MEGAGENTRIFICATION

Limits of an Urban Paradigm

CCTV Building, Beijing / Handball Arena, Zagreb

Text for The Neoliberal Frontline: Urban Struggles in Post Socialist Societies

The right to the city is far more than the individual liberty to access urban resources: it is a right to change ourselves by changing the city.

David Harvey

What is the city for? The response of neoliberal urbanism has been extraordinarily coherent: the city is a living and breathing machine for maximizing the return on investment. The frenetic gentrification of attractive city neighborhoods over the course of the last decade and the dramatically swelling real-estate bubbles that came in its wake have provided the most obvious illustration of this primary rule. Behind the urban scenes, the transnationalization of municipal bond offers has been widely used to raise capital for the infrastructure of the real-estate boom, opening up lucrative financial markets and reconfiguring the links between municipal and national governance in the process. These two major trends have both been subordinate to a third phenomenon, the grand prize of neoliberal urbanism: the installation of postmodern production facilities, whether the big league of global corporate headquarters and associated services, or the smaller but still highly profitable gemstones of credit-based luxury consumption (shopping centers, tourist districts, franchised boutiques). In a breathtaking press toward total makeover, the face of cities across the world has been changed since the early 1980s, not only to fit an aesthetic norm, as is widely conjectured, but above all in accordance with an underlying toolkit, a unified set of productive and regulatory procedures. The result of the three interrelated transformations can be termed mega-gentrification: an entirely new, globally connected urban realm responding to the needs and desires of increasingly homogeneous world elites.

This pattern is increasingly well known, and I will sketch out its features in more concrete detail below. What has not yet been formulated is the question that appears on the horizon of the current credit crisis and the prolonged recession or depression that is almost sure to follow. Yet this question is the only thing that really matters today, it is the crux of our present moment. Is neoliberal urbanism a destiny? Or can a combination of local inhabitants’ movements, national regulation and a broad transnational analysis of prevailing trends act together to counter the most damaging processes that are currently at work? While entire sectors of the corporate elites slide into bankruptcy and the state comes back in with a vengeance, can contesting social forces reclaim a right to the city?

Such sweeping questions were not on anyone’s agenda back in the late 1960s and early 1970s, when the word gentrification first came to designate the home-improvement efforts of a few hip entrepreneurs who could be alternatively mocked or flattered by connotations of finer lifestyles and a vague aura of “Merry Olde England.” But the neoliberal version of urban renewal no longer matches that quaint image of forty years ago. With his analysis of three distinct phases in the gentrification process, the geographer Neil Smith has clearly demonstrated the successive increases in scale, to the point where today, in the phase of “generalized gentrification,” the installation of major cultural facilities designed as investment magnets is carried out under integrated municipal and state-government plans for the valorization of urban property on world markets.1 Commercial investment in such “regenerated” zones is inevitably dominated by transnational franchises with the ability to raise initial capital, apply precut management schemes, provide flawless logistical support and unveil instantly recognizable brand-name decors. In European cities formerly marked by a specific national or regional character, the appearance of fully standardized consumption environments in the 1990s came as something of a shock, underscoring the new status of real-estate speculation as a prime terrain of both private and public finance. Elsewhere, however, the very word gentrification seems to collapse beneath the magnitude of urban renewal programs: in countries like China, for example, what is typically at stake is not the beautification of existing streets, parks and housing stock, but instead, the razing of entire districts and the construction of high-rise, high-rent towers in their place. Yet the old notion of an aristocratic “landed gentry” living off the rent of rural property has gained new currency in all these different cases, as lucky owners around the world have been able to sell off their massively inflated homes and apartments for handsome retirements, or better yet, refinance their mortgages on the fly, so as to generate precious liquidities for investment on the surging stock-markets. The masters of the regenerated inner city are indeed a new gentry, flush with the returns on their exclusive titles to nobility: the ownership deeds granting them a stake in the global boom of urban centrality.

