Capital's Metropolis: Chicago and the Transformation of American Housing Policy

The US economic recovery of the 1990s accelerated amidst privatization, selective devolution and the reinvention of the public sector itself. Simultaneously, mortgage finance and assisted housing policy were recast in terms of market processes, individual responsibility and private home-ownership, even as gentrification enjoyed a dramatic resurgence. The intersection of these seemingly unrelated processes signifies an important transformation of the American inner city. Nowhere are these connections more explicit than in Chicago, where newly devolved and flexible policy infrastructures are built on the ashes of prominent experiments of previous generations. In this paper we use Chicago as a context to explore the linkages between reinvestment, housing finance and the reinvention of assisted housing. We analyse local and federal developments in assisted housing policy and develop a multivariate analysis of mortgage loans in Chicago's neighbourhoods during the 1990s expansion. New constructions of scale in assisted housing, exemplifed by Chicago's Lake Parc Place and the federal HOPE VI programme, constitute a centripetal devolution mediated by the relationship between public policy and local private market forces. National changes in housing finance have altered historical processes of redlining, disinvestment, and gentrification. Mortgage capital, traditionally responsible for the creation or exacerbation of rent gaps, now lubricates the flow of capital into the gentrifying frontier of the inner city. The intensified market discipline of housing policy, based partly on theories incubated in Chicago, suggests a new regime of neighbourhood change in the American inner city.