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Samuel Stein’s “Capital City: Gentrification and the Real Estate State” and What it Means for LA

A review of Stein's newest book.

Gentrification technically means the arrival of the gentry. Gentry has little cultural meaning in American English, but gentrification has maintained a firm grip on denoting the influx of capital into low-income neighborhoods. The return of upwardly-mobile latinx populations to the neighborhoods they grew up in? Call it gentefication. A plan to generate revenue for the NYC Housing Authority by supporting new development on public housing land, titled NextGen NYCHA? It’s NextGentrification NYCHA. Its catch-all nature as a term doesn’t provide much insight into its roots, its purpose, and its threat.

Samuel Stein recognizes this, and comes equipped with a more robust way of describing the phenomenon: the real estate state. This concept, as defined in his new book “Capital City: Gentrification and the Real Estate State,” is the practice of bending the arc of all urban planning back to the replenishment of real estate capital. He codifies the LLC landlords and empty luxury apartments and commodification of space as symptoms of this political and economic framework. To outline this definition, the book focuses on cities’ pivot to neoliberalism, urban planning’s history of planning gentrification, and real estate capital’s political power, culminating in an examination of Donald Trump as the “Developer President,” a.k.a. our landlord-in-chief. It is a cogent and expertly-written breakdown of how cities have churned through their working class communities to build playgrounds for the rich.

Stein’s case study is New York, whose history is largely rooted in the speculative value of real estate (the famous, if not quite true, story of its origin involves Peter Minuit buying Manhattan Island from the Native Americans for $24). Real estate speculation, neighborhood disinvestment and subsequent gentrification, urban renewal — these are all familiar patterns to New Yorkers, and the dangerous power of the real estate class has a more politically defined outline. Real estate decisions in the five boroughs also both reflect and produce economically destabilizing forces for the whole country. As David Harvey notes in his book Rebel Cities, the cycle of property speculation in New York follows a stark pattern. New building booms spike in the years preceding major economic crashes: 1929, 1973, 1987, and 2000 all saw major skyscraper development in New York. The city is a natural place to look in order to explain the role of real estate capital in urban life cycles and the subsequent disenfranchisement of communities without capital power.

The fundamental criticism in the book is that current conventional wisdom of urban planning sees luxury development as the key to achieve anything positive for the lives of a city’s residents. Affordable housing? Make it a required component of all luxury apartment buildings. This leaves little room for the construction of affordable housing without a development that will upend a neighborhood’s fabric and its residents (it also is rarely, truly, “affordable,” and instead goes off a median income range that leaves out a city’s most vulnerable and low-income communities). Improved infrastructure? Get the money by attracting wealthy developers and taxing them. This logic also disintegrates when the method of attracting wealthy developers is providing astronomically high tax abatements (hello, Amazon). The entire logic limits the political imaginary of a city to one that caters exclusively to the landed class and private property valuations. It also, as Stein never shies away from pointing out, privileges the destruction of communities of color to better serve the needs of capital. The neighborhoods that get up-zoned are not necessarily the ones closest to train stops or public infrastructure; they’re the ones occupied by Black and Brown communities, because the powerful White property owners of other neighborhoods are often respected in their demands to leave their neighborhood unchanged. Histories of redlining, housing segregation, predatory lending, disinvestment, and racial and spatial violence are all wrapped up in determining which neighborhood sees the vulture capital arrive first.

Stein also tracks the deindustrialization of urban centers and, with it, the loss of production capital as a driving political force. Without this counterforce that viewed land as a cost rather than commodity (higher rents=demands for higher wages from employees), real estate became the primary driver of planning and policy decisions. Stein does not wax nostalgic for the days of powerful material producers — they fought for their own malicious and disenfranchising policies — but he does make a powerful case for the urban downfall propelled by moving production centers outside of the urban center (or the country as a whole).

