Rent gaps, gentrification and the “two circuits” of Latin American urban economies

Matthew Richmond and Jeff Garmany

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Recent research in Latin America, and our own analysis of Brazilian cities, indicate that aspects of rent gap theory – in particular, the assumption that strong links exist between rent gaps and gentrification – do not fully account for observed empirical conditions. Drawing on Milton Santos' theory of “two circuits” of urban economies in the global South, we seek to develop an expanded framework better suited to explaining the Latin American context. Specifically, we argue that important socio-spatial processes combine to embed what Santos called the “lower circuit” in certain parts of the city. This “territorialisation” of space by the lower circuit impedes the entry of the upper circuit, thus constraining expected rent gap capture and gentrification. We argue that only by taking both circuits into account, and considering how they become territorialised in urban space, can we properly grasp the relationship between rent gaps and gentrification in Latin American cities.

Keywords: rent gap; gentrification; Southern theory; Latin America; Brazil; urban development (search for similar items in EconPapers)
JEL-codes: R00 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2023-03-28
New Economics Papers: this item is included in nep-his, nep-pke and nep-ure
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Published in Tijdschrift Voor Economische En Sociale Geografie, 28, March, 2023. ISSN: 0040-747X

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