From TriBeCa to SoHo to Dumbo, artists tend to agglomerate in well-publicized art centers rich in loft space. However, the paradox of artistic agglomeration is that artists are eventually priced out of the region of agglomeration as their presence attracts bourgeois residents and capital-rich businesses that together bid up rents. Art centers thus possess a dynamism that other regions of agglomeration, like Silicon Valley or Route 128, do not share. While the dynamic quality of art centers is well-known, artists’ crucial role in gentrification is not.

Often, artists are considered victims of gentrification since they are often the ones being priced out of a region by more affluent businessmen. However, artists play a crucial role in the gentrifying process as they help revitalize areas of past stagnation and crime. That artists are eventually priced out of the regions they helped to revive is not necessarily inefficient as they move on to improve the next low-rent industrial area leaving the old art center with increased land value and more businesses.

To understand how artists act as gentrifiers and fit into capitalist plans to raise land value, we must first establish a working definition of gentrification as: “A process by which dilapidated subdivided dwellings or slum neighborhoods are taken over by the wealthy or their agents through purchase, the non-renewal of leases or occasionally, the harassment of tenants, and then converted to expensive single-family housing.

Gentrification is a reversal of the normal filtering process, for it involves old substantial dwellings that usually filter down the social hierarchy but in this case are recolonised and filtered back up. Yardley 3-4) Since identifying artists’ role in the gentrification process is the subject of this paper and since the process relies on the establishment of an arts center, we must first ascertain artists’ reasons for agglomerating. Artists agglomerate for four primary reasons: to efficiently coordinate complex and ordinary inputs, to facilitate training, to aid in gatekeeper filtering, and to gain the public exposure necessary to effect sales (Caves 26).

Artists living in art centers enjoy low-cost access to specialized auxiliary service providers, like low-cost, high-variety suppliers of the art’s raw material, whether it consist of frames, paints, musical instruments, etc. While this cost advantage might play a small role in agglomeration, an art center’s ability to employ critical writers and important industry publications, which are necessary to legitimize and popularize the artists, provides increasing returns to an art market’s scale.

The more artists in an area, the more critics and publications, with significant art centers likely having the most important publications. These publications will be bought by purchasers of art who would otherwise face high information costs in investigating an industry marked by infinite variety; thus, these publications aid artists in the selling of their works (30). Art centers also facilitate artistic training since artists must see the work of other artists to improve their own art and must engage in artistic dialog over philosophies, techniques, and materials to produce cutting-edge work.

Trade publications are an indirect and often delayed source of information and thus can not substitute for actual artistic interaction (Caves 26). As Caves notes, “One must be plugged into the latest ideas about what is valid and important, even before this dialogue is embodied in new works of art on view in the galleries and glossy magazines” (26). For this reason, most serious artists pay New York’s high rents once they accumulate a reasonable body of skills in a lower rent region (29). Also important, agglomeration aids in gatekeeper filtering.

Dealers and agents often serve as intermediaries between artist and buyer. Local dealers can visit lofts and discuss the art with the artist. Since artistic interpretation normally requires a body of work, “the evidence from personal contact with the artist by default grows more important” (Caves 27). Modern information and entertainment media, the sources of which are typically only located in artistic agglomerations of a certain critical mass, play a large role in public perception of the artist’s persona, which crucially affects interpretation and criticism (27).

Perhaps nothing drives art center formation more than an artist’s need for public exposure since the artist’s ultimate goal is exhibition of his work in a respected gallery. As Caves notes, “a large city is (other things equal) better suited for an art center than a small one, and both the number of artists and the number of exhibition spaces apparently increase more than proportionally with US cities’ populations” (32). Artists will thus tend to locate in larger cities with over two-thirds of America’s better-known artists living in New York (32).

With a chance to display their work, artists face the prospect that dealers or collectors will purchase their art. We might expect a concentrated region of artists to induce competition that would at least partially offset these four factors favoring agglomeration. However, because buyers of art consider art a major purchase, they will likely shop for art only rarely and thus would like the largest selection possible. If artists were randomly distributed around the world, rich patrons would face prohibitive shopping costs.

In addition, art is highly differentiated, and thus one piece of art is not a substitute for another. These two factors together militate against the dispersal of artists’ locations (30). However, the locations of art centers are in constant flux. Unlike Route 128 and Silicon Valley which have been the United States’ centers of high-tech industry for many decades and Wall Street which has been the world’s center of finance for centuries, art centers are in a constant state of flux.

