Transcript GGR 357F Geography of Housing and Housing Policy November

GGR 357 H1F
Geography of Housing and Housing Policy
Session 6
Neighbourhood
transitions
June 4, 2008
DR. AMANDA HELDERMAN
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Session 6: Neighbourhood transitions
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Announcements
Midterm answers
Neighbourhood transitions
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Factors of neighbourhood changes
Theoretical models that explain transitions in an
area
Research methods
Gentrification, branding, marketing
Roles of culture versus that of the economy
Announcements
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Paper assignment due June 20, 2008:
http://individual.utoronto.ca/helderman
Don’t wait too long with contacting me if you
have any difficulties!
Please consult previous lecture notes/ slides
before contacting me
Announcements
Final exam:
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Similar format as midterm
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85% about sessions after the midterm
15% about sessions before midterm
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Final exam on June 23, 2008, 5-7 pm
– Wilson Hall (New College)
– Room 1016
Announcements
Topics to tackle before the final exam:
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Neighbourhood transitions - today
Access to housing: housing allocation – Monday (9th)
Housing affordability and quality – Wednesday (11th)
Meanings of home and attitudes toward
homeownership – Monday (16th)
Reflection on the role of the government and other
actors in the public domain – Wednesday (18th)
Last session: a review if schedule allows it
APUS class representative (part 1)
The association of Part-Time Undergraduate Students
(APUS) is accepting those summer students who are
taking 1.0 credits or less as our members. We
encourage you to participate in APUS by becoming a
representative for your class. The following are some of
the issues that APUS is active in by addressing:…
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APUS class representative (part 2)
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tuition freeze,
university/government financial aid for part-time
students,
part-time student on-campus housing,
family care, and
summer/evening course selection.
As a class representative, you would receive periodic
information updates from APUS and keep your
classmates informed about upcoming summer social
events, meetings, important issues and campaigns. You
would also bring back to APUS feedback you receive
from your classmates on issues and concerns.
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Contact: 416-978-3993 or [email protected]
Exam answers - Question 1
a) Explain why housing is so attractive to individuals
(mention at least 3 reasons for 1 point each, up to 3
points).
Homeowners build up equity from their homes, they enjoy
on average a better housing quality, they are free to
customize their home, they are independent and
have full control over their housing situation,
homeownership represents continuity and stability,
homeownership to many represents status, and
finally it also represents emotional value.
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Exam answers - Question 1
b) Give 3 definitions of housing (6 points).
Physical product/ facility (bricks and mortar), commodity/
economic/ exchange good, investment good/ asset,
sector of the economy, social/ collective good,
building block of neighbourhoods (2 points each up to
6 points)
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Exam answers - Question 1
c) What was Bourne’s definition of housing? Include an
example to illustrate what that means. (4 points)
Housing can be described as a bundle of services (2
points). Services that housing delivers: shelter,
wealth, shelter from inflation (capital), accessibility to
services, accessibility to work, accessibility to
neighbourhood, social status, right to privacy (add 2
points for any of the examples including an
explanation of the definition).
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Exam answers - Question 1
d) Why did he land on this definition(2 points)?
All alternative definitions are applicable at the same time, but some
meanings are separated or confused. Alternative 1: The
definitions provided previously overlap and are thus confusing
definitions to co-exist in explaining one and the same concept.
Alternative 2: They overlap and are thus confusing definitions
to co-exist in explaining one and the same concept (2 points).
d) Mention 2 deliverables of housing in this context (2 points).
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Any two of the following 6 is correct: Shelter from the elements,
value/wealth/equity for owners, shelter from taxes,
accessibility of services, accessibility of work, accessibility
neighbourhood, social status, and/or right to privacy.
Exam answers - Question 1
e) Describe why housing is important for understanding
neighbourhood dynamics (4 points).
Housing is the principle mechanism through which urban
neighbourhoods change: moves of households/
activities (demographic change), new developments
(demographic, economic, social, cultural), aging of
real estate, and/or fluctuations in house prices. Not
all examples are necessary. Answer must reflect
some idea of how neighbourhoods change through
housing or rather the matching process of households
and housing (stock).
