Tannara Yelland / Los Angeles Review
of Books
“Capital City: Gentrification
and the Real Estate State”
A book by Samuel Stein
Over computerized images of a
nondescript early American city and a rushing river, a man with a quiet voice
and a delightful Philadelphia accent describes the process by which the city of
Franklin developed its first water distribution system. The Goodhill Water
Works, the voice explains, was created after a series of yellow fever outbreaks
that the city blamed on contaminated local water. This led town elites to
decide that a new water source was required for the growing municipality.
Despite the fact that the state-of-the-art space doubled as a tourist
attraction while it pumped fresh water straight into town, residents could only
access the water if they had the money to pay for installation and a
subscription. Otherwise, they would have to use the few free fountains placed
around the city. The bulk of the city’s residents — including indentured
servants, a small number of enslaved people, and free workers — had no time,
money, or, in some cases, freedom to take in the beautiful grounds and stunning
architecture. For them, despite this impressive achievement on the road to
their city’s modernization, it was more or less as if nothing had changed at
all.
Franklin, as you may have
guessed, is not a real place. It is the creation of Justin Roczniak, who
publishes a series on YouTube (where he goes by donoteat01) using the video
game “Cities: Skylines” to explore the historical development of cities, and to
discuss how inequality has been built into American cities from their earliest
moments. Starting with an Indigenous settlement along a river, Roczniak
describes the displacements and conflicts that have gone into city-building, as
well as developments such as the carceral system and organized labor. A
self-described socialist, Roczniak uses this historical narrative to examine
“how we view cities and what cities are capable of,” as he told Kotaku last
year.
The series weds the often
wonkish world of urban planning discourse to the pop culture juggernaut that is
gaming, and in doing so claims a space in both fields for leftist analysis. And
both urban planning and gaming are in dire need of some socialism. In recent
years, the public urban planning conversation has been dominated by “urbanism,”
a bland quasi-progressive ideology that typically lacks any coherent class or
power analysis. Now a dominant tendency among city-planners and many municipal
politicians, urbanism treats procedural changes like tweaks to zoning laws as
key to solving the problems of the modern city.
Because urbanism dominates
discussions about cities — about what ails them and how to fix them —
structural analyses have been sorely lacking. The discourse around
gentrification still focuses too much on fancy coffee shops and not enough on
systematic disinvestment in areas inhabited by people of color and the working
class. For urbanists, unaffordable housing can be solved by increasing the
amount and density of housing units through “upzoning,” while a more structural
analysis would focus on rent control or building more public housing.
Much like Roczniak’s YouTube
series, Samuel Stein’s captivating “Capital City: Gentrification and the Real
Estate State” is an effort to shift the discussion away from urbanism and
toward socialism. Stein offers a planner and geographer’s perspective on the
way the city works today, but also shows that planners — even those interested
in dismantling oppressive systems — often uphold the power of capital. “[C]apitalism
makes the best of planning impossible,” he writes. “[A]ny good that planners do
is filtered through a system that dispossesses those who cannot pay.” It is
clear that Stein is interested in recuperating a more expansive set of
possibilities for cities and city-dwellers than exists under capitalism, and
that he sees planning as an avenue toward them. “Capital City” ultimately shows
that socialists belong in the public conversation about cities — a conversation
that has long been controlled by neoliberal politics ranging from austerity on
the right to urbanism on the center-left.
¤
“Capital City” begins with a
brief history of planning as both practice and profession. Stein shows how race
and class often determine the way that space is structured in the United
States. In addition to noting the racist practices of redlining and
segregation, Stein discusses a foundational aspect of American history that has
often been ignored in mainstream discussions of how cities and space are
apportioned: the displacement and genocide of Indigenous peoples. He shows that
settler colonialism has been — and continues to be — key to the establishment
and expansion of American cities. As Europeans arrived on the land now known as
the United States and dispossessed Indigenous nations, they engaged in a
“spatial form of primitive accumulation,” building their early towns’ street
grids over top of Indigenous settlements and trails.
Click here to
read long excerpts of “Capital City” at Google Books.
