1.6: Thinking about a Place

Places have a certain preciousness for their users that is not part of the conventional concept of things that one considers useful or valuable. A crucial initial difference is that place is indispensable; all human activity must occur somewhere. Individuals cannot do without place by substituting another product. People can, of course do with less place and less desirable place, but they cannot do without place altogether (Logan and Molotch, 2007: 17).

Use value

Even when compared to other indispensable commodities such as food, - a place is still particular in its essence. The use of a particular place creates and sustains access to additional use values. One's home in a particular place, as an example, provides access to school, friends, work placed, and shops. Changing homes disrupts connections to these other places and their related values as well. Place is thus not a discrete element, like a toy or even food; the precise conditions of its use determine how other elements, including other commodities, will be used. Cox (1981: 433) speaks of "home' as a vested interest "spilling out of the individual household and its dwelling and projecting itself onto neighbors, streets, local businesses, schools, and other institutions." Any individual residential location connects people to a range of complementary persons, organizations, and physical resources.

The stakes involved in the relationship to place can be high, reflecting all manner of material, spiritual, and psychological connections to land and buildings. Places represent "the focusing of experiences and intentions, onto particular settings full with meanings, with real objects, and with ongoing activities" (Relph, 1976: 141). Numerous scholars from Anderson (1976) to Whyte (1943) have shown that given places achieve significance beyond the more casual relations people have to other commodities. Although the connection to place can vary in intensity for different class, age, gender, and ethnic groups, individual relationships to place are often characterized by intense feelings and commitments appropriate to long-term and multifaceted social and material attachments.

Location value

These social and material attachments create an asymmetrical market relation between buyers and sellers. People pay what property owners demand, not because the real estate unit is worth it, but because the property is held to have peculiar or idiosyncratic location value and benefits. Access to resources like friends, jobs, and schools is so important that residents (as continuous consumers-buyers) are willing to resort to all sorts of 'extra-market' mechanisms to fight for their right to keep location relations intact. They organize, protest, use violence, and seek political regulation. They strive not just for tenure in a given location but for stability in the surrounding neighborhood as well (Logan and Molotch, 2007:18).

Neighborhoods

According to Castells (1983) location establishes a special collective interest among individuals. People who have bought into the same neighborhood share a quality of public services (garbage pickup, police behavior, and so forth); through these forms of 'collective consumption' residents have a common stake in the area's future. Residents also share the same fate when natural disasters such as floods and hurricanes threaten and when institutions alter the local landscape by creating highways, parks, or elements that disfigure a location. Individuals are not mutually dependent on what goes on inside a neighborhood including the composition of an area. They also feel the effects of what goes on outside it as well. The standing of a neighborhood in relation to other neighborhoods creates conditions that its residents experience in common. Each place has a particular political or economic standing in relation to other places that affects the quality of life and opportunities available to those who live within its boundaries. A neighborhood with a critical voting block for example, may generate high levels of public services or large numbers of patronage jobs for its working-class residents, thereby aiding their well-being. A rich neighborhood can protect its residents' life styles from external threats in a way that transcends personal resources, even those typically associated with the affluent (Dear, 1981).

Neighborhoods organize life chances in the same sense, as do the more familiar dimensions of class. Giddens (1973: 108-110) notes the importance of spatial segregation as a "proximate factor of class structure as an aspect of consumption rather than production which acts to reinforce the separations" produced by unequal market capacity.

Like class and status groupings, and even more than many other associations, places create "communities of fate" (Stinchcombe, 1965: 181). Thus, one must consider the stratification of places along with the stratification of individuals in order to understand the distribution of life chances or market opportunities. People's sense of such dynamics, perceived as the relative "standing" of their neighborhood, gives them some of their spiritual or sentimental stake in place - thus further distinguishing home from other, less life-significant things or places with some value attached.

Material versus psychological

Although there is much academic debate on the subject, the material use of place does not separate from psychological use; the daily round that makes physical survival possible takes on emotional meanings through that very capacity to fulfill life's crucial goals. The material and psychic rewards thus combine to create a feeling of "community." Much of residents' striving as members of community organizations or just as responsible neighbors represents an effort to preserve and enhance their networks of sustenance. Appreciation of neighborhood resources, so varied and diffusely experienced, gives rise to "sentiment," the sense that a particular place uniquely fulfills a complex set of needs. When residents' speak positively of use values, they imply fulfillment of all these needs material and non-material (Logan and Molotch (2007: 21).

Retailers

Although residents are the foremost examples of people who pursue use values through property, others also pursue use values through property, and these people operate in a manner different from what the market model would imply. Retailers, for example, depend on geographical context and often develop enduring connections to a given location. Proximity to customers can be their most important location resource. Moreover, some of the same factors important to residents affect their prospects: physical amenities, community services, and a social network supporting the makeup of the neighborhood, including the shops. A retailer may depend not only on a substantial number of people nearby but on a certain type of residential enclave. An exclusive restaurant would benefit from a more affluent residential population. Thus, merchants have an ongoing stake in a particular social makeup of place.

