Gentrification: Demolishing a Sense of Community?

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In 1964, Ruth Glass first coined the phenomenon of gentrification having observed the transformation in the social-structure of Barnsbury, Islington, following the residential displacement of its local working-class population. However, residential rehabilitation is merely one particular feature of today's gentrification process that is now encompassing of broader strategies of, inter alia, economic, social, and spatial restructuring. Indeed, contemporary social movements like Focus E15 indicate that gentrification has become an extraordinarily politicised and contentious phenomenon in the sphere of urbanisation. Its mechanisms could be analysed through combinations of both production-side and consumption-side channels. Neil Smith's (1979) rent-gap thesis has served as a provocative explanation of the production-side factors, describing the process of gentrification as a gradual consequence of the systematic disinvestment of capital in certain localities. But, from a consumption-side perspective, gentrification could be understood as a process of changes in the consumption preferences of the middle-class demographic that have increasingly renounced the monotony of suburbia and have become intoxicated by the thrills inner-city life.

However, London's current process of housing stock transfers can be better understood through the concept of a third-wave of state-sponsored gentrification (Watt, 2009), whereby the state has actively encouraged the gentrification process within previously inaccessible, disadvantaged inner-city neighbourhoods, most of which are home to a plethora of low-cost socially rented dwellings, by promoting the investments of housing associations and privately-operated property developers into the construction of owner-occupied housing, and, in the meantime, validating the destruction of affordable social housing to accommodate these changes. Interestingly, for private-investors there is considerable potential for capital accumulation because of a state-induced rent gap that has come to being because of sustained state-disinvestment into London's urban infrastructure whilst the land that it is constructed on has continually risen in value because of market demand outstripping supply. London's individual councils have all used the rhetoric of mixed-communities, and their supposed benefits in terms of the reduction of socio-spatial segregation and improvements in social-cohesion, as a rationale to displace, and replace, substantial parts of those same communities. It is through regenerative programmes that are “discursively framed as community-led regeneration [initiatives]” (Watt, 2009), such as the New Deal for Communities, that the leverage of those residing in London's social housing against a market-led gentrification process has been removed. Indeed, London's gentrification process, at present, is not representative of a natural, inevitable market adjustment process, but is, in fact, a series of inefficient government interventions that have failed to treat the systemic causes of regional degeneration within the capital and, oftentimes, produced grossly socially inefficient outcomes.

So, what does the existing academic literature have to say about the outcomes of gentrification? Principally, the most commonly invoked consequence of the gentrification process is displacement, which can be defined as the “complex, multi-stranded phenomenon whereby low-income residents are pressurised out of their homes and neighbourhoods, either directly via removal through housing demolitions, landlord evictions and rent increases, or indirectly via the loss of neighbourhood resources” (Watt, 2009). Atkinson (2000) validated this phenomenon as a veritable outcome of London's 'urban regeneration' initiatives and found that in the inner-city boroughs of Hammersmith, Kensington, and Camden, increases in the number of those in professional employment, those with higher-education qualifications, and those that are owner-occupiers, were subsequently followed by elevated levels of displacement of the working-class, the elderly, and private-sector tenants. Naturally, the forced dislocation of these residents from their communities has staggeringly detrimental consequences for the most vulnerable subdivisions of society; the elderly, for example, which are disproportionately represented amongst displacees, could suffer from the removal of long-term, supportive community networks which are imperative for comfortable day-to-day life if they are displaced from the places in which they have legitimate economic and social claims. Whilst neighbourhood transition can, of course, be understood as an organic outcome of the interaction of market forces, and the supposition that a neighbourhood must remain a stagnant environment is entirely inaccurate, the direction of its outcomes, however, are malleable and could be, and ought to be, moulded by political interventions which counterpoise the effects of displacement rather than fostering them. Currently, London is pursuing its strategy of mixed-community development by increasingly utilising public-private partnerships to improve their existing inventory of housing in light of unprecedented levels of budget cutbacks. Yet, the government's benign motivation to dilute London's gravest difficulties of concentrated poverty has been achieved through considerably more hostile approaches by private-developers that have aggressively out-migrated residents of social accommodation. Therefore, this development strategy has circumvented any sense of social responsibility and, more importantly, neglected the “structural causes of regional and city economic decline and poverty” (Atkinson, 2003).