This story does not have a 1:1 parallel in Los Angeles. LA’s major 20th century manufacturing core was the aerospace industry, which was enmeshed with the Department of Defense and Cold War-era policies. Also, while the sector is still a far cry from what it once was, LA/Long Beach/Anaheim has recently had the largest number of manufacturing jobs in the country. This points to the difficulty of comparing cities built on the 20th century urban model — New York, Detroit, Chicago — with the regional expolis of the Los Angeles area. The patterns and systems of real estate power, however, yield similar narratives regardless of the city’s relationship to former/current manufacturing powers. Real estate is a prime actor in Harvey’s concept of accumulation by dispossession, and while regions might have on-the-ground differences and relationships, the macro turn towards land and housing as an investment tool rather than a human right affects all contemporary cities, however different their local identities.

Stein argues well that Trump’s rise is as much about the eminence of real estate capital as it is about racism, misogyny, and xenophobia. There remains a breakdown of messaging about the connection between urban development and Trump’s presidency, as many anti-Trump groups are also pro-development. LA is a prime example of this contradiction — remember Measure S? Measure S, or the Neighborhood Integrity Initiative, appeared on the ballot a few months after Trump’s election, and it demanded a two-year moratorium on all development that required variances in the zoning code (as well as requiring an update to the city’s comprehensive plan during the two years). It lost, badly, in no small part to the campaigning against it by the anti-Trump coalitions in the city.

At the end of 2016, Donald Trump’s election either reinforced obvious problems about America or revealed them (largely depending on the color of your skin). Los Angeles, responding with the fervor of a threatened city, took to the streets in protest for days following his election and during seemingly every weekend in 2017. The stakes and energy were high, but feelings of powerlessness hung over any effort to affect the federal government. Enter: local issues, ready to receive the surplus political focus.

For many in LA, land of sunny skies and rampant wealth disparity, the issue of priority was (and remains) housing and homelessness. So when Donald Trump won only a few months before Measure S was up for vote, the fight had a new foil. The measure appeared to reek of Trumpian problems: wealthy residents refusing to accommodate new residents and an irresponsible nostalgia for an unsustainable old version of Los Angeles. LA Weekly, in its pre-buyout form, even referred to it as an attempt to Make Los Angeles Great Again.

It helped that the largest single donor for the measure was the AIDS Healthcare Foundation, whose president and co-founder Michael Weinstein had a bone to pick with a tall building development next to his office. This fed into a spun narrative that Weinstein was stepping outside his lane for personal reasons and threatening the livelihoods of Los Angeles’ poorest residents as a result. Nonprofit organizations, housing and homelessness advocacy groups, Mayor Garcetti, Curbed, LA Weekly, The LA Times, LAist (where I was a reporter, actively touting the supposed dangers of the measure), and newly politically vocal Angelenos all campaigned against Measure S. The Yes on S campaign also suffered when it made the bad call to send a deeply manipulative fake eviction notice to voters, terrorizing people into voting yes (which they didn’t end up doing, by a long shot).

Trump’s emergence as a locus for people’s political animus meant comparing a campaign to his reactionary, xenophobic, and bigoted politics was a surefire way to galvanize people to your side. Both the Yes on S and No on S campaigns knew this. Both called the other campaign Trumpian. If the campaign camps were really split along the fault line the No on S supporters claimed — progressive advocacy groups and constituents who embraced an LA for the many versus wealthy LA residents who wanted to keep power in the hands of the few — the progressive/conservative division would have been unarguable. What most of the reporting sidestepped, though, was the Yes on S support from two specific grassroots organizations: the LA Tenants Union and the Crenshaw Subway Coalition.

The LATU was in a more nascent phase, not yet having led the growing number of powerful rent strikes across the city. The Crenshaw Subway Coalition had, a few years earlier, won Leimert Park stations on the Crenshaw Metro Line extension and guarantees that they would be below-grade. Both are community-based and volunteer-run. They are grassroots groups comprised majority by real stakeholders in the neighborhoods they fight for. They are the precise communities all progressives claim to represent. So why weren’t they fighting as part of the No on S campaign?

