How rent gap theory has been made true and how it could be made untrue again. Gentrification and the financialization of land and housing in Frankfurt, Germany

Authors: Sebastian Schipper*, Institut für Humangeographie
Topics: Urban Geography, Economic Geography, Urban and Regional Planning
Keywords: housing, gentrification, rent gap, financialization,
Session Type: Paper
Day: 4/10/2018
Start / End Time: 8:00 AM / 9:40 AM
Room: St. Charles, Marriott, River Tower Elevators, 41st Floor
Presentation File: No File Uploaded

Since the beginning of the global financial crisis in 2008, many urban centers in Germany are faced with a new wave of gentrification. Against this background, the paper focuses on a centrally located working class neighborhood in Frankfurt am Main: the Gallus district. This districts was for a long time considered to be ‘un-gentrifiable’ due to its specific ownership structure dominated by non-profit housing associations. To explain the recent displacement processes of low-income households, the paper looks at both the massive new-build luxury housing estates and the financialization of the existing housing stock. By mapping the ownership structure of the neighborhood in the 1970s and by comparing it with the situation today, it demonstrates how different processes of neoliberalization have led to a complete reversal of the ownership structure: A highly de-commodified built environment of a working class neighborhood has successfully been turned into financial assets for profit-seeking investment capital. With this example the paper addresses the multifaceted role of the (local) state in enabling gentrification and displacement in areas previously thought as ‘un-gentrifiable’. Apart from that, the paper reflects also on political strategies pushed forward by urban social movements aiming at de-commodifying/de-financializing the housing stock and at making rent gap theory untrue again in order to stop the ongoing displacement of working class households.

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