fund Blackstone is now the world’s largest homeowner.

6.                Industrial zones depress land prices, which is why city governments try to remove them.  With them go jobs and gentrification can proceed.

7.                “Market economies require planning.”

8.                “One of the tasks of urban planning … is to make capitalist development appear to be in the rational best interests of workers and bosses alike.”

9.                ‘Participatory planning' by neighborhoods is used as a charade and is never decisive.  The City Council can ignore it. Essentially the process is “open but rigged.”

10.           “Real estate went from being a secondary to a primary source of capital accumulation.”

11.           “Art and cultural production” … are ways “to bring people with money into their cities.”  (The ‘creative class’ then gets removed as prices go up.)

12.           Stein supports the ‘right to stay’ – similar to what David Harvey called “the right to the city.”

Stein discusses the ‘rent gap,’ the ‘value gap’ and the ‘functional gap’ which allow for gentrification economics in a market context.  He explains the uses of upzoning, downzoning and rezoning.  He describes value recapture from private projects, which are the window-dressing used to justify privatization.  And several other wonky terms.  This level of detail is useful for anyone attending a city hearing on a project or debating a real estate lackey.

We'll Squeeze You In Somewhere...

Stein’s immediate answers to gentrification all operate within the capitalist system, but are transitional demands.  He does not use the phrase ‘housing is a right’ but I’m sure he’d agree.  He doesn't deal with the immediate issue of homelessness.  Why cities in a capitalist economy are so large is not addressed.  Ultimately Stein wants to socialize the land.  This he sees as the end product of a mass anti-capitalist movement that repoliticizes land and rent as social issues, not natural events.

His immediate solutions?  1.  Make inclusionary zoning apply to richer neighborhoods too.  2.  Institute rent control.  3.  Stop privatization with ‘community land trusts,’ a real estate form of a co-operative.  4.  Cities should stop selling empty properties to landlords for a pittance, and instead include them in public housing.  5.  Build more public housing.  6.  Stop using property taxes to fund so many things.  7.  Pass laws or taxes against empty apartments owned or run by AirBnB landlords, empty 2nd homes, the overseas wealthy and speculators.  8.  Bring industry back to the city.  9.  Raise wages to pay the rent. 

P.S. – An excellent editorial by Ginger Jentzen against the Minneapolis 2040 Comprehensive Plan, which rezones the whole city to allow building 3 story apartment buildings everywhere.  This plan is being looked at nationwide.

http://www.citypages.com/news/minneapolis-housing-plan-rewards-developers-punishes-working-people/479556123

P.P.S - Trump's HUD has just endorsed a plan to fight for 'affordable housing' by getting rid of barriers to construction. So Minneapolis Mayor Jacob Frey has a new ally.   

Other reviews on this issue:  “How to Kill a City,” “Cade’s Rebellion,” “Tales of Two Cities,” “Rebel Cities,” “Nomadland,” “Notes on Local Politics in Our Town.”

And I bought it at May Day Books!

Red Frog, June 28, 2019