After outlining this history,
Stein lays out his book’s central argument: in recent decades, the
financialization of real estate has given rise to what he terms the “real
estate state.” Real estate capital exerts inordinate power over the levers of
government, he argues, taking advantage of deindustrialization to extract value
from cities. “When manufacturing firms exited post-war urban centers,” Stein
writes, “they left behind not just a tremendous amount of property but also a
political vacuum.” Real estate capital was perfectly situated to take advantage
of the glut of now-empty warehouses and abandoned space, and, because it was
necessarily “place-based,” it had always been a presence in local politics.
As politicians sought to fill
the gap left by the disappearance of industry, many aligned with
development-friendly movements and explicitly pushed for gentrification as a
way of “renewing” city cores. Desperate to retain capital investment — a
desperation that remains today, as the grotesque municipal competition for
Amazon’s “HQ2” illustrated — cities have taken to enticing developers and real
estate investors with “geobribes.” One of the most egregious examples that
Stein names is Tax Increment Financing, a “widely used development incentive”
in which a city designates a “blighted” area, issues bonds to pay for
infrastructure upgrades, and then gives the improved area over to a private
developer to build private housing or retail space. The city is responsible for
making the bondholders whole whether the area is profitable or not; meanwhile,
if it is profitable, the developer accrues most of that windfall
(save whatever they pay in taxes), and another neighborhood is dramatically
gentrified. Strategies like these allow real estate developers to reap profits
through a cruel, mutually constitutive process of dis- and hyper-investment
(the latter is more commonly called gentrification).
While much of the United
States is experiencing disinvestment, rarefied areas are experiencing a
flood of capital invested in land and property, resulting in skyrocketing costs
of living. The two processes go hand in hand, Stein explains: disinvestment
causes property values to crater and leads better-heeled (often white) residents
to depart, typically taking needed community services and amenities with them.
These declining property values then create the conditions for a new round of
hyper-investment, which takes advantage of a gap between profit potential and
existing value. In other words, disinvestment causes property values to decline
enough so that developers can come back, years or decades later, and make a
killing, sweeping up now-cheapened real estate and “flipping” it for sale to a
new round of gentrifying buyers.
¤
Despite writing that real
estate capital’s power is a global phenomenon, Stein is overwhelmingly focused
on the United States, and specifically New York City; readers from outside this
epicenter of real estate capital will largely be left to draw their own conclusions
about how Stein’s analysis relates to their own surroundings. But there are
good reasons to focus on New York City too. First, as Stein acknowledges, it is
the city he lives in and knows best. More importantly, the focus on New York
City allows Stein to draw on the city’s history as a site for early and extreme
experiments in financializing the spaces in which we live.
The city was a leader in
public housing and rent control in the first several decades of the 20th
century, owing largely to well-organized tenants’ movements. Yet after the
financial crisis of the 1970s, it led a different way — rapidly reversing those
earlier working-class gains. Stein explains that New York was pulled back “from
the brink of bankruptcy” by a coalition of “banks, real estate interests and
municipal unions, who disciplined the city through a process of privatization
and disinvestment from social services that continues to this day.” Local
politicians, restrained and still smarting from their brush with economic disaster,
were eager to appease capital. In addition to buying up abandoned industrial
spaces, enterprising real estate interests began to eye neighborhoods that had
low property values due to the longstanding racist practice of redlining (by
which black residents were forced into specific neighborhoods that were then
systematically underserviced). They saw in both locations an opportunity to
capitalize on disinvestment. By converting industrial space for residential
purposes, pushing out poor (mostly nonwhite) residents, improving existing
housing stock, and replacing it with more luxurious spaces, landlords and
developers attracted higher-income residents, raised property values, and
remade whole segments of the city “from places into products.”
Today, New York is a
playground for the wealthy where thousands of luxury apartments sit empty,
serving as some business tycoon’s fifth pied-à-terre, as the workers who make
the city run crowd into cramped apartments or, worse yet, don’t have a home at
all. The situation has been exacerbated by city and state governments happy to
sell out working-class residents in favor of private investment.
To illustrate this last point,
Stein looks at the policies of New York’s two most recent mayors: incumbent
Bill de Blasio and billionaire business magnate Michael Bloomberg. Though the
two are often framed as polar political opposites, with Bloomberg prioritizing
corporate interests and de Blasio a progressive, Stein shows that, in many
ways, de Blasio has continued Bloomberg-era real estate policies that have
allowed investors and developers to run roughshod over what was once a livable
city for the 99 percent.
