What caused inner city gentrification?

Paul Krugman once said that while we can make a reasonable fist of unpicking how a city developed historically, it is virtually impossible to predict where it might go in the future.

Could anyone in the 1950s or 1960s have confidently predicted the extent of gentrification of Melbourne’s inner city? Looking back we can attempt to identify some of the key forces that produced the inner city revival and see just how difficult it would have been to predict.

Photo by ExTester

The starting point was the departure of manufacturing for the suburbs which began in earnest in the 1950s.  This exodus was driven by a number of factors, including new ‘horizontal production’ methods, reductions in the cost of truck transport, increasing traffic congestion in the inner city and the suburbanisation of much of the blue collar workforce.

What it did was crucial – it made the inner city a much more pleasant place to live in.

The rapid expansion in higher education in the 60s and 70s introduced many staff and students to the lifestyle possibilities of the inner city. House prices were competitive with the fringe suburbs, at least in the early decades of gentrification, in part because many of the (former) migrant families who occupied inner city housing aspired to live in the suburbs.

Later, declining household size – itself the product of upstream changes in factors such as fertility – meant inner city dwellings provided more space per person, especially for the expanding cohort of professionals who worked in the CBD. They married later, had fewer children and hence required less space (although terraces could easily be renovated and extended). Read the rest of this entry »