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The word gentrification was coined by British sociologist Ruth Glass in 1964. In her book London: Aspects of Change, Glass described the upheaval of certain neighborhoods in London by the middle-class “gentry” from the countryside.

“ One by one, many of the working class quarters have been invaded by the middle class—upper and lower,” Glass wrote. “Once this process of ‘gentrification’ starts in a district it goes on rapidly until all or most of the working class occupiers are displaced and the whole social character of the district is changed.” Even then, gentrification meant remaking a neighborhood for new incomers and to the detriment of current residents.

The first mention of gentrification stateside seems to have occurred four years later, in 1969, when a white Brooklyn man named Everett Ortner founded the Brownstone Revival Committee, a nonprofit committed to the “brownstone lifestyle.” Ortner began publishing The Brownstoner, a magazine dedicated to convincing other middle- and upper-class white people to move to Brooklyn. One article in the magazine proclaimed, “ Gentrification is not ‘genocide’ but ‘genesis.’ ” Gentrification supporters such as Ortner were intent on persuading the gentry that gentrification was an organic movement made up of people who wanted to improve neighborhoods—in other words, he and others wanted to shift the focus from larger forces to individual decisions. Ortner wrote in The Brownstoner, “ I think one should approach the acquisition of a brownstone, the way one goes into a love affair: To the non-lover it is merely a row house. To the brownstone connoisseur, it is part of an architecturally homogeneous cityscape, scaled perfectly for its function, housing many but offering each person space and privacy and a civilized style of living.”

well as by the Brooklyn Union Gas company, and its purpose seemed to be less to help revitalize neighborhoods and more to revitalize the profits of Brooklyn real estate firms and the local gas company. The largely vacant neighborhoods were not good for gas sales, and gentrifiers would uplift the neighborhood’s economies and the bottom line of Brooklyn Union Gas. The gas company went as far as to renovate its own four-story brownstone in Park Slope and advertised in a local paper, “ The gas-lit outside appeal of the new homes is complemented by the comfort features inside: year round gas air conditioning and plenty of living space that spills over into free form backyard patios dotted with evergreen shrubbery and gas-fired barbeques.”

Ortner and his fellow members of the Brownstone Revival Committee, like similar groups in cities across the country, were instrumental in crafting the narrative of good-hearted pioneers the media still cling to today. Yet Ortner’s story proves that gentrification was never really about individual pioneers, but rather about a confluence of policies pushed by wealthy individuals, politicians, and the companies that stood to benefit from a gentrified neighborhood. Today gentrification has become an even more pronounced top-down process.

In 1979, MIT urban studies professor Phillip Clay outlined four distinct phases of gentrification, which remain remarkably applicable today. According to Clay, the first phase begins when individuals, unsupported by any government or large institution, decide to begin moving into a previously poor neighborhood and renovating houses. National media pay little attention, and any increase in the concentration of gentrifiers comes largely from word of mouth. There’s some evidence that historically this phase of gentrification was often spearheaded by gays and lesbians in search of safe spaces outside homogenized suburbia where they could congregate. San Francisco experienced an influx of gays during World War II, thanks in part to the military’s practice of dishonorably discharging gay men into the city via military bases on the Pacific Ocean. While there are no hard numbers, there is evidence that the white LGBT community , especially lesbians, also played a pioneering role in Brooklyn in the 1970s. New Orleans’s largely white queer scene today also seems one step ahead of other gentrifying places. (Detroit is an outlier here, as there’s not much of a queer scene.)

The second phase, according to Clay, is when those attracted to the neighborhood because of the change that’s already begun start buying up real estate. Some in this second wave are hoping to take part in the neighborhood’s new cultural cachet. Others are small-scale speculators, hoping they can get a house on the cheap and sell it sometime later. This is the phase when media start paying attention, and when the New York Times might write an article about whether said neighborhood is the next hot new thing, or even the next Williamsburg. Vacancies go down, and displacement begins.

I would argue that these first two phases are still happening in some cities—Detroit; Cleveland; Lexington,

2 How Gentrification Works

But even then, in the early days of gentrification, the process had just as much to do with a specific set of policies and corporations that benefited from them as it did with love. The first Back to the City Conference, established by Ortner in 1974, was sponsored by a real estate industry group called the Development Council of New York City as well as by the Brooklyn Union Gas company, and its purpose seemed to be less to help revitalize neighborhoods and more to revitalize the profits of Brooklyn real estate firms and the local gas company. The largely vacant neighborhoods were not good for gas sales, and gentrifiers would uplift the neighborhood’s economies and the bottom line of Brooklyn Union Gas. The gas company went as far as to renovate its own four-story brownstone in Park Slope and advertised in a local paper, “ The gas-lit outside appeal of the new homes is complemented by the comfort features inside: year round gas air conditioning and plenty of living space that spills over into free form backyard patios dotted with evergreen shrubbery and gas-fired barbeques.”