What then of the city as a collective project, which alone makes this kind of individual jackpot possible? Jason Hackworth has shown how cities in the USA, then increasingly around the world, have had recourse to only three bond-rating agencies in order to make their municipal bonds attractive as a secure, blue-chip investment for pension funds and other large portfolio administrators.2 The key transformation of the 1980s and 1990s, in Hackworth’s analysis of the American data, is the relative eclipse of local banks as major buyers on the bond markets and the corresponding rise of institutional investors without any detailed knowledge of the urban environment. Under these conditions, the role of the Nationally Recognized Statistical Rating Organizations – Moody’s, Standard & Poor’s and Fitch – is to provide authoritative guarantees of future profitability, absolving fund managers from any possible accusation of undue risk-taking. Indeed, binding regulation prohibits many pension funds from acquiring any but the highest-ranked securities. The advantages for distant institutional investors of such close surveillance of urban development projects were irresistible. With the volume of investment rising globally and capital pouring into municipal bond markets from sources as far away as Saudi Arabia or China, the rating agencies came to reign supreme over infrastructural planning, not only in the US but throughout the world. To facilitate the management of budgets, projects are often spun off into specially chartered “districts” (airport district, sewage district, etc.) which may also be configured as private-public partnerships. In addition to the standardized development pattern that this process imposes, what results above all is a loss of democratic oversight as increasingly large tracts of urban land are managed according to the dictates of the ratings agencies, and in some cases handed over to quasi-non-governmental organizations, or “quangos” as they are called in Great Britain. The double negation of “quasi” and “non” says a lot about how much can be hidden in this process. The juridical basis of public space falls into the legal gap between public and private.

What drives cities toward this opaque but highly orchestrated process of total makeover? The big prize, as Saskia Sassen pointed out almost two decades ago, is the status of “global city,” or command and control center of the world economy.3 The key attributes here are full integration to global financial flows, top-quality information and transportation infrastructure, and “world class” real-estate markets and cultural amenities making the city attractive for the most qualified corporate personnel. While it is obvious that only a few cities can ever obtain this position (Sassen herself focused only on New York, London and Tokyo), still enormous sums are spent by competing metropolises all over the world in hopes of moving up the ranks of global integration. In the historically dominant financial capitals and among the serious new contenders such as Shanghai, Sydney, Sao Paulo, Brussels or Istanbul, what one witnesses is the wholesale retooling of parts of the city for a new kind of cosmopolitan citizen, fantastically wealthy, exceedingly well informed and uniquely demanding in matters of infrastructure, entertainment and security. The territory of this new “landed gentry” is vigilantly guarded by men in corporate uniforms with nightsticks and radios and guns, yet it cannot be reduced to the supremely valuable urban districts in which the owners physically live – for through freeways, heliports, airlines, fiber-optic cables and satellite communications systems, their territory extends to the mega-scale of the global network.

Interestingly, it is among the lesser wannabes of global citydom that we find the single most influential model for everyday gentrification in Europe, namely Barcelona, which does not even figure on the list of sixty leading cities recently compiled by the American magazine Foreign Policy.4 Nonetheless, the global reach of the Catalan metropolis has been prodigious. Flagship urban development projects such as the Olympics, or more recently, the Universal Forum of Cultures, lavish provision of tourist facilities and conference centers, careful attention to the restoration or redesign of streets, façades and urban furnishings, deliberate encouragement of the tertiary sectors of the urban economy and last but not least, liberal spending on local cultural events, has served to create civic pride, political consensus, skyrocketing real-estate values and multiple incitements to spending and investment from the outside. Using this integrated approach, Barcelona has not only refreshed and refurbished its decaying neighborhoods – and driven away much of the exotic urban fauna that gave it a literary reputation in the 1930s-60s – but it has also become a veritable model, a full-fledged European equivalent to San Francisco as seen by the American “creative-city” booster Richard Florida. In 1999, in an unprecedented gesture, the Royal Institute of British Architects awarded its Gold Medal not to an individual but to the entire metropolis of Barcelona; while at the same time, an Urban Task Force under the leadership of Sir Richard Rogers drafted plans for what would essentially be the “Barcelonization” of ten British cities.5 Today the architects and planners of the Catalan capital are able to sell the city’s collectively generated urban expertise far beyond its borders or ring roads. When crumbling capitals like Budapest or Buenos Aires suddenly find themselves graced with beautifully restored historical districts and entire streets filled with brand-new theme restaurants – along with bond-issues in the works for exclusive infrastructures, an incongruous “lifestyle” rhetoric on the lips of city officials and grand aspirations for hosting cultural events – the influence of the Barcelona model is never very distant. Through strategic professional networking the “mega” scale is attained among the minor leagues, by extension rather than concentration.

