Monday Nov 19

EXCERPT FROM Gringolandia: Lifestyle Migration Under Late Capitalism: Lifestyle Gentrification Comes from the North to Latin America

Infrastructure projects are designed and guided by financial logic that conceives of emerging cities as competitive zones, which can be pulled into economic relations at a global scale and thereby made more useful to capital. Large infrastructure projects do resolve real problems that are the result of contemporary social processes in Latin America: congestion, traffic, and urban pollution, in this case. However, they also require financing and loan repayment, which obligates new relations of exploitation based on economic development. Cities must become more competitive—and increase ground rents and the public tax base to afford the loans. In Cuenca, Equador’s case, this tax base has long been controlled by the landowning families who most benefit from policies that raise ground rents and that force informal workers and rural peasants into more intensive relations of exploitation.¹ In an economy dominated by low-income informal workers and shaped by a history of racial hierarchy, ground rent increases do not produce development; they produce inequality. The trans-nationalization of real estate in cities like Cuenca and its environs exacerbates these inequalities. The competitiveness of cities in the Global South is often premised on financial support from institutions in the Global North, which, thereby, are able to intensify exploitation, appropriating higher rents in the form of interest payments. Lifestyle migrants can pay higher rents and are attracted by infrastructure designed to improve the livability of cities. These improvements can be appropriated, especially in conditions where North Americans need a low-cost retirement destination to live up to the cultural ideal of “successful aging.” This appropriation can broadly be termed as gentrification, which, in mid-sized Latin American cities like Cuenca, is a truly trans-national phenomenon.

Though latitudes are the scaffolding of a sociology of global inequality, it is important to understand how geographies of difference and the opportunities, meanings, and uses of relative exchange values across latitudes are shifting as a result of the capitalist compression of space and time described earlier. This compression activates new opportunities to exploit rent gaps as spaces in the Global South are reimagined for higher-rent activities derived from offshoring lifestyles or activities previously located in the Global North. In many cases, attracting higher-income buyers from higher latitudes of the global division of labor is the only way to make investment in urban “revitalization” in lower-income countries profitable.² The spatial consequences of this type of urban intervention are well known in the North American context and go by the name “gentrification,” whereby the population of a neighborhood is replaced by higher-income groups and activities (Clark 2005). Latin American studies of gentrification have pointed out that the class dynamics of the region do not favor the same types of gentrification processes as the Global North. The large number of informal workers with insecure incomes and the relatively small size of the middle class have meant that transnational actors and the state are much more important in supporting and financing higher-rent activities in historic centers than they are in North American cities. Moreover, the hollowing out of many of these historic centers in Latin America and the “regeneration” of these spaces through state investment in tourism has led to debates about what forms of dispossession, exclusion, and dislocation actually take place in these contexts and how they may differ from classical cases in urban studies. While Latin American studies of gentrification tend to focus on large metropolitan areas and to a lesser degree on rural ones, the same processes also play out in smaller historical cities, such as Cuenca or San Miguel de Allende in Mexico. In these cities, as in larger ones, the potential to increase ground rents through support for “colonial-style” heritage preservation has drawn the IADB into the ambit of funding municipal intervention projects going back to the 1990s. Clearly, accumulation through land and real estate speculation has spread far beyond the big city “usual suspects” even in Latin American urban research.

Cuenca has become a globalized social space through a combination of transnational networks that entangle wealthy Ecuadorian landowners, Anglo-American international lifestyle marketers, developers and bankers from the Global North, and North American lifestyle migrants, most of whom are retirees in search of lower-cost retirement options. The transnational processes now changing the city also include remittances from Ecuadorian migrant workers in the Global North as well as return migrants—although these transformations tend to be on the city’s edges more so than in its historic center. While a series of factors have combined to make the city the most expensive in Ecuador, heritage preservation and transnational lifestyle migration are now the main drivers of urban transformation.³ This is because they represent demand for the higher-rent activity that the Municipio de Cuenca is intending to generate through intervention projects, often identified by foreign or IADB consultants. Since 2013, this latter has been working with Cuenca through its Emerging and Sustainable Cities program, part of its Housing and Urban Development loan portfolio. The intentions of this program are to make cities in Latin America and the Caribbean—many of them mid-sized cities like Cuenca—more competitive and integrated into an emerging global economy. Consultants have deliberately focused on growth strategies that will help Cuenca increase ground rents through urban improvement projects— but they do so in the absence of any program aimed at increasing local incomes. Thus, the higher-rent activities will have to be supported by external forces, namely, tourism and lifestyle migration.

This promotion of urban “revitalization” in Cuenca’s El Centro is, therefore, a form of urban colonialism, connected not only to processes of globalization but also to the coloniality of global structures of accumulation centered on new types of exploitation of urban land in the Global South. Just as in New York or London, where a global super-elite have generated ground rent increases that no longer bear any relation to local incomes, so too has North–South migration to mid-sized cities and towns—like Cuenca and Vilcabamba—generated transnational processes of gentrification, displacement, and exclusion. These lifestyle migrants from higher-income countries—many of them a new type of economic migrant—are often seen as benign and are not perceived as competition for local laborers. However, they activate global rent gaps and help produce gentrification processes that displace them. Even in relatively small numbers, North American lifestyle migrants can have a very significant impact, as Cuenca and Vilcabamba demonstrate. As pension savings and financial security are undermined, baby boomer retirees seeking more livable, walkable urban spaces (which North American developers and municipalities singularly fail to produce) end up appropriating improvements that may be conceived of and justified as benefiting local populations.

