Assessing exclusionary displacement through rent gap analysis in the high-rise redevelopment of Santiago, Chile

Abstract

Rent gap theory is used here as a way to analyse exclusionary displacement in six high-rise urban renewal areas in Santiago, Chile. Drawing on a survey of 746 original households, this article finds 40 per cent of low-income owner-residents do not have the chance to purchase new replacement accommodation using the portion of rent gap they capture after selling their land to high-rise developers. Whilst the sale price of new apartments rises, a particular type of blockbusting limits the choices of the low-income residents to selling at a good price or staying put. The ratio between the different ground rent levels captured either by developers and original owner-residents confirms the extensive power deployed by the large-scale real estate firms at the moment of gentrifying central areas and the extent to which they generate residential displacement. The ground rent capture is a political economic process, not a function of the market.