    However, gentrification is less-interestingly considered through residential displacement of individual households than through the effects that the threat of displacement imposes upon on the residents of pre- or post-gentrified districts. Professor Stephen Sheppard (2012) notes that “community improvement actions” are privately-produced public goods that, as is the case with many goods of this kind, unfortunately suffer from persistent under-provision and, as such, are not provided at a socially optimum level. Interestingly, unstable communities, by which I mean those that are consistently plagued by the threat of displacement, are denied investments into socially-beneficial community projects that every resident would profit from had this threat not existed. Ideally, a “perfectly organised” community would have devised institutions to ensure that community improvement actions were provided to a level where the marginal social-benefit of these improvements were equated to their marginal social-cost and, therefore, they would be provided at an efficient level. But, now suppose that residents of the community, regardless of socio-economic class, perceived there to be a considerable displacement risk, then this would have the effect of decreasing the expected benefit from some community improvement because said resident is uncertain whether they will benefit from it over the lifetime of the community. It is therefore clear that if these residents were to value community improvements below their true socially optimal level then, theoretically, they will be under-provided in such communities. Sheppard (2012) chose to test the hypothesis that a risk of displacement could be associated with considerable reductions in community benefit actions by estimating four different regressions; the chosen dependent variables to measure community improvements were the logs of the expenditure per thousand residents and the number of community improvement organizations per thousand residents, and the independent variables to measure displacement risk were the logs of the percentage of the population over the age of five that has moved within the last five years and the percentage of all the population that had moved within the metropolitan statistical area over the same time period. Sheppard found that the estimated coefficients were both statistically and economically significant. Indeed, considerable increases in displacement risk were associated with “a 52% to 72% decrease in community benefit expenditures per capita, or a 17% to 35% decrease in the numbers of organizations” (Sheppard, 2012). Consequently, there is evidence that there exists a social-cost borne by the community holistically, not only by those low-income households typically associated with bearing the brunt of gentrification. It is necessary that London's municipal governments assist in the provision of community improvement actions and that their policies address issues facing the retention of affordable housing such that these potential outcomes of state-sponsored gentrification are counteracted.

Furthermore, Sakizlioglu (2014), of the Urban and Regional Research Center at Utrecht University, explores the outcomes of this element of temporality in the analysis of displacement and has likened the state authorities targeting of Tarlabaşı, Istanbul, for urban renewal to a form of state-sponsored gentrification. Residents of Tarlabaşı found that, after having their locale announced as a 'designated renewal area,' they faced increasingly threatening appropriation strategies from both the public and private sector, suffered from substantial disinvestment within the district and observed the gradual deconstruction of the social-networks to which they belonged; as such, the inhabitants found themselves living in the long-shadows that displacement had cast some time before they were actually displaced. Today, Tarlabaşı is being transformed into the “Champs-Élysées of Istanbul” (Sakizlioglu, 2014), its residents, though, 'decanted' to the peripheral limits of the capital like those in Parisian banlieues.

London's borough of Southwark is similarly undergoing a process of urban regeneration, although it is more moderate in its approach than Istanbul's destructive transformation of Tarlabaşı. Indeed, Southwark Council's regeneration of Elephant and Castle actually comes with a promise that local people will benefit from a “dramatically improved physical environment,” have “access to more local jobs and training opportunities” and the chance to buy thousands of newly built homes (Southwark Council, 2015). However, whether such promises will materialise in the near future remains a much contested issue.

Southwark, of course, is home to two of London's most infamous 'sink estates,' the Aylesbury and the Heygate, which are characterized by extreme socio-economic marginality and serve as perfect symbols of the capital's urban blight and material dilapidation. Naturally, these estates were prime targets for Southwark's own plans for urban revitalisation and the introduction of  socially “mixed communities [which will] help to overcome the problems associated with areas focused on deprivation such as reduced local business activity, limited local jobs and employment ambitions, downward pressures on school quality, high levels of crime and disorder, and health inequalities.” (Aylesbury Area Action Plan, 2010); these are, of course, completely justified aspirations for estates that frequently feature as narcotic-infested backdrops for television's latest crime dramas.

The 'regeneration' of the Heygate Estate, however, has presented previous residents with a scenario that is the antithesis of the discursive vehicle used by Southwark Council. Indeed, the neo-brutalist council estate which formerly provided the local community with 1200 dwellings, the majority of which were socially rented, has recently literally been ripped down by the insatiable hands of private property developers who plan to build approximately double the existing amount on the site. Unfortunately, merely seventy-nine of those units are allocated to be socially rented and only five-hundred are considered “affordable” - I note that affordability in this context does not actually suggest that the estates previous residents could constitute the majority of tenants in the modern apartment blocks, the rent for a two-bedroom flat alone would require an income of almost £44,000, which far exceeds the £12,000 mean-income earned by tenants that socially rent (Wiles, 2014). Heygate's residents now find themselves forcibly decanted across London's other boroughs, many of them far from relatives and workplaces; as an aside, Southwark Council actually engaged in unethical tactics like permanently switching off the estate's district heating systems to flush out its remaining residents, leaving those that are vulnerable without even the most basic utilities. It appears that the previous occupants of the Heygate Estate won't be able to share in the proposed benefits of mixed communities, although it must be noted this is but one constituent of the wider redevelopment of the Elephant and Castle area. The future of the Aylesbury Estate, though, appears similarly bleak.

However, the anti-gentrification narrative, which typically presents neighbourhood transition as totally exclusionary of the locale's original residents, at times, discounts the positive consequences of revitalisation that Southwark Council had alluded to above. Primarily, gentrification can be associated with both absolute and relative increases in the average levels of income in gentrified neighbourhoods. But, to properly examine the net-effect of these absolute and relative changes, it's necessary to understand three possible underlying sources of these changes beforehand. First, those that move-in might earn an income that is comparatively higher than the localised average; we shall call this selective entry. Second, those that move-out might earn an income that is lower than the average; we shall call this selective exit. Or, third, those original members of the neighbourhood that are not displaced might actually experience increases in their level of income; we shall call this incumbent upgrading.

