The Rent Gap Theory

by Biljana Spirkoska

The Rent Gap theory or renting gap theory was founded in 1979 by the geographer Neil Smith. The theory forms an explanation for the beginning of the process of Gentrification or social restructuring of a quarter, arguing that the process is driven by land prices and urban speculation rather than cultural preference for inner city living. The Rent Gap theory, according to Smith, is essentially a measure of the difference in a site's actual value and its potential value at 'best use'. In his further explanation, when the overall rent gap (the actual rent and the potential rent after rehabilitation (rent gap), in an area is determined to be great, it is suggested that the area will undergo gentrification as developers identify this difference as an economic opportunity on which to capitalize.

In his lecture on The Rent Gap Theory, Frank Eckardt explains the transformation of devalorized inner-city housing stock into an affluent neighborhood as follows. In search for low prices, authentical and central location, the more economically marginal subgroups, for example artists and yuppies, are the first to arrive in the devaluated inner-city urban neighborhoods. Since these young individuals usually live in non-family households, they have a higher tolerance for perceived urban ills such as crime, poor-quality schools, lack of amenities like shops and parks, and the presence of disadvantaged racial, ethnic, or socio-economic groups, the same main reason these areas are being avoided by the middle-class. As the number of the newcomers grows, they create amenities valued by them, particularly service establishments such as new bars, restaurants, and art galleries that serve them. These added amenities and investment to the area, increase local property values, and pave the way for attraction of the middle-class. Given that the cost of the rent in the area in turns increases significantly, the local residents no longer can afford to leave there, meaning they are priced out of their own neighborhood. In the same way, certain businesses which were catering this particular segment of population shut down once that population is displaced.

Smith further links the phenomenon of gentrification also to a restructuring of the economy. In his explanation, "deindustrialization has not only brought about the downfall of certain city districts, but also stimulated the growth of the service sector, which generated a particular employment structure in central urban areas"(GUST, 1999). In other words, while the economic activities are suburbanized, high-level service functions and executive decision-making tend to be increasingly centralized in a downtown central business district. In this context, Smith demonstrates that "gentrification is not only a local phenomenon but just as much determined by international and global factors. Gentrification is more than rehabilitation of the housing stock. It has become the hallmark of the unevenly developing global city"(GUST, 1999).

The positive and negative sides of the gentrification process are being broadly argued. While some are emphasizing the undeniable contribution made towards the revitalization of the city centers, others point to the associated displacement of lower- income residents and small-scale businesses, which results in transformation of the neighborhood's character and culture. Furthermore, they argue that "gentrification didn’t solve any of the urban problems like crime, homelessness, since the problems were only exported to other neighborhoods"(GUST, 1999). From Smits critical perspective, "the phenomenon amounts to little more than a greed-inspired attack by politicians and realtors against a mix of local minorities, lower classes, and homeless persons".
The critics on the gentrification process have mounted to the point when even community organizations have started to be established to fight against it, and rent control ordinances have been passed by some cities.

I will finalize with Peter Marcus explanation of the two opponent sides:
…the poorer residents of the Lower East Side of Manhattan, of Kreuzberg in Berlin, and of the area around the University of Southern California in Los Angeles wish to keep the gentrifiers out as much as the residents of the suburbs and luxury housing of these cities want to keep the poor out; yet the two desires are not equivalent morally. One represents the desire of those poorer to insulate themselves from losses to the more powerful; the other represents the ability of the more powerful to insulate themselves from the necessity of sharing with, or exposure to, those poorer. One wall defends survival, the other protects privilege. (GUST, 1999)



This text is based on a lecture on The Rent Gap Theory held by Prof. Dr. Frank Eckardt within the course German cities in transition at Bauhaus University in Weimar.

Further references:
― Ghent Urban Studies Team, 1999. The Urban Condition: Space, Community, and Self in the Contemporary Metropolis, 010 Publishers, Rotterdam
― http://www.sfu.ca/geog452spring00/project3/m_rent.html
― http://en.wikipedia.org/wiki/Gentrification
― http://www.answers.com/topic/gentrification

The new Public Space?

by Stefan Lazarevski

If you Google the phrase “public space”, most likely you will hit the Wikipedia’s definition of public space as “an area or place that is open and accessible to all citizens”.
Architects and urban planners prefer to think of it as a static and materialistic space, fertile for experimenting with different tools which stimulate social interactions, accommodate public functions and provide common ground for debates. The followers of the Situationists, one of the last avant-garde movements of the twentieth century, envisioned the public space as a space for action. They thought that “every step taken in public creates a situation that changes space”. (Scymczak, 2007) Each intervention in public space, according to them, was nothing but strategy that immanently provokes publicity, because public space structures society and at the same time, it is socially produced. The projects and the participants within these public spaces should become part of the history of a place.

On the other hand, the expansion of the social networking sites has shed totally new light over the definition of public space. Reflecting on the identity construction, the social networks and the speed of the information interchange, Edwin Gardner identifies the virtual social space as the new public space. “No need for Architecture, we’ve got Facebook now”, he says. This, new social space abandons the actual, built environment in favor of an imagined, virtual one. There is no need for physical architecture anymore to enable social practice. Further on, he explains that the rise of social networking is some sort of remedy for the alienation and anonymity that inherently comes with the metropolitan life. Some of the loneliest people often live in the big Metropolitan cities, where work-life relationship is very fragile. These people have little or no time for face-to-face social interaction which ultimately could result in no interaction at all. Internet, on the other hand, has effectively changed the perception of boundaries and distances of the World, making it one global village. Here, argues Gardner, no one can comfortably disappear in the crowd, and this, in a bizarre way provides the people with psychiatric treatment against social amnesia that comes with a disconnected life. Creation of an image of ourselves, in this virtual space, anticipates deeper psychological process of how we picture ourselves. The perfect avatar, types of social networks that we are involved or even the status updates in limited characters, speak of a very sophisticated and profound identity construction. The second life provided by the virtual public space, not only doesn’t relieve the anxiety of self-consciousness, but in fact it magnifies it.

One of the biggest advantages of the social networks is the possibility of social interaction literally anywhere, making architecture’s social function redundant. However, this by no means, should be translated as goodbye to the old town squares, streets or any physical evidence of public space. On contrary, virtual social space should be understood more as “an augmentation of existing social practices. Virtual social space and the social networking as such should facilitate further development and upgrade of the traditional public space.
One of the oldest forms of virtual social networks is the Chinese Guanxi. This is translated into networks or connections and is based on individuals' having something in common. The essence of Guanxi is that each relationship carries with it a set of expectations and obligations for each participant. What was once pervasive relational business network today is one of the most common forms of online organization. However in either of the cases the conventional public space was never underutilized or abandoned, but in fact it provided physical accommodation of abstract and yet necessary organizational system.

Whichever side we choose to lean on: the traditional or the virtual public space, it is undeniably that the social media is changing how we relate to ourselves and space. Edwin Gardner underlines: “Tomorrow the invisible dimension floating over everyday life that is social media will descend and touch down; it will become omnipresent in the everyday. When the internet becomes truly mobile and computing ubiquitous, when the virtual mixes with the real and when the interface merges with the face-to-face, than we will be in a new place all together.” (2009)


Reference:
― Gardner, Edwin, 2009, Essay: No need for Architecture, we’ve got Facebook now, Volume 19
― http://en.wikipedia.org/wiki/, 03.05.2009