I would argue that these first two phases are still happening in some cities—Detroit; Cleveland; Lexington, Kentucky; and others—where young people are flocking, where new restaurants are opening, and where intrepid reporters are sent to cover the surprising revitalization of once downtrodden cities. But these phases are also historical anachronisms at this point. Gentrification in places such as Detroit and Cleveland, while appearing as organic as the flocking of gay men to San Francisco, is today most often sponsored by the state and other powerful institutions.

Clark’s third phase is essentially what New Orleans is experiencing right now, as middle-class gentrifiers start taking on more prominent roles in gentrifying neighborhoods—sitting on committees and community boards, promoting neighborhoods to outsiders as a place where the middle class can move and maintain a high quality of life. During this phase, Clark says, you can expect banks to begin lending more frequently in previously disinvested neighborhoods. Developers (as opposed to individuals) become the preeminent renovators and builders. Police and other security forces increase to ensure that the new gentrified class feels safe. Tensions between the “old” and the “new” rise.

Stage four is when a neighborhood is already gentrified and begins to become even more wealthy. Managerial-class professionals replace the artists and punks. Properties that were held vacant by developers are turned into high-cost condos. Displacement is rampant. And gentrification begins spilling over into other, less gentrified neighborhoods.

In 1979, these phases provided a near-complete and prescient description of the process. But several researchers have suggested that today we need to add a fifth phase to that list, in order to grapple with what’s happened to places such as New York and San Francisco. Gentrification in these globalized cities is no longer about individuals, and it’s not even about local developers chasing cash in cool neighborhoods. In the words of geographer Neil Smith, it’s about “ the reach of global capital down to the local neighborhood scale.”

Today, many development deals are initiated by foreign investors, and many neighborhoods are affordable only to the global elite. Buildings spring up that are meant less to house people and more to house the wealth of millionaires and billionaires. In a stretch of Midtown Manhattan, which has recently become filled with sky-high multimillion-dollar condo buildings, a New York Times investigation found that 50 percent of apartments are vacant for the majority of each year. In other words, the fifth and last phase of gentrification is when neighborhoods aren’t just more friendly to capital than to people but cease being places to live a normal life, with work and home and school and community spaces, and become luxury commodities.

These phases provide a good outline of how gentrification works, and they also rightly suggest that the process is predictable—that the pioneers and the coffee shops will likely be followed by the professionals and the condos, no matter where you are. But gentrification is also messier than that. Sometimes the phases happen simultaneously, or out of order. Detroit’s gentrification, for example, seems to be largely driven by professionals, not individual “pioneers.” But regardless of what order they come in, the phases all push in the same direction: gentrification heightens the worth of neighborhoods and cities until they become uninhabitable for average people.

Clay’s stages of gentrification are useful to understand how the process happens, but they don’t answer the fundamental question of why. Why do neighborhoods and entire cities all of a sudden become hot for reinvestment? There’s a critical preparatory phase missing from the analysis, a phase zero. Cities’ real estate and zoning policies are determined by local, state, and federal governments. And so for phases one through five to happen, governments have to be willing to allow for it.

There’s still debate in academic circles about what forces convince lawmakers to welcome or encourage gentrification. Some view gentrification as a production-driven process: real estate developers who see profit potential in inner cities are luring in the young and moneyed, displacing those who aren’t as profitable. Others argue gentrification is a consumption-driven process that is more about a million Everett Ortners converging on cities—that generations of white people raised in the suburbs have come to see the inner city as a space for personal liberation and economic possibility, and therefore create spaces within cities that conform to their needs. The negative effects of gentrification (displacement, cultural loss, etc.), in this view, are just unfortunate ancillary consequences of the compounded individual decisions of millions of former suburbanites who believe they’d be better off in the city. To be sure, consumption explanations have some merit: inner-cities are attractive cultural spaces. I know several dozen young white people who were raised in the suburbs and who believed the only place they could live a good life was in the city. They came to New York to be artists, activists, authors , and other types of creatives, and/or to liberate themselves from the familial expectations of the suburbs—to be single, gay, queer, or just different.

