Tapping into the remarkable power of city planning to reclaim urban life for all residents.
Next City’s Oscar Perry Abello spoke with author Samuel Stein last week about his new book, “Capital City: Gentrification and the Real Estate State,” published by Verso Books. The following is an excerpt from the book’s introduction, in which the author digs into the ways the state uses and is used by capital — in particular, the $217-trillion real estate industry — and how urban planners often find themselves conflicted between the need to make cities “better” and more liveable and the pressure to make decisions in service to rising real-estate values.
With wages flat, many people — even those with full-time jobs — simply cannot afford stable housing. Last year, as cities and states continued to pass punitive legislation against the poor, about 2 million people in the United States went homeless and 7 million more lived in precarious housing situations — doubled or tripled up, couch surfing or sleeping in shift beds. This opens the door to an entire industry of private homeless services, with philanthropic and real estate capital blended to find profits in extreme poverty.
The force behind these trends is the growing centrality of urban real estate to capital’s global growth strategy. Through this process, the price of land becomes a central economic determinate and a dominant political issue. The clunky term “gentrification” becomes a household word and displacement an everyday fact of life. Housing becomes a globally traded financial asset, creating the conditions for synchronized bubbles and crashes. Government, particularly at the municipal level, becomes increasingly obsessed with raising property values and redistributing wealth upward through land and rents. Real estate developer Donald Trump becomes first a celebrity and ultimately a president. Taken together, we witness the rise of the real estate state, a political formation in which real estate capital has inordinate influence over the shape of our cities, the parameters of our politics and the lives we lead.
The real estate state is not new, nor is it all-encompassing. Like the carceral state, the warfare state, the welfare state or the administrative state, it is an expression of government — a component, a bloc, a manifestation, a tendency — that has been around in one form or another for as long as states and private property have existed. Landowners have been determining the shape of cities for centuries, and the idea of housing as a commodity — even as a financial asset — is not exactly state of the art. What is relatively new, however, is the outsized power of real estate interests within the capitalist state. As real estate values have risen to absurd heights, so has the political force of real estate capital.
The real estate state is a feature of government at all levels, from the hyper-local to the global. It is most firmly grafted onto municipal governments, however, because that is where much of the capitalist state’s physical planning is done. City planners therefore sit uncomfortably at the center of this maelstrom.