As a result of these and other changes, during the second half of the twentieth century industry decamped from many first-world central cities in search of lower wages, looser environmental standards and wide-open spaces in northern suburbs, rural towns and international “free trade zones.” New York City is an extreme but telling example: from the 1950s to the 1990s, the city lost 750,000 manufacturing jobs while its land values soared from $20 billion to $400 billion.

In several cities, these trends coincided with a severe round of fiscal crises and capital strikes—moments when a state cannot raise the capital it needs to maintain its budgets and bond investors refuse to buy shares in its future.24 New York’s late-1970s recovery from the brink of bankruptcy was led by banks, real estate interests and municipal unions, who disciplined the city through a process of privatization and disinvestment from social services that continues to this day.25 Municipal wages and benefits were slashed; welfare payments fell by one-third; the city’s public universities started charging tuitions. Meanwhile, stock taxes were dropped, income taxes were halved and real estate taxes fell to historic levels.26 This became a model for neoliberal governments throughout the country and around the world.27

Gentrification, then, was a “spatial fix” for capitalism’s urban crisis: a way to profit from previous disasters and to find new places for investors to turn money into more money. Deindustrialization created the space for real estate’s revival, and redlining and urban renewal set the spatial patterns for disinvestment and reinvestment. What first appeared as an opportunistic venture for middle class movers and profit-seeking landlords—a building-by-building, block-by-block phenomenon—became a way to transform entire cities from places into products.

As cities destroyed their public housing, they chipped away at rent controls or abandoned them altogether. This helped cement the relationship between planning and gentrification. With strong rent controls in place, urban planning interventions like new parks, schools and transit do not necessarily produce elevated housing costs; while public investments in neighborhoods might widen rent gaps, rent controls would prevent landlords from closing them. With rent controls diminished or removed, however, landlords could more easily raise rents based on new neighborhood improvements; they market these planning interventions as amenities for their property, and thus immediately turn inclusionary public investments into exclusionary private gains. Today a weak form of rent control still stands in some California, DC, Maryland, New York and New Jersey cities, but these systems have been systematically undermined by landlord-backed legislators and under-enforced by regulators. Many US states have passed ordinances outlawing further controls.

By choice or by force, planners use gentrification to create the physical environments for capital to thrive. It is the process by which cities seek capital, and capital seeks land. Its endgame is a city controlled by bankers and developers, run like a corporation, designed as a luxury product and planned by the finance sector. What was public becomes private; what was common becomes enclosed; what was cheap becomes expensive; what was shared becomes traded. Through the real estate state, the city becomes gentrified. Through gentrification, the city becomes neoliberal.