Others have posited that gentrification represents a more nefarious kind of individualistic expression: that of colonial power. In the same way that people of European descent colonized the Americas, some argue, gentrifiers see the inner city as a place lacking control and in need of white “civilizing” force. “ As part of the experience of postwar suburbanization , the U.S. city came to be seen as an ‘urban wilderness,’” Neil Smith wrote in his landmark 1996 book on gentrification, The New Urban Frontier. “In the language of gentrification, the appeal to frontier imagery has been exact: urban pioneers, urban homesteaders and urban cowboys became the new folk heroes of the urban frontier.”

It’s hard to argue that gentrifiers don’t often harbor this troubling colonialist mind-set. I’ve heard countless times about people who think the only way to make a neighborhood better or safer is for them to move into it. And the language developers and gentrifiers use is often dripping with imperialist subtext. When a new apartment building opened on the west side of Times Square in 1983 (back then a non-gentrified area), its owners advertised in the New York Times with a full-page spread that celebrated the “ taming of the wild, wild West ” where “the trailblazers have done their work.”

2 How Gentrification Works

Often stores in gentrifying areas will hint at these semi-subconscious colonialist sympathies. In Brooklyn, there’s Empire Mayonnaise and Outpost Café (outpost of what?), both of which are glaringly white businesses in predominantly black neighborhoods. In 2014, a building opened in Bushwick, a predominantly Hispanic section of Brooklyn, called Colony 1209. Its sales materials sound like gentrification-themed self-parody: “ Here you’ll find a group of like-minded settlers , mixing the customs of their original homeland with those of one of NYC’s most historic neighborhoods to create art, community, and a new lifestyle. Let’s Homestead, Bushwick-style.” It’s worth noting that the building received a fifteen-year tax abatement from the city worth $8 million.

But these cultural explanations don’t go far enough toward explaining the why of gentrification, the phase zero. Yes, it’s important that young white people with money find inner-city spaces attractive, but at the end of the day gentrification isn’t about culture, it’s about money. Gentrifiers may be seeking art, emancipation from suburban norms, and a sense of discovery, but the entire process would grind to a halt if it weren’t profitable. Developers don’t build condos to lose money or support the arts. They don’t pressure cities to rezone entire neighborhoods because they believe in inner-city liberation. So to answer the question of why gentrification happens, we have to answer the question of how the city became profitable to gentrify.

Cities do not gentrify unless the process is profitable for real estate developers. Yes, hipsters and yuppies can move into a neighborhood and inflate local real estate values, but it is developers’ profit motive that causes massive, citywide change.

The city wasn’t always profitable. Up until the 1960s, developers could make much more money in the suburbs—buying land cheaply, constructing single-family houses, and taking advantage of a burgeoning mortgage industry to sell to the (mostly white) middle and upper classes. But at a certain point, profit potential in many suburbs was more or less maxed out. If you look at the inner-ring suburbs of New York, you can see why: by the 1960s, in places near commuter trains or within a reasonable driving distance of the city, nearly all of the land was developed and housing prices were high, making it hard for developers to buy on the cheap and sell at a markup. Sure, they could buy land even farther from the city and attempt to develop it, but commuters are only willing to travel so far, and New York’s suburban commute times were already pushing the hour mark. The city, on the other hand, was a bargain, thanks to white flight and deindustrialization.

In 1979, geographer Neil Smith came up with what has become possibly the most influential academic theory on gentrification: the rent gap. Smith posited that the more disinvested a space becomes, the more profitable it is to gentrify. The idea behind his theory is a basic tenet of free-market economics: capital will go where the rate of potential return (i.e., the potential to make profit) is greatest. Smith realized that gentrification wasn’t happening at random. It was predictable. If you wanted to find the neighborhood that would gentrify next, all you had to do was figure out where the biggest potential for profit was in a city—the place where buildings could be bought cheap and made more expensive in a short period of time.

By looking at tax data, Smith could pinpoint blocks that seemed to be gentrifiable, which usually meant buildings

were in disrepair (so they could be bought cheap) and were close to other gentrified areas (so it wouldn’t be too much of a stretch for gentrifiers to move in). The rent gap was the disparity between how much a property was worth in its current state and how much it would be worth gentrified. The larger the gap in a neighborhood, the higher the chance it would gentrify.

Gentrification might seem rapid when you’re in a neighborhood experiencing it firsthand, but it’s really a long game: real estate developers (at least the smart ones) know they can benefit from the vast, decades-long shifts that happen in metropolises. As Smith points out, developers reap profit by charging the highest rents they can to poor people and skimping on repairs, milking buildings for all they’re worth, and then they benefit from kicking out those residents, making repairs, and charging much more money to new residents.

