The Commodification Gap

Gentrification and Public Policy in London, Berlin and St. Petersburg

Matthias Bernt

• Publisher: Wiley
• Year: 2022
• ISBN:
  9781119603078
• Edition: 1
• Topic: Sciences sociales
• Subtopic: Sociologie urbaine

THE COMMODIFICATION GAP

'In an elegant and careful theoretical analysis, this book demonstrates how gentrification is always entwined with institutions and distinctive contextual processes. Matthias Bernt develops a new concept, the "commodification gap", which is tested in three richly researched cases. With this, the concept of gentrification becomes a multiplicity and the possibility of conversations across different urban contexts is expanded. A richly rewarding read!'

—Jennifer Robinson, Professor of Human Geography, University College London, UK

'Urban studies has reached a stalemate of universalism versus particularism. Matthias Bernt is breaking out of this deadlock by being very precise about what exactly is universal and what is not – and how one can conceptualize both. The Commodity Gap is a key contribution to not only gentrification studies, but also to comparative urbanism and urban studies at large.'

—Manuel B. Aalbers, Division of Geography & Tourism, KU Leuven, Belgium

The Commodification Gap provides an insightful institutionalist perspective on the field of gentrification studies. The book explores the relationship between the operation of gentrification and the institutions underpinning - but also influencing and restricting - it in three neighborhoods in London, Berlin and St. Petersburg. Matthias Bernt demonstrates how different institutional arrangements have resulted in the facilitation, deceleration or alteration of gentrification across time and place.

The book is based on empirical studies conducted in Great Britain, Germany and Russia and contains one of the first-ever English language discussions of gentrification in Germany and Russia. It begins with an examination of the limits of the widely established "rent-gap" theory and proposes the novel concept of the "commodification gap." It then moves on to explore how different institutional contexts in the UK, Germany and Russia have framed the conditions for these gaps to enable gentrification. The Commodification Gap is an indispensable resource for researchers and academics studying human geography, housing studies, urban sociology and spatial planning.

CHAPTER 1
Introduction

Gentrification Between Universality and Particularity

In the late 1990s, Prenzlauer Berg, a neighbourhood in East Berlin, experienced rapid changes. After decades of decay, more and more of its dilapidated residential buildings were bought up by investors, renovated and rented out with considerable price increases. Grey and weathered facades turned into colourful yellow, lilac and pale blue. The smell of coal produced by oven heating disappeared. The place became fashionable and more and more media reports came up with stories about Berlin’s new ‘in‐quarter’. Accompanying this, the composition of the population changed too, with newcomers tending to be younger, better educated and, as time went by, also richer than the established residents. Together with this new population came a wave of newly established bars, clubs, restaurants, boutiques, etc.

So far, the story hardly sounds spectacular – even readers who have never heard of Prenzlauer Berg will most likely be aware of similar changes in other neighbourhoods and cities. In fact, what happened in Prenzlauer Berg has been experienced in many places in the world, before and since. The term gentrification has now become the most common term used for this kind of urban transformation. The theme has become so omnipresent that hardly any international conference that is focused on the urban proceeds without presentations on gentrification. Stacks of books have been written on the subject and in many countries the term has entered everyday vocabulary. Gentrification, however, was a term invented by the British‐German sociologist Ruth Glass, who described it as early as 1964, in the following words:

One by one, many of the working class quarters of London have been invaded by the middle‐classes – upper and lower. Shabby, modest mews and cottages – two rooms up, two down – have been taken over, when their leases have expired, and have become elegant, expensive residences. Larger Victorian houses, downgraded in an earlier or recent period – which were used as lodging houses or were otherwise in multiple occupation – have been upgraded once again… . Once this process of ‘gentrification’ starts in a district, it goes on rapidly until all or most of the original working class occupiers are displaced, and the whole social character of the district has changed.

