Henry George, an American economist whose work revolves around the role of land ownership in perpetuating inequality, wrote that the very concept of land ownership could be defending only by “confounding in the popular mind the distinction between property in land and property in things that are the result of labor.” The reverse, however, is also true: the negative effects of property in land can also be used to tar the every existence of capital property. The discourse around gentrification is a good example. The overwhelming majority of people understand the problem around gentrification to be that marginalized communities are displaced by rising rents. Even a free-market supporter would have a hard time arguing there is no external harm done by this process, even if the capitalist logic is sound. However, there seems to be little agreement on what precisely constitutes ‘gentrification’ for purposes of definition. Much of the ire around gentrification is directed at new building or transit projects, which are seen as increasing rents and thus driving out existing residents.
However, this is likely an example of George’s ‘confounding’ issue. The problem is not, really, the new bus line or condos - the problem is the impact they have on current land values. Blocking the investment of new capital is ineffective at slowing this process - one need only look to examples like Haight-Ashbury in San Francisco. In this famous neighborhood, density has been limited to moderate levels through zoning, and height restrictions and historical preservation have kept the neighborhood’s built environment remarkably similar to its famous 1960s and 1970s days. Nonetheless, the Haight has still lost a major portion of its Black community and has become a notable wealthy enclave. Cities attempting to stop gentrification often try to halt the most visible sign of it - the expenditure of new capital to upgrade private housing stocks, or new business openings - but this rarely has the desired impact, because it conflates capital with land.
Henry George wrote over a century ago, but he was no stranger to what would later be termed gentrification; he describes San Francisco anticipating the completion of the transcontinental railroad:
…we were all — all of us, rich and poor — hoping for the development of California, proud of her future greatness, looking forward to the time when San Francisco was to be one of the great capitals of the world; looking forward to the time when this great empire of the West was to count her population by millions, and underneath it all came to me what that miner said: What about the masses of the people?
As George saw it, the fundamental problem was that any new increase in wealth, whether due to capital investment, better governance, agglomeration, or any other cause, would fundamentally be eaten up by rising land values. The only answer as George saw it was to better distribute the rents earned by landowners. Other tactics - like increased construction, investment in social housing, and the like - may be able to prevent immediate displacement of communities, but the root problem is going to come down to the issue of land ownership - and confusing that with other forms of capital is helpful to no one.
A critique in long form
https://calmandcollected.substack.com/p/stop-conflating-gentrification-with
The condos are an indicator of rising land values, not a cause. But selective upzoning to permit condos can cause localized increases in land values.