“ Having produced a scarcity of capital in the name of profit they now flood the neighborhood for the same purpose, portraying themselves all along as civic-minded heroes, pioneers taking a risk where no one else would venture, builders of a new city for the worthy populace,” Smith writes.

This milk-and-revitalize strategy can sound conspiratorial, and the reality often bears out that interpretation. New York’s real estate and banking barons bought up cheap land in the outer boroughs before they lobbied for the deindustrialization of Manhattan, so they could profit both off the city’s new condos and the industry and poor people forced into Brooklyn and Queens. But it doesn’t have to be the result of clever plotting. Creating markets where profit potential is highest—that is, purchasing declining and underfunded buildings, and then quickly renovating and flipping them—is just sound economics. A rental market where the poor are adequately provided for, where there is enough space in a neighborhood to accommodate everyone, costs building owners more and is less profitable.

This constant search for the highest profit potential—what Smith calls a locational seesaw—is what created the suburbs, and it’s what created the gentrified cities of today’s United States. In the 1930s, most Americans were stably housed in either cities or rural areas, but the entire country was in an economic depression. By funding the construction of roads outside cities and by subsidizing and underwriting mortgages for suburban homes, the federal government created the suburban housing industry in a matter of years, and promoted billions of dollars in economic growth for developers. Later, once the suburbs were built out, developers had to search for new ways to revitalize their profit rate, and both gentrification and exurbanization were part of this search.

Using the rent gap theory, Smith was able to accurately predict the gentrification of many New York neighborhoods, including the Lower East Side, Harlem, and Park Slope. He looked at tax arrears data and found that gentrification happened right after buildings hit their highest level of tax debt—a sign landlords were milking their buildings by not doing repairs or paying their taxes in preparation for flipping them. The same sections of Park Slope that Everett Ortner was attempting to gentrify hit their highest levels of tax arrears in 1976. Sure enough, 1977 was the first year in which several buildings were converted from rentals to co-ops and condominiums. Between 1977 and 1984, there were 130 such conversions in Park Slope. The neighborhood’s rapid conversions accounted for 21 percent

of all such activity in the entire borough those years.

Does Smith’s theory mean every gentrifier is seeking a high return on profit? Of course not. And it doesn’t mean developers are even conscious of the dynamic they’re playing into. But regardless of individual intent, the basic tenet holds true: gentrification works on a mass scale only because most inner cities have been purposely depressed and therefore are now profitable to reinvest in. That led Smith to conclude that “ gentrification is a back-to-the-city movement all right, but a back-to-the-city movement by capital rather than people.”

Most cities in the US experienced slow bleeds of capital thanks to deindustrialization and white flight, which eventually made their inner cities ripe for gentrification. But New Orleans’s economic devalorization was instant, thanks to Katrina. The city’s real estate was already relatively inexpensive before the storm, but Katrina pushed values low enough that even hobby investors could afford to snatch up a few damaged properties. And the storm made the potential value of the place higher: before Katrina, many New Orleans neighborhoods were not exactly welcoming of (white) outsiders. Crime was high. Most neighborhoods were majority black. The storm changed that, allowing developers to envision entire neighborhoods as majority white or at least more mixed, more upscale, and therefore more profitable. With real estate prices low and the potential for remaking the city high, the rent gap was bigger than ever, and so it made economic sense to gentrify New Orleans.

Private profit only partially explains gentrification, though. Gentrification may not happen without the confluence of shifting cultural desires and newly focused real estate capital, but its pervasiveness—its existence not only in major cultural and economic capitals but also in rural towns and midsized postindustrial middle American cities—can be explained only by the active promotion of gentrification by a third party, a party large enough to influence policy: the government.

For the past half century, as the federal government has repeatedly slashed funds for everything from public housing to neighborhood development, anti-poverty programs to public transit, cities have been left to fend for themselves. And that’s pushed many into “entrepreneurial” and neoliberal forms of government—encouraging the growth of businesses and industries that in turn encourage the attraction of high-income and upper-middle-income families into cities. Through their taxes, those families help pay for the basic necessities of cities that used to be funded by the federal government. At the same time, cities have been forced into slashing the budgets of necessary but expensive parts of any good city: parks, transit, programs for the poor. In other words, cities are looking for the rich and the upper middle class to use their tax dollars and spending power to fund what used to be paid for by America’s semi-robust federal welfare state.