(Glass 1964, pp. xviii–xix)

Changes from shabby and modest to elegant and expensive were, of course, exactly what activists in Prenzlauer Berg had in mind when they started using the term gentrification to depict the changes they saw happening in their neighbourhood in the late 1990s. They were met by sharp opposition. Public officials and urban planners, but also Berlin‐based urban scholars, took the claim that the changes taking place in the quarter could be termed as gentrification as an insolent provocation (see Winters 1997; Häußermann and Kapphan 2002). Interestingly, the arguments brought forward at that time were neither confined to questions of data interpretation, nor did they move quickly to the possible implications for public policies and planning. More often than not, a rejection of the argument came together with de facto claims about the ontological status of the concept of gentrification. A larger group of critics posited that the concept of gentrification was developed in the contexts of the USA and the UK, with their untamed laissez‐faire capitalism (and had limited value beyond these locations). European cities, in contrast – and Berlin, in particular – would be marked by stronger urban planning, more welfare state assistance and highly developed tenant rights that together would protect the city from the excessive development experienced elsewhere. Altogether, this would make the concept of gentrification inapplicable. A second group of critics addressed the situation from another direction. They argued that gentrification was a necessary and unavoidable companion of capitalist land and housing markets. As long as there was capitalism, there would be gentrification. Talking about rent regulations and planning strategies would, therefore, only turn attention away from problems that were systemic in nature.

Thus, whereas one line of critiques emphasised the particularities of Berlin and set them in contrast to a perceived Anglo‐American ‘normal’, the other managed to do exactly the opposite and abandoned the specificities of Berlin to make a global critique of capitalism. Unwittingly, both perspectives made an age‐old choice known from the field of comparative social research: analysing the same situation and empirical data, the first argued in a clearly individualising way, whereas the latter rested on a universalising form of explanation. The outcome was diametrically opposed positions.

What both perspectives had in common, however, is that they effectively cushioned Berlin’s planning and renewal policies against criticism. If planning, welfare protection and tenant rights were so strong that gentrification could not happen here, why change anything? If gentrification was so deeply embedded in the nature of global capitalism, why should one expect local policies to make a difference? In summary, while coming from opposite directions, both critiques effectively shielded the policies of ‘Careful Urban Renewal’ exercised in Berlin at those times (see Chapter 5 for details) against criticism and helped in defending the status quo.

With this study, I want to suggest a different perspective on gentrification. I will show that gentrification is, indeed, a universal phenomenon that reflects general conditions set by capitalist land and housing markets, yet at the same time, it is only made possible through specific institutional constellations. Gentrification, I argue, is at the same time economically and politically determined. It rests on historically specific entanglements of markets and states, expressed in multiple combinations of commodification and decommodification. Analysing the historically specific nexus between commodification and decommodification in driving gentrification is, therefore, central to this book.

What is meant by decommodification and commodification? Under capitalism, most housing is produced for the purpose of being sold as a commodity in the market. At the same time, housing is an essential human need. Most societies have, therefore, found ways in which the production and/or consumption of housing is completely or partly sheltered against the markets, so that its character as a commodity is limited and/or restricted. Thereby, commodification and decommodification stand in a dialectical relationship. Commodification happens when the social use of housing is subordinated to its economic value. When housing is commodified, it can be treated as an investment and can be purchased, sold, mortgaged, securitised and traded in markets. Decommodification occurs when exactly the opposite is taking place (see Esping‐Andersen 1990, p. 22). When the provision of housing is rendered as a right and/or when a person can maintain accommodation without reliance on the market, or when the conditions in the markets make it impossible to trade housing or invest in it, the commodity status is loosened and housing becomes decommodified.

With this study, I argue that it is only when decommodification is limited to a degree that allows for satisfactory rates of return on investment in housing that upgrading becomes lucrative for investors and gentrification is achieved. This is what I call the ‘commodification gap’. I argue that it lies at the heart of what makes a difference when comparing gentrification across varied contexts. The major point here is that the general dynamics of commodification are universal in capitalist societies, whereas the ways in which markets are embedded into societies and the variations in which social rights are perceived, negotiated and legislated are not.

