Gentrification: a word we hear every day in discussions concerning planning in the United States, particularly around central city revitalization, real estate development, housing, economic development, and the list goes on. It generally involves two elements:

• The movement of high-income groups into urban areas where they have greater resources to pay for land and housing when compared to existing residents.
• An increase in land values, rents, and property taxes, which occur as a result of the increase in demand for housing, which excludes and ultimately expels existing low-income residents who can no longer afford to live there.

But what about la gentrificación?

The phenomenon of urban gentrification is no less present in Latin America than in any other part of the world. In the historic centers of Latin American cities like Quito, Ecuador and Santiago, Chile, developers and private owners are buying up colonial houses and historic buildings, transforming them into boutique hotels, commercial centers, and high value residential real estate, embracing many elements of the gentrification that has become common in the largest cities of North America. New development raises housing values and excludes many of the working-class and low-income residents who historically chose to live in the center due to proximity to jobs and mobility. Additionally, the push for tourism in historic centers places pressure on local governments to ban informal street vendors, which may be a nuisance to foreign tourists but are a fundamental source of employment for many residents of Latin American cities. The push to revitalize historic centers to increase land value and attract tourists in Latin America raises questions about equity and the right to the city.

Additionally, Latin American cities including Santiago are seeing a new type of uniquely Latin American gentrification. In Latin American cities, the periphery was and continues to be the domain of the working classes, who, during the 20th century migrated to the city from rural areas, and lacked access to the formal land markets and housing markets in upper-middle class and upper class areas. In Santiago, wealth is concentrated in the east and north-east of the city, while poverty is dispersed to the periphery of the city.

In the 21st century, planned suburban developments on the periphery of Santiago attract a growing upper-middle class, which drives up land values on the outskirts of the city. According to Francisco Sabatini, professor of urban planning at the Universidad Católica de Chile, this phenomenon of peripheral and exurban development constitutes a new and unique type of gentrification. Since they are greenfield developments, they do not displace people in the short-term, calling into question whether they are really gentrification. As Sabatini argues, it is only “gentrification without displacement” in the short term. In the long term, it restricts access to housing for low-income residents on the outskirts of the city, as well as places new constraints on access to public space and transit.

Over the next generation, suburban expansion will only continue this phenomenon, driving low-income Santiaguinos further out, placing greater strains on public transit and increasing their already long commute times. On the other hand, as Sabatini argues, these developments could be a first step in integrating some of the traditional social class divisions in Santiago, and could generate new types of interaction among residents of different income levels. The new and ongoing development on the outskirts of Santiago will create a new dynamic in terms of public space, land use, and transportation planning, and time will tell if it begins to displace low-income residents on the periphery of the city.

About the Author: Michael Hogan is an economic researcher at RTI International and a second year MCRP student specializing in economic development. Originally from North Carolina, he comes to UNC via Santiago, Chile, where he worked on innovative business development projects for the copper mining industry, investing in new copper products and improved mining and refining processes. His research and professional interests include local and regional economic development through industry transformation, diversification, and value chain upgrading.