Storm of the Century 21: Katrina and the Raid

The hottest real estate tip of the new century may have blown in on the wings of a storm. According to a recent report in the New York Times, soggy tracts of land in some of the most devastated districts in New Orleans are selling like beignets at nickel-bargain prices, lending a whole new meaning to the term "waterfront property." And you can bet your bottom dollar these buyers aren't reaching deep into their pockets out of the goodness of their hearts: this isn't about charity, but speculation, and a ballsy one at that. The brisk turnover of Katrina-ravaged properties has defied all expectations for the post-apocalypse housing market, but perhaps we should've seen this coming. The rapid devaluation and subsequent reinvestment sweeping New Orleans is reminiscent of a real estate cycle that generally takes place at a snail's pace by comparison. Could Katrina have ushered in an accelerated version of gentrification in the Ninth Ward?

Gentrification is a parasitical process that turns blight into bling. Speculators, much like maggots, feed on decay, worming their way block by block into impoverished neighborhoods whose ground rents have plummeted due to disinvestment and decline. The logic of gentrification is cold, brutal, and remarkably predictable. On the local scale, landlords stop sinking capital into properties whose poor tenants cannot afford to pay rents that will cover maintenance and upkeep costs on aging, dilapidated and increasingly costly buildings; developers snap up such properties at rock-bottom prices in anticipation that reinvestment, renovation and the replacement of poor tenants by affluent ones will turn a tidy profit down the road. On a larger scale, gentrification is a product of capital "switching" in both a geographical and an economic sense, from one location to another as well as between sectors of the capitalist economy; thus postwar gentrification in the US was preceded by investment abandonment from the pricey, capital-saturated inner-city to the relatively cheaper suburbs, and driven along by a later movement of capital from volatile industries to the relatively safer realm of real estate once capital flight had turned the inner-city into a ghetto (Smith 1996). Disinvestment is the key: gentrifiers buy cheap and sell dear, gambling that the profit to be made from the digestion of impoverished neighborhoods at the larval stage of investment will turn them into capital-bloated flies with maturation.

Gentrification is a quintessential example of "creative destruction," the tendency of capitalism, and by extension modernity, to concoct a fresh strong brew from the dregs of ruination. Katrina provided the destruction upon which the current wave of speculation is built, compressing and intensifying the process of devalorization, squeezing the slow ravages of entropy to which all human works are susceptible into a few savage hours. It also accomplished in one fell swoop a distasteful and often difficult task faced by the "pioneers" of gentrification: the displacement of the poor from their homes to make way for the impending yuppie invasion. The storm, in other words, acted as a proxy for every landlord who ever wished to be shot of his current crop of tenants, actively dismantling both the physical and political infrastructure standing in the way of the sale.

Real estate booms aren't exactly unheard of in the wake of so-called "natural" disasters, but uneven development counts: disasters hit the poor much harder than they hit those with the economic power to weather the storm. Like gentrification of the more quotidian kind, the post-Katrina real estate boom will likely have stark implications for race. Even before the variable of gentrification loomed darkly on the horizon, a recent study conducted by researchers at Tulane University predicted that New Orleans would lose 80% of its African American population without a concerted effort to help the displaced population resettle in their old neighborhoods. If the prospect of such a coordinated project to reinstate the most vulnerable inhabitants of New Orleans -- the poor, the uninsured, the renters, and the unemployed in a place where race and class closely overlap -- was dismal before the speculation began, it is all but gone now.

The spectre of disaster-driven gentrification in New Orleans has planted an uncomfortable seed in the minds of those who inhabit other particularly vulnerable urban landscapes, such as San Francisco, where some wonder if the Big One might not trigger the further gentrification of city already gentrified to the hilt. But beyond the vagaries of urban life on the fault line, the more systematic threat of global warming, with its attendant corollaries of rising waters and rapacious weather, compels us to consider whether climate change might become a regular player on the increasingly global gentrification stage. And if, as the meteorological magi suggest, global warming is a crisis of capitalism's own making, then in all likelihood it will find a way to turn that crisis to its own advantage, as it has done so often in the past.

My comparison of speculators to maggots is no comment on the moral failings of individuals. Neither maggots nor speculators can help what they are. Maggots, like all larvae, do what they must do to survive as maggots; speculators, like all capitalists, do what they must do to survive as speculators. In the greater cycle of life and death, maggots serve their purpose admirably, much as speculators and developers do in the cycle of capital accumulation -- with one important difference. Life, death, and the recycling of decay into growth are inevitable. Capitalism, and the brutal cycle of creative destruction upon which it feeds, is not.

Citations:

Smith, Neil, 1996. The New Urban Frontier: Gentrification and the Revanchist City. London and New York: Routledge.

Comments

[lusmeri]

Just thought I'd let you know I'm a regular reader.

[SB]

COming soon to Oxford too....

PS the right url for the JPE is jpe.library.arizona.edu and the most recent paper by Dwyer & Minegal is pretty interesting.

[SB]

COming soon to Oxford too....

PS the right url for the JPE is jpe.library.arizona.edu and the most recent paper by Dwyer & Minegal is pretty interesting.

[t h rive]

are you still writing?

i came across your blog in looking for reference to political ecology as i may begin to study that area. i work in the resource sector.

czek out my blog link if you please.