 

    The Center for Economic Studies (CES) (2010) found that both selective entry and selective exit played crucial roles in determining changes in income levels of gentrified neighbourhoods in the US. It found that in-movers in gaining tracts had incomes greater than incumbent residents by approximately twenty-five percent, which is broadly in accordance with the stereotypical pattern of gentrification which presumes that well-heeled homeowners move into lower-income areas. It also found that residents who moved out of the area earned an income considerably lower than the localised average and thereby helped contribute to rises in mean income levels. However, these two results are merely indicative of an increasing localised average of income and are of limited use in considering whether the remaining residents have actually profited from the gentrification process. Fortunately, the CES's data suggests that incumbent upgrading too had occurred in neighbourhoods undergoing economic succession; residents who remained in their housing units in gaining neighbourhoods experienced increases in real-income levels comparatively higher than their counterparts in non-gaining neighbourhoods. Now, although incumbent upgrading is not the most important contributor to changes in average real-income levels in gentrified districts, it's nonetheless still an important contributor and one which is frequently ignored in discussions of neighbourhood change – discussions that usually assume that indigenous residents themselves cannot drive community improvements. Interestingly, the National Bureau of Economic Research (2008) found that certain indigenous low-income ethnic groups with high-school diplomas actually stood to gain the most from gentrification.

 

What, then, are the sources of incumbent upgrading in gentrified neighbourhoods? Well, presuming that these communities were heretofore experiencing societal or spatial isolation from job opportunities, then the residential integration of well-heeled in-movers may serve to inject economic capital into the neighbourhood and facilitate access to localised employment that they previously were isolated from (Meltzer & Ghorbani, 2015). Furthermore, incumbents also benefit from ameliorations in information asymmetries concerning local employment opportunities and, therefore, their search costs will decrease. However, whether the original residents actually profit from the influx of business establishments is a contentious issue. Primarily, for the neighbourhood's original residents to benefit from the establishment of new businesses the probability that those firms choose to hire within the community must be moderately large. If service-orientated businesses resolve to set-up in the neighbourhood, complementing the consumption preferences of the middle-class, then these establishments will most probably employ the local labour force because they are unlikely to require skill-sets that are more technical than those already possessed by the neighbourhood's unemployed workers. It can be argued that this process will create positive feedback loops that encourage further employment. But, if the process of gentrification is to be inclusive of London's working-class we must endeavour to ensure that our public policies support the continuous employment of these residents.

However, Lester and Hartley (2013) posit that one possible outcome of economic upgrading observed in certain neighbourhoods is that a process of industrial restructuring had occurred as manufacturing businesses found themselves evicted from industrial buildings by commercial landlords, such that their buildings could, instead, be purchased by property developers or other commercial enterprises. Therefore, it is imperative that policy makers incorporate restructuring efforts, including additional re-training schemes and improvements in education, into their urban regeneration initiatives, such that the neighbourhood's transition away from employment in the manufacturing sector does not increase structural unemployment, further aggravating the phenomenon of spatial mismatch.

Moreover, through the process of gentrification, the appetites of the upper- and middle-classes for high-quality institutions puts pressure on important public services to improve the quality of the service that they deliver, thereby improving the quality of life for all residents within the community. 'More Coffee, Less Crime?' is a recent examination of the outcomes that gentrification has had on the crime rates of certain neighbourhoods in Chicago, playfully using the annual number of coffee shops operating as an “on-the-ground measure of a particular form of economic development and [the] changing consumption patterns that tap into central theoretical frames within the gentrification literature” (Papachristos et al., 2011). Its conclusion? That more coffee does demonstrate a negative relationship with the community's crime rate, especially with regards to serious offences like larceny and homicide. Its logic is simple; indigenous residents are able to benefit from the social, cultural, and economic capital of the more-affluent in-movers and so can demand better law-enforcement efforts that ameliorate crime rates at the neighbourhood and, potentially, city level. Furthermore, the process of gentrification not only improves such institutions but, also, has the effect of offering original residents economic and social opportunities that increase social-cohesion and further decrease delinquency. However, the investigation also found that certain neighbourhoods that have undergone periods of socioeconomic heterogeneity are sometimes less-capable of controlling crime internally than others; this effect was found to be particularly marked in Black gentrifying neighbourhoods where particular types of crime, including those of property and economic nature, have increased marginally. In London, though, it seems that the gentrified neighbourhoods are seeing that crime is actually falling precipitously, but we must question who does this really benefit?