The outstanding question, however, concerns the future of both these speculatively driven models, at a time when the major attribute of the global city – finance capital – and the major source of funding for the gentrification of second-rank provincial cities – abundant credit from outside – have both run straight into their fundamental contradiction: namely, the inability of exploited workers and overstretched consumers to go on holding the spinning ball of golden dreams up in the air. Today we face the largest financial crisis in a century, already well on its way to becoming a crisis of the real economy in the realms of industry and trade, but also a political crisis on the streets and in the voting booths where the pressure of rapidly rising unemployment is making itself powerfully evident. Mega-gentrification has at last met its limits, and a sophisticated urban development paradigm built up over the course of three decades now stands on the verge of collapse. For community groups fighting the gentrification of their neighborhoods, or the installation of cultural and consumption facilities whose first effect would be to erase their culture and displace their consumption to big-box wastelands, this sudden halt to the speculative boom will come as a relief, or even as a saving grace. But for everyone with a long-term interest in ecologically sustainable development, in the sharing of urban centrality with the periphery, in the production of participatory culture rather than paying entertainment, and in the democratically chosen transformation of lifestyles in full respect of those who would rather stay the same – in short, for everyone vitally interested in the grassroots exercise of the right to the city – the current crisis opens other possibilities and poses other, perhaps thornier questions.

How to find anything but a respite in a global construction downswing which could easily be as transient as those of innumerable recessions past? How to begin undoing the reflexes and reformulating the expertise accumulated over three decades of neoliberal management? How to spread an awareness of the subtle iniquities of neoliberal urbanism, at a time when far more pressing issues and varieties of political rhetoric are likely to come to the fore? How to insure that public works projects, if they are carried out, do not merely reiterate the same illusory priorities as the credit-sponsored projects which preceded them? And above all, how to continue resisting the imposition of municipally mandated real-estate schemes which, like everything in society, do not ever really die but instead go into a kind of living paralysis, an automated repetition whose only guarantee of continuity is the refusal of any input from the outside world? These and many other issues arising from the current crisis are far more than any single local group or social movement could ever resolve on its own. As David Harvey notes, the right to the city is “a common rather than an individual right, since this transformation inevitably depends upon the exercise of a collective power to reshape the processes of urbanization.”6 As such it demands common efforts, across local, national and even continental boundaries. And though every significant struggle happens in one single place, with one single constellation of forces, still it is high time to establish links from city to city, from country to country, from region to region – and to begin building a common grassroots paradigm of alternative urbanism, where issues of spatial justice are always granted their full weight, whatever the scales of decision.

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Notes

1Neil Smith, “New Globalism, New Urbanism: Gentrification as Global Urban Strategy,” in Antipode 34/3 (July 2002). For a detailed treatment of municipal, state and corporate collaboration on urban development projects, see Erik Swyngedouw et. al., “Neoliberal Urbanization in Europe: Large-Scale Urban Development Projects and the New Urban Policy,” in the same special issue of Antipode.

2Jason Hackworth, The Neoliberal City: Governance, Ideology and Development in American Urbanism (Ithaca: Cornell University Press, 2007).

3Saskia Sassen, The Global City: New York, London, Tokyo (Princeton University Press, 1991).

4A.T. Kearney, Inc. and The Chicago Council on Global Affairs,“The 2008 Global Cities Index,” in Foreign Policy (November-December 2008). Barcelona does, however, figure in a specifically cultural category at the bottom of the ranking established by P.J. Taylor, “Leading World Cities: Empirical Evaluations of Urban Nodes in Multiple Networks,” in Urban Studies 42/9 (2005).

5Mari Paz Balibrea, “Urbanism, culture and the post-industrial city: challenging the ‘Barcelona Model,’” in Tim Marshall, ed., Transforming Barcelona (London: Routledge, 2004).

6David Harvey, “The Right to the City,” in New Left Review 53 (September-October 2008).