Unlike relatively successful businesses, relatively successful artists are priced out of their gallery and loft spaces as rents rise. Newsweek alleges that SoHo is becoming “about as cutting-edge as Rodeo Drive” as Urban Outfitters and Starbucks replace galleries and artists’ lofts (Plagens). SoHo began as an art district thirty years ago as artists began renting studio space in factory buildings and living in them illegally. As rents began to rise with the 1980’s art-market boom, some galleries were forced to move to lower-rent locations.

A six-story building consisting of 12 lofts in SoHo in 1968 sold for $12,000 while in 1980 the market value of just one of the lofts reached $180,000 (Zukin 132). Even Mary Boone, dealer to Julian Schnable, Barbara Kruger, and Sean Scully, decided to escape SoHo’s high rents (Plagens). This pattern has been repeated in San Francisco’s SoMa and California’s Venice and Ocean Park; artists help revitalize a run-down factory area and are priced out of their lofts once rents soar. While Newsweek is critical of this “gentrification crunch,” it does not suggest how the process results in inefficiency.

The land increases in value and artists move to help revitalize a new area. Moreover, the Newsweek article and most gentrification literature does not consider the artists as gentrifiers, but considers them victims of the gentrification process and suggests that society is being hurt by the destruction of an important art center, thereby hinting at the need for government regulation. While we could conceive of a story by which society loses as a result of the migration of artists, the story is not compelling.

We might think, for instance, that less successful artists and galleries, whose revenues can not support high rents, move away from the art center leaving only the most successful galleries. These artists and galleries benefit from the additional people who visit the gentrified art center with its new stores, restaurants, and hotels. Dealer Friedrich Petzel of SoHo recognizes this effect by defending SoHo’s gentrification: “We needed a hotel. And I need a restaurant where I can have lunch with a client” (Plagens).

However, because artists require contact with other artists, we might think that future art will suffer as the best artists and galleries do not have the benefit of access to lower quality or undiscovered artists as they would in low-rent art centers. Thus, we might think society loses in its quality of art. This tenuous argument relies on the fact that excellent artists absolutely need the immediate presence of second-rate artists. However, because these artists do not leave the city but simply migrate to a new area like the southern edge of SoHo, Chelsea, or Dumbo, it is unlikely that art will suffer.

The second-rate artists must still tour the top SoHo galleries since they desire discovery. It would seem that art need not suffer and that the only result of the gentrification process is increased land values and the migration of the art center to a new low-rent location which will one day also be gentrified. A fundamental issue at stake is whether or not artists constitute the gentry. If they do not differ from the lower class city dwellers on education and income, we might agree that gentrification takes place only after the artists are priced out.

At first glance, artists do seem to exist in relative poverty as they earn 6 percent less than the rest of the employed population and since this difference increases to 10. 3 percent when such things as education, experience, health, regional location, and demographic properties are controlled for (Caves 79). However, this apparent validation of the idea of the starving artist fails for two reasons. First, the artistic profession is dominated by younger people whose low current incomes can be expected to increase more than the average person’s current income. In addition, the data are made irrelevant by selection bias.

The only people counted as artists are those artists who earn their primary income from their art; this is a very small percentage of all artists as many artists hold non-artistic jobs. For instance, a survey conducted by Gregory Wassall and Neil Apler of 3000 New England artists demonstrates that 24 percent only hold artistic jobs. Moreover, of the people surveyed, only 46 percent of total income is earned from artistic work. Despite this, median income of these artists is only 1. 6 percent lower than average income while artists’ family income is 11. 3 percent higher than average family income.

Considering that many artists receive transfer payments from their parents and that artists had 16. 5 years of education compared to the average of 12. 3 years, artists are either as well off or better off than the typical person and are far more educated (Caves 79). The data leads Caves to conclude that “most artists did achieve middle-class living standards, either from their art or from employment and family support” (80). The conversion of industrial loft space into artistic loft space symbolizes the bourgeois conversion of the industrial economy into a service economy (Zukin 112).

Thus, we see the problematic nature of considering gentrification as occurring only after the artists are priced out of the art center. Artists have much more education than the average and do not face the same level of economic want as they have wealthier families who likely sent them to college and would help them economically should they need it. Moreover, the fact of their superior education gives them the ability to command a higher paying job should they decide to leave the art profession.