Retailers like residents may, or may, not welcome nearby development, which could mean new competitors as well as an expanded market. These necessities cause retailers, as a group, to have mixed interests; they may serve an intermediate social role in conflicts that arise between residents and place entrepreneurs. Their role is not easily predictable, however, since it is contingent on the specific form of retailing, and whether, or not, the present residential population will enhance or inhibit future profit making. Retailers may also own extensive property themselves, further complicating their interests in a neighborhood.

Corporations

Individual corporations typically derive their own use values from a particular location. Whatever the basis for corporate location decisions (commonly referred to as maximizing access to raw materials, markets, and labor), firms do not usually depend on intensification of adjacent land for the success of their own operations. They may benefit from a nearby assortment of business support services that will deliver, together, a collective economy for the area but there is no inherent need for land-use intensification in general. Of course, such firms can also simultaneously own land and buildings; and this ownership may eventually override other considerations. Corporations principally involved in productive enterprise may later find their real estate holdings their greatest asset, At that point their interest shifts from the use values of a place to its exchange value, once again blurring the neatness of connecting a place to its use or exchange value (Logan and Molotch, 2007).

Business attachment to place

There are three important general observations about business attachments to place. First, compared to those of residents, the satisfaction that owners and operators derive from place is less diffuse. Their paramount interest is the profitability of their operations; concerns with place turn heavily on how well land, buildings and locations in general serve that overarching goal. Second, businesses, as compared to residents, have a greater opportunity to move to another place should conditions in one place cease to be appropriate. Free of at least some of the constraints holding residents, such as sentimental ties to family and access to schools and jobs, businesses can exit more easily. Firms that have not committed major facilities to a given location (sunk costs) are particularly mobile. Finally, a firms' use of place is less fragile than that of residents. Capital can adapt to changes such as noise, odor, and ethnic succession, whereas the effect of such change on residents is immediate and more serious. Of course, some forms of capital do have specific location needs, but these location needs will adjust only by extreme changes such as traffic issues such as road construction, or poor communications (Pred, 1977, 1980).

The lack of entrenchment and firm connection felt by businesses presents tends to reduce government control over such entities. Although residents vary in their attachment to a neighborhood, businesses' attachment to place is much weaker overall. This adds to the difficulties of those, like government officials or neighborhood leaders, who might try to control them. At the other extreme are residents like the elderly poor who are permanent to the place they use. The most vulnerable participants in place markets are those with the fewest alternatives (Janowitz, 1951).

Place as monopoly

The ownership of land is inherently monopolistic providing owners with complete control over the total supply. There can be no additional entrepreneurs or any new product. The individual owner also has a monopoly over a subsection of the marketplace. Every parcel of land is unique in the access it provides to other parcels and uses, and this quality underscores the specialness of land and buildings as commodities. Thus, owners control access to it as well as its given set of spatial relations.

Construction Effects on Price

New construction has less bearing on market dynamics than one might think. New units on the same land can never duplicate previous products. Each product, old or new, is different and unique, and each therefore reinforces the monopoly character of property and the resulting price system. For example, building space on the top floor of a skyscraper is more desirable than the same square footage just one floor lower. Conversely, you cannot duplicate the advantages of street-level retail space on a floor above. These additional types of relationships also give places their monopolistic character (Markusen, 1979).

Another curious aspect of real estate is its essentially "second-hand" nature (Turner, 1977: 39). Buildings and land are continuously ‘sold, resold, or rented and re-rented’. In a typical area, no more than 3 percent of the product for sale or rent consists of new construction. Not only land, even the structures on any piece of land can have infinite lives; neither utility nor market price need decrease through continuous use. In truth, successive investments can often build upon rather than devalue a location (Harvey, 1983). Since the amount of new property on the market at any given moment is ordinarily only a small part of the total that is for sale, entrepreneurs' decisions to add to this supply by building additional structures will have a much more limited impact on price than would the same decisions with other type of commodities (Markusen, 1979). Each unit is typically prices in relation to the surrounding units.

In contrast, areas where building construction is more rapid have higher rather than lower costs, even when demand factors are statistically controlled. This makes sense when one considers price a function of comparison to other surrounding structures. With new and old forms of construction, there is a pricing balance while new construction alone produces new and generally, higher priced ‘comparable pricing’ based on construction costs.

Similarly, relatively high vacancy rates are not associated with lower rent levels that suggests that new construction leads local markets to a new, higher pricing structure rather than equilibrating a previous one. Given the fixed supply of land and the existence of relational advantage of one building over another, more money entering an area's real estate market not only results in more structures being built but also increases the price of land and quite plausibly, the rents on previously existing "comparable" buildings. Thus, higher investment levels can push the entire price structure upward (Appelbaum and Gilderbloom, 1983).