Gentrification and its contentment: An anthropological perspective on housing,heritage and urban social change in Shanghai

Introduction

The dominant gentrification narrative usually laments the inequalities arising from high-income outsiders’ pushing out low-income original residents from their own locales. Gentrification is, therefore, often used in a negative way – implying that a ‘gentrifier’ is an actor explicitly involved in the use of financial advantage to deprive existing residents from a lower socioeconomic status of their rights, such as their right to home, their right to the city, and therefore preventing them from accessing the developmental process of the place to which they are historically and emotionally attached (Butler, 1997; Herzfeld, 2009; Smith, 2006). Gentrification is a common phenomenon found in many large cities (see Hamnett and Williams, 1979; Zukin, 1982). The common thread that runs through the cases of these cities involves just what I have described – the poorer original residents being overpowered by the richer incoming residents who would move into the neighbourhoods in question believing that they would become prime locations. The residents with higher income would then gradually change the neighbourhood environment, its characteristics, and eventually its reputation attracting other middle-class residents with the same socioeconomic status to join them by moving into those places. The demography of such places would change owing to two factors: the so-called ‘network effect’, as a result of the perception of the place – often as cultured and safe – that attracts a particular group of residents; and, more importantly, the drastic increase in the cost of living as a result of the lifestyle and consumption patterns of the new residents who have higher incomes. The original residents would move away because they could no longer afford to live in the neighbourhood owing to the rising cost of living. Under emphasised in the existing literature is also how some residents voluntarily move out as they could not resist the temptation of receiving high rent, which in many cases facilitates a systematic pattern of social change. As a result, what follows gentrification is the displacement of the communities of the economically inferior original residents by rich newcomers, who may or may not have any knowledge of the place into which they are moving. The economically superior newcomers then take possession of the neighbourhood, turning it into their private enclave and limit the access of those economically inferior to them through market mechanisms such as high rents and living costs.

What this general picture of gentrification presents is both economic inequality and structural discrimination. Although there are cases that the settlement of the new residents helps to rejuvenate areas, especially old industrial areas that are left empty after the departure of the industry, those cases are largely considered to be exceptions in contemporary debates on gentrification since they do not involve the displacement of existing residents. That is to say, the so-called ‘classic gentrification’ process usually involves a developer, or a coalition of developers, driving out the original residents, and then replacing them with the residents who are willing to pay more rent. Sooner or later, to paraphrase the urbanist Jane Jacobs (1964 [1960]) the neighbourhood would lose its original character because of the homogeneous demography of the new residents, and therefore its diversity. Eventually, the sense of belonging of its original residents would also disappear owing to the homogeneity of the newcomers who may or may not know, care, or have any emotional attachment to the neighbourhood. Classic gentrification, therefore, is about power: It is about how the rich overpower the poor, and about how the poor suffer because they do not have any leverage against the rich. In other words, gentrification is an inevitable product of neoliberal capitalism (Butler, 2007; Harvey, 2005; Pan, 2011).

This paper aims at showing a different kind of narrative. What if the story of gentrification in Shanghai, though having similar results is not all about how the rich overpower the poor, but how the poor understand what the rich want – and, through that knowledge – strategically and voluntarily leave their neighbourhoods so that they could gain what they otherwise would never receive? Would this still be gentrification? I am presenting precisely this narrative to suggest an alternative process of gentrification. In this narrative, not all residents are displaced unwillingly. While the displacing forms of gentrification may be more common, or demand more attention, gentrification can have an upside in circumstances when mainly upward social mobility is not otherwise possible without entrepreneurship in China (see Arkaraprasertkul, 2016b). This paper shows that the displaced original residents are the ones who instigate the process, and therefore profit from renting their places to the newcomers. Taking place in an informal manner skirting state control, the case presented in this paper illustrates that gentrification need not always displace and disregard residents with the arrival of wealthy invaders.