If they do not enjoy middle-class incomes, it is by choice. These artists do constitute the gentry, as they bear much more in common with their upper-class families than with the poorly educated people whom they displace. In many cases, the dichotomy between current residents and artists is obvious. For example, Nick Rothenberg, a young, college-educated student with the dream of entering Hollywood, established an office in South Central LA where he’d awake “in the morning to find fresh bullet holes in the cars out front” (Rose 188).

His contacts in Hollywood would refuse to park their Mercedes in front of his house and would thus refuse to meet him at his home office. While he was poor, he was very different from the poor people surrounding him since he had realistic dreams of great wealth, which eventually led him to leave his crime-ridden neighborhood to become a multi-millionaire employing 250 people in a business that creates web strategy for major Hollywood studios.

Zukin goes further than merely asserting the obvious difference in class between artists and local residents to claim that the bourgeoisie has wholly expropriated art. As Zukin notes, “previously regarded as rebellious and bizarre, artists became so integrated into the mainstream of American society that they were practically indistinguishable from other groups in the broadly defined middle class” (96).

In fact, with the transformation of artists’ perceptions in the 1960’s from “beat” to “middle class,” artists gained a sense of upward mobility as the bourgeoisie viewed the “bohemianism” of artists as a transitional phase associated with youth during which a talented artist seeks discovery (96-97). College-educated artists rely on college-educated critics, curators and dealers, and as the professonalization of the arts industry progresses, other college-educated members of the middle class begin to take an interest in art.

Zukin notes that “in these conditions, art no longer either contradicted or negated the value of social existence, especially the life of the middle class. Instead, art found its function in representing this existence and its implicit existential angst” (97). With the popularization of artistic schools and the legitimization of art as a career choice, artists became “practitioners rather than visionaries” and “imitators instead of innovators,” who would defend their art with academic concepts and jargon-laden methodology (98).

Such an outcome, far from alienating the artists from the middle class, made the artists middle class. Almost anyone could acquire the body of skills necessary to pursue an art career just as anyone could acquire the body of skills necessary for an investment banking career; while success might correlate with true artistic ability, it became possible for any person with an interest in the arts and the money to pursue that interest to enter the art profession.

Art became less elitist and more accessible. Further suggesting the absorption of art into the middle class is its history of conspiring with its wealthy patrons for its own ends. For instance, many prominent literary and artistic figures were invited to JFK’s inauguration, which resulted in much favorable press coverage lauding the administration for its “cultural tone” (Zukin 105). The politicians began to use the artists for their own ends, and in return artists began to sense their political power.

Artists create works for the super rich with the most successful artists’ selling exclusively to wealthy businessmen and to families with old money. When artists in SoHo were threatened by the loss of a housing subsidy and development by real estate investors, they made use of the political power of their customers. As one SoHo artists recalls in a passage worth quoting at length for the obviously bourgeois nature of the artistic community: “We had gallery owners. Many of us worked in schools and universities.

There were wealthy collectors we had sold to. There were some very influential artists in the area – Rover Rauschenberg, Robert Indiana, Julie Juddwho could call on curators and museum board members. Others of us had only an occasional wealthy person who bought something from us. We all put together the names of who we could talk to and found that between us we had a rather impressive list. It ranged from people who had nothing to do with art, like the chairmen of the boards of banks, to curators and international art dealers.

We started to call these people up to let them know, Hey, there’s a unique phenomenon going on right here that nobody know about, and if we don’t do something it will be destroyed. ‘” (Zukin 116). As a result of calling on their network of political and economic support and of cooperating with publicity, SoHo was designated an official landmark district which made it much harder for developers to enter. Well-educated exercisers of political power with wealthy customers, artists must be considered members of the middle class. When they move into an area, they are the gentry.

To better understand how artists aid in removing lower-class people from an area while at the same time attracting upper-class people, we must better understand the economic process of gentrification. Neil Smith of Rutgers University conceives of gentrification as an “inexorable and irreversible product of the capitalist system” (Yardley 13). Two possible sources of gentrification exist: demand-side causes and supply-side causes. The popular press has largely enshrined demand-side explanations suggesting that gentrification is the result of changes in middle-class tastes and family preferences.

According to this argument, the middle-class begins to value dynamic city life over steady suburban life. Since modern families are smaller as the result of postponed marriages and ubiquitous divorce, it has been hypothesized that small city apartments have become convenient substitutes for suburban living (13). Thus, we might think that this decreased demand for large suburban spaces to raise families and the desire for shorter commutes have increased demand for city living causing a “back to the city movement.

