Week 4 Lecture Notes_ Redevelopment & Gentrification

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Toronto Metropolitan University *

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Apr 3, 2024

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Week 4 Lecture Notes: Redevelopment & Gentrification Module 3(A) August & Walks ● The goal of this study is to examine how the financialization of rental housing is: – Reshaping Toronto’s rental housing market – Restructuring the social space of the city Financialization of multi-family rental housing What is “financialization”? ● Productive activities: Determined by financial activities (manufacturing) ● Today our economy does not rely on productive activities; now it relies on the financial market ● Example: 2007-08 financial crisis was originated by a crash in the stock market → not actual productivity ● Financialization: finance sector became dominant and determines the good or bad in countries The financialization of housing markets: when house is no longer considered just a shelter, where housing is considered as a financial asset ● Housing as a financial asset vs housing as shelter ○ Housing as a shelter: source of protection ○ Financial asset: housing is not just a shelter/refuge for people → now is considered as a financial asset → people own houses as a means to make money/make profit ● Multi-family rental housing is increasingly been treated as a financial asset ○ Multi-family rental housing: Refers to apartment buildings that are for rent (not condos) ○ Multi-families: there are multiple units on every single floor, different from townhouse (one unit); apartment tower has number of different families ○ Apartment towers have become a financial asset but… ● Who benefits and who suffers the consequences? ○ Variation in people can have a positive effect on some and negative effect on others ○ So who benefits and who suffers the consequences of the financialization of the housing market?

Toronto as the ideal case study ● Located at the center of Canada’s largest CMA (larger area than city of Toronto but GTA is larger) → most important unit of this larger CMA ● Large rental sector (46% of households are renters) → they do not own their own property, rather they pay rent every month to their landlords ● Canada’s financial center: many financial decisions are made → high percentage of renter and finance decision affecting the country takes place in toronto ● Highly gentrified → Toronto has a lot of areas that used to be low income areas that became totally renovated From Social Housing to Vacancy Decontrol

● 1950s-1970s: apartment construction was massive in the city: lots of apartments and apartment building were being constructed; before it was not like that at all, most were detached or semi-deatched houses; came about after WW2 ○ After WW2: due to increase of population from baby boomers (lots were born) ○ Also because a lot of European immigrants came to canada ○ More people → more homes to accommodate them ○ Massive apartment construction to accommodate all these people ○ Apartment construction was made possible by improvement in construction technology (floors upon floors → vertical building) + economy was doing well so financial source was present ● 1980s-1990s: rental housing construction declined in favour of condominium development ○ What made builders more interested in building condos over rental apartments → construction industry realized that by building condos they could have made a profit immediately ○ If it was rent → profit was dispersed throughout the years ○ If condos are built, builders invest a lot of capital to build → but guarantee that cost is covered and also making profit in a short period of time → because once the condo is build, they can sell and immediately make money ○ If built for rent → every month is a modest rent, in a time span of 20-25 years, it would take time ● 1990s: the decline of social housing construction in the 1990s ○ In conjunction with the proliferation of condos and the decline in rental apartment, social housing was also declining ○ Social housing: public housing owned by government (not private companies) to rent to low-income people for an affordable price ○ Public housing = social housing ○ Why did they stop building public housing: provincial government had a financial deficit, stopped putting money on social housing → they withdraw from social housing ○ In period before 1990s, public housing was built with the financial support of 3 government levels: federal government, provincial government, and city of toronto ○ Federal government: can’t put money anymore → downloaded (transferred responsibility) to provincial government → Provincial passed it to city of Toronto → cities left alone to cover the expenses (cities are the poorest level of government) → public housing came to a standstill ○ 20 years of no public housing in the country and city of Toronto ● 1997: the 1997 tenant protection act and vacancy decontrol ○ Introduced by the provincial government ○ This legislation seems like it would protect tenants/renters by looking at the title

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○ BUT… this act introduced vacancy decontrol ○ Vacancy decontrol: if you are renting your place, you are not allowed to double your rent from the next year → only increase certain percentage of rent according to the province (e.g., the province will tell them to increase only by 0.5% each year) → but this legislation states that if your place is vacant, you can rent how much you want ○ Example: someone leaves, the next person will not rent the same as previous renter, they can increase rent as high as they want Financialization of rental housing in Toronto The financialization of rental housing started as a way to capitalize on: ● Deregulation: no limit to how much you can charge (after renter left and new one comes) → financial asset: landlords can make money → charge how much you want once vacant ● Downloading: transfer of responsibilities → city stopped building public housing → landlords take it as an opportunity of scarce housing to have renters pay rent made by landlords ● Lack of affordable housing Private real estate companies’ transformation into Real Estate Investment Trusts (REITs) ● Make money by considering housing owned/rented as financial market → generate shareholders for their companies Strategies of financialized landlords ● Financialized landlords have developed strategies to maximize profits for investors – Treating homes as financial assets: not a shelter/refuge, but means to make money for themselves and their shareholders, engage in practices of cutting costs – Cutting costs: paying a cleaner every two weeks – Increasing revenues: asking residents to pay additional fees for common areas or etc. (example: rent areas for parties) – Gentrifying-by-upgrading: increase rent above provincial guidelines by showing to the provincial government that they improved building → people move out → vacancy control by increasing rent → they get rid of low-income tenants → have wealthy tenants come in Geography of post-crisis intensification and expansion ● Following the 2008-2009 recession, the financialization of rental housing intensified – New and aggressive financialized landlords entered the Toronto market and have adopted 2 major locational strategies

