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Impact of Gentrification to a Global City Research Paper

Gentrification is a process that involves the change of residence among the middle class to areas that were occupied by the working class (Causes of Gentrification n.d). These movements lead to dislocation of the low income residents together with their business enterprises. Sociologically, people live in a society which is socially stratified.

The movement of middle class to new residences leads to the development of these areas. Historically, towns have developed through displacement of low class people by the middle class. For example, the developments of urban centers like Harappa and Mohenjo Daro in the Indus valley of Mesopotamia due to agricultural activities, revealed massive displacement of the low class from the Indus valley leaving it for the middle class who could afford to live by the living standards.

Therefore, gentrification changes the social status of any given region economically, culturally, and politically. The mass movement of people can cause housing and health problems to the local inhabitant who could not afford to continue staying in these places. In addition, there is a notable change in the lifestyle of various individuals.

This process of relocation has various factors that support its occurrence. These causes can also be referred to as forces. A case study of the city of Oakland revealed a change in the economy of the world after World War II led to job losses among the working class.

The West Oaklanders depended on this as their source of livelihood. Therefore, this occurrence made them more vulnerable to displacement by the wealthy merchants. Moreover, West Oakland residents lacked investment in transit and schools; this made them marginalized and could not access employment.

The residents highly relied on automobiles; therefore, their absence made it impossible for them to access commercial centers in the developed suburbs. This inequality in development was enhanced by the wealthy group who could own automobiles. West Oakland, therefore, became open for gentrification. This was due to massive developments in the well equipped regions that had low population density. The government policies at that time also favored developing such regions.

Developments in these regions led to growth of industries thus occupying vast pieces of land, which were occupied by the middle class (Causes of Gentrification n.d). This step resulted to movement to regions like West Oakland that had the poor as the majority. West Oakland had problems with controlling their economy, which was unstable; they also had cheap real estate due to inequitable development programs by the government. As a result, gentrification became an inevitable factor.

Neil Smith’s theory of production asserts this phenomenon; it relates money and production. The low rental houses in the outskirts of urban centers made merchants move from inner city to these areas after World War II. Simultaneously, capital movement to these new areas became inevitable.

This scenario led to increase in land value in the suburban areas and consequent decrease in land value at the inner city. This analysis revealed a larger rent-gap. Smith argues that this difference made developers rethink on rebuilding the inner city thus leading to higher mortgages from the high profits attained. Clearly, there is an upgrading of the inner city’s neighborhoods. Further, there is the population and demographic backgrounds. This aspect analyzes the rapid growing population between the ages of 25 to 35.

These people increased demand for houses. For instance, in London, the high demand during 1984 saw the recycling of cities cope up with the high demand. These new crops of people were young, singles and talented with good jobs in the city. They got married late and had fewer children than their predecessors. Notably, the females were also getting into the workforce; this led to increase in household earnings (Causes of Gentrification n.d).

Some took a long time before getting children, and with continued influx led to search for alternatives away from the inner city. This baby boom generation preferred staying close to their workplaces. This scenario led to invasion of neighborhoods to look for space to accommodate the new generations who preferred living closer to their work stations. Markedly, these groups had little concern for school and conditions of playgrounds as they had no children at early ages.

Another cause for the change in lifestyle can be attributed to belief and attitude change among the middle and upper class that opted to live in urban areas to rural and suburban. These groups of people preferred living in the inner city with the pioneers. The increased movement in the 1970s led to congestions in the inner city, thus making the middle class look for alternative residences at the suburban where the low class people were staying.

There is also the political reason behind gentrification. In this point, there are two advances, the traditional and Marxist. The traditional perspective argues that the alterations in the political systems in 1950s such as desegregation and anti-discriminatory laws at the workplaces made different races move into the city. This led to movement to suburban lands and estates which further facilitated the movement into the inner city.