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Exam answers - Question 1
f) Explain, by using an example, why housing can mean
different things to different people at the same time (4
points).
Housing can mean different things to different people at
the same time. First it is an investment good for the
developer, and later it can be an investment good for
the owner-occupier, anticipating that the property will
increase in price. To the construction company housing
is an industry, to the user the same object can mean
shelter. Any logical explanation is OK, as long as
definitions of housing are matched as described under
b.
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So far all answers could be retrieved/ could have been studied in
Bourne’s chapter 2 and lecture slides of the introduction/ first lecture.
Exam answers - Question 2
a) Mention the three classic ways of modelling housing market
behaviour (6 points).
Gravity Models, Push-Pull Models, Markov Chains (2 points each,
up to 6 points).
b) Explain the main differences in the assumptions of these
models (5 points).
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Gravity models assumptions are based on the characteristics of
places, push-pull models are based on the individual
assessments of characteristics of places, Markov chains are
based on the probabilities of moving to each home in the
chain of housing vacancies (4 points plus 1 point for the
latter).
Exam answers - Question 2
c) Mention the two newer approaches (4 points).
Microeconomic and life course approaches (2 points each).
d) Name one main difference and one commonality
between the two (4 points).
They both view moving behaviour as adjustment
mechanisms: to adapt to new needs in the household
and/ or dissatisfaction. They both incorporate microeconomic decision making. …
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Exam answers - Question 2
The life course perspective however, adds individual
perspective on how a move may occur (by changes in
the household, labour, education and housing career).
In other words, demographic events (which are
universal) are introduced as milestones that help
understand housing market behaviour. The life course
theory forges theoretical and empirical work. (2 points
for one difference, 2 points for one commonality, up to
4 points in total.)
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Exam answers - Question 2
Give two reasons why short distance moves occur more
frequently than long distance moves (3 points each,
up to 6 points in total).
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Short distance moves occur more often because the
dominating motive for moving (housing and
household motives) relate to housing characteristics
(3 points). (Larger house required because more
members in the household. A better house, etc.)
These motives do not incur a long-distance moves like
moving for a job might do. If you move over a short
distance, you do not need to change jobs in most
cases (another 3 points). Predominance of motives for
moving thus incurs more short-distance moves.
Exam answers - Question 3
III. Touch upon: The parallel careers or domains in the life
course (mention at least three, one point each, up to
a maximum of 3 points).
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Household career
Housing career
Education career
Labour career
Exam answers - Question 3
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How these trigger a move, by describing examples (2
points each, up to a maximum of 6 points).
Household career triggers a move by: cohabitation, child
birth, divorce/separation, remarriage, widowhood
through demand for less or more space, or a
necessary change in location.
Education career triggers a move by: enrolling into higher
education that is not in the same place as your
parental home.
Labour career triggers a move by changing jobs in a
location to where there is no sustainable daily
commute possible. Generally this is due to distance.
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Exam answers - Question 3
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Name 2 out of 4 life course stages (2 points each, up
to a total of 4 points).
The four life course stages are: home making, child
bearing, child rearing, post child.
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Describe what the link is between the life course
theory and housing demand (up to 3 points).
Households create a set of circumstances by their
combined behaviour. Alternatives are OK, within
reason.
Exam answers - Question 3
Explain what was so new about the life course theory
(name 3 innovative aspects out of the 6 discussed for 3
points each, for up to 9 points in total).
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Convergence of theory and empirical work
Attention to individual households (micro-level)
Residential location topic was brought into the centre of
housing studies
Individual action was linked with social change and
social structure
Demographic events were introduced as milestones and
critical transitions in people’s lives
The mechanisms are universal, applying to almost
anyone, and throughout history
Exam answers - Question 4
Touch upon: The definition of social exclusion (3 points).
Social exclusion: Social exclusion occurs when people or
groups decide consciously or unconsciously, to
put up barriers, preventing others from full and
equal participation, leading to a loss of rights, loss
of power, lack of integration in society, affecting
the ability to live fully.
