Gentrification is followed by Plutocratization
Plutocratization is driving the reasonably well-to-do out of the world's major urban centers.
Simon Kuper, Priced out of Paris - FT.com
Two mournful friends dropped by our flat in Paris last Sunday. They are a well-paid couple from the caste known in Paris as âbobosâ: people with bourgeois incomes and bohemian tastes. In the popular narrative, bobos have invaded Paris, driving out pure bohemians and the working class. But my bobo friends had a new story: they themselves were being driven out of Paris. To get enough space for their kids, they were leaving for the suburbs. When theyâd told the headmaster at the childrenâs school, he had looked sad and said: âEveryone is leaving.â Paris is pricing out even the upper middle-class.
There is a wider story here. The great global cities â notably New York, London, Singapore, Hong Kong and Paris â are unprecedentedly desirable. At last weekâs fascinating New Cities Summit in SĂŁo Paulo, the architect Daniel Libeskind said: âWe live in a time of renaissance ⌠cities are coming back to life, after a long neglect.â Edward Luce chronicled the urban revival in last Saturdayâs FT Magazine. However, thereâs an iron law of 21st-century life: when something is desirable, the âone per centâ grabs it. The great cities are becoming elite citadels. This is terrifying for everyone else.
At the New Cities Summit I had a coffee with Saskia Sassen of Columbia University, leading thinker on cities. That took some doing: Sassen arrived from BogotĂĄ that morning, and was flying to Zurich hours later. âCities were poor,â she told me, in between. âIn the 1970s London was broke, New York was broke, Tokyo was broke, Paris was much poorer than now. And the built environment was a bit run down.â
But from the 1980s, these cities recovered. An increasingly complex financial sector needed more sophisticated networks of lawyers and accountants. Corporate mergers and takeovers meant global headquarters got concentrated in fewer places. Crime declined, making cities less scary. And so great cities grew richer. Fancy architects put up lovely buildings. House prices rose.
First, the working classes and bohemians were priced out. Nowadays the only ribald proletarian banter you hear inside Paris is from the market sellers, who donât live there anymore.
That was gentrification. Now comes plutocratisation: the middle classes and small companies are falling victim to class-cleansing. Global cities are becoming patrician ghettos. In 2009, says Sassen, the top 1 per cent of New York Cityâs earners got 44 per cent of the compensation paid to its workers. The âsuper-prime housing marketâ keeps rising even when the national economy collapses. After Manhattan, New Yorkâs upper-middle classes are being priced out of Brooklyn. Sassen diagnoses âgradual destructionâ.
Global cities are turning into vast gated communities where the one per cent reproduces itself. Elite members donât live there for their jobs. They work virtually anyway. Rather, global cities are where they network with each other, and put their kids through their countryâs best schools. The elite talks about its cities in ostensibly innocent language, says Sassen: âa good education for my child,â âmy neighbourhood and its shopsâ. But the truth is exclusion.
And the trickle down effects? Those well-to-do folks move to an immediate periphery -- like Beacon, just within commute or train ride range of NYC -- displacing the lower- and middle class folks who can't compete with a downtown salary. And while many praise the growth and renovation of these perimeter communities, the poor and less well-to-do get pushed even farther out, or into the new home of poverty, in less affluent suburbs.