On the other hand, the Marxist dimension denies the view that political and economic factors as perceptible in facilitating the gentrification process, but purports that such acts are intentional. That is a powerful group designs a policy of neglecting the inner city, but when they become aware of the benefits that the inner city occupants enjoy, they forcefully displace the powerless residents to suburban regions hence gentrification.

Moreover, there is the Consumption theory argues that the consumption blueprint among the middle class is the main cause for gentrification (Chelcea 2006). Therefore, the theory focuses on what a group consumes to determine the ability to occupy a new residential area.

David Ley argues that market nature does not affect gentrification; for instance, gentrification accommodates changes that occur due demands that arise from a given generation. The gentrification process, therefore, occurs with the urban pioneers like artists moving in to redevelop potential areas.

Later, the complete refurbishment leads to rise in prices of houses, health facilities and taxes hence outclassing the local residents. The middle class, then, moves in this displacing the low income earners. Afterwards, the upper and middle income earners demand better services forcing alteration in business strategies consequently increasing prices. The continued increase in prices phases out the remaining low class hence more middle and upper class merchants come in leading to a continuous process of gentrification.

This process of displacing a group of individual from their areas of residence and consequent building of better houses has numerous impacts that range from the economic to the cultural front. In the economic front, property owners receive high incentives for venturing in the low class regions (CDC – Healthy Places – Health Effects of Gentrification 2012).

World governments view such developments initiatives as a positive approach in improving the economy. At the same time, the developers will realize increased values for their properties. That is the middle class will be willing to rent the new houses at a higher price than the low class residents. The increased property rates can also stabilize a shaky economy among the players. In addition, local governments’ record increased tax outputs from the new businesses set in such areas.

This change through gentrification can attract further developing firms into such areas thereby increasing the overall economic growth. Further, people are well positioned to own homes in such arrangements thus stopping to stay in rental houses that are common in inner cities. On the other hand, gentrification phase out retail chains together with the low income earners.

The social aspect is a broad subject that analyzes displacements and social changes. Forceful displacement of the low class is a negative effect of gentrification which can lead to homelessness. These people are forcefully displaced from their historical habitats. Those who decide to remain experience a high increase in the prices of basic services hence can be termed as exploitation of the local inhabitants.

Additionally, gentrified people lack political and economic power to demand their rights as they are unable to meet the new targets (Abrahamson 2004). Again, there is loss social diversity with the coming of the middle and upper income earners. These groups of people are always reserved; therefore, little engagement in societal issues that bring people of different races, religions and ethnic groups together.

Global cities, on the other front, have a global network that affects their operations. These cities have an economy that depends on each other. Cities like Frankfurt, Chicago and Toronto have concentrated their economic activities in certain parts of their cities (Abrahamson 2004).

Notably, there exist similar chains that exist in all these cities, for example, The Coca Cola Company, MacDonald Fast Food chains amongst others. The set up in these cities favor settlement of high income earners. For instance, the flow of capital into these cities mostly targets commercial and financial centers thus leaving small scale businesses.

In addition, the low class cannot withstand the tax levy in the cities; this makes them move out of the city to look for some locations which are favorable. The global economy also alienates the middle income earners from inner city to search for alternative settlements which are only available among the low class in suburban regions. The global cities have a network of economy that links their daily operations such that an effect on one city will automatically be felt in other cities and to the whole world.

For instance, the relationship between Moscow and Illinois economy was evident in 1998 when GUM mall in Moscow underwent financial problems. The Germany’s Dresner Bank accepted to lend GUM $10 million and by 1997 GUM’s liquid assets reached $30 million. When GUM started experiencing some financial challenges, businesses in Thailand also started recording negative turnovers, unemployment and inflation was a common issue.

This situation prompted the locals to change their currencies to US Dollars at any exchange rate. This trend continued until the value of Thailand’s currency begun to decline. The Hong Kong’s stock market, later, felt the effect by recording a loss of 23% of their stock value within a period of four days. This market shock continued until in 1998 when the New York, Brazil and Mexico’s stock markets all recorded a one-day loss. Afterwards, GUM merchandised products lost value in Illinois US.