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Exam answers - Question 4
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Background factors of social exclusion (3 for 2 points
each, up to a total of 6)
Backgrounds of social exclusion: racial discrimination,
economic discrimination, gender discrimination,
health discrimination, poverty discrimination,
neighbourhood discrimination.
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Exam answers - Question 4
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The differences between social exclusion through
housing and social exclusion from housing (2 points)
Exclusion from housing focuses on unmet housing
demands while exclusion through housing focuses the
shift outwards: the impact of housing on broader
societal participation.
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Exam answers - Question 4
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The definition of spatial segregation (3 points)
Spatial segregation: Spatial effect of social exclusion.
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The term ‘social location’ (2 points)
Social location: Through housing, one’s residential
location and with that access to other services than
housing is determined.
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Exam answers - Question 4
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A description –with examples- of “neighbourhoodism”
(4 points).
“Neighbourhoodism” is a diminished access to services
such as food deliveries, taxis, home insurance, housing
elsewhere due to the reputation of the neighbourhood
where individuals reside.
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Exam answers - Question 4
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How the spatial assimilation model aims to solve spatial
segregation issues and why its applicability, in cases of
“neighbourhoodism”, is limited (5 points).
The spatial assimilation model assumes that newcomers
start at the bottom of the socio-economic ladder. Once
their socio-economic status improves, they will leave
their initial neighbourhoods and start a cultural
assimilation process. Cultural assimilation process does
not account for limited possibilities of doing so by
discrimination. Neighbourhoodism is one form of
discrimination: housing distributors may be biased
about neighbourhoods with a certain reputation,
limiting individuals’ opportunity structure.
Exam answers - Question 5
Match and explain
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Landlords
Mortgage lenders
Real-estate agents
Planners
Residents X
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Steering
Family-based planning X
Discrimination
Gender-based planning X
Redlining
Items marked with X do not have to be considered. (One of both at the right
side must be considered though; 1 point each)
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Exam answers - Question 5
Match (1 point each) and explain (2 points each, total of 12
points)
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Steering: Real-estate agents may direct certain buyers/
renters to certain areas (bias)
Family-based planning: Planners often design types of
neighbourhoods based on a nuclear family’s needs while
nowadays one-person households and households without
children are increasing
Discrimination: Putting up barriers for or denying access to
groups of people based on certain characteristics
Gender-based planning: Planners often design types of
neighbourhoods based on a nuclear family’s needs while
nowadays single women increasingly run their own household
Redlining: Refusal to provide loans/ mortgages for objects in
low-income neighbourhoods or neighbourhoods with poor
housing conditions
Exam answers - Question 5
Explain:
• Social class hypothesis (4 points)
Social class hypothesis assumes that all spatial
segregation can be explained by socio-economic
characteristics
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Exam answers - Question 5
Explain:
• How government policy of multiculturalism may lead to
social exclusion (4 points)
Multiculturalism may lead to social exclusion if sufficient
access to language books and newspapers decreases
literacy and English proficiency among second (or
more) generation immigrants.
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Exam answers - Question 5
Explain:
 What the ethnic enclave model is based on (2 points)
The Ethnic Enclave Model is based on the notion that
bonding with the own (ethnic) community does not
necessarily weaken in the course of time. Spatial
assimilation (acculturation) therefore is not necessarily
a goal for ethnic groups, despite increased wealth/
higher income/ greater social mobility.
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Exam answers - Question 5
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What chain immigration is (1 point)
Immigrants chose to live near their previously established
immigrant friends and relatives resulting in a process
named chain immigration.
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Exam answers - Question 5
Explain:
• How researchers who adopted the ethnic enclave
theory would feel about the criticism on
multiculturalism (2 points)
Ethnic Enclave researchers will stress the advantages of
threshold populations for not only language
newspapers, but also for specialized products, churches
and opportunities in ethnic entrepreneurship (often
within the home).
ANY QUESTIONS ABOUT THE MIDTERM?