Whilst some academics have argued that 'improving' the social-mix in less-affluent areas has, on aggregate, proffered greater investment into socially-beneficial projects for the local community, the distribution of some of these benefits within these communities has begun to reflect the socio-spatial segregation that has come to define classic anti-gentrification rhetoric and the oppositions notion of 'gentrified London.' Indeed, Butler, Hamnett and Ramsden (2013) have used cross-sectional data to argue that the process of gentrification in the Victoria park area of East London has resulted in “direct exclusionary displacement” of the existing lower-income population from well-performing local schools that have benefited from the influx of the London's upper-classes within the last few decades. Schools like Lauriston and Mossbourne Academy have become part of a middle-class narrative, and have readily submitted themselves to middle-class domination at the expense of inclusion and multiculturalism by constraining local resident’s choice of education through 'distance to school' regulations and increasingly bounded catchment areas. Only those with a certain threshold of social and economic resources are able to make the decision that their local educational establishment is unsatisfactory and, therefore, engage in socially reprehensible behaviour like purchasing property in close proximity to schools like Lauriston, such that their child's name is registered to an address in the school's catchment area, but subsequently renting the address out to other aspiring professionals. Consequently, such behaviour serves to displace children in the locale from what would otherwise be their catchment school, resigning them to under-resourced and under-performing institutions and, more importantly, denying them an opportunity to escape their immediate position in the UK's system of social stratification. Indubitably, one's choice of education has never been a truly free choice, naturally bound by the number of places that schools have to offer and, in the case of the private sector, one's ability to pay, but to further concentrate the freedom to exercise choice amongst the absolutely and relativity privileged (Power et al., 2003) by increasingly rationing choice through 'distance to school' policies is contrary to libertarian ideology and, at the same time, ultimately denies children from lower-income households of opportunities for intergenerational equality.

        It is these disparities in the distribution of outcomes between agents in locales undergoing initiatives of urban regeneration that serve to undermine the propounded benefits of mixed-communities that are premised on the economic, social, and normative, integration of people within heterogeneous neighbourhoods. Lees (2008) argues that the predominant policy assumption that gentrification can foster social cohesion is usually predicated on political conjecture. Instead, the evidence presented contrasted said assumptions and appeared to suggest that “gentrification [tends] to result in ‘tectonic’ juxtapositions of polarised socioeconomic groups rather than in socially cohesive communities” (Lees, 2008). It seems that socially-mixed communities cannot actually guarantee the upward mobility of the working-classes because the lifeworlds of each differing group rarely intersect, which, thereby, restricts the transference of social capital from high- to low-income populations. Furthermore, contact between these divergent groups “tend to be superficial at best and outright hostile at worst” (Uitermark & Duyvendak, 2007) which implies that communities that are socially mixed, and, therefore, home to disparate culture and social-classes, are equally likely to engender community conflict as they are harmony. Indeed, the state's promotion of urban regeneration through mixed-communities as a panacea to London's problems of concentrated poverty is a cosmetic policy that treats its symptoms without actually ameliorating the social conditions that affects its most underprivileged groups. Further, mixed-communities appear to be a completely one-sided strategy that are seldom advocated in equivalently socially-homogenous, but comparatively more-affluent, neighbourhoods; consequently, these strategies increasingly stigmatise the working-classes and, incorrectly, foster the sentiment that all of society should become, or aspire to become, middle-class.

    The literature of the Create Streets and the Policy Exchange's 2013 co-publication of 'Create Streets,' which found itself particularly well-received by those in favour of the UK's current form of urban regeneration strategies, reflects these attitudes that those who reside in local-authority housing require betterment of the socio-economic composition of their community in order to improve their immediate position. Create Streets utilises these thoroughly erroneous, but nevertheless well-established, attitudes as a fundamental component in the formula for the justification of the destruction of socially rented multi-storey tenements, and the facilitation of their replacement by privately-developed “real houses.” Its arguments are premised on the stigmatisation of the high-rise architecture of London's inner-city housing estates, which, apparently, intrinsically lends itself to “[making] people badder, sadder and lonelier” (Create Streets, 2013), despite London's love-affair with luxury condominium towers. However, its implications are concerning because it presents us with a false-choice between the current form of state-sponsored gentrification, a strategy marketed as one of the only instruments of growth within the context of a deteriorating city, or the continual social, and physical, degeneration of its neighbourhoods. Indeed, this nouvelle vague of state-led gentrification, premised on mixed-community policies, owes little to the age-old invisible hand of market forces, but much to an overbearing government with an insidious political desire to cease the municipal management of social housing. Unfortunately, the UK government's urban regeneration strategies are, at present, exclusionary of those that are in a position to profit the most from gentrification's localised outcomes, such as the increased availability of employment opportunities, because the issue of displacement is merely viewed as “an unfortunate corollary of processes that are revitalising city centres, attracting private investment and securing the physical fabric of architecturally valuable neighbourhoods” (Atkinson, 2003).

    However, I do not suggest that the government should endeavour to pursue alternative policies and impose regulations that merely serve to insulate impoverished neighbourhoods from the gentrification process, thereby condemning successive generations of those communities to a destitute existence. But, instead, I argue that gentrification's current form is generally delivering outcomes that are socially inefficient. Primarily, I believe that, instead of pursuing policies that exacerbate London's existing issues of affordable housing, its municipal governments must be observed to be actively involved in addressing the residential demands of its lower-income population. I propose that local councils must proceed to eliminate supererogatory regulatory barriers to residential development, whilst, also, providing long-term financial and technical assistance to entities that include substantial portions of both socially-rented and genuinely affordable units in their development plans; consequently, this commitment will demonstrate that affordable housing is an important component of the broader community. Furthermore, in lieu of dismantling its pre-constructed housing stock, London's municipal governments must support these commitments by promoting development on appropriate brownfield sites. I believe that an increasingly more laissez-faire approach to residential development would provide the necessary incentives for agents to re-optimize their behaviour and this would, therefore, help to mitigate the exclusionary displacement effects of gentrification

