The Pandemic, Progressives, Gentrification, and Miami
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Complaints about gentrification reflect a misapprehension of supply and demand.
The Atlantic published a long essay today about gentrification. Two paragraphs struck me as particularly incisive:
Gentrification is a notoriously slippery term, and the popular appeal of any attempt to address it depends largely on how one defines it. By focusing on supposedly unrestrained growth as its root cause, new progressive campaigns have revived a decades-old political coalition of renters, homeowners, and other interest groups whose origins lie in a different era of these cities’ histories. This unusually broad and largely inadvertent partnership was influential in bringing an end to the era of urban renewal, and it has the potential to be a potent force in urban politics for years to come. Yet this anti-growth partnership presumes that the interests of the landed and the landless are aligned—that a policy of more tightly regulated development can both generate wealth for those who own property and redistribute it to those who don’t. In the 21st century, when halting the rise of rents and property values in many large cities has take a global pandemic, the logic that undergirds this movement deserves a critical look.
Skepticism about growth has been a powerful force in urban politics for more than half a century. Around 1960, groups across several American cities began questioning the political economy that seemed to produce constant development and redevelopment projects, which the sociologists John Logan and Harvey Molotch memorably characterized as a “growth machine.” Then, as today, the slow-growthers and no-growthers were an idiosyncratic bunch. Conservationists, worried about the effect of metropolitan expansion on scenic rural areas, organized for new laws protecting “open space” and establishing environmental-review procedures for major development projects. Architectural preservationists, who preferred ornate older buildings to modernist designs and saw their work as integral to keeping urban living appealing, worked to designate some of American cities’ first historic districts. Homeowner groups mobilized against highways, commercial establishments, multi-family apartment buildings, and other nuisances that they perceived as threats to their property values and “neighborhood character.” And left-wing organizations constituting what the activist Harry Boyte later called the “backyard revolution”—a movement that emphasized small-scale community organizing and other place-based advocacy as a means of effecting social justice—participated as well, calling for processes that would allow vulnerable groups, such as tenants, to veto new projects they did not feel were in their best interest.
I’ve always thought that people most opposed to gentrification were also most likely to misapprehend the relationship between supply, demand, and price. When you constrain supply, through zoning regulations which inhibit the development of new housing, and demand rises, then price will rise. This isn’t something that can be legislated away by regulatory diktat, no matter the beliefs of those who advocate in favor of restricting the housing supply.
Over the past several months, the mayor of Miami, Francis X Suarez, has become somewhat famous on Twitter, for reaching out to aggrieved Silicon Valley executives, encouraging them to move to Miami.
Part of the pitch is that housing is cheaper in Miami than it is in Silicon Valley, in part because Miami is not as constrained as Silicon Valley is by zoning regulations which inhibit an increase in housing supply.
To the extent that Suarez is successful in luring successful technology entrepreneurs to Miami (and, to be clear, he is having some success at his outreach campaign), he will prove the central thesis of this post (and of the essay in The Atlantic), which is that those who oppose gentrification fail to consider the second- and third-order effects of their desire to inhibit housing supply: other cities become more attractive. Cities compete for residents, and those cities which can offer reasonably-priced real estate will attract some very productive people disgruntled at incompetent government elsewhere.