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Neighbourhood transitions
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Aging of real estate
Changing values of housing as a consequence of
neighbourhood transitions
Depreciation
Declining housing quality
Mismatches between housing and households
Filtering downward or upward
Residential relocations
Changing composition of households
Changing quality of housing and neighbourhoods
Introduction to neighbourhood transitions
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Mechanisms of change
Upward/ downward changes
Theories/ concepts
Effects of revitalization
Literature
Neighbourhood transitions
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When prices are low, some inner city environments are
prone to gentrification
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Improvement in quality housing and neighbourhood
Services may change (daily necessities get crowded out
by trendy shops, restaurants and branches)
Reduction in the availability of low cost housing
Ultimately: social polarization and displacement?
Six major processes of change on the
housing market
Occupancy turnover and the movements of
households within the housing stock
 Filtering process and changes in housing quality
 Housing and neighbourhood change: arbitrage
 Progression of housing vacancies through the stock
(vacancy chains)
 Spatial variations in house price changes
 Revitalization and the return-to-the-city movement:
gentrification
(Bourne, 1981)
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Households move through the housing
stock
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Matching of households and housing
Incomes and house prices act as the broad constraints
on the likely behaviour of households and their
occupancy of the housing stock
Most moves within same tenure, but there is movement
between segments, from private rental to owneroccupied
Changes within housing stock (conversion)
Simplified: Cheap, small rental housing in CBD and
expensive large owner-occupied housing on the edge of
the city
Filtering
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Any change in the relative position of the housing unit
or the household in the inventory, or matrix, of housing
units in the area: filtering up and filtering down
History concept: Innermost rings in the city were
occupied by a succession of social groups of decreasing
income.
Each zone filtered down over time.
Filtering
Based on specific assumptions from the ecological literature:
 Demand for housing related to income (newer and more
accessible)
 Housing depreciates with age, reducing the flow of
housing services
 Encouraging those with sufficient income to relocate
 New construction is necessary and stimulating for filtering
 Welfare component: housing could filter down to lower
income groups, improving their housing quality
 Park, 1925; Hoyt, 1939; Ratcliffe, 1949
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Filtering
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Filtering up only occurs when price declines more rapidly than
housing quality (Grigsby, 1963)
Filtering up only occurs when the change is to a more
preferred bundle of housing services (Leven, 1976)
Households can undergo filtering without moving: passive
filtering
Households can undergo filtering by relocating: active
filtering
Filtering recognizes the importance of external factors in
determining housing conditions
Filtering incorporated consumer preferences and expectations
about housing services
Types of filtering
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Changes
Changes
Changes
Changes
in
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supply
the position of households
the matching of households and housing
household welfare
Filtering and policy
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Policy thinking: if rate of new construction is faster than
the rate of filtering downward, most lower-income
households will be able to improve housing
Lacks regard for distribution by price and quality
Justifies construction of middle- and upper-income
housing
Assumption: New housing will exceed household
formation and real incomes will rise
Criticism for filtering
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Housing of reasonable quality does not filter down and
thus does not become available to lower-income groups
Other reasons of unavailability:
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Conversion to other uses or other forms of tenure, often
for investment purposes
Demolishment for roads, redevelopment, or parking
Even if housing filters down, there is lack of mortgage
availability, high rents, discrimination, and a low
housing quality
Filtering may not be an efficient or humane way of
providing housing
Arbitrage model of neighbourhood change
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A more recent version on filtering
Placed central are the conditions and mechanisms that
move boundaries between neighbourhoods of different
socio-economic status and ethnic differences in an
unstable housing market
This approach unites elements of neighbourhood
change with sub-market interrelationships, filtering and
housing preferences
Differs from filtering: direct response to changes in
preferences
Leven, 1976; Little 1976
Arbitrage model
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Mismatch of supply and demand
Shift of boundaries between neighbourhoods
Self-generating (self-fulfilling expectations of
transitions)
Access to housing by higher-income groups
New housing realized outside neighbourhood
Assumption: people want to live with similar people
Arbitrage model
As boundaries shift, house prices differentiate according
to four levels:
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Centre of high status area
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Near boundary of low status area, in high status area
(locational discount)
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Near boundary of high status, in lower status area
(premium)
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Centre of lower status
Demand influences prices and moves boundaries
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Arbitrage model
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The direction in which a boundary shifts is dependent
on which group exercises the largest demand on
housing
If this is a low income group: higher-income groups
may be ‘blown out’ by the demand, leading to a
continued deterioration of the housing stock
This is the core of the process of arbitrage
Higher income households perceive a future decline in
housing services through neighbourhood transitions
They seek to move out to newer housing
Arbitrage model
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Lower income households can not exercise that much
choice
Shrinking demand because of deterioration, demolition
and abandonment
Only profitable market alternative: conversion (e.g.