● Suburbs: squeezing profits from existing tenants → “I am going to cut my costs, less services provided to you” increase revenue by reducing expense ○ Example: every month I make 10K each month but I have to pay 5K for services (trash removal) → 5K profit ○ but if I reduce expenses I can make more profit → cut cost, make more profit ● Inner city: gentrifying-by-upgrade (thus displacing existing tenants) ○ Improve building, demonstrate that I improved building, government agrees for my increasing rent → low income tenants leave and wealthier tenants move in Repositioning spatial inequality Investing in multi-family housing has been quite profitable for financialized landlords ● Landlords benefit from financialization of housing market but consequences to tenants ● The price has been paid by tenants in terms of ○ Higher rents and fees ○ Reduced quality of life The city has witnessed ● Increased neighborhood income segregation → separation between rich and poor areas ● Restructuring of the inner city (through gentrification) Conclusion ● The financialization of rental housing has been allowed by neoliberal policies ● The phenomenon is particularly evident in Toronto and this has resulted in – Increasing inequality: between rich and poor – Spatial displacement: displaced because they cannot afford rent Module 3(B) Lehrer Toronto’s socio- spatial transformation and its causes: ● Continued rapid suburban growth: general increase population in the suburbs (outer suburbs, Markham, Richmond hill, Vaughn) ● Decline and disinvestment in the inner suburbs: this was written five years ago but does not apply now → they do not spend the money on inner suburbs ● Inner city reinvestment (gentrification): most investment and most gentrification → inner city space is almost totally gentrified

● Lake Ontario to Steeles Ave in the north ● Inner city: purple ● Inner suburbs: orange, yellow, green → has the least investment in the city Gentrification in Toronto ● Process that has occurred for many years but the term was coined but Ruth Glass ● Glass was studying in the city of london UK, she noticed that in the inner city of london areas were being renovated, became nicer, and wealthier moved in and pushed out low income people ● Gentrification process has changed throughout the decade ● Initial process was that the rich bought areas just to profit of it and make it nice ● Now, condos are built and renovated ● From the upgrading of individual houses to the construction of new condominium towers ○ Process exclusively led by few people buying property and renovating it to people making more renovations and building condos ● From the inner city to neighborhoods located beyond the immediate core ○ Gentrification in the beginning, was exclusive to inner city, today it is outside the boundaries of the inner city → inner suburbs ● From an individual initiative to a process involving larger developers and state support ○ Companies that have a lot of fluidity/cash to develop ● From a residential to a commercial process ○ Not just renovation of houses, today it extends to businesses → commercial gentrification: not housing but commercial space ● Businesses bought up by big companies → kick out low income independent stores and replace them (e.g., yonge street)

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● Entirely gentrified areas ● Distillery District and Leslieville ● The junction and liberty village *not the only gentrified areas there are more but this is only an example

*no need to memorize the names and dates of these legislations (not in the final exam) → just understand that this support of gentrification on the part of the province + city that just started → it has shown support for a very long time What can the city gain from the gentrification of the city? ● The main source of income of the city is property taxes: more people pay property taxes ● The gentrified area that is low income → nicer → more attractive → value of the land goes up → more property taxes in a gentrified area ● Increase in gentrification → increase property taxes → increase income

What can the province of Ontario gain from the gentrification of the city? ● They do not get property taxes ● Since early 2000s there has been an increased pressure by the province to reduce urban sprawl ● Facilitate intensification: bring people back to the city → facilitates gentrification → construction of condominium towers The Condo Generation ● Condos are a part of gentrification: built to be sold for property owner ● Tend to be relatively young: Young (24-40 years-old) ○ Young people are most attracted to downtown or inner city living (entertaining amenities) ● Highly educated: mostly achieve a BA ● Couples or singles (no children): maybe a pet but not children ○ Generally, condos are fairly small; rare to find 3 bedroom units; usually studio, 1 bed, even 2 bed ○ Children need more space and not ideal for condo living ● Employed full-time ● Above-average income ○ Condos are fairly expensive in city of toronto, pay the mortgage ● Home-owners ○ Condos are built to be sold ● These are the people that Richard Florida identifies as members of the creative class: http://bigthink.com/videos/the-creative-class-is-alive-and-well Richard Florida ● Scholar that published the book “rise of the creative class” Video Notes

