Best of 2018: Gentrification and Cataclysmic Money

As a Strong Towns staffer, I think the work we do around housing policy is some of the most important work we’re doing as an organization. Getting housing right is central to the challenge of building and nurturing places that are resilient and productive.

Our housing conversation also feels much more fluid—and in some ways, much more of a work in progress—than, say, our clear-cut stances on parking minimums or infrastructure mega-projects. When it comes to the state of our cities, housing is a uniquely difficult aspect to write about for two reasons:

  1. It’s emotional, because the idea of home is emotional, and the idea of community is emotional, too. People polarize into camps around housing issues, and often have a hard time even hearing different perspectives, let alone finding common ground with them. Well-meaning efforts to address housing costs, even when everyone agrees there’s a problem, can go down in flames, as Austin, Texas’s rewrite of its development code did this year.

  2. It’s immensely complex. Not complicated, which is something different: engineering tasks like designing a bridge are complicated, but there are predictable rules and predictable outcomes. Housing markets, on the other hand, are complex adaptive systems, with a million moving parts, each of which affects all of the others. Even Ph.D economists can’t always agree on how proposed policy changes will affect housing prices. There is no simple story to tell here: we’re not going to give you The Solution™ to your housing crisis.

Back when I was still a guest contributor and not yet a staff member—I formally joined Strong Towns in July of this year—I took a stab at a series of articles exploring the relationship between gentrification, concentrated poverty, and development policy. The first two articles ran in 2017, and can be found here and here. But it’s in the third and fourth, published early this year, where I found that a thesis of sorts really started to take shape.

We need better conversations about housing in America’s cities, informed by the humble appreciation of complexity. The rapid transformation of a neighborhood by what Jane Jacobs (a hero to many planners, myself included) called “cataclysmic money” can do immense harm to real people’s lives. So can neglecting a neighborhood, and so can trying to preserve it under glass and exclude newcomers. If we want the places we live to be prosperous, just, and resilient, then we must allow them to grow, breathe, and evolve over time. At the end of 2018, that idea is as important as ever.


Rough Waters: Gentrification and Cataclysmic Money

Which do you want, the trickle or the fire hose? Our neighborhoods tend to experience either too much investment or too little. In many ways, we’ve engineered incremental, evolutionary growth out of our cities.

"We talk about neighborhoods as though their fates are independent of each other, and as though decline and gentrification are opposite problems instead of two sides of a coin. This is clear in a lot of urbanist language, such as Joe Cortright's statement at City Observatory: "Concentrated poverty is a bigger problem than gentrification." The point made is valid and important. But that either-or wording elides a vital piece of the story.

It's more instructive to think of both concentrated poverty and gentrification as symptoms of a deeper distortion in the way we finance development and the public policies we use to direct and encourage it. The form of any city tells you a lot about the economic ecosystem that produced it. When downtown Cleveland sprouts new high-rises, the nearby Ohio City neighborhood sprouts microbreweries, and much of the rest of Cleveland sprouts weeds around abandoned homes (15,000 and counting), it's obvious that many Cleveland residents are poorly served. What kind of economy is doing this?

Exaggerated disinvestment-reinvestment cycles — of which gentrification is the reinvestment phase — happen because we've engineered them into our real-estate markets through policy and financing mechanisms that prioritize what Jane Jacobs famously called "cataclysmic money" over "gradual money." Incremental reinvestment is an endangered species in the American city. More often, it's a trickle or a fire hose. Take your pick.

Neighborhoods that can't sustain steady, gradual reinvestment are sooner or later going to be subject to destabilizing change, whether that change looks to you like gentrification or something else. No matter where a neighborhood is in the real-estate cycle — decline, stagnation, or rebound — it can benefit from a policy agenda that emphasizes incremental rather than cataclysmic change, financial and political stakes for local residents, and stability and security for individuals.”   Read the rest of the article.

Calming the Waters: How to Address Both Gentrification and Concentrated Poverty

We can alleviate housing crises and make our neighborhoods more resilient to them. But it requires us to understand cities in a different way: as delicate ecosystems in which we must calm big waves and allow small things to grow.

"Concentrated wealth and concentrated poverty are symptoms of a development model in which places are built and financed in a way that makes long-term decline inevitable, an "all or nothing" development environment in which investment is distributed extremely unevenly, and a bias toward "big-ness" — big projects, big price tags — that excludes small players from the market. Small crafts can't sail in big waves.

Address those sources of turbulent economic waters, and you just might create an economy in which the problems associated with gentrification and the problems associated with stagnation and entrenched poverty get a bit more solvable.


How would we go about building a city of neighborhoods that all provide for basic safety, health, and access to opportunity? A city of neighborhoods that are fiscally productive and sustainable? A city where residents poor and rich can have a stake in their neighborhood's success, as well as the ability to put down roots and stay as long as they wish to stay? What kind of economy would produce that city?

To someone concerned about the future gentrification of their neighborhood, you might call this "gentrification-proofing." To someone concerned about its decline, "decline-proofing"…. Let's talk not about prescriptive fixes, but about objectives and principles of an economic ecology that would lead to stable and resilient neighborhoods and inclusive wealth-building. I've argued before that planners should be the conservation biologists of cities. We don't decide exactly what grows where. Our job is to get the ecology right."  Read the rest of the article.