The Rent Gap Debunked

Abstract

The rent gap theory of gentrification has inspired a substantial amount of critical attention as well as several empirical studies. None of these studies addresses a fundamental problem with the rent gap hypothesis—namely, its dependence on a distinction between actual and potential land rent. That distinction does not contribute to the explanation of either the location or timing of changes in land use. And, contrary to some claims, there are no antecedents for the rent gap in the history of economic ideas—whether Marxian or neoclassical. It is concluded that the standard neoclassical concept of land-use succession is more coherent than the rent gap concept. However, neither approach explains how neighbourhoods previously subject to disinvestment come to be perceived to have the potential for reinvestment and higher land rents.