Tuesday, 29 September 2015

Why we're so agitated about 'gentrification' (and how London needs a 'Green Belt' review)


As one of the self-important semi-rioters attacking the Cereal Killer cafe put it:

While I understand people’s annoyance at property damage please put it into the context of the violence of poverty, hunger and homelessness many thousands of Londoners are being subjected to. The cereal cafe was back open on Sunday morning while the destruction caused by gentrification continues - as will the fight back.

A veritable avalanche of concerned articles now tumble into the UK press - following in the footsteps of the same words about different places: Berlin, Sydney, Seattle and San Francisco. For some the criticism centres on the wealth of new arrivals or else on the mundane daily lives of those new residents - on the Google Bus.

But always and everywhere the thing that drives the attack on 'gentrification' is the cost of living in these cities and, in particular, the cost of housing. Even when people try to make it out to be more complicated by saying its "a complex, layered suite of intersecting measures" they end up talking about housing:

Given crippling student debt, rental costs that even those on “average salaries” can’t afford and the hyper-gentrification of previously affordable urban areas, even middle-class people have a right to be angry at an urban capitalism that is pricing them (and their children) out of the city.

So, given that it's housing that's the problem, perhaps we should ask why this is the case. Not my coming up with instant fixes like rent caps or rationing but by looking at the underlying reasons, which boils down to supply and demand. And especially supply:

By rationing land, urban containment policy drives up the price of housing and has been associated with an unprecedented loss of housing affordability in a number of metropolitan areas in the United States and elsewhere. Urban containment policy has also been associated with greater housing market volatility. This is a particular concern given the role of the 2000s US housing bubble and bust in precipitating the Great Financial Crisis that resulted in a reduction of international economic output.

And this exactly describes the situation in London. Elsewhere in England this doesn't apply - population densities for the London boroughs are, almost without exception, higher than anywhere else (even a place like Portsmouth that's constrained by its geography). For inner London these densities are three times greater than in Manchester or Bristol. There is little reason to change or review 'Green Belts' around Birmingham, Manchester and Leeds - other than the understandable preference for people to live in or near those 'Green Belts' - but for London, ending the policy of urban containment and densification is absolutely essential if problems with affordability and price volatility are to be avoided. Moreover, because London is so critical to the UK economy these decisions should not be left merely to the Mayor of London (or a collection of borough and district council leaders).

The consequence of failing to do something to address this problem isn't just more unpleasant rioters but a threat to the golden goose that is London's economy. Without a workforce able to access your jobs, the businesses will look elsewhere. We might hope this is Leeds, Manchester or Cardiff but it's just as likely to be Brussels, Frankfurt or Milan. Maybe even Cape Town, Djakarta or Lagos.


1 comment:

George Carty said...

I'm surprised that UKIP hasn't declared war on Green Belts, as they're not beholden to rentier interests (like the Tories) nor to environmentalist nostrums (like Labour or the Lib Dems).