Theoretical and background discussion

It has been more than half a century since scholars began to pay attention to gentrification, and, as pointed out above, the negative connotation of the term (for a thorough discussion on the genealogy of the term, see Wang and Lau, 2009). In my case, I use the term because it has the closest meaning to the term zhongchanjiejihua – literally translated as ‘middleclassification’ – which my informants used to describe what they believed was happening in their neighbourhood. In addition to that, I also use the term for the purpose of theoretical analysis. Fitting the description of Ruth Glass (1964), the scholar who coined the term gentrification is the demographic change of small and historic neighbourhoods in rapidly urbanised Shanghai, arguing that gentrification is a process primarily involving the replacement of the old working class residents in their enclave by new, affluent and ‘culturally adept’ residents (Hamnett, 2000). ¹

Demographically, this replacement results not only in a drastic change in the average income of the residents in the neighbourhood as a result of the decline in the proportion of working class residents, but also in the decrease in the average age of the residents, the increase in the average education level, and therefore the dramatic shrinkage in household size. Second, the market drives the process, as monetary exchange value plays a significant role in both the active replacement and voluntary relocation of old residents. Therefore, this process involves not only the active exchange of capital, but also dynamic speculation, such as the invention of new sets of criteria determining new market value against the ‘socialist’ use value of old structures. Heritage and history are the elements that the original residents possess (see Herzfeld, 2014) and it is precisely these elements that entice new residents to engage in the process that would eventually lead to a solution that benefits both parties – the original residents get to relocate themselves to more comfortable locations, and the rich get to assume ownership (permanent or temporary) of what they think would enhance their cultural capital. Finally, this process results in the physical change of the neighbourhood, such as the arrival of cafés, small-scale clothing boutiques and jewellery stores, high-end teahouses, elite arts and crafts schools; these diverse enterprises are agents of new ideas of what is desirable and attractive in accordance with the taste of the new residents.

In Shanghai, housing reform and the new land lease regime that began in the early 1990s enabled a large portion of the city’s residents to relocate from the dilapidated apartments that were mostly built either during the Treaty Port (1842–1945) or so-called ‘high socialist’ (1949–1978) eras, to new, often high-rise and high-density, apartments (Liang, 2014; Lu et al., 2001). The massive urbanisation that followed for the next two decades, especially in the areas that are today’s city financial and commercial centres, gave a large number of residents better physical living conditions (Peng, 1986). Some residents who were not as lucky had to stay put in the old housing structures, waiting for the local government, often in coalition with a real estate developer, to offer them a relocation package once the land in which they live is targeted for redevelopment (Zhu and Qian, 2003). In most cases, these residents still live in old, mostly rundown apartments. In spite of having doubled since 1949, the average living space per person in these apartments is still relatively small – at 8 m² per person (Wu, 1999). In many cases the hazardous living conditions are a direct result of both the dated infrastructure and the lack of proper maintenance (Pellow, 1993). When combining these two factors with the occupation of the aged residents who are still using the cooking methods with which they are most familiar such as coal and gas stoves, it is not surprising that the risk of fire is among the highest in urban areas within the city (Shanghai Municipal Government, 2013). Most of these residents would prefer to maintain their social contacts with old neighbours with whom they have lived. Nonetheless, they are pragmatic when it comes to how they would like to spend the rest of their lives as pensioners, and the legal possession of assets they would like to pass on to their offspring. Thus, even if the residents do not wish to move, what eventually stops them from staying put is the very pragmatic realisation that unless they comply with the relocation process they would be left with a small, usually rundown, room, instead of a new apartment to pass on to their children to live in or to resell if their children prefer to use the cash to invest elsewhere.

The tenants of the old apartments are those whose housing rights were provided for them in the high-socialist era by their work units (commonly known in Mandarin Chinese as danwei). But once the housing reform began in the era of opening up and reform (gaigekaifang) in the early 1980s, the burden for housing maintenance was transferred to the tenants themselves (Lee, 1988; Wang, 1996). While this form of privatisation, on the surface, may sound as though an urban resident eventually gets to own property, the real intention of the central government was to force the tens of millions of urban residents who resided in Shanghai then to be responsible for maintaining, renovating and sometimes completely overhauling their homes should they want to have a better living environment (Peng, 1986, 1987).