Modern colonization took effect mostly during the Industrial revolution where Asia and Africa colonization took centre stage. Powerful colonial masters were extending their influence in the name of market expansion. Bourgeoisies like Cecil Rhodes avoided social revolution by foreseeing colonial conquest. By 1800, the inequality ratio rose to two to one due to massive polarization.

Currently, the ratio has jumped to 60:1; this implies that a paltry 20% of the world population can access the beneficial system. The liberation movement that took place after the Second World War saw the start to an end of colonialism and the European expansion trend (Chelcea 2006). This expansion, between 1500 and 1950, marked the initial development of capitalism where there were two aspects of living styles among the world population.

For example, in the 1960s, chief executive officers of American large non-financial institutions were earning an average of $190,000 which was over forty times the earnings of a factory worker. In 1980, the CEOs could take home over $2 million, 93 times the pay of an industrial worker. Clearly, the drivers of an industry are the factory workers, without which the industry cannot operate. Ironically, the inequality practised gave them less recognition for their tireless efforts.

Later, social arrest came up, where the workers made the US environment extremely hostile as they were demanding equal treatment just like the bourgeoisies. The bourgeoisies, on their part, felt that implementation of equality will make them lose their workers hence reduction in the profit margins. Evidently, the entire world’s population lives different lives thus prompting dissatisfaction among the low class in the society.

The economic difference that was pioneered by the powerful forces is a form of discrimination of liberty and other fundamental human rights like rights to own property (Sassen 2005). Attempts by the low class to institute social and political equality have been met by strong resistance among the upper class and the economically endowed continents. These nations fear that should other nations become economically empowered; their control over such countries will fade.

For instance, the numerous American companies that were set abroad between 1980 and 1990 could experience low customer base and even the decrease in the number of employees as they will own their own firms. It is this dominance of the US industries overseas that makes it difficult for US to accept the idea of economic globalization. In addition, the massive cost of investment that the US incurred in furnishing these industries will not be regained with the economic globalization phenomenon.

On the other hand, citizens are provided with variety of products which are of high quality due to competition. This type of economy also makes it possible for movement of people all over the world to seek for good employment terms. The former colonialists argue that this free movement also increases networks of terrorism into the countries; a situation that destroy their economy. Further, they argue that such free movements enhance the spread of diseases like HIV/AIDS.

The call for correction in the livelihood of all individuals globally constitutes economic globalization. This aspect also ensures that production of goods and services are made to be similar world over. For instance, US citizens can start purchasing clothes made in China and vice versa and even obtain vehicles made in South Korea. This reveals the globalized nature of the economy where freedom of choice is not restricted and all nations appreciate the technology and works of each other.

Gentrification encourages the development of new high and middle income areas world over. This scenario makes it possible for a continuous and uniform replication in different parts of the world hence leading to a similar economy (Sassen 2005). The similar economy is facilitated by setting up of similar chain store like food stores in these upcoming suburban areas.

This process will actually create a globalized economy that is uniform from the onset. Moreover, office congestion in the inner city will force other individuals to move out to the outskirts of the city center. This scenario will encourage decentralization of services and development in the world.

A global city like New York can experience massive reduction in criminal activities that are related to low class actions (Sassen 2005). Through gentrification, the movement of low class individuals will be fostered, and this will increase the space for developing new residential homes for the middle class around the city.

In addition, there will be an increase in the number of large and middle scale corporations that will be willing to invest in these new areas. Consequently, the overall economy will rise alongside increased employment opportunities and reduced inflation.


Abrahamson, Mark. 2004. Global Cities. New York: Oxford University Press.

CDC – Healthy Places – . 2012, September 25. Centers for Disease Control and Prevention. Web.

. n.d.. The On-Line Conference on Community Organizing. Web.

Chelcea, Liviu. 2006. . Academia, 1. Web.

Sassen, Sakia. 2005. “The Global City: Introducing a Concept.” Brown Journal of World Affairs, XI (2), 27 – 42.

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