New luxury development in downtown Los Angeles’ South Park neighborhood

These groups knew the claim that market-rate housing development lifts all ships is the neoliberal urbanist equivalent of trickle-down economics. They knew that catering to real estate capital and its desires necessitates a commodification of space, and that with commodification comes a decimation of affordable living. They could see firsthand that, regardless of the supposed politics of a group, when real estate is the most powerful voice at the table, low-income and non-White communities will suffer. Sure, the No on S campaign unified the liberal voices in Los Angeles politics, but it also engaged major real estate development companies to shell out cash to protect their interests. No on S was the work of the real estate state, and it was antagonistic to the communities it claimed to protect. It argued any housing for the homeless would have been stalled as a result of the moratorium. We are now inching closer to the end of what would have been the moratorium, and the funds set aside for homelessness have delivered zero returns.

Stein urgently points out how the entangled relationship between real estate and urban amelioration has turned neighborhood attention — the very thing disinvested communities need the most — into a dangerous proposition. This reaction is absolutely legitimate, as improved neighborhood conditions generally serve as preconditions for a total replacement of its residents. Critics believe this negative attachment to upgrades closes the door on new infrastructure, amenities, and provisions for a neighborhood (a similar claim as “voting against your best interests”). Why would any community ask for a new train, though, if they have no guarantees they’ll be able to stay when the train finally pulls up to the station? Until a political system moves away from lifting the spatial value produced by communities and putting it into the pockets of real estate powers, populations are disincentivized from cheering on a new, high-value development.

The current hyperspeed growth of Inglewood reveals this dynamic occurring in real time. The arrival of a new stadium and the billions of potential real estate valuations has spurned rapid change in the city. One crucial tool for this increased value was the extension of the Crenshaw line to the LAX connector, bringing public transportation to LA’s airport for the first time and new access to a wide swath of South LA. Public transportation is a necessary component of a healthy city. It provides low-cost mobility, reduces greenhouse emissions, and democratizes access to space. When it feeds directly into increased real estate value, though, it falls prey to the cycle of gentrification that displaces the very residents that have felt the brunt of inaccess and disinvestment for decades. To reduce the impact of histories of racial and economic oppression, and to reverse its course for the future, cities need more homes and better transit. As Stein lays out in his book, though, these components cannot be trusted to push back against rampant gentrification on their own. Without political will and policies that disincentivize the production of real estate capital, all civic improvements will be building blocks for its own downfall. The ouroboros of urban development will continue to sacrifice the potential for true spatial justice.

It’s hard, but feasible, to identify the patterns of policy and development that have ushered in new levels of gentrification. It’s harder, still, to identify the best methods for undermining the power of real estate capital. Stein spends the final section of his book doing this, and points out the specific power of tenants as a political bloc (in NY, that group is even larger than the percentage of transit riders compared to car drivers) and the necessity for powerful rent control laws. Really, what he advocates for is the abolition of private property, but tenant power and below-market rent are steps to reach for in the meantime. In New York, current fights include a rigorous campaign for Universal Rent Control legislation and the growing strength and size of local groups like the Crown Heights Tenants Union. While California received a major blow when Proposition 10 failed to win on the 2018 ballot, the high campaign spending from real estate demonstrated the threat something like Prop 10 would have had to their interests. Prop 10’s loss was not the end of hope for a rent-controlled future in California; it brought the fight into sharper relief.

As Rebecca Solnit wrote in Hollow City: The Siege of San Francisco and the Crisis of American Urbanism, “[e]very day somebody’s apartment or house is turned from a home into a commodity and put on the market, and they join the ranks of the displaced.” Turning to the market to solve the crisis of cities is putting faith in a fantasy. As cities continue to lose their grip on the reality of their citizens, and see buildings shoot up as more and more people fill the streets or leave the city entirely, the generative force of urban life will disappear. It is, of course, this generative force that gives cities their value in the first place, but this remains unconcerning to the capital that keeps getting distracted by its reflection in tall glass husks. Hopefully, though, it’ll stay distracted, oblivious to how much the people whose homes it destroyed have started to organize.

Samuel Stein’s “Capital City: Gentrification and the Real Estate State” is available March 12, from Verso Books.