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● Sciences, arts, entrepreneurship ● Rate of unemployment never went higher than 5% ● Half of the workforce are in the creative class ● All over the world 40% in creative class ● How do we get people into the creative class Who is the creative class? ● Tend to have education: work with their mind rather than their strength ● People who do not work with their physical strength, rather use their mind, and creativity ● Specific group of people that tend to have certain characteristics ● Condo people fit this creative class of people What is the result of the condo boom? ● How are condo-dwellers affecting the existing retail and commercial composition of downtown neighborhoods? ○ People are willing to spend their money in food, electronics, and etc. ○ Affects retail environment → the kind of the stores that appear relate to what the people in the neighborhood want ○ Depend on who live there ○ Retail environment changes to match the individuals living in the area → lower scale businesses are pushed out ● Are existing businesses and services that cater to lower income residents being displaced? With what consequences? ○ Yes they will be displaced ○ Low income store will gradually be pushed out and be replaced by affluent businesses that offer different kind of businesses Gentrification and its contradictions ● Gentrification relies on selling Toronto as a multicultural, diverse and inclusive city ○ Those that make up the creative class/those who buy condos like diversity ○ Condo campaigns present that downtown core is diversity → attracts them ○ Leher argues that what gentrification is doing is exactly the opposite of diversity → it creates a space that is exclusive (e.g., no socioeconomically diverse given that the healthy can only afford the area ○ Area promotes diversity and inclusivity but not really since actual diversity is pushed out ● Yet, gentrification has resulted in a more homogeneous, highly exclusive and less diverse city

Kern How does a gentrification campaign to attract women in the city? Questions in the reading/main ideas: ● How do gendered ideologies fit in the discourse of urban revitalization in Toronto? ● Do women feel safe in the city? ● How are constructions of gender manipulated by neoliberal urbanism? How do they connect with gentrification? Women & Condos ● What is women’s role in marketing the city? ● Women are 50% of purchasers of condos ● Kern states that the suburb living no longer attracted female members of society (past: men working and women stay at home) → narrative changed ● The condo industry refashions this “you do not want to live in the suburbs and live a boring life. Come downtown, do whatever you want, so many activities” → present to women that inner city environment is a must, a life you want to live ● Do revitalization and condominium development enhance women’s liberation? Are all women equally “liberated”? ○ City living as liberation? Not really for all → liberation of going out and spend a lot of money ○ Liberation that is limited → affect a portion of women in the city ○ But spending money on spas and coffee may not be possible to women who work 12 hour shifts and are tired ○ Revitalized space focus on specific types of people Who Belongs to Revitalized Spaces? ● The typical condo-dweller: 1. White 2. Able-bodied 3. Heterosexual 4. Middle to Upper class ● Who is left out? How Condos Are Advertised

● Women as potential consumers: downtown condominium living as the best way for women to enjoy life at its full ● Women’s bodies as representing condominium development ● Weird since you are trying to sell a condo and you present a woman ● Not offering people to buy the lady but the building → women used as an object of consumption to attract the viewer ● We don’t even know what the units look like inside ● We do not even see a condo at all in the ad above ● This marketing scheme does not work on women because they are objectifying women Women in the Scary City

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● How do women condo owners rationalize fear and safety in the city? → fear is heightened because women are taught the city environment is dangerous; narrative that the city environment is full of strangers that could be dangerous ○ This level of anxiety makes it an attractive place ● Are pleasure and risk linked? Are marginalized groups in the streets necessary to bring the city alive? ○ Example: Rollercoaster → want to go despite fear during drop, adrenaline ○ The more curious people become ● What is the role played by security personnel and cameras in the new buildings? How much does it contribute to a sense of safety? ○ Controlled fear ○ Example of rollercoaster: there is safety precautions ○ BUT would women still buy condos if they know that there is a high risk of assault in the area ○ Condos promotes that they can keep danger under control: condos have secruity guards, security cameras → mechanisms that are employed to reassure women that the inner city is fine → a little fear but protected because condo tries to protect them Conclusion (of Kern) Feminist discourse that is questionable: ● Liberation that is not true liberation → only those who have the money to spend it ● Objectifies women ● Feminism is lost in the patriarchal urban social structures that: 1. Define liberation through consumption: only those who spend it 2. Objectify women’s bodies in the promotion of revitalization: using bodies as ads to advertise condos Richard Florida’s Mea Culpa ● Richard Florida introduced the CREATIVE CLASS as the solution to urban problems ● Today, Florida admits that the creative class was not the panacea he claimed to be: https://jacobinmag.com/2017/08/new-urban-crisis-review-richard-florida ● Florida asserted that creative class is the salvation of cities → get wealthier and better; affluence of creative class would have tricked down to the population→ benefit for all ● But almost 20 years later, Florida changed his mind

● It causes segregation in the economic lines ● City as a prettier environment outside but only affected some parts of the population Conclusion: it is wrong to exclusively focus on creative class and to exclude others ● Prof example: her access to the university space through bus, those who drive the bus are vital to society → their job is essential for her to do her job ● Not everyone benefits from gentrification: some people do and some people don’t → positives and negatives

Week 4 Lecture Notes_ Redevelopment & Gentrification

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