Furthermore, municipal governments must resolve to encourage the participation of representative members of localities into their urban regeneration initiatives, such that these members can identify their neighbourhood-specific needs and assist in the development of functional solutions. I suppose that the comprehensive engagement of the local community in addressing their residential requirements before their options become increasingly constrained by the process of gentrification will mitigate the degenerative effects that displacement risk can impose on the indigenous population. Currently, state-sponsored gentrification materialises the abstract concept that the demands of lower-income households are immaterial, this is, of course, clarified by the permitted retrogression of the economic, social, and physical capital in those areas targeted for regeneration; this is something that our policies must endeavour to change. Furthermore, incentivising the investment into, and the operation of, privately-managed community improvement institutions that could fulfil the demands of the community's residents, will exponentially ameliorate declining levels of neighbourhood satisfaction and, perhaps, could expedite other private-market investments that will further revitalise the locality.

Additionally, the policies of neighbourhood regeneration should not only focus on the production of affordable housing units but, also, on the retention of existing units. It is imperative that retention strategies concentrate on the continued affordability of residential units to mitigate the effects of increases in costs which can result in the secondary displacement of an area's residents. Increasing the accessibility of credit to lower-income households, those that may previously have been discriminated against, could potentially offset these sources of secondary displacement. Finally, instead of promoting mixed-communities as the preeminent strategy to resolve London's complex problems of concentrated urban poverty, I argue that public policies should precisely tackle the systemic causes of socioeconomic inequalities. I emphasise that refinements in the quality of educational establishments and improvements in the availability of employment opportunities will serve as the vehicle for reductions in poverty. Introducing 'Community Contracts,' for example, as an initiative to encourage commercial enterprises to provide unskilled employment for lower-income households in neighbourhoods undergoing gentrification, in return for regulatory support to take advantage of market conditions.  I believe that these opportunities would both increase the incumbent resident's capability to remain in the neighbourhood and support the development of commerce committed to hiring within the community, whilst also treating the fundamental causes that perpetuate the cycle of poverty.

It is entirely possible that gentrification can produce mutually-beneficial outcomes throughout the various strata of the UK's society, but to achieve this we must re-evaluate the evidence of the benefits of mixed-communities that we have premised the current manifestation of state-sponsored gentrification upon and then, in light of this, we must proceed to reformat the gentrification process such that it is inclusive of all. It is only through doing so that we can begin to rebuild the sense of community that we've regrettably begun to demolish.

Resources used:

Gentrification, Education and Exclusionary Displacement in East London

https://southwarknotes.files.wordpress.com/2014/06/staying-put-web-version-low.pdf

http://journalistsresource.org/studies/economics/real-estate/gentrification-urban-displacement-affordable-housing-overview-research-roundup

http://web.williams.edu/Economics/ArtsEcon/library/pdfs/WhyIsGentrificationAProbREFORM.pdf  http://onlinelibrary.wiley.com/store/10.1111/tesg.12051/asset/tesg12051.pdf?v=1&t=id76rz7l&s=21981188cc08039aa56a62f701407613d853d296 (SAKIZLIOG ̆ Lu) http://onlinelibrary.wiley.com/store/10.1111/j.1540-6040.2011.01371.x/asset/j.1540-6040.2011.01371.x.pdf?v=1&t=id8xindl&s=ac3bca2bf64c01a8445174a0bed9f651829ae9ba http://usj.sagepub.com/content/40/12/2343.full.pdf http://www.theguardian.com/housing-network/2014/feb/03/affordable-housing-meaning-rent-social-housing

https://southwarknotes.files.wordpress.com/2009/12/the-urban-injustices-of-new-labour_s-e28098new-urban-renewal_-the-case-of-the-aylesbury-estate-in-london.pdf

http://www.theguardian.com/society/2014/oct/07/southwark-london-regeneration-urban-renewal-social-cleansing-fears http://ecgi.ssrn.com/delivery.php?ID=606070026007126072079077086080008086026071069006028088099020122064089026105068007022096019020106111061101117112017120105013081015046040047000096001094083108016125060034044026000092095099006072114075119070079092106007102081094024011118102124030125117&EXT=pdf

http://www.nber.org/papers/w14036 https://www.stlouisfed.org/~/media/Files/PDFs/Community%20Development/Econ%20Mobility/Sessions/MeltzerPaper508.pdf http://citeseerx.ist.psu.edu/viewdoc/download;jsessionid=154782A3949BF5D494A1D55978836FFB?doi=10.1.1.309.1418&rep=rep1&type=pdf

http://www.citylab.com/work/2014/02/blame-overbearing-government-gentrification-not-neo-liberalism/8441/

https://www.jacobinmag.com/2014/09/liberalism-and-gentrification/

http://www.tandfonline.com/doi/pdf/10.1080/08111140903154147

http://www.calvin.edu/~jks4/city/litrevs/gentrification.pdf

http://uar.sagepub.com/content/40/4/463.full.pdf+html

http://download.springer.com/static/pdf/815/art%253A10.1023%252FA%253A1010128901782.pdf?originUrl=http%3A%2F%2Flink.springer.com%2Farticle%2F10.1023%2FA%3A1010128901782&token2=exp=1439551214~acl=%2Fstatic%2Fpdf%2F815%2Fart%25253A10.1023%25252FA%25253A1010128901782.pdf%3ForiginUrl%3Dhttp%253A%252F%252Flink.springer.com%252Farticle%252F10.1023%252FA%253A1010128901782*~hmac=2b4cda5f91635d14c1496ec1465b9f5bb5f761d176b66d3573d1bd70342fb654

http://usj.sagepub.com/content/37/1/149.full.pdf+html

http://www.brookings.edu/blogs/social-mobility-memos/posts/2015/02/10-gentrification-poverty-mobility-butler

http://www.brookings.edu/blogs/social-mobility-memos/posts/2015/02/11-low-income-neighborhood-gentrification-butler

http://www.forbes.com/sites/stephensmith/2011/09/29/does-urban-growth-have-to-mean-gentrification/

