http://southsidepride.com/geography-lessons-and-gentrification-2/
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 cafĂŠs 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 inâwho 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: âGlobal Capitalism and Processes of Urban
Regeneration: A Tribute to Neil Smith.â
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: âThere 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 conceptsâthe notion of private property is probably
4,000 years old and human civilization and development is probably 50,000 years
oldâ and that for most of human existence there was equalitarianism and shared
communal resources.
Clark says, âWe need to institutionalize floors and ceilings. Right now 67
people own as much wealth as half the people on earth.â 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 âimprovedâ 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 Minnesotaâs 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 stadiumâto 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 thatâs why I asked why the City Council did nothing.
Alondra Cano said she wouldnât answer that question.
Iâll keep asking.
Ed Felien
<email obscured>
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