The treatment of gentrification as either a general feature of capitalism or a local experience – as argued in the debates in Prenzlauer Berg that I have described – thus, rests on a false dichotomy. However, this treatment is not unique to Berlin. Quite to the contrary, the difficulty of balancing historical and geographic particularities with the status of gentrification as a general theory has been a problem that has occupied urban scholars for a long time. Gentrification studies have been characterised by a progressing seesaw motion between universalising and individualising approaches for decades. When the term gentrification was invented by Ruth Glass, it primarily reflected on a very British (and to some degree even London‐based) experience. Picking up on historical English class structures, the term gentrification had both a descriptive and an analytical edge, but always with a close connection to London. This is also reflected in the title of the book: London: Aspects of Change. Only a few years after the development of the term, it travelled to the other side of the Atlantic and stimulated a first wave of studies in North America. Here, the background was a novel and counterintuitive ‘back to the city’ movement of middle‐class households experienced after decades of ‘urban crisis’ and ‘white flight’, for which new explanations were needed. In this context, gentrification appeared as the term du jour to describe a new phenomenon. By and large, two major forces were seen as driving it – and both seemed to be of universal value (at least in Canada and the USA): (i) the sociocultural transformations accompanying the dawn of a post‐industrial society, resulting in the rise of a new middle‐class and (ii) the discovery of inner cities as a renewed terrain for investment strategies. Both transformations made up the core of explanations for gentrification back then and for more than two decades ‘gentrification debates battled back and forth over the “post‐industrial, new middle‐class thesis” and the “rent gap exploitation thesis” over what had caused the rise of gentrification’ (Shin and López‐Morales 2018, p. 15). While gentrification expanded fast as a research field and became a major battleground of scholarly debates, differences between the place of its origin (London) and cities like Philadelphia, New York, Vancouver and others were hardly raised as a matter of concern.

In a second wave, the gentrification concept travelled back and forth across the English Channel to Western Europe, i.e. to a context that had also experienced deindustrialisation, suburbanisation and the growth of a service economy, but with some delay and a different history of urbanisation and housing. Here, too, empirical studies (by and large) stayed with the concepts imported from the USA/UK. At the same time, the particularities of West European cities, as opposed to those in the UK and the USA, were raised as issues of concern and attributed to ‘contextual factors’ or ‘modifications’. If the first phase of gentrification studies had been uninterested in the issue of comparability, the contributions in this second phase were marked by attempts to contextualise what was still seen as a global phenomenon explained by universally valid theories.

From the late 1990s, this mood changed considerably. In the USA and the UK, gentrification had become such a cottage industry of academic career building that not only were more and more studies produced, but also more and more phenomena that were not included in the classical gentrification canon were now characterised as gentrification. Research emerged about commercial gentrification (Bridge and Dowling 2001), new‐build gentrification (Davidson and Lees 2005, 2010), tourist gentrification (Gotham 2005), rural gentrification (Phillips 1993, 2004), studentification (Smith and Holt 2007), super‐gentrification (Lees 2003; Butler and Lees 2006) and other forms of upgrading that did not follow the traditional demographic, cultural, and spatial patterns known from earlier gentrification studies. This expansion of gentrification research led to a grow...

Table of contents

• Cover
• Table of Contents
• Series Page
• Title Page
• Copyright Page
• List of Figures
• List of Tables
• Series Editors’ Preface
• Preface
• CHAPTER 1: Introduction
• CHAPTER 2: Why the Rent Gap isn’t Enough
• CHAPTER 3: Three Countries, Three Housing Systems
• CHAPTER 4: Barnsbury
• CHAPTER 5: Prenzlauer Berg
• CHAPTER 6: Splintered Gentrification
• CHAPTER 7: The Commodification Gap
• Appendix A: Appendix ACompulsory Purchase in Barnsbury
• Appendix B: Appendix BResidents in NS‐SeC Classes 1 and 2
• References
• Index
• End User License Agreement