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http://www.slate.com/articles/news_and_politics/politics/2015/01/the_gentrification_myth_it_s_rare_and_not_as_bad_for_the_poor_as_people.2.html

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Public economic discourse is reduced to this?

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We fear for the future of the nation if this is the level of public economic discourse:

Fiscal austerity has become such a staple of conventional wisdom in the UK that anyone in public life who challenges it is written off as a dangerous leftist. Jeremy Corbyn, the current favourite to become the next leader of Britain’s Labour party, is the latest victim of this chorus of disparagement. Some of his positions are untenable, but his remarks on economic policy are not foolish and they deserve proper scrutiny.

Corbyn has proposed two alternatives to the UK’s current policy of austerity: a national investment bank, to be capitalised by cancelling private-sector tax relief and subsidies;

Very well, let us take this seriously.

The £93 billion in "private sector tax relief and subsidies" that Corbyn is talking about is a number made up out of the aether by a sociologist from a third rate university. Farnsworth, for that is his name, has decided that depreciation allowances for companies investing in capital equipment are in fact equivalent to the taxpayer paying for that capital investment. And that is by far the largest component in that £93 billion.

That is, the suggestion is that we will get more investment by taxing investment more heavily. This is of course ludicrous, economic insanity of the highest order.

And here is where we get worried about the nation. Robert Skidelsky, that is, Baron Skidelsky, Emeritus Professor of Political Economy at Warwick, is describing this as something not foolish, something we should take seriously?

Shouldn't we worry about the future of the nation when the supposedly sensible, the adults in the room, get swept up in this sort of mania?

Expressive voting and the paradox of Corbyn

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Last week, YouGov released a new poll of Labour leadership selectors that suggested that Jeremy Corbyn may very well win in the first round. Corbyn’s meteoric rise from charity case to front runner has been all the more remarkable because, in the words of Alastair Campbell, “Jeremy Corbyn as … every piece of political intelligence, experience and analysis tells you will never be elected Prime Minister.” So what’s going on here? Is conventional Westminster wisdom wrong? Is the favourite of the unions capable of repeating the success of Syriza? Or has Labour rediscovered its “desire never to win again”? Perhaps neither.

A useful insight might come from public choice theory, and in particular from a highly-regarded and heavily-cited book by Geoffrey Brennan and Loren Lomasky. In Democracy and Decision: the pure theory of electoral preference, Brennan & Lomasky offer a new explanation for the “paradox of voting”, the rationality-defying fact that people vote despite the fact that the probability of one’s vote mattering is almost zero. As Sam observed on these pages:

No individual can reasonably expect her vote to determine or even influence the outcome of an election. In America, the chance of a one-vote victory margin that would determine the 2008 presidential election was about 1 in 10 million in some swing states, and 1 in a billion in places like California or Texas.

Thus a rational voter would be a non-voter, avoiding the cost of registering for and participating in something that they cannot possibly hope to affect. And yet people vote.

Brennan & Lomasky offer a different explanation. Individuals do not vote primarily to affect the outcome (which they know they cannot) but to express an preference; indeed, to express themselves. Much as we might shout at a football match on television or curse out loud when on our own, there is something inherent in the human psyche that wishes to express its opinion. What is more, the way in which we express ourselves helps define who we are, and enables us to feel good about ourselves.

The crucial point here is that there is absolutely zero cost to expressing oneself any way one pleases at the ballot box, because one’s vote is hardly likely to matter. For the same reason, the only tangible benefit one is likely to reap from voting is that feeling one gets for choosing “the right” candidate. Vote Labour and you are a caring person; vote Conservative and you are a responsible person; vote UKIP and you are a proud patriot; vote Green and you want to save our planet...

Which brings us back to Mr Corbyn. John Mann, Labour MP for Bassetlaw, tweeted that “Quite a number of Corbyn supporters [said] to me that principled opposition is better than seeking an electoral majority.” He dismissed this as “The elite speak[ing]”.

But maybe what is going on here is that Labour supporters, bruised by a crushing defeat and frustrated by the thought of another five years of Conservative rule, are voting not rationally but expressively. Remember, the chance that any single vote matters is going to be tiny: Edlin, Gelman, and Kaplan suggest that “The probability of a pivotal vote is inversely proportional to the number of voters…”; that means that a Labour leadership selector has a 1-in-400,000 chance of being decisive.