Detroit, New Orleans, and countless other cities are hoping the spending power of millennials who can afford to live consumption-oriented lifestyles will provide the tax dollars that everyone relies on. In richer cities with more infrastructure, such as San Francisco and New York, governments are relying on those millennials, along with big companies, millionaires, and billionaires, to provide the bulk of their tax revenue. In 1960, economist Friedrich

Hayek, one of the fathers of neoliberalism, laid out this gentrification strategy: “ Though the majority of residents may never contemplate a change of residence, there will usually be enough people, especially among the young and more enterprising, to make it necessary for the local authorities to provide as good services at as reasonable costs as their competitors.” Hayek, who also advocated for a near-zero-spending federal government, was saying cities needed to fight for the young and moneyed in order to survive.

Nearly sixty years later, you can see that strategy playing out in most American cities: in New Orleans’s all-out attempt to attract companies, especially the movie industry, to move into the city; in Detroit’s various incentives for young people to move to the city; in San Francisco’s policy of giving Twitter and other tech companies millions in tax breaks to stay in the city and build offices in its poorest neighborhoods; in New York’s policy of subsidizing housing for the richest with the idea that they’ll help fund the rest of the city.

“ They are the ones that pay a lot of the taxes ,” New York’s billionaire former mayor Michael Bloomberg said. “They’re the ones that spend a lot of money in the stores and restaurants and create a big chunk of our economy.… [I]f we could get every billionaire around the world to move here, it would be a godsend.”

Federal spending on cities has been declining for decades, but it was President Ronald Reagan, elected in 1980 with a mandate to slash budgets, who really sealed the fate of many urban centers. Reagan cut all nonmilitary spending by the US government by 9.7 percent in his first term, and in his second term cut the Department of Housing and Urban Development’s budget by an astonishing 40 percent, hobbling cities’ abilities to pay for public housing. The Department of Transportation also had its funding cut by about 10.5 percent during Reagan’s first term and 7.5 percent in his second. Those cuts forced cities to turn to alternative sources of funding, in particular bonds, to finance things such as public transit and road repair. But not just anyone can issue a bond—governments first had to prove they’d be able to pay that bond back. And there are only two entities that decide if a government or company is capable of paying back a bond: Standard & Poor’s and Moody’s, ratings agencies that until relatively recently mostly concerned themselves with rating companies’ investment-worthiness. But now, with cities looking to take out loans to fund their operations, the agencies rated cities in the same way. They’d downgrade the rating of any government with high spending (i.e., a basic social safety net) and not enough income (i.e., too many poor people). That’s exactly what happened to Detroit : its costs were too high and its income too low, and so its credit rating was downgraded again and again until it was nearly impossible for the city to get a loan.

The result, to paraphrase planning and geography professor Jason Hackworth , was that cities were forced into becoming more entrepreneurial in a short period of time. They hired city managers and PR teams in a quest to turn themselves into profitable entities, as if cities were corporations. It’s not uncommon these days for smaller cities to launch campaigns in larger ones, attempting to lure monied twenty- and thirtysomethings away. At one point ads promoting “Life in Cbus ” (Columbus, Ohio) with slogans such as “Where Standing Out Never Means Standing Alone” littered Metro stations in Washington, DC. Philadelphia also paid for promotional billboards in Washington,

DC, as well as in Chicago, and started an organization called Campus Philly, which runs incentives to get people who come to the city for college to stay once they graduate.

New Orleans has been less direct, but no less committed to wooing rich people to the city. Through its tax credit programs , the city has incentivized tech companies and movie and TV studios to set up shop in the city. It sold off properties (many abandoned since Katrina) in poor areas to luxury developers. It began marketing residential neighborhoods beyond the French Quarter in its tourism ads, especially rapidly gentrifying ones such as the Marigny and Bywater (this inspired a pretty great parody video in which a black New Orleanian makes fun of all the new white tourists in the Bywater getting their bikes stolen).

That’s all left New Orleans a radically different place than it was pre-Katrina: it’s richer, whiter, and slightly less populous. And this newer, richer, whiter city was built on the forced removal of tens of thousands of poor black people, which sounds terrible—unless you’re a member of a city government that is only concerned with its bottom line. If that’s the case, things are going great.

“ Hurricane Katrina was an awful event ,” Ryan Berni, a senior aide to Mayor Mitch Landrieu, told Politico in 2015. “But it presented the opportunity for New Orleans to become this country’s laboratory and hub for innovation and change.”