|
|
Musings Report 2019:7 2-16-19 Gentrification: A Diversity of Services Is Replaced by a Monoculture of Restaurants
You are receiving this email because you are one of the 500+ subscribers/major contributors to www.oftwominds.com.
For those who are new to the Musings reports: they are basically a glimpse into my notebook, the unfiltered swamp where I organize future themes, sort through the dozens of stories and links submitted by readers, refine my own research and start connecting dots which appear later in the blog or in my books. As always, I hope the Musings spark new appraisals and insights. Thank you for supporting the site and for inviting me into your circle of correspondents.
Thank You, Contributors!
Thank you, Herb S., Edward, David E., Patrick J., Marcella C., Donald B., Kurt W. and Blaise S. for renewing your generous support of my work, and welcome new subscribers-patrons Simon D. and Robert S. Thank you, Anthony B. for returning as a contributor/subscriber.
Gentrification: A Diversity of Services Is Replaced by a Monoculture of Restaurants
This week, we're continuing our application of the principles of evolution to human systems such as cities.
The term gentrification gets a lot of use, but what does it mean? The root word is of course gentry, which was the social and economic class just below the Aristocracy/ Nobility, people who owned land and who had the education and manners befitting the monied class, as opposed to mere commoners who managed to accumulate wealth but not social capital (i.e. the values, manners, social circles and education of a "gentleman".)
Broadly speaking, the analog today is the top 5% to 10% of the populace, the upper-middle class whose income is largely derived from their labor rather than from unearned income from assets (i.e the very wealthy).
Depending on the locale, this class in America earns upwards of $100,000 each. Average individual income in the US is $55,000, median income for full-time workers is around $43,000.
About 13% earn $100,000 or more. The top 10% earned at least $114,000 and the top 5% earned at least $153,000. (To enter the top 1%, you need an income in excess of $300,000 annually.)
Median household income is about $62,000 annually.
About a third of households earned $100,000 or more. The top 10% earned about $179,000, the top 5% made $236,000 and an income of $434,000 puts you in the top 1% of households.
Gentrification is the process of an urban zone transforming to meet the tastes and budgets of the upper 10%, those with enough discretionary income to afford costly live theater, fancy coffee drinks, $12 cocktails, $50+ meals and so on.
In effect, the bottom 90% are priced out of these zones and cannot afford to live there. Visits are rare treats, much like a rural family in China might go to McDonald's in a big city as a rare splurge. (The McDonald's meal for three might take a quarter of the family's monthly income.)
In evolutionary terms, gentrified urban zones lose their diversity, as the only businesses that can afford the high rents in gentrified areas are food and beverage establishments, and a few high-volume outposts of banks and corporate chains such as Walgreens.
Commercial diversity is relegated to the parts of the town/city with very little pedestrian traffic. This includes everyday services and retail such as dry cleaners, hardware stores, auto mechanics, jewelers, grocery stores, etc.
Such businesses were once staples of urban neighborhoods. Take a look at the photos in this article:
Every Building on Every Block: A Time Capsule of 1930s New York.
This loss of diversity is masked by the high occupancy rates during boom times such as now. But commercial zones outside the gentrified cores are full of empty storefronts.
The irony is that the soaring cost of commercial space in gentrified areas squeezes out the diversity that attracted the upper middle class in the first place, leaving a monoculture of high-end eateries and bars and Corporate America outlets that can be found in every city.
Manhattan’s shuttered storefronts tell a larger American story: Only Amazon-proof businesses can now survive in brick and mortar.
"A war is playing out in American cities between wealth and weirdness. The former encourages the pursuit of national trends and national brands—high-end fitness studios adjoining Sweetgreen franchises--for the purpose of maximizing profit on a per-lease basis. That spirit runs counter to the desire for diversity and experimentation, which requires policies that actively promote the survival of small companies in an economy that would otherwise eat them up."
Gentrification is a process that's been around since urbanization itself, but it is becoming more extreme as the gulf between classes--and the businesses that cater to them--widens.
Food, cooking and eating out are now national obsessions, with dozens if not hundreds of TV shows and podcasts devoted to restaurants, gourmet cooking and so on.
Have you ever seen such a program in which the restaurant owner admitted that it was a horrible business, demanding soul-crushing hours and huge sums of money, a business in which 95% of the entrants close in a few months or years?
This reality is masked behind endless happy-talk about following one's passion, one's love of cooking, one's love of customers, etc.