But they have a precisely 1-in-1 chance of defining who they are by how they vote. With a probability of one they can make a statement that they are caring and principled, that they believe in social justice, that they reject the Conservative dogma that has dominated electoral politics for a third of a century. Conventional Westminster wisdom may be right that Corbyn isn’t electable, but whether Corbyn becomes leader is not a function of their single vote, whereas that single vote says everything about the voter and their values.

What results, as public choice theorists know only too well, is a collective action problem. No individual can affect the outcome and therefore the worst outcome results. It is important to acknowledge, also, that it is highly unlikely that voters are fully conscious of how the incentives affect their behaviour. But it does explain why supporters whose party has only ever won when it has tacked to the centre are nonetheless willing to vote for the most extreme candidate on the ticket despite the fact that their last, somewhat off-centre leader, lost them the general election.

It may not be the “right” thing to do, but God! It feels good!

Why these crash programmes to build houses won't work

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There's any number of plans out there to create massive housebuilding programmes. There's even that lovely Corbynite idea that the Bank of England should just print lots more money to pay for them: along with an insistence that this simply won't be inflationary. Nope, not at all. Because there's slack in the economy, you see? And yes, there is most certainly slack in the economy. But spraying money around and the inflationary effects of doing so does rather depend upon whether there's slack in that part of the economy that you're spraying money at:

Two-thirds of British building companies have had to turn down work because they do not have enough skilled tradesmen, according to a survey by the Federation of Master Builders. The trade body for construction firms said that 66pc of its members have had to refuse new business because of a lack of resources while almost half have been forced to outsource work. The bosses of some of Britain’s biggest housebuilding companies have spoken out this week about the shortage.

Thus the problem in housebuilding is more of a structural one than a short term financing one. Meaning that just spraying money at the sector will only raise wages of those in short supply to do the work. And that is, erm, inflationary, isn't it?

So perhaps it isn't a very bright idea to simply print more money to firehose into this sector then?

Victory for vaping

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The report from Public Health England is highly significant.  A major health body has concluded after research that e-cigarettes are 95% less harmful than smoking tobacco cigarettes.  PHE is an executive agency sponsored by the Department of Health.  It asked a team of experts to conduct an independent review of the evidence, and the findings are unequivocal.

They conclude there is no evidence that e-cigarettes are a gateway to lead children or non-smokers into smoking.  On the contrary, they find that almost all of the 2.6 million vapers in Britain are current or ex-smokers using e-cigarettes to help them quit or to keep them from reverting.

They found that increasing numbers, now nearly half the population, believe that vaping is as harmful or more harmful than are cigarettes, even though it is estimated to be only up to 5% as harmful.  This could be because the anti-vapers trying to have it banned indoors or in public places have persuaded them that it is harmful.  The report makes a telling estimate:

At the moment, 80,000 people [in England] die every year as a result of cigarette smoking. If everybody who was smoking switched to e-cigarettes that would reduce to about 4,000 deaths a year. That's the best estimate at the moment. It may well be much, much lower than that.

It also makes it plain that e-cigarettes are an effective means of helping people to quit.  Those who oppose vaping because "it looks like smoking" are missing the point.  It is probably because it resembles smoking that it works.  Users put it with their hands to their mouth and produce vapour that looks like smoke, while giving them the nicotine kick.  They don't have to quit doing any of this, but the harmful cigarette smoke with its tars and noxious gases is absent.

The report suggests that e-cigarettes are a "game changer" in public health.  It is interesting that many of the big tobacco companies have bought e-cigarette companies, clearly spotting where the future is going.  There will be some who campaign against the acceptability of vaping because they claim it normalizes smoking.  This is not only silly, but threatens the most effective method to help smokers to quit.  It is not smoking that e-cigarettes normalize; they normalize giving up smoking.

Image credit to: www.vaping360.com

There's a fairly simple answer to this question

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Over in The Guardian there's a question asked that rather horrifies us:

What is the correct number of children each of us should have? It’s a question to which we urgently need an answer – made all the more necessary by the latest reported figures, which show that Britain now has more families with four or more children than at any time since the 1970s. According to the European statistics agency, Eurostat, there’s a growing trend for large families – even though the average family size is getting smaller.

Should this be celebrated, or condemned? We need some guidance, surely. If not, how are today’s young people of childbearing age ever going to work out what to do?

The horror coming from the fact that if there is some "right" number of children that each couple, or woman, should have, then obviously there has to be someone, somewhere, who decides what that number is. And then, naturally, some system of enforcement. And when there's enforcement of anything like this we get to the horrors of those Chinese and or Indian systems of forced sterilisations, enforced abortions and the rest. Things that have also happened, on a smaller scale, here in Europe within living memory.

Thus the correct answer to the "how many children should people have?" question is: none of your damn business matey.

Isn't Corbyn offering us all such lovely sweeties?

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As the cynics realists among us know, the art of electoral politics is to bribe enough people with other peoples' money that you've managed to buy enough votes. Which is what Jeremy Corbyn is doing here:

Corbynmania went into orbit when the Labour leadership frontrunner revealed he would reopen coal mines if he becomes Prime Minister.

Bookies favourite Jeremy Corbyn has unveiled his vision for the country, which includes nationalising parts of the gas and electricity sector and “where you can” reopening pits.

That's all three of the remaining members of the NUM onside, plus any number of Labour Party romantics who get all hot and sweaty at the thought of manly men doing manly things like dying of black lung and being crushed by cave ins.

