Wednesday, November 2, 2011

The Gentrification Cycle: Factories, Artists, Chain Stores, Repeat

I just finished reading Sharon Zukin's great new book, Naked City.  One fantastic nuggest is her discussion of gentrification in New York's SoHo district.  At one level, Zukin's account confirms the now well-known gentrification cycle referenced above: deindustrialization creates low-rent vacancies in industrial districts; artists are drawn to these districts by the depressed rents and spacious "lofts"; the district becomes a hub of avant garde creativity, generating media attention and foot traffic, both of which create a "buzz" around the neighborhood; shops and restaurants are drawn to the area to cater to the increased foot traffic and capitalize on the "buzz;" the introduction of these shops and restaurants in turn induces more foot traffic, more media attention, and more "buzz;" eventually national chain stores see the area as ripe for investment and begin to move in; finally, of course, each of these trends causes rents to escalate until, with the arrival of deep-pocketed chain stores, the very artists who made the district trendy are priced out.  The district ends up as nothing more than a high-end outdoor shopping mall with little street "cred," and the artists relocate to a new low-rent industrial area, triggering the process all over again. 

Zukin's book is a work of sociology, but I think it implicitly raises some interesting questions about law's role in the gentrification cycle.  Initially,  in many cases a rezoning is necessary in order to turn industrial buildings into residential lofts, and then more rezonings may be needed to permit retail commercial uses.   After SoHo's experience, Zukin tells us, every city worth its salt wanted to replicate New York's success -- turning a depleted industrial district into a revenue-generating shopping district.  Therefore, obtaining the necessary rezonings has been a piece of cake.  But local governments want to do more than just allow gentrification -- they want to jump-start the cycle.  So cities from Santa Ana, California to Shanghai, China have taken affirmative measures to lure artists into old warehouses and other downtown buildings.  It seems to me that while this approach may be necessary in an age of globalization dominated by mobile capital, it is also extremely cynical -- cities are luring artists in the hopes that the artists will spur a renaissance that will then force the artists themselves to leave.  Very few cities provide any permanent or semi-permanent protection for artists (such as rent control) because the whole point of the process is to bring in the chain stores to displace the artists (and state courts are divided on whether rent control is even a valid exercise of municipal home rule powers).  Zoning has long been seen as a way of addressing perceived market-failures; with gentrification, it seems, municipalities are using their land use powers to accelerate a "natural" market phenomenon.  This should give us some pause.

Ken Stahl

http://lawprofessors.typepad.com/land_use/2011/11/the-gentrification-cycle-factories-artists-chain-stores-repeat.html

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Comments

Ken - Very interesting! When I was in private practice in DC we had a client who developed affordable work/live spaces (in market rate developments) in the downtown area. They worked with this CDC, which still seems to be in business:

http://www.culturaldc.org/projects/artist_housing.html

This is perhaps a less cynical way to attract and retain artists, although I agree about the mixed blessings of gentrification, in general.

Posted by: Jamie Baker Roskie | Nov 3, 2011 10:48:13 AM

Thanks Jamie. This is very interesting. I wonder how successful the CDC has been and how much financial support it gets from the city government.

Posted by: Ken Stahl | Nov 3, 2011 11:56:06 AM

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