In the present day, a smart city is inherently exclusive. In order to take advantage of all of the opportunities and services that the smart city offers, one needs to have a certain (high) level of personal technological capital and a very specific, technologically driven thought process behind one’s everyday decisions. Moreover the types of financialisation described in Desiree Fields & Sabina Uffer’s article The financialisation of rental housing: A comparative analysis of New York City and Berlin further paints a picture of an exclusive city as only very specific socioeconomic groups can thrive after financialisation[1]. As Fields and Uffer describe, once large, global financial institutions take over large housing complexes within a city, the companies, acting as risk-oriented entrepreneurs/investors (not landlords), strive for an incredibly selfish level of profit-driven efficiency. Global corporations do this through reducing maintenance and housing upkeep (and therefore expenses), driving residents out of their homes, using government-issued vacancy bonuses to implement major capital improvements (thereby repositioning under-market units within the economy), and consequently releasing untapped value and profits[1]. Though financialisation and urban pioneering are detrimental to a city’s social diversity and culture, it is very efficient in the economic and technological sense while being used “as a preemptive justification for a new urban future.”[2]
One potential way to make the smart city more inclusive to people of all socioeconomic backgrounds would be to implement a technology like that described in Crowley et al. (2014). A smart city filled with sensors that monitor energy usage could be an incredibly cost-effective way of monitoring costs in a building and therefore theoretically, could make the smart city more accessible to people of all socioeconomic backgrounds.[3] The only problem with this logic is that it likely requires the technology and more cost effective living to be established first and then for low-income families to more in after.
Because smart cities are more focused on efficiency, perhaps financialisation could actually benefit smart cities. As we have discussed in class, smart cities can be build on any location from scratch and therefore the financialisation of a new smart city could have less negative externalities. Financialisation occurring in a new smart city would reduce the negative externalities (compared to financialisation of a normal city) because there are no residents to displace with red-lining, there is no existing city culture to destroy, and the social dynamic does not even exist yet. Financialisation would simply amplify the smart city’s exclusivity (which could potentially be what some smart city residents and governments are striving for).
That being said, financialisation is likely not the correct technique for creating housing that most benefits the common good. In order to maximize the public benefit or public good of city housing, the city’s government cannot give up control over the city’s public housing as the government will no longer be capable of improving social welfare or supporting domestic business through housing policies and pricing.[1] Governments cannot simply be focused on increasing their income; they have to focus on keeping their residents happy and the city running smoothly. The city’s government must focus on the physical needs, safety, security, social needs, esteem, and self-actualization of its residents. As described in Fields and Uffer (2014), city governments “need to find a way to forge critical urban politics of finance focused on common welfare rather than short-term objectives of growth and competition” (13)[1].
With this in mind, I think that the ideal housing situation to most benefit the common good would be a wide variety of different types of housing all mixed together in one city, while still keeping already existing neighborhoods alive. As described earlier, it is incredibly important to keep enough government-regulated housing to ensure all socioeconomic groups and cultures can afford to live within the city. With enough government rent-regulated housing, the idea of a New Frontier and Urban Pioneering as “idyllic yet also dangerous, romantic but also ruthless” (Smith) begins to change. Cities reduce the risk of forcing large groups and social diversity out of the city and avoid failing to cope with its homeless (New York City as described in Smith) while still gaining the positive sides of gentrification such as improvements in infrastructure, public space, and quality of life.
I think the best types of housing for Portland would be a combination of coops, larger apartment buildings, and government regulated housing. I think coops would benefit Portland because coops encourage all residents to invest in the continued quality of their own buildings, therefore avoiding the infrastructure problems described previously with financialisation and furthermore nurturing a mini-community that can potentially contribute to Portland’s culture as a whole. That being said, specific individuals living in a coop could potentially be less likely to take care of their own apartment’s infrastructure because they know the cost will be spread across the entire building for large maintenance repairs. Because coops have the potential to create these perverse incentives, I think it is really important to have regular (local land lord owned, not financialised) apartment buildings and government regulated housing as well.
[1] Fields, Desiree., Uffer, Sabina. “The Financialisation of Rental Housing: A Comparative Analysis of New York City and Berlin.” Urban Studies July 2014 (2014).
[2] Smith, Neil. “Class Struggle on Avenue B: Lower East Side as Wild Wild West.” The People, Place, ad Space Reader (1996).
[3] Crowley, David N., Curry, Edward., Breslin, John G. “Leveraging Social Media and Iot to Bootstrap Smart Environments.” Studies in Computational Intelligence (2014).