This is not merely a free market process. As elsewhere in Latin America, the activation of rent gaps and the expansion of secondary circuits of accumulation have depended on heritage preservation in which local and national governments play an important part. As noted international financial institutions have also supported local government. In Cuenca’s El Centro, IADB loans funded “intervention” projects designed to “revitalize” central plazas with the intention of raising ground rents. While attempts were made to provide services for workers who would soon be displaced, nothing was done to support the livelihood of, increase employment opportunities for, or improve the incomes of informal vendors— social justice policies that would require much more substantial economic reforms and global economic redistribution. Thus, as in other heritage cities targeted by the IADB and World Bank, at- tempts to improve competitiveness and aesthetics of downtown neighborhoods have promoted gentrification and displacement. Moreover, this displacement overlaps the marginalization of rural and indigenous traditions in shaping the modern heritage city and reproduces caste systems that exacerbate income inequalities. Increasing the market value of heritage sectors is consistent with national developmentalist programs, which are increasingly called into question, in the Ecuadorian context in particular, through the politics of Sumak Kawsay or Buen Vivir. This latter seeks to enhance quality of life outside of traditional economic growth models. But the existing emphasis on growth and heritage tourism also marginalizes alternatives. The national government’s support for Cuenca’s urban heritage redevelopment and its tranvía project intended to extract more exchange value from existing space, positioning Cuenca as an important part of its national tourism strategy. While the migration of North American retirees to the city has been crucial to actually realizing ground rent increases, the process of gentrification was both state led and promoted by international financial institutions. The latter’s ability to compel the action of the Ecuadorian state, obliging it to pursue policies that maximize foreign exchange earnings, is a reflection of neoliberal developmentalism, which was consolidated in the debt crisis of the early 1980s—a crisis created by banks located and owned in the Global North (which overlent for projects that were sometimes never going to be profitable) but which was paid for by workers in the Global South (who lost decades of development as their countries repaid loans to the Global North at the usurious interest rates of the Carter and Reagan administrations). Tourism and heritage gentrification in Cuenca fit within a colonial history of accumulation through dispossession and depends on the epistemic coloniality of developmentalist thinking, which presumes that economic growth in the Western, Eurocentric pattern provides better lives for everyone.

In Cuenca, state-led urban gentrification is also an elite-driven process, dependent on local architects and developers, many of them from wealthy, landed families. Their interests in increasing ground rents also work to favor appropriation of lower-income spaces by higher-income latitudes and thus perpetuate a long history of urban colonialism. Municipal participation in urban “interventions” and infrastructure upgrades stimulated large private construction sites that have supplanted formerly lower- income housing in central areas of the city. Large private developments of luxury condo apartments are sold advertising modern, European appliances in English. These urban interventions are conducted under the guidance of the IADB, whose Emerging and Sustainable Cities program specifically calls for a change in Cuenca’s model of urban growth toward a denser urban layout. The new condominiums are marketed to the professional classes and to foreign lifestyle migrants who can pay the rents that make these projects profitable. For Ecuadorian middle and upper-middle classes, units might be purchased as an investment, with the intention of renting to foreign residents. In Gringolandia and elsewhere in the central areas of Cuenca, North American tenants are the main driving force of increased rents on land and condominium units, much as tenants have been the leading force in other Latin American gentrifications.

Moreover, noted of Panama’s Casco Viejo, the urban transformations taking place in Cuenca could not be sustained on the basis of local income and investment alone. Growth and ground rent increases depend on demand from higher latitudes of the global division of labor. Thus, local improvements always risk being appropriated by people from higher latitudes, who are able to pay to sustain higher-rent activities.

In the case of lifestyle migration to Ecuador, cultural ideals are an important factor in configuring the emerging forms of neoliberal globality, which shape social hierarchies at different latitudes. The cultural ideal of successful aging was readily visible in the discourses of North Americans in Cuenca, who assigned moral worth and social distinction to themselves (as adventurous) and others like them (as brave), as noted in the introduction, often on the basis of staying active and avoiding signs of aging or of slowing down. North Americans have internalized the ideal of taking individual responsibility for an aging process that is supposed to maximize health, welfare, and sociability through independent action, instead of relying on entitlement welfare programs, which the ageist discourse on health care reform in the United States has framed as unaffordable. While North American lifestyle migrants appear to be breaking new ground and experimenting in novel lifestyles, these latter also follow socially sanctioned cultural codes and pre- scribed paths that are shaped by policy debates from the 1980s and 1990s, increasingly packaged by an international lifestyle industry and effectively rendering them conformist, even as they may appear unorthodox.

It is easy to identify with cultural ideals and lifestyle experiments. Such lives do seem exciting and full of potential, in part because so many people today identify with travel and personal growth as the ends of successful living and aging. Often, they are the lives we would want for ourselves. They inspire us to find our own sources of adventure. But they are also culturally and politically produced ideals that play out in the tension between a utilitarian accumulation of intense experiences (e.g., living in a way that produces as much “true” inner happiness as possible; cf. Bellah et al. 1985) and the enforced conformity of prescribed consumer lifestyles, promoted by marketers (like International Living) and corporate interests whose vision of global society is one of increasing competitiveness and profitability. They individualize responsibility for health and sociability in aging at the expense of a more holistic approach that would recognize and address social inequalities. Lifestyle migration to Ecuador is an experiment with life, but one that is increasingly a mass-produced, catered phenomenon, with a market of individuals searching (and sometimes needing) to partake in it. As an ideal of adventurous aging, it is the product of a competitive, neoliberal culture of constant self-evaluation and comparison that leads us to be dissatisfied with lives that seem to fade out.

Matthew Hayes is the Canada Research Chair in Global and International Studies at St. Thomas University in Fredericton, New Bruswick.

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