Both Bloomberg and de Blasio
have used zoning as a way to reshape certain areas of the city. Bloomberg’s
practice was to rezone neighborhoods. Stein writes that there was a specific,
racist character to Bloomberg’s pattern of upzoning primarily working-class,
black areas while, in essence, protecting the character and value of primarily
white neighborhoods. By contrast, de Blasio has been a proponent of
inclusionary zoning, and so is widely seen as progressive by urbanist types.
Stein, however, does a superb job of describing exactly why de Blasio’s policy
does not deserve that reputation. Because it requires some (usually small)
number of housing units in a new development to be “affordable,” it relies on
building more unaffordable housing in order to add a small number of
affordable housing units in a given development (and even then, the measure of
an “affordable” apartment is unreachable for many New Yorkers). De Blasio’s
metric for “affordability,” while an improvement over Bloomberg’s, still
effectively prices out 57 percent of New York’s Black and Latinx residents.
¤
Stein ends with a set of
prescriptions for how radical planners might seek to use the tools at their
disposal to “unmake the real estate state.” He is attentive to the difficulties
that this call to action involves: “All consciousness is contradictory,” he
writes almost apologetically, “but the situation for capitalist urban planners
is especially thorny. They are simultaneously far-seeing visionaries and
day-to-day pragmatists.” Ultimately, however, he sees promise for radical
planning within the capitalist state (and this despite his earlier claim that
by helping establish spatial order in capitalist states, “planners — whatever
their intention — are working for the maintenance, defense and expansion of
capitalism”). At the close of his book, Stein suggests that leftist planners
could both make use of existing tools and widen the horizons of what is
possible. In answer to the perennial question “reform or revolution,” it seems
Stein would echo the little girl in the meme who asks, “Why not both?”
In this prescriptive section,
Stein has something to offer almost everyone. Are you merely dipping your toes
in the idea that the capitalist city has problems? Perhaps you’d be interested
in using inclusionary zoning to target wealthy white neighborhoods for
integration or protecting working-class areas with preservation policies.
Skeptical about the prospect of repurposing tools originally designed for the
benefit of the white and the wealthy? You might want to move on to socializing
land and “unmaking the social relations that produce capitalist private
property.” If that gives you pause and makes you ask how, exactly, we are
supposed to accomplish such a goal, it’s time to look at the final section of
this chapter: politics. Here, Stein readily acknowledges that planners cannot
unmake the real estate state on their own — not even close. Mass politics that
both forcefully advocate for specific goals and “make the status quo untenable”
are integral to the process.
It’s clear from his
prescriptions that Stein sees a joint effort between mass political movements
and radical, avowedly anticapitalist planners as a fruitful path. Yet this
prescription, simultaneously the most ambitious and the most realistic for
actually effecting lasting change, feels tacked on given how vanishingly little
space activists and organized grassroots politics are afforded throughout the
book. He might have discussed previous examples of collaborations between
planners and activists — collaborations that sometimes worked well and other
times resulted in disaster. While groups like the Planners Network put
progressive planners to work with community organizations, the midcentury
project of “urban renewal” involved razing “blighted” (usually poor and/or
nonwhite) areas to create new and apparently improved housing or retail,
displacing existing tenants and disrupting their communities. A more
comprehensive exploration of the complex historical relationship between
planning and activism, and the tensions and possibilities in that pairing,
might have grounded the analysis in a way that would give his conclusions more
force.
Nevertheless, “Capital City”
is a fascinating read for anyone interested in cities, capitalism, racism, or
housing. It will undoubtedly be a great resource for socialists who are looking
for common ground with urbanist friends or family (or a friendly method of
radicalization). Stein has produced a book that is concise and digestible,
without sacrificing analytical heft. Socialists are re-entering the popular
conversation about cities from coast to coast, reminding people that winning
another world is not only possible but necessary, and that we can only do it
together. Stein’s work is an important addition to this movement, and,
crucially, a promising tool for introducing more people to these ideas.
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