However, Smith show that 72 percent of gentrifiers are city dwellers and thus demand-side arguments while popular with the press, cannot be accurate (Yardley 14; Zukin 131). Supply-side explanations of gentrification are much more convincing as builders, developers, lenders, politicians, and government agencies seem to control the devalorization (decrease in land value) and revalorization (increase in land value) of the gentrification process. Critical to the ensuing discussion are a few definitions.

Ground rent” refers to the value of the land; “capitalized ground rent” refers to the investment made by landlords in upkeep with return on capitalized ground rent coming in the form of rent paid by tenants; finally, “potential ground rent” is the amount of rent possible if the land were efficiently utilized (Yardley 15-16). When inner cities are first built, ground rents converge to potential ground rents but as the city expands and lower cost building technology proliferates, more recent buildings are advantaged.

With style obsolescence and deterioration from use, the cycle of devalorization begins. As the ground rents decrease, landlords might decide to invest less in repairs and to charge less in rent. This causes further ground rent devaluation. As the area becomes known for its low-cost housing, banks will be less likely to grant mortgages to people willing to live in the area. “House values soon fall below the capitalized ground rent and far below the potential ground rent” (Yardley 17).

Landlords who had been keeping up with repairs will stop as the rents fail to compensate them for repairs. At this point, real estate agents and banks begin to further the devalorization process. Real estate agents may begin the practice of blockbusting, whereby houses are bought up cheaply and offered for sale to low-income minorities who do not spend any money on repairs. Racist sentiments and high crime lead whites to leave. Banks begin to redline these areas making it impossible to secure mortgage money in the area.

Crime spreads and a slum is created (Yardley 18). At this point, ground rents and potential ground rents have diverged enough to make it profitable for developers and banks to begin the process of revalorization, and governments begin to sense the urgent need for revitalization. Developers who notice the arbitrage opportunity buy the devalued land and lobby for area improvement. The city and developers conspire to eliminate crime through “collective social action” (Yardley 19), and banks end their redlining practices providing the necessary money for urban renewal.

Revalorization results and the rent gap, the difference between ground rents and potential ground rents, begins to close as represented in the below figure. Land value Distance from city center Mayors and towns have begun to understand the gentrifying power of artists. Like Rothenberg above, artists tend to be young, single members of the middle class who are willing to sacrifice the “background noise” of crime for low rents and ample space. Moreover, according to Zukin, “all studies of gentrification confirm that a fairly homogeneous group of in-movers [like artists] reduces residential density and replaces an existing population” (135).

Since “social solidarity” as indicated by “residential clustering of visible, highly singular social groups” among in-movers tends to improve chances of gentrification and the ability to displace existing residents, artists seem to be the ideal first-round gentrifiers. With their “homogeneity” and “social solidarity,” they have the best chance to displace current residents. Since they also have high tolerance for crime and run-down living conditions and tend to make their own improvements, they are more likely to begin the gentrification process.

As highly educated members of the middle class and as seekers of publicity, they could help revitalize an area and bring to it an avant-garde reputation. Since “it is generally agreed that gentrifying neighborhoods produce higher tax yields,” we might expect political leaders to conspire with artists in creating an art community and to not support the population displaced by the artists (Zukin 136). If artists are later replaced by people who pay even higher taxes, the town benefits even more. In practice, we find exactly what we predict.

TriBeCa became popular in the 1840’s as businesses fled Wall Street for its high rents. With the success of Washington Market, TriBeCa by the 1880’s became a major center for groceries, liquor, produce, and wool. When Washington Market closed in 1968 and rents plummeted, artists began to move into the region. The large amount of floor space, the large window sizes, and the low rents appealed to artists (Yardley 25). Artists did not demand the amenities of an apartment complex and thus entered the area before other professionals.

With the new artistic climate and bourgeois inhabitants, land values began to rise and businesses began to open office space in the area. Artists who wished to keep the area residential clashed with business. The New York Times reported that the dispute pitted “artists against yuppies” (Yardley 28) as one set of gentrifiers sought to displace the other. While Loft Laws, which helped maintain low rents, protected some artists, others were not protected and were displaced by the wealthier yuppie populations.

Yardley bemoans this result commenting, “The sad irony is that having created avant-garde areas of style and artistic creativity, the artists paradoxically aided their own demise. ” What Yardley in his excellent analysis of the gentrification of TriBeCa fails to realize is that artists are the first stage in a gentrification process and that if wealthier tenants displace them, they are not ruined. Instead, they move on to another low-rent district and begin the cycle anew. For instance, artists have begun to agglomerate in a new region under the Manhattan Bridge Overpass called Dumbo.

