Inequality in the Gentrifying European City
Introduction:
Socio-economic and class inequalities are on the rise in a host of contexts, underpinned by a restructuring of the global economy, labour markets, finance, and the welfare state. The Fordist welfare state that provided extensive social safety nets has been subject to a gradual dismantling and, instead, contemporary welfare states have been reoriented towards facilitating private accumulation and enabling market forces. Although socio-economic inequalities are in essence a-spatial, they are typically also expressed in urban space. Most major European cities of the twenty-first century are marked by aggravating levels of socio-economic segregation. Affluent residents increasingly seem to be flocking together into areas of privilege, while lower class residents are ever more likely to concentrate in low status areas. Indicators of segregation say little, however, about the different dimensions of social-spatial inequalities and the underlying dynamics that forge them.
Gentrifying:
Gentrifying, the transformation of urban space for more affluent users, is frequently attributed a key role in neighborhood change. However, gentrification may also be an important force of urban change that reshapes the social geography of cities as a whole. Most gentrification studies focus – insufficiently – on the consequences of gentrification for urban-regional inequalities, for instance by only considering the gentrifying neighbourhoods themselves and ignoring their spatial flipside, or by only taking into account certain types of gentrification. This is a crucial lacuna given the ever growing footprint of gentrification. The main aim of this dissertation is therefore to understand the impact of gentrification on social-spatial inequalities at the urban-regional level to its full extent.
New population dynamics:
To understand the expansion of gentrification processes, it is important to consider contemporary demographic trends. An important point of reference is Ley’s (1996) work on the rise of a new middle class, which took place during the post-war period marked by the transition to a post-industrial society and economy. Economic growth and restructuring fuelled a rapid expansion of the middle classes. While middle class suburbanization burgeoned at that time, a counter-process was also on the rise. Expanding university enrolment among the baby boom generation prompted specific middle class fractions of this generation to develop a more urban residential orientation. Furthermore, the growth of middle class professions in services, finance, and consumption also found their concentration in major cities.
Capital and housing wealth:
Although state support for gentrification continues to be central in contemporary gentrification processes, it is suggested that global capital flows, financial markets, and available mortgage credit are also of growing importance. The combined and intensive push by both state and capital is captured by fourth wave gentrification, as formulated by Lees, Slater, and Wyly (2008). Capital reinvestment in real estate and land markets, both by institutional investors and private households, has always been at the very heart of gentrification. However, due to housing restructuring and new finance systems, speculation on housing – and on gentrification – has seen a huge boost.
Housing:
Differences between the two cities clearly crystallize when looking at housing market dynamics. Amsterdam’s housing market is considerably tighter, as is reflected, for example, in average sale prices for owner-occupied housing. These are substantially above the national average in Amsterdam, whereas they are structurally below the national average in Rotterdam. In the years leading up to the 2008 global financial crisis, the formation of a housing bubble can clearly be seen in Amsterdam, while price increases remained more modest elsewhere.
Conclusion:
This chapter has extended original conceptualisations of gentrification processes to include multiple causes of neighbourhood upgrading. Our analyses show that modes of gentrification vary between neighbourhoods in both cities, and that causation is contingent on both neighbourhood and urban context. These findings inform ongoing and interrelated theoretical debates about gentrification, most notably about the question whether dwindling numbers of lower-income or working-class residents in gentrifying neighbourhoods are the result of gentrification-induced displacement, or the result of broader, gradual replacement processes.
Furthermore, a second key debate addressed in this chapter concerns the need to focus on either the demographic shifts involved in gentrification, or to focus on underlying class dimensions and differences instead. In these core debates, the implication is that gentrification, at least when it occurs within a single urban context, can be decisively explained through a single theoretical model of change.
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