“I think we can develop coal technology. Let's do so because energy prices around the world are going up. Open cast mining is not acceptable, deep mined coal is possible and is an alternative.

Open cast mining: it's not that it creates a hole in the ground that is the problem (and the spoil piles of deep mining are just as much of an eyesore) it's that it can be done with two men and a dog which isn't going to revive that industrial proletariat that all too many still swoon over.

And clean coal, carbon capture, simply isn't going to happen in anything approaching a reality that we would want to live in. Quite apart from anything else, any technology that actually works (not something we're sure can be achieved) would turn out to be vastly cheaper if applied to natural gas rather than coal. So the very idea of clean coal is pretty much a non-starter.

But then this is an election campaign, isn't it? Nothing anyone says has to make any sense, it just has to buy those votes....

To disagree a little with Allister Heath here

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We like Allister around here, really we do, but we fear that he's fallen into a slight error here in his list of taxes that should be abolished:

Third and fourth, the supplementary charge on the profits of oil and gas firms working in the North Sea, and the petroleum revenue tax, which hits older fields. Adam Memon of the Centre for Policy Studies is right to be calling for the immediate abolition of both taxes. The official statistics are grim: in 1998, Britain’s oil and gas output reached 230m tonnes of oil equivalent; in 2014, this was just 76m. One consequence of this catastrophic shrinkage is that the Scottish National party’s stated plan to rely on North Sea revenues to keep the welfare state going in an independent Scotland are deluded – but it also means that the Government must stop using the tax system to discourage what is left of this industry. Offshore corporation tax receipts have collapsed from £9.8bn in 2008/09 to £2.1bn in 2014/15, the Centre for Policy Studies reminds us, and is set to fall further to £600m and below shortly. Many fields still face horrendously high marginal tax rates, yet yield less and less for the Treasury. The supplementary charge and the petroleum revenue tax should both be axed. This wouldn’t be enough to turn back the clock but it would help engineer at least a minor renaissance for the sector. As a result, it is possible that the industry would, on balance, yield more cash for George Osborne.

Even The Guardian once managed to note that there really is a Laffer Effect on oil taxation. Noting that Gordon Brown has managed to raise tax levels so high that production, and thus revenues, declined. But that's an issue about tax rates, not about the existence of a tax. And the truth is that these are resource rents and those really should be taxed until the pips squeak.

The point being that such natural resources simply exist. No one created them and thus there's not really any reason why anyone in particular should profit from their existence. And we do need some tax revenue because we do need to have some government (no, we are not anarcho-capitalists). That people should profit from their capital, ingenuity and work in extracting and refining is just fine: but not that a private company should profit simply from the existence of such natural resources. That value, that resource rent, should be taxed away.

That is, we can have productive arguments about whether the tax rates are currently too high, but we shouldn't then fall into the error of arguing that such taxes should be done away with. The price of oil is set by the market in general: thus all such resource rent taxation does is change who profits from that happenstance of the creation of a natural resource, private company shareholders or all of us from lower taxation upon our incomes or consumption.

Change the oil taxation system by all means but don't end up not taxing resource rents.

Old myths die hard, don't they?

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Well, no, not really Geoffrey, not really:

Poor harvests, far away, were famously one of the causes of the Arab spring. In 2007-8 grain prices spiked after poor weather cut worldwide production, at a time when food stocks had been run down – and export restrictions, by countries wishing to secure their own supplies, made things even worse.

This is to introduce the idea that climate change is going to lead to extreme weather and.....yes, you guessed it....Aieee! We All Die!

Except of course it wasn't bad harvests that caused the problems. It was the idiot idea of feeding corn (and, to a lesser extent, wheat) into car fuel tanks rather than people. As much as 5% of the crop was diverted to this process leading the World Bank to tell us that "large increases in biofuels production in the United States and Europe are the main reason behind the steep rise in global food prices".

That is, the problem was caused by one of the sillier attempts to deal with climate change. And as ever, if you misdiagnose the cause of a problem you're never going to be able to solve it.

Somewhat ghoulish but interesting all the same

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Another one of those reports telling us of the terrors of inequality:

The death rate among preschool children in the UK is almost double that of Sweden, with social inequalities being partly to blame, according to researchers.

We have to say that we're not convinced. We could imagine poverty contributing to such things, but simple inequality we have a hard time believing.

The researchers found there were 614 deaths per 100,000 of the under-fives population in the UK, compared with 328 in Sweden. The primary causes of death in the UK were problems associated with premature birth, congenital abnormalities, and infections, with the mortality rate for the first of these factors being 13 times higher than in Sweden.

The study’s co-author Imti Choonara, emeritus professor at Nottingham University’s academic unit of child health, said: “The major cause of death is prematurity, and social economic inequalities are one of the causes [of prematurity]. A society with large inequalities inevitably results in worse health outcomes.”

But they're adamant that it is that inequality. Which is interesting because other studies of premature birth and survival rates don't think that's it at all.

Rather, they think that the Swedish health care system, despite it costing about the same as the NHS, is rather better at dealing with all of this than the NHS is.

That is, the usual finding on this subject is that the NHS isn't very good. Bit of a surprise that, isn't it?