The well-hidden reality is the vast majority of these food-beverage businesses are extremely precarious: their costs are so high that they are barely making a profit even with the place jammed every night. The slightest slowdown will push them into the red and eventual liquidation.
This is the predictable result of a loss of diversity, a narrowing base of customers and a sharp rise in the cost of doing business: a relatively modest drop in sales (say 20%) will sink a third of these businesses, and doom another third to extinction should the downturn last longer than six months.
What was once an apparently thriving gentrified area will be hollowed out very quickly. And since prices for commercial leases (and for houses) are notoriously sticky, meaning landlords and sellers refuse to budge on their asking price, empty storefronts will remain empty for a long time.
All of this is foreseeable, but nobody reckons it possible during the boom when every storefront is occupied by a corporate chain or bistro, gelato store, coffee shop, etc.
Highlights of the Blog This Past Week
What Happens When More QE Fails to Reverse the Recession? 2/15/19
What Caused the Recession of 2019-2021? 2/14/19
The Corporate Lemmings Who Rushed into Mobile/Social Media Ads Are Running off the Cliff 2/13/19
We're Overdue for a Sell-Everything/No-Fed-Rescue Recession 2/12/19
2019: The Three Trends That Matter 2/11/19
Best Thing That Happened To Me This Week
I received positive emails from a variety of readers, one of whom observed (in response to my gratitude for his email that Samuel Clemens (Mark Twain) said that he 'could live for six months on a compliment.' Compliments are rare in life and should definitely be savored.
Musings on the Economy: Potholes and Homeless Encampments
Those of us who live (at least part-time) in urban centers are witnessing scenes that are disturbingly parallel with those found in so-called 3rd world nations mired in structural poverty and political servitude.
Study By MIT Economist: U.S. Has Regressed To A Third-World Nation For Most Of Its Citizens
Here in the San Francisco Bay Area, terribly squalid homeless encampments have become permanent features in the urban landscape.
Many city streets are in a state of abject disrepair, to the point that they're dangerous to ride a bicycle on due to the risk of being tossed off your bike by a deep pothole.
Cities can no longer fund repaving streets--one of the most fundamental public services--out of tax revenues, and are now resorting to floating $100 million bonds that will cost the city millions of dollars in interest as the "only way" to fund basic infrastructure maintenance.
Even when the voters pass these bonds, streets remain unpaved while hundreds of luxury apartments are being built on these same streets. I've noticed that these large buildings (5- 6 stories containing 100+ apartments) repave the street in front of their entrances, while the rest of the street remains potholed and deeply rutted.
Clearly, we've lost our way. All the proposed "solutions" are based on borrowing heavily from our future selves, on the highly suspect faith that we'll be so immensely wealthy in the future that we can pay the high costs of ever-rising debt and repave the streets even as we continue paying for maintenance that was done 20 years ago.
What if we're not immensely wealthier than we are today? The whole debt mountain collapses in a heap of defaults and nonexistent collateral.
From Left Field
Inside the long, strange story of organized crime taking over the former Soviet Union—and how Russia tamed it only to unleash it on the West.
Plummeting insect numbers 'threaten collapse of nature'
Beyond Corporate Power
Umberto Eco’s Antilibrary: Why Unread Books Are More Valuable to Our Lives than Read Ones-- How to become an “antischolar” in a culture that treats knowledge as “an ornament that allows us to rise in the pecking order.”
Study By MIT Economist: U.S. Has Regressed To A Third-World Nation For Most Of Its Citizens -- I'm seeing in in the SF Bay Area...
Brexit as a Constitutional Crisis-- well worth a read...
Demystifying the Democratic Transition in Venezuela -- a European point of view worth reading...
There’s One Thing More Valuable Than Our Time, and That’s Who We Spend It With -- so true...
Robert H. Latiff | A.I. and Warfare (56 minutes) (via John F.)
Books So Good I’ve Read Them 2X (Or More!) (via Tom B.) -- great list and useful short reviews...
Veni, Vidi, Tweeti (I Came, I Saw, I Tweeted): An Obituary for the Republic -- about as close to the nub as I've seen in 2+ years...
How the US has hidden its empire -- the "other" America...
"Writers aren't people exactly. Or, if they're any good, they're a whole lot of people trying so hard to be one person." F. Scott Fitzgerald
Thanks for reading--
charles |
|
|
|
|
|
