Subsidized gentrification

When part of a city has been abandoned, and the Bohemians and working people move in, they often create a wonderful neighborhood. The demand for the neighborhood increases, values increase, the wealthy outbid the poor, and slowly the neighborhood, as it was, disappears. This can generally be stopped, but it's very hard work. In Eugene, 5th Street Market is an example: started by hippies, taken over by millionaire investors. Greenwich Village in Manhattan is a more famous example, but I think one of the best examples, is Venice, Italy ... built gradually for more than a thousand years, the Venetians themselves are now priced out by expensive hotels, and billionaires looking to display their art collections.

It's hard to stop. But a different trend, is when such gentrification is subsidized speculatively, by government. Subsidized Gentrification is the Eugene City staff's brilliant plan for West Broadway in downtown Eugene: take solid buildings, half-full with Bohemians, and before the process has run its course, before there is demand, kick out all the poor people, destroy the businesses that serve them, and roll-the-dice on a high-end mall.

There's a downtown group that's partisan to this kind of development, and its director recently wrote me:

"The real estate is too valuable for it to stay in the current condition"

I wrote back:

"If the cost of locating to the buildings is too high, as it obviously is, then the real estate is less valuable than expectation. When the demand increases, so does the value. That's very basic economics. When the demand is low, redevelopment can only happen with grossly wasteful public subsidy. This happens all over the country, and it's criminally undemocratic."