Can economic development policy trigger gentrification? Assessing and anatomising the mechanisms of state-led gentrification

Abstract

This paper aims to bridge universality – as gentrification stands as a global threat to vulnerable communities – and local circumstances and geographies, by investigating structural factors, such as deindustrialisation and land rent gaps, as well as local political economies and socio-spatial structures, which are all common in the Global South. We conducted research in Belo Horizonte, Brazil, to investigate whether a neoliberal economic development policy acted as a trigger for gentrification, relying on mixed methods research to analyse evidence of economic restructuring, land rent creation, changes in resident profiles and major urban development trends in the region. Findings indicate evidence of economic restructuring and that the policy triggered higher land values. However, we did not observe evidence of gentrification in the area and attribute this to a still-relevant manufacturing sector, the extensive presence of large informal settlements, the growing numbers of suburban gated communities, the low proportion of renters, and the fact that local elites are moving southwards while the policy took place in the northern peripheries of the metropolis. Federal policies such as minimum wage increases and housing programs partially contradicted neoliberal state policies. This case study offers a lens to investigate gentrification in different latitudes and illustrates how social policies may prevent gentrification processes.

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