In Stadsleven ‘The unjust city‘ we research how the city is built on all kinds of injustice. Susan S. Fainstein, author of The Just City, writes how heightened inequality has become the new normal of American and European cities.
Invasion of the superrich
An anonymous buyer, most likely a Russian oligarch, purchased a 25-bedroom mansion in London for £50 million six years ago and subsequently spent many tens of millions more renovating it. In New York a holding company representing a mysterious owner bought a duplex penthouse in a new building for over $100 million. Despite the inflationary effect such extraordinarily expensive transactions have on housing prices in these two cities, they have been welcomed by political officials. Michael R. Bloomberg, the former mayor of New York, declared: “If we could get every billionaire around the world to move here, it would be a godsend.” Similarly Boris Johnson, Mayor of London, commented “London is to the billionaire as the jungles of Sumatra are to the orangutan. We’re proud of that.”
New York City: Weak in ensuring equity? Credits: L1mey
The hope is that the benefits of such wealth will flow down to support the income of contractors, massage therapists, restaurateurs, and all the service providers demanded by the wealthy occupants of these desirable properties. The further expectation is that they would produce tax payments which would enlarge the budgets of the receiving metropolises, allowing local government to build infrastructure and assist the needy. If our concern is social justice, however, we must question these assumptions.
Ghettoization of the poor
In my book The Just City I define urban justice in terms of democracy, diversity, and equity. The influx of the super-rich, unfortunately, does little to enhance these qualities. As far as the effect on democracy goes, rich foreigners probably do not intrude into the decision making processes of the cities where they have purchased valuable domiciles. Likewise native hedge fund partners and corporate executives have relatively little interest in local matters, as their scope is global. Rather, it is real estate developers, who reap massive profits from constructing buildings for the ultra-wealthy, that exercise a disproportionate influence on public policy relating to planning, zoning, and infrastructure investment.
The Just City – Susan Fainstein
In terms of diversity, although Russian oligarchs and Asian entrepreneurs do add elements of difference into the upper strata of urban society in global cities, their presence largely increases class spatial segregation. Gentrification temporarily breaks down ethnic segregation, but as the process reaches its conclusion, the isolation of the rich and the ghettoization of the poor become exacerbated. Now in cities like San Francisco and Paris, as well as London and New York, the entire central areas have become enclaves of the wealthy.
Heightened inequality as new normal
Most significantly the growth in the number of billionaires and multimillionaires has not in fact caused a trickle-down effect. The amount of affordable housing has shrunk, and governmental adoption of neoliberal ideology has produced large cutbacks in housing assistance to those priced out of the market. Furthermore, if the property owners are foreigners, most of their tax money goes elsewhere. Urban inequality has increased: incomes and assets of the bottom half of the population have not reached the levels preceding the global financial crisis of 2007-8, even while the wealth and income stream of those at the top have soared. The new normal in American and European cities is heightened inequality.
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