The region, as yet, lacks the upscale coffee houses and an Abercrombie and Fitch, but the artists have not been there long. In this unattractive area of Brooklyn, artists have found low rents and ample unused industrial space. Moreover, they have realized the power of association and put on Dumbo-wide exhibitions to attract crowds and other artists. Margaret Champagne is one typical Dumbo resident. At 22, she graduated from Pace with a theater degree and moved to Dumbo to create a makeshift theater and focus on her art (Marks).

Living “in a concrete box in a dusty industrial zone,” she is the archetypal, unwitting gentrifier. Well-educated, white, and middle class, she is willing to put up with crime and dirt because of her passion for her art; she does not consider herself anything but an artist and bohemian who seeks the company of other artists for inspiration and learning. She does not anticipate the upscale stores that might rise up in the next decade and that will price her out of her space. However, some Dumbo residents recognize the threat and hope to avoid Dumbo ending up a trendy art district with a Starbucks on every corner.

For instance, some Dumbo artists campaign on the slogan “no SoHo in Dumbo” to prevent Dumbo-wide exhibitions which might draw trendy crowds (Marks). Their campaigning fall largely on deaf ears however as artists must be part of a community of artists and must have the opportunity to exhibit their work with the hope of discovery. As such, they must always seek to attract other artists and the yuppie patrons who might one day transform the industrial Dumbo into a trendy SoHo.

Politicians in other regions have recognized the gentrifying power of artists and have sought ways of attracting them to their dilapidated urban centers. Peekskill, New York, hired Ralph DiBart to revitalize the city’s broken-down business district. Until recently, Peekskill according to the New York Times seemed “to have more in common with the aging post-industrialist cities farther upstate, like Schenectady or Utica” whose “leaders want to shut their governments down” (Nieves).

With over 100 artists, DiBart is betting on artists to attract the businesses that could remake the small town of 20,000. The New York Times reports that DiBart “seems most excited about the businesses that artists in Peekskill have attracted,” including several computer graphics and multimedia firms. Businesses bring in tax revenue and employees and can help ensure the town’s survival. His next goal is to work on how to let passersby realize that what appears to be vacant upper floors are actually artist studios (Nieves).

Clearly, the town is using artists to spur business development. Providence, Rhode Island, has come to the same conclusion as DiBart on how to spur economic growth in an aging manufacturing town with much empty loft space. Mayor Cianci has passed laws allowing artists to pay no state income tax, permitting their customers to pay no sales tax, and giving tax breaks to owners who convert old buildings into residential units (Janofsky).

Mayor 16 of the last 22 years, Cianci is serious about creating an art Mecca. “With financial help from the city, state, and Federal Government over the last 20 years, old theaters were spruced up, restaurants opened, big hotel chains came to town, the railroad tracks were moved underground, even the rivers running through the city were rerouted to create open space linking the downtown area to tow treasures, Brown University and the Rhode Island School of Design [Risdy’]” (Janofsky).

While artists there recognize that “every artist wants to live in lower Manhattan,” they find Providence an excellent, supportive place “where you can live and work in comfort” and “get momentum” prior to the expensive move to New York (Janofsky). Cianci’s goal of using artists to aid business development seems to be working with a newly opened 1. 3 million square foot mall, movie theaters, shops, and restaurants. Everyone seems to realize that artists are bourgeois gentrifiers except academics who lament the destruction of arts centers like SoHo and TriBeCa as artists are “gentrified” out by yuppies.

Perhaps, people have difficulty picturing artists as front-line gentrifiers responsible for the displacement of poor minorities by stores like Urban Outfitters, Starbucks, and Finagle a Bagel and upper middle-class whites. However, there can be no doubt that artists help displace existing poor populations, raise property values, and attract trendy stores and chic residents. Politicians have realized this extraordinary power of artists and applied its principles with great success.

At first seeming caring and sensitive, policies to draw artists are routed in economic need and the desire for higher rents and greater tax dollars. Priced out of the areas they helped to transform and revitalize, artists are left searching for the next artistic enclave where they can again benefit from the increasing returns of agglomeration. Artists play an important and thankless role in urban renewal, promoting economic efficiency through increased land values, better utilization of land, and high economic growth within the former artistic enclave.