Geography lessons and gentrification

BY ED FELIEN

Last month Council Member Alondra Cano organized a meeting in her ward (9th Ward) to discuss gentrification.  More than a hundred people showed up to listen to experts talk about how gentrification of neighborhoods prices poor and working people out of their homes.
Most people when they think about gentrification think of it as something harmless or benign: A neighborhood gets run down; artists move in and set up studios; coffee shops and small cafés open up; the neighborhood becomes fashionable; developers come in and build luxury condos.
What are left out of that equation are the people who lived there before and after the artists moved in—who had businesses and social networks that were disrupted and eventually priced out of their community.
There are three ways local governments can protect low-cost housing for working families:  They can build public housing; they can subsidize rental costs through Section 8 federal grants; or they could institute rent control that would freeze rents for tenants.
In the first weeks of September my wife and I traveled to Barcelona, where we attended a bi-lingual conference sponsored by the University of Barcelona Department of Geography: “Global Capitalism and Processes of Urban Regeneration: A Tribute to Neil Smith.”
Neil Smith is most famous for developing the Rent Gap Theory, which demonstrates how rents continue to go up and the cost of operating rental property continues to decline over time.  This gap is the principal engine driving gentrification.  The more profit that can be made from a property the more likely profiteers and developers are to re-purpose buildings and neighborhoods, pricing out poor and working people and making way for luxury condos.
Eric Clark, one of the keynote speakers, explained the factors that make the Rent Gap Theory possible:  “There must be a belief in free market fundamentalism, a belief that the market will sort out the best and highest use of property.  In this, it shares an affinity with religious fundamentalism.  Right-wing think tanks use a compliant media to indoctrinate a captive audience with the absolute certainty of the divine right of profit.  We need to counter this ideology by remembering that private property and the free market are relatively recent social concepts—the notion of private property is probably 4,000 years old and human civilization and development is probably 50,000 years old— and that for most of human existence there was equalitarianism and shared communal resources.
Clark says, “We need to institutionalize floors and ceilings.  Right now 67 people own as much wealth as half the people on earth.”  More equality would mean more trust between people and better democracy.  The rich have turned property, land, even air and water, into commodities, and they continue to privatize schools, medicine and natural resources.
Many of the papers at the conference dealt with the social problems of gentrification where working class communities have been “improved” out of existence by financial speculators and government policies.
Green lining is a particularly devious form of gentrification.  The most obvious example given at the conference was of a Whole Foods store coming into a neighborhood, displacing a neighborhood grocery store, raising prices by a third and eliminating the social networking that provided local jobs and commerce.
Gentrification is a relatively recent term.  Fifty years ago it was called Urban Renewal, which meant Urban Removal of Poor People, when the local and federal government openly collaborated with developers in eliminating poor neighborhoods.
Forty years ago, while I was on the Minneapolis City Council, I tried to institute rent control to protect low-income housing around Loring Park that was being bought up by speculators and developers.  My colleagues on the Council did not support it.  I tried to pass a referendum, but the committee in charge of writing the referendum got taken over by a wannabe lawyer and the proposed ordinance went on for four pages.  It failed at the ballot box.
Something quite like Urban Removal of Poor People has happened in North Minneapolis over the last 10 years.   Myron Orfield in his report on minority lending for the University of Minnesota’s Law School Institute on Metropolitan Opportunity demonstrated how racist redlining doomed minority mortgages.  By charging higher interest rates to non-whites, and to whites living in minority areas, and by charging higher closing costs, the banks insured that homeowners were bound to default on their mortgages.  This swindle by the banks ended          up costing homeowners and municipalities in the metro area $20.5 billion and devastated the North Minneapolis minority  community.
I asked Cano at the meeting why the City Council did nothing about this crime against Minneapolis homeowners.  Other cities, like Los Angeles, have sued and recovered damages from mortgage brokers.  The U.S. Justice Department recently won a $200 million lawsuit against US Bank for discriminatory lending practices.  In a related irony, US Bank just paid Zygi Wilf a different $200 million for naming rights to the new Viking stadium—to whitewash its local reputation.
Unfortunately, for the foreclosed homeowners, time has run out.  The statute of limitations on contract law is six years, and most of the mortgages were made before 2008.  The mayor and City Council knew this in 2013.  They knew that US Bank and Wells Fargo had committed serious crimes, and they knew they had only six years to recover damages.  And they knew that homeowners depended on them to initiate a class action lawsuit to recover the money they had lost in rigged mortgages.
And that’s why I asked why the City Council did nothing.
Alondra Cano said she wouldn’t answer that question.
I’ll keep asking.