This document discusses theories of gentrification from both production and consumption perspectives. It proposes using an agent-based model to simulate gentrification by coupling economic and cultural dynamics. The model represents agents with different incomes and cultures living in a city with neighborhoods that vary in property prices and conditions. Agents decide to move based on cultural dissonance with neighbors and property decay/price increases. The model shows how increasing investment leads to population changes, cultural uniformity, and cycles of investment and disinvestment that resemble gentrification and displacement patterns. Future work could improve agent heterogeneity and mobility and integrate actual city data.

1. Gentrification
● Production side ● Consumption side
explanations explanations
– Rent-gap theory (N.Smith, – Post-industrial shift
1979) G. depends on the ● Predominance of white collar
movement of capital from one work
area of the city to the other in
pursuit of higher profit
● 'Creative' classes
Urban development, technological shift,
● Fashion effects (NY 'loft
depreciation create localized mismatch living')
between current and potential land use

2. This model
● So far...
– Implements the rent-gap theory
● Wishes to
– Couple economic and cultural/diversity dynamics.
● Gentrification affects the cultural other than economical
identity of places.
– Embed + compare production and consumption
factors → “theoretical synthesis”
– Predict the future! :-)

3. Agent model
➔ Income level [0-1] (random)
➔ Mobility propensity (Poisson distribution 0.06/year)
➔ String culture (n=10) |_|_|_|_|_|_|_|_|_|_|
0100101011 1011011001
0
1
0
0
0
0
1
0
1
0
● Long-time neighbours interact → Cultures mix
● Interaction more likely when common traits exist

4. City model
● Individual dwelling
– Condition [0-1] random
– Price [0-1] = cond + 0.15
● Neighbourhood
– Allure (sticky and approximate)
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Price-gap:
difference between a property's price and
mean price of surrounding properties

5. Parameters
● Kapital level
– Number of properties receiving investment each
year
● Decay factor
– Constant monthly decay. Set at 0.0015
● Immigration rate
– Set at 3% per year

6. Economic processes
● Decay
– Constant decay (0.0015/step)
– Empty properties decay 1.5x faster
– Price is lowered as consequence of decay and if
empty for 6 consecutive months
● Investment
– K properties with wider price-gap receive investment
● Price = mean neighbour's price + 15%
● Condition = 0.95

7. Residential choice process

8. Decision to move
● Dissonance ● Poor dwellings
– “Spatial cognitive – Prolonged stay in
dissonance” when “slum” increases
neighbours too mobility propensity
different ● Price increase
– High dissonance
increases mobility
– Price increase puts
propensity the agent in 'seek-
new-place' mode

9. Results

10. Spatial dynamics
K=10 (2.2%) K=15 (3.5%) K=20 (4.5%)
K=25 (5.6%) K=30 (6.8%) K=35 (8%)

11. Population dynamics
K=15
Gini = 47; Slum 62%

12. K=25
Population dynamics
Neighbourhoods
steadily increasing
the mean income,
while the population
decreases and
increases in waves,
signal gentrification +
displacement: the
poor go, the rich
Gini = 40; move in.
Slum = 30%

13. K=25
Cultural dynamics
➔ Cultural uniformity is
maximized in areas where
prices have been stable for a
long time at a high level
➔ Little clustering happens in
poor areas: the "slum" is a
transition zone for poor
immigrants, who quickly enter
and leave.

14. Population dynamics
K=35
➔ Higher capital = higher prices = lower population
➔ Cycles of investment and disinvestment
➔ Rat race around the city
➔ Reminds of Smith's definition

15. Cultural dynamics
Culture uniforms when
prices are steady for
some time, allowing for
➔ residents to stay put
➔ cultures mix
➔ self-selection of in-
movers via “allure”

16. Future
● More realistic residential mobility
● More heterogeneous agents
– Classes of agents: “gentrifiers” and “non-
gentrifiers”
● Population dynamics
● Actual city land values