The transformation of the city into a pricey commodity for sale is one of the most profitable ventures in the current phase of capitalism. This is why private players and local governments are eager to invest monumental resources in the production and promotion of this ever more sophisticated, ever more seductive money-making machine: the city. And the urban space created by capital is a very seductive space indeed—provided you have the money.
Yes, because the driving motor of the process of urbanization is the quest for profit. And despite what we may have heard in the campaign speeches of this or that elected official, one of their fundamental duties once in office will be to create the conditions where urban land can be turned into profit. This is the key to a deeper understanding of the functioning of our cities. This explains why, despite their political color or campaign promises, elected officials in successful global cities from London to New York, from San Francisco to Beijing, routinely adopt strikingly similar, ubiquitous policies, whose bottom line, apart from a few tweaks here and there, is always one and the same: the redevelopment of underperforming property markets (i.e., low-income or ex-manufacturing districts) into high- revenue urban land that can accommodate the most profitable uses (swanky residential enclaves, high-end retail rows) and attract the most profitable consumers (international companies and their employees, wealthy newcomers, tourists, and the global super-rich).
From Beijing’s hutong settlements to London’s industrial waterfronts, from Berlin’s Soviet-era Plattenbauten to Chicago’s public housing projects, demolition and reconstruction are the order of the day. The result of this incessant process of creative destruction is not only a spectacular, ever-changing city that relentlessly morph before our very eyes, but also the obliteration of what stood in the way of profit, and with it, the disruption of existing built legacies, social ties, and cultural identities.
In New York City, we know all too well how this works on the ground: low- income neighborhoods and former industrial districts are relentlessly being revamped into upscale residential enclaves with amenable parks and high-end retail, driving up the overall cost of land and pushing low- and middle- income longtime residents and small local businesses out of their communities. New York has seen this trend during the last decade under the administrations of Michael Bloomberg and Bill de Blasio, courtesy of an unprecedented wave of rezonings across the five boroughs. Often, the standards of affordability of new housing developments in rezoned areas have attracted middle- and upper-middle-income transplants escaping from the rising costs in more expensive neighborhoods, while still remaining out of the reach of locals. From 125th Street in Harlem to the Williamsburg waterfront, from Long Island City to Bedford-Stuyvesant, New York’s city producers have hammered away to enhance housing, amenities, and retail options to make them into fashionable, revamped destinations for wealthier residents.
New York’s city producers have hammered away to enhance housing, amenities, and retail options to make them into fashionable, revamped destinations for wealthier residents.
The result of these relentless transformations is a city whose space, for those at the lower end of the social and economic ladder, is getting tighter and tighter.
In New York, this trend has been magnified by the city’s position as one of the major global financial capitals, where immense wealth in the upper crust of the corporate and financial industries collides with growing poverty in the lower sectors of the economy. There’s a brand-new elite of super-wealthy individuals who demand the highest standards of living in the city’s most exclusive properties, and hordes of foreign buyers looking for safe deposit boxes in an ever-booming NYC luxury condo market. Their ability to outbid any other buyer when it comes to real estate, as well as their demands for outrageously priced housing, services, and amenities, which are met by developers eager to extract all the profit they can from this luxury craze, is one of the crucial engines of the massive gentrification waves that today have made Manhattan, and even large swaths of Brooklyn and Queens, an off-limits territory even to upper- middle-class New Yorkers.
But this process is global. Take London, for instance. In the city where a 188-square-foot apartment (not much larger than a prison cell) can sell for £275,000, a car box in Highgate for £250,000, and a Knightsbridge apartment for £65 million, real estate insanity has become the norm. Not to mention Paris. In the City of Love, where rich Middle Eastern and Chinese buyers are now ousting the French from the housing market, even the upper middle classes are being priced out. And don’t get me started on San Francisco. The City by the Bay is the new US capital of insane housing prices, and home to the highest concentration of the global super-rich (those making over $30 million) of any city in the US. Here, venture capitalists, Silicon Valley entrepreneurs, and tech-sector employees have been buying up the most desirable areas in a bidding frenzy for years, creating a housing market where most new construction consists of super-upscale condos, and where the median home price today is above $1.2 million. And if San Francisco prices are crazy, then prices in cities like Tokyo or Melbourne have long been in the asylum. And the list could go on.
For ordinary people, keeping afloat in big cities around the world has become a serious challenge, and for those at the lower end of the economic ladder, survival in these cities is a daily struggle. These are the small business-owners, the minimum-wage clerks, the runners and the janitors— those working in the so-called service economy that makes the other half of the city function. But even those able to make a middle-class income— salespeople, nurses, managers, executive assistants, graphic designers, copywriters, and other professionals— are being priced out. From London to San Francisco, from Paris to Milan, from Singapore to Dublin, finding a decent rental has become a pipe dream for most—not to mention buying a home. This is what urban life is becoming for many of us, in a world where big cities are slowly becoming citadels of overpriced properties where the very rich love to park their cash, leaving very little space at hand for anyone else.
And this is not some unexplainable god-given plague, but a man-made disaster—the result of very concrete urban policies that for years have been favoring the influx of a new, extra-national, super-wealthy class of citizens, for which governments and developers have devised brand-new glittering enclaves that are pushing the lower-, middle-, and even upper-middle-income classes out.
The end game of this era of rampant creative destruction is a segregated, dysfunctional city that bears very little resemblance to the cities of opportunities to which our fathers and grandfathers migrated. Is the elite city to become the final destination of booming cities around the world? And are our neighborhoods destined to be trampled by multimillion-dollar safe-deposit boxes in the sky for the wealthiest global players?
Featured Image: New York City by Jeff Turner. CC by 2.0 via Flickr.