[ part 1: Why low income areas | part 2: About gentrification | part 3: Coming soon ]
New money changes the game in Paris
Real estate prices in coveted downtown Paris started to take off around 1996 then began to seriously explode in 2000. France’s population is mostly made of middle class households that did not experience any dramatic increase of their purchasing power in the 90’s, and that – aside from a certain elite – certainly does not have the means to afford posh flats in the capital. So what was Paris’ late-nineties real estate bubble triggered by?
I believe the globalization of the economy is responsible for the Parisian housing bubble. In 1995 Paris was much cheaper a world-class capital to purchase an apartment in than London or Berlin for instance, let alone New York City. But since its cachet and history had always been very appealing to tourists around the world, the wealthier ones that had succumbed to the French capital’s charms started snatching pied-à-terre with a view on the Seine by the truckload. Speculation became more widespread a practice as more transactions occurred in the housing market. Studios and apartments were selling like hotcakes: the real estate frenzy had begun.
As the evolution of the price per square meter shows on the diagram hereafter, the demand was already soaring by 2000. Many wealthy Americans or Europeans coming from Spain, Italy and the United Kingdom were buying vacation flats in Paris and local real estate agents were more than happy to cater to this new moneyed clientele that oftentimes paid cash for large flats. Contrary to the established Saudi and Middle Eastern owners that traditionally favor Haussmannian grandeur in the 7th, 8th, 9th and 16th arrondissements, these hip newcomers usually prefered village-like districts such as the 1st, 4th, 5th and 6th arrondissements.
This was to change Paris’ socioeconomic makeup forever. By 2002 many formerly artsy and popular central districts like les Halles and le Marais had become so expensive that most middle class French families had little choice but to move to the peripheries.
A dramatic impact on the suburbs ensues
When an entire city’s area becomes out of reach for middle class folks, a nearby grittier one usually gentrifies; like water, money and people follow the old “communicating vases” principle. As new money started invading downtown Paris in the mid-nineties, the ghettoization process of Paris’ neglected outskirts stopped and started reversing when a new, wealthier crowd of individuals and real estate promoters decided to move in the 92, 93 and 94 zip codes.
Paris’ limited space and notorious unaffordability discouraged many people; progressively, the concrete jungle made of dilapidated apartment buildings and abandoned manufactures right outside the boulevard périphérique began not to look so bad after all. Real estate developers started buying lots, tearing down old buildings and replacing them with clean-looking residences or budget hotels for business travellers. Parisians families fed up with their shrinking living spaces and ever-rising rents fled the capital for larger, cheaper flats right outside of Paris’ threshold. Upper class investors turned old, 19th century manufactures into lofts. Liberal yuppies, adventurous artists and single professionals tired of Paris’ squeaky-clean image suddenly grew an appetite for the banlieue’s street cred. Gentrification was blooming and by 1997 the proche banlieue began acquiring a new flavor thanks to its newcomers – just like Harlem and Brooklyn became progressively desirable to migrating middle class folks when lower and midtown Manhattan became out of reach.
This ground-breaking phenomenon started to transform the face of Paris’ banlieue so much that it could not be ignored; at the time the French press christened it boboïsation – a neologism that has the same meaning as gentrification – and its aforementioned actors were called boheminan bourgeois or bobos. As a result of this good press, housing prices in the outskirts started rising as well.
Does gentrified means unaffordable?
Left-wing press and politicians criticized this influx of upper and middle class bobos money into Paris’ peripheral towns as responsible for forcing local lower income families to relocate farther in the suburbs.
This is partially true. Housing prices did go up in these formerly cheap neighborhoods. But in reality it had a positive effect on the “look and feel” of many of these cities that went from rough to somewhat pleasant: buildings have been noticeably better maintained by their new landlord or homeowners association; more property tax money has been collected and town halls have reinvested it in public amenities. As a resident of ill-reputed Saint-Ouen in the 93 zip code from 1998 to 2002 when I was in college, I have personally witnessed and experienced the improvement of public infrastructures.
However, don’t start imagining the proche banlieue zip codes suddenly became posh; even today the population’s social makeup in these peripheral areas strongly remains young and working-class, and properties remain much more affordable. What the late-nineties bobo gentrification did was send a message to middle class and more affluent Parisians that buying property to live in these formerly unglamorous blue-collar suburbs is no longer taboo. As cynical as this might sound, the market economy does have a way to shatter old societal boundaries like that...
[ part 1: Why low income areas | part 2: About gentrification | part 3: Coming soon ]
