SAMUEL STEIN: Real estate has something approaching a monopoly in terms of the demands that they make on the state around planning, and so planners are then encouraged to make interventions that only raise land and property values, that only lead to rising rents, even when they’re trying to do something entirely different. That’s the situation we’re living in and that’s what I’m calling the rise of the real estate state.
My name is Samuel Stein and I’m the author of Capital City: Gentrification and the Real Estate State.
I got interested in planning years ago when I was kind of learning to love the city that I live in, New York City, and was excited by a lot of things that planners were doing, but also so pissed off at what they were doing in terms of incentivizing gentrification and luxury development. So I go and study planning and I came out kind of more confused than I started, maybe.
It seemed like there was a lot that planners could do to make interventions that are good for business and especially good for real estate, but pretty strict limits when you tried to cut down their ability to extract profits from land. And there seemed to be a consensus that gentrification was, let’s say, problematic; but for a lot of planners it’s just sort of like the unintended consequence of good urban form.
My original subtitle for the book was Urban Planners and the Real Estate State, and I think my publisher rightfully said, People will be interested in urban planning, but they don’t necessarily think they are. What they care about is gentrification. What they’re worried about is gentrification. It’s your job to convince them that they should be thinking about planners as key to that. So I wanted to, on the one hand, explain what planning is and what it can be, and the limitations that are put on planners; and on the other hand, kind of show the world of planning that the results of what we’re doing are really bad.
There’s a contradiction in capitalist urban planning, which an author named Richard Fogelsong pointed out about 30 years ago, where capitalists demand a certain degree of planning, but also bristle at the notion that they can’t run things themselves. So they like the idea that there’s a free market, that capital is a powerful social organizer that can sort of solve the world’s problems. But they also demand all sorts of things from the state in terms of infrastructure, in terms of education for their workforce, all sorts of basic things that they are not willing to do themselves, but that they can’t operate without.
The interesting thing is that industrial and real estate capital have historically had a different set of demands on the state and specifically on urban planners in particular municipalities. So industrial capital, for example, has an interest in there being lower land values and cheaper housing because they make stuff on land. They don’t make money off of the land itself. They want cheap housing because if their workers are paying a ton in rent, then they’re going to be going to their bosses and saying, Hey, you need to pay me more because my landlord is taking all that money. Real estate capital doesn’t want any of that. They want land values to keep going up. They want rents to keep going up because their entire business model is making money off land and their monopoly on it. And you come to environmental regulations, you see the opposite dynamic. Industrial capital wants to be able to pollute as much as it wants, wherever it wants with no consequences. Real estate capital—and there are some exceptions to this—generally wants to see more environmental regulation and more environmental cleanup because it creates more opportunity for them to build. Cleaner environment means potentially higher rents too.
There was a split between what industrial capital was demanding from planners and what real estate capital is demanding from planners over the last, say, 60 years or so. The United States and many other capitalist countries have gone through a reorganization of manufacturing. We can call it industrialization, but really it’s a geographic dispersal. The world as a whole is more industrial than ever. Manufacturing is still a very important part of the US economy, but it’s not happening in a bunch of factories, right in the center of cities.
When industry leaves, you get three different kinds of vacuums that open up. One is an economic vacuum: New York City lost 750,000 manufacturing jobs between 1950 and 1990 so something has to take that place. And in New York and in many other places, the biggest growing sector is what we call FIRE: finance, insurance, and real estate, and then the service economies that develop around that. Then there is a spatial vacuum: the manufacturing is leaving. That leaves a lot of space open for redevelopment and some of that is converting factories into loft buildings. Some of it is tearing down the old manufacturing areas and building up something new, repurposing ports, spaces of recreation or luxury development. And then finally you have a political vacuum: if before different factions of capitol were asking for different things from the state and the working class could sort of play off of that and find those contradictions and make its own demands, now real estate has a monopoly.
One way to understand gentrification is as a spatial fix for capital. Capitol needs to go somewhere. It’s always in motion. That’s what makes it capital, according to Marx. In the mid 1970s there was a global crisis that had to do with all sorts of factors including declining rates of profitability, the oil crisis, labor’s growing power and its threats on production.So there was all sorts of restructuring. One result, or one outcome, or one fix, for that crisis was capital moving back into cities that it had previously disinvested from. And that disinvestment we can trace back to programs like urban renewal. Before that we can look at redlining, which was part of the federal government’s response to the Great Depression and the foreclosure crisis that it induced. And we saw a really massive and federally subsidized growth of suburban areas.
Gentrification then is the return of capital to those spaces that had been first invested in and then disinvested in, in a form of reinvestment. And it’s a predatory form of reinvestment. People who stuck it out and built community and really maintained the social value of those neighborhoods are then displaced by the rising tide of capital.
There’s a theorist named Ipsita Chatterjee who says that gentrification is the theft of spaces of labor and their conversion into spaces of profit. And that’s my favorite definition of the term because it really gets to the alienation of people’s spatial production.
There are a bunch of things that currently exist in New York City and in many other cities that I think can be expanded on or generalized. And I think it’s important that people see these so that they don’t think that we’re only talking about inventing new systems. We do have public housing in this country. It’s been severely disinvested, it’s been segregated, but it’s not an imagination to talk about public housing. We just have to reinvest in it and we have to build more of it. We need to be bringing more land and buildings out of the private realm and into the public realm. This sounds in some ways farfetched, but the federal government took over enormous quantities of mortgages as part of the bank bailout after 2008 and that was done to bail out the banks rather than the homeowners. But it’s not like we don’t take property right now.
Ultimately, I think we need to be getting people to the point of imagining, what does life look like if land is not treated as a commodity? What if land is treated as a common resource—as first of all indigenous territory—and not as something that can be alienated, bought, and sold. I think urban life changes fundamentally from that point on, and it’s not the end of cities. It’s the beginning of a very different form of urban life that gets us out at some of these contradictions between the benefits that we can create through government, through planning, through social endeavor, and the private benefit that is absorbed by whoever owns the land.
Yes, I do think that there is a future for planning. I do believe in planning.
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Samuel Stein is a PhD candidate in geography at the Graduate Center of the City University of New York and the author of Capital City: Gentrification and the Real Estate State (Verso, 2019). His academic work has been published in The Journal of Urban Affairs, International Planning Studies, New Labor Forum, and Metropolitics, and his popular writing has appeared in The Guardian, Jacobin Magazine, The Village Voice (RIP), and many other publications.
In this book on gentrification in the Indian city of Ahmedabad, geographer Ipsita Chatterjee presents a theory of gentrification that is profound, original, and clarifying. In short: gentrification is the way in which capital alienates residents from the spaces they built and maintained, in a process directly analogous to the way capital alienates workers from the products of their labor on the job.
Fogelsong’s multi-century history is a deep dive into the contradictions of capitalist urban planning, a process that is simultaneously designed to secure private accumulation, public health and safety, and state power. These elements do not easily mix. While others have presented idealized views of planners as consensus-builders, Fogelsong dwells in the conflicts that animate urban history and highlights the ways the capitalist state has adapted to manage them.