The ambiguity of the housing law itself is also an issue, as often times the only legal evidence that many residents, who received their rights to live in the property confiscated from the first owners into the common pool during the first decade of the high socialist era, have is the fact that they have occupied the property for ‘significant periods of time’ (Sommers and Phillips, 2009). Whether or not this was enough time to claim ownership depends largely on the decision of the local authorities. On top of the lack of funds to improve the houses on the part of both the tenants and local authorities, the tenants are also reluctant to use their savings to refurbish the now dilapidated stock of historic housing, especially when there are a number of cases involving the government’s use of forced eviction and eminent domain for opaque purposes (Human Rights in China, 2010; Richburg, 2010; Shin, 2013). Hence, it is not rare to see many old and dilapidated houses even in the prime business areas of Shanghai today (Shao, 2013). The physical decay and the lack of adequate space in the houses is one explanation for how and why the residents themselves are active in the process of obtaining compensation, and eventually voluntary relocation. Many pragmatic residents are also willing to sell as they see an attempt to stay as risking receiving little or no compensation from the process. With the rapid building of new apartment typologies in the suburbs, the new apartments in which these tenants are often being relocated are more spacious and well-equipped with modern facilities such as hot water and air-conditioning systems. The expansive metro and public transportation system also facilitates these residents’ mobility; hence, one of my informants expressed, ‘it is a no brainer … I get a bigger, nicer, and more expensive apartment here (if I decide to sell it in the future), and if I miss the old neighbourhood where I once lived, I could just take a bus there – I am a senior citizen now with a jinlaoka [senior citizens’ free public transportation pass]!’. ²

Methodology and site

Only through understanding this particular context can we see the nuances of both the physical and social change in China’s largest city. On the surface, visitors to Shanghai often have the impression that Shanghai is a city in flux. Such fluidity has to do with the facilitation of state-led changes in the ownership of desirable urban spaces (He, 2007). Many scholars, including myself, have made romanticising remarks, such as the yearning for the ‘old and authentic Shanghai’ (Arkaraprasertkul, 2012; Johnston and Er, 1993). Together with what Richard Ocejo terms (2014) ‘nostalgia narratives’, the interaction between the different generations of residents and gentrifiers only facilitates the reproduction of this notion of ‘lost romanticism’, of which the critique of ‘evil capitalism’ is a direct by-product. In a way, history and Chinese aesthetics are a conceptual relationship that is often taken for granted. As Kay J Anderson (1991) points out in her study of how the conceptual connection between authenticity and immigrant Chinatowns in non-Chinese cities make the ‘idea of Chinatown’, it is obvious, especially in my case, that the idea of a romantic historic Shanghainese neighbourhood is a simplified nostalgic construction that takes for granted the genealogy of contestation and confrontation among the residents whose physical lives and wellbeing are at stake in a particular urban place (Arkaraprasertkul, 2010). While relying on statistical analysis as the primary source of data is simplistic, as the numbers do not explain the deeper motive behind the relocation of the residents, humanistic narratives also fall short of getting beyond the nostalgia. In addition to justifying ethnography as the methodology of the research undergirding the qualitative findings of this paper, my purpose is to call for more ethnographic studies of similar phenomena.

The main method I used to conduct this research was ethnography, supported by open-ended interviews, archival research, and statistical analysis. I spent two years living in Shanghai conducting thorough participant observation. The neighbourhood in which I physically lived for the period of my research is a traditional lilong neighbourhood. In order to protect the privacy and anonymity of its residents, I assign it a pseudonym ‘Tranquil Light Neighborhood’, or TLN, for short. TLN was built in the early 1930s, the last decade of the Treaty Port era. As evident in its prime location, it was designed by the finest architect with the finest craftsmanship for affluent residents. TLN, from the beginning, had gates on both sides to prevent outsiders from wandering into the neighbourhood. When the Chinese Communist Party (CCP) seized the city in 1949, the neighbourhood and its housing stocks were confiscated from the wealthy residