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).

They were drawn to the inner city initially by the diversity of jobs it offered and later by the CBD’s increasing specialisation in high-paying Government, corporate and producer services jobs, a consequence of higher level economic changes brought on by the shift from a goods to a services and knowledge-based economy. Increasing female workforce participation made possible by improved birth control helped to make the then-fringe suburbs, which were progressively becoming more distant from the centre, less attractive and the accessible inner city correspondingly more attractive. The higher density of the centre also complemented the lifestyle of these smaller, richer and better educated households.

These are some of the forces that came into play at different times but worked synergistically to produce gentrification. While it seems easy to understand the broad outline of these changes in retrospect, it is hard even with the benefit of hindsight to unpick exactly how the events unfolded, what relative contribution each factor made, or how it might have worked out if some of these factors had been different or even absent. It is harder still to sort out cause and effect at the geographic level of individual suburbs. Perhaps a small difference in one factor could have produced a wildly different outcome.

Those difficulties however are trifling compared to how hard it is to identify all the relevant factors – with an appropriate weighting and timing – that will shape Melbourne over the next 50 years. Will the inner city, for example, still be the key location for jobs it is today?


5 Comments on “What caused inner city gentrification?”

  1. This notion of gentrification and its wider syndromes and ramifications is definitely an intriguing area to explore. (Being primarily about people … and not planning. Heh, heh.)

    Other social factors and other influences (often closely interrelated) worthy of serious analysis would include:

    * The role of alternatively minded residents;
    * The role of artists and those placing a high priority on creativity & the arts;
    * The perceptions of ‘cool’ and atmospheric/aesthetic precincts and high urban/industrial landscapes (and also when an area becomes uncool);
    * The ongoing search/necessity for lower rental or home prices and the ongoing influence of shifting prices forcing movement from one suburb to the next;
    * The relationships built between self and group identity and the identity and images conjured by where you live.

    A parallel process to that found in tourism development also most likely exists in some instances.

    For example, in tourism many new ‘unspoiled’ destinations have been first ‘discovered’ by surfers and backpackers and the more adventurous. (And there are those places seen as retaining their ‘authenticity’ … as opposed to those that have lost it or never had it.)

    The ‘word’ on these then increases to the point where the basic accommodation options and available services move to a newer level with rising ‘word of mouth’ and demand. The role of the ‘cool’ and the dynamics of self/group identity also enter again.

    Then depending on (a) what outstanding qualities the place really had to begin with (to potentially lose over time and under pressure if badly managed or left undefended) and (b) how much demand exists, the ultimate phase of ‘gentrification’ for and by the most wealthy and rich frequently occurs.

    This cycle of search and discovery and development (and at worst tourism ‘overdevelopment’) then repeats itself.

    In the urban gentrification and neighbourhood redevelopment context ((and lets not forget this may often involve a welcome ‘revival’), the discovery phase may be undertaken by artists, students and ‘alternatives’ who, to remain untainted and retain their edge, may then potentially move on when ‘yuppification’ (for lack of a better word) occurs … and prices start spiralling.

    (Again, depending on whose perspective is at work, yuppification/gentrification may also mean changing from unspoiled to spoilt and involve a shift from ‘authentic’ to ‘inauthentic’ or some related urban notion of taming of the wild!)

    Original land owners – whether poor or not – have to make their own choices about selling or staying. But if poor, some of the changes (such as higher property taxes) may leave them needing to make some challenging and not always beneficial decisions. Alternatively, it may be the best thing that ever happened to them … beyond the stark realities, always that perception issue!

    The role of small business development and entrepreneurialship also arises in any analysis – and sometimes the new settlers are the activists and potential seers and visionaries in this regard. Having or raising the necessary resources also helps.

    Their more imaginative initiatives, coupled with the surviving authenticity and increased success of older establishments, ultimately contribute to the whole ‘spiral process’; further enhance community life and available options; and provide an even stronger incentive to visit or shift on the part of a range of knowing consumers and self conscious ‘lifestylers’ and wannabees.

    Of course, for better or for worse, gain or loss, fundamentally fueling all this movement in both tourism and these shapeshifting forms of urban redevelopment is the discerned quality and reputation of the precinct’s new coffee shop, brewpub and teahouse!

    Re-enter the values questions that gentrification always carries with it … Starbucks versus Pellegrinis, logo versus no-logo, infused versus slap it on the grill, slow versus fast, big ‘A’ arts versus little ‘a’, and so many other variants of this theme.

    At this level, life can become extremely amusing … even horrifying yet fascinating (HYF) … and would we really get to gain the benefit of any of this (including the wonderful sense of parodox and parody) without the compassionate, even parental care of all our traditionally ‘customer first’ marketers and more recently their new social media sites … to both instantly spread the word … and generate the desires!

    • Moss says:

      Wow Bruce.
      Here’s my take on Gentrification:
      Poor “hipsters” got older and richer but wanted to stay in the cool places of their youth.

      Oh and there is some very interesting stuff of a parallel nature to the idea of gentrification by folks like Richard Florida and even in books like The Warhol Economy by Elizabeth Currid. Reading these makes it appear to be overwhelmingly a social phenomenon based on access to cheap housing (low barriers to entry by the “Creative Class”).
      Would be interested to see an analysis of some of Florida’s ideas to Melbourne suburbs…

    • Alan Davies says:

      Bruce, here’s an interesting link that picks up on some of the cultural aspects of change in inner city Melbourne. It makes a useful distinction between the earlier “bohemian” period and the later “gentrification” period.

    • Alan Davies says:

      Following up on my original post, here’s a very interesting review from The Atlantic of a couple of books that examine the gentrification of Manhattan.

  2. […] pointed out before some of the underlying forces that drove gentrification of the inner city. These include the exodus of manufacturing and migrants […]


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