multi-family) = arbitrage
Discounted housing leads to lack of maintenance and
physical deterioration
Arbitrage model and non-residents
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Institutional lenders reinforce expectations of
neighbourhood change by withdrawing investments,
refusing loans, or demanding higher down payments
Speculators may purchase housing but want a quick
return which further accelerates under-investment and
deterioration
Vacancy Chains
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Perspective related to filtering
Directly links housing units involved in household
relocations
Tricky to understand because, like housing careers and
Markov Chains, they do not focus on households but on
‘vacancy’ that is being displaced with every step (the
moves thus go “in the opposite direction”)
Example: hermit crabs
Moves/ residential mobility
Vacancy
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Vacancy Chains
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Vacancy chains are short because of diversity in the
housing stock and because of the weakness of the
method:
Especially short when there are a lot of new households
and in-migrants, and where demolitions take place,
chains are shorter when new public sector housing is
constructed
No or few homes are left behind in such cases
Criticism on vacancy chains
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Links imply causal linkage that may not be existent
(households do not know each other, no common
denominator)
Unsuitable for measuring if quality of housing for the
poor is improved by filtering because the poor seldom
appear in such chains, except when social housing is
constructed
Descriptive index on the aggregate level
Insight into turnover generated by new construction
Spatial variations in house prices
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Price: most common index of housing market
performance
Four sets of factors that determine price:
Structural characteristics of the house
Neighbourhood characteristics (phys & soc)
Location (accessibility)
Institutional behaviour (fin. & real est. agents)
Stuctural characteristics of the house
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Size/ Floor area
Lot size
Number of rooms
Level of improvements
Garage
Air Conditioning
Neighbourhood characteristics
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Physically attractive/ scenic
Pollution
Higher-income neighbours
Location
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Accessibility CBD (Hoyt, 1939)
Multi-centred city: many work locations
Not the most important characteristic anymore, but
there are still some signs of it
Hedonic price estimation
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House value hard to determine sometimes
Not many comparable units
Individuals may value characteristics differently
Solution: hedonic price estimation, which is the result
of multiple regression of housing characteristics
Return-to-the-city
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Return-to-the-city movement since the 1970s, even
though trend has always shifted between high- and
low-income areas
Suburban middle- and higher-income households
Many labels: revitalization, gentrification, whitepainting
Revitalization
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Improvement in housing and neighbourhood quality,
combined with increase of average income
Private action, individual or corporation action
Quasi public housing associations, self-help groups,
direct public grants action
Streets or single houses
Usually within fixed distance of CBD (± 3 km)
Gentrification
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The investment of urban space for the use of a more
affluent clientele (Hackworth & Rekers)
More explicit class connotation than revitalization
Traditional working class neighbourhoods are invaded
by middle and upper income groups (Hamnett, 1973)
The Usual Areas
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Historic and attractive central area
High proportion of professional occupations/ offices
Tight housing market
Older housing with architectural merit
Inner city amenities (parks, cultural institutions, etc.)
Absence of ethnic strife
Relative difficulties in commuting from suburbs
The Usual Circumstances
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Demographic shifts (dink, smaller families)
Employment (dual income): Disposable income and
share to spend on housing has increased
Costs suburban housing has increased since the 1970s,
while costs of commuting increased
Shifts in tastes and housing preferences
Image branding/ packaging
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Developers can do a lot to create an image for a
neighbourhood
Financial institutions have influence by expediting
transitions by extending mortgages to ‘in-areas’
Ethnic packaging
Ethnic commercial strips are marketable branding
mechanisms, intended or not
Ethnic packaging
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Mistaken identities of areas such as Little Italy
Only 10% of population Italian by mother tongue, even
less by place of birth or spoken language
Dissonance between cultural and commercial identities
Since the 1980s and 1990s there is a recognition for
the importance of culture
Complication: sometimes culture is produced by
economic interests, not autonomous
Dualism between culture approach and
economic approach
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Culture approach: gentrification is the spatial
expression of a critical class politics
Consumer dominance
Neighbourhoods gentrify because of changing tastes
and preferences
Rejection of the suburbs because of the distance to
work, isolation, and lack of diversity
Cultural humanism as dominant influence: humans
have a certain degree of decision-making autonomy,
and are not easily predictable (Ley, Caulfield)
Dualism between culture approach and
economic approach
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Economics placed central: gentrification is caused by the
availability of inexpensive real estate.
Rent gap theory: many neighbourhoods experienced
disinvestment in inner-city, leading to a decline in potential
rent (=highest and best use)
Gentrification takes place where the potential rent is far
above the actual rent  supply and concentration of
devalorized land is necessary
Gentrification is facilitated by developers and governments
Marxian economics is the primary influence
Smith/ Badcock/ Clark
Dualism between culture approach and
economic approach
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The early 1990s recession brought an end to large scale
gentrification, seemingly supporting the culture hypothesis
Note: Demographics pointed in the direction of there being
more people that would be interested in living in the suburbs
at that time (maturing families)
Two sides of the same coin, rather than a polarity of culture
and economics
Dualism is only problematic if ethnic identity may be
marketed to sell real estate, because it draws the attention
away from the way cultural amenities are strategically
produced
Toronto examples
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Some areas have historical cultural identity, and some
don’t
Little Italy has an Italian history, but there has been a
shift since the 1970s in the type of economy and
population: from traditional and family orientated to
trendy, the ethnic swoosh is all that remained of the
original Little Italy
College degree went up from 2.5% in 1971 to 32.5% in
2001
Toronto examples
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A history of many identities: Greektown on the
Danforth (Cuban, Afghani, Japanese, Greek)
Gentrification changed the economy, the population
and housing
House value and rent higher than for metropolitan area
as a whole, exclusion of everyone except upwardly
mobile young professionals
More self-conscious promotion has led to a less trendy
area than Little Italy, but still a happening place
Chains moved in
Branches moving into gentrified areas
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Toronto examples
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Corso Italia/ St. Clair area
Some Italian history, though more recent than Little
Italy
Fashionable and high end, geographically and culturally
isolated from rest of downtown, less tourist oriented
The feel remains more working class and more Italian
than yup, even though there are early signs of
gentrification
Toronto examples
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Gerard India Bazaar
Interestingly, no ethnic history except for a Hindi movie
theatre (Bollywood productions) that drew in the EastIndian crowd from all over the GTA
Entrepreneurs noticed the interest and started opening
business but the residential identity was never
parallelled
Many immigrants, mostly Chinese
Values of rent are below the metropolitan level and
fluctuate considerably
Incomes have declined in this area
Culture/ Economy
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Inclusion of culture seems analytically helpful for the
study of cities
Reproduction of ethnicity for consumption is rarely to
promote displacement of residents
Instead it attracts YUPs, whose activities are
government supported (all levels of government)
Consequences of revitalization
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Physical improvement of housing stock in the area
Physical improvement of neighbourhood
Higher prices and rents
Reduces inventory of low-cost housing
Dislodgement of original residents
Social fabric of neighbourhood decreases
Demand for local services (daily grocery shopping,
schools) changes
Land use densities and patterns
Not necessarily bad or good…
Literature for this session
78
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Hackworth, J. & J. Rekers (2005), Ethnic packaging and
gentrification. The case of four neighbourhoods in
Toronto. Urban Affairs Review 41/2, pp. 211-236.
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Slater, T. (2005), Gentrification in Canada’s cities. In:
R. Atkinson and G. Bridge (eds), Gentrification in a
global context: the new urban colonialism, Chapter 3.
London/ New York: Routledge, pp. 39-56.
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Smith, N. (1987), Gentrification and the rent gap.
Annals of the Association of American Geographers,
77/3, pp. 462-465.