ancient cities

224 Displacement
maintenance, and repairs if they do not perceive an
adequate return on their investment. “Redlining”
is a type of disinvestment initiated by lenders:
Banks and other financial institutions turn down
mortgage applications in specific areas because
they believe that the growing presence of racial
and ethnic minorities increases the chances of borrowers
defaulting on their loans. Individual homeowners
make similar decisions when they sell their
homes in response to a real or perceived decline in
housing and land values. This is known as “panic
selling.” Disinvestment in isolated properties in
otherwise stable or appreciating areas is rare; most
disinvested properties are located in places where
neighboring properties have received a similar
treatment.
The physical signs of disinvestment may include
construction projects that have not been completed
and buildings that have fallen into disrepair
because money for maintenance and upgrading is
withheld. Disinvestment can repel existing and
potential tenants, suppressing rental revenues and
leading, in some cases, to abandonment and demolition.
It can also have potentially negative social
and political consequences, including arson, crime,
property tax delinquency, public service reductions,
and health hazards.
The active withdrawal of capital from real
estate may be distinguished from a decline in
investment. All real estate investment occurs in
boom–slump cycles, and investment might drop
off in relative terms after a phase of overinvestment
and overbuilding within an individual market.
In the office building market in the early
1990s, for example, floor space exceeded demand
in most North American cities, which caused
vacancies to increase, prices to fall, and investors
to expend less money on such projects than they
did in prior years. However, the subsequent decline
in investment did not last long, and most urban
office markets recovered within the decade.
In many instances suburbanization, with the
promise of fewer risks and more profit, has drawn
capital outside city limits. The lure of the suburbs—
made more accessible by cheap credit and public
infrastructure—along with deeply embedded racial
discrimination turned urban areas into relatively
less attractive investments.
Disinvested locations, however, provide fertile
grounds for the process of neighborhood change
known as gentrification, which is essentially sustained
local reinvestment. Most disinvested areas
and properties can reverse direction with the right
amount of public and private assistance. Indeed,
investors often take advantage of previous rounds
of disinvestment to buy up properties cheaply,
renovate, and sell them for a handsome profit
when consumer demand rebounds.
Rachel Weber
See also Deindustrialization; Real Estate; Redlining;
Uneven Development
Further Readings
Beauregard, Robert A. 1993. Voices of Decline: The
Postwar Fate of US Cities. New York: Blackwell.
Scafidi, Benjamin, Michael Schill, Susan Wachter, and
Dennis Culhane. 1998. “An Economic Analysis of
Housing Abandonment.” Journal of Housing
Economics 7:287–303.
Smith, Neil. 1996. The New Urban Frontier:
Gentrification and the Revanchist City. New York:
Routledge.
Di s p l a c e m e n t
For as long as humans have congregated in urban
centers, people have been forced to move for various
reasons. Scholars, though, have struggled to
define this displacement. Grier and Grier developed
a definition in the 1970s that encapsulates
people’s general understanding. They defined displacement
as occurring when a household is compelled
to leave its residence because of conditions
that affect the dwelling or its immediate surroundings
and (1) are beyond the household’s control,
(2) occur despite the household’s adherence to
previously imposed conditions of occupancy, and
(3) cause continued occupancy to be impossible,
hazardous, or unaffordable.
Natural disasters and human conflict are perhaps
responsible for the largest amount of displacement.
Hurricane Katrina in 2005 is an
example of widespread displacement caused by a
natural disaster. Some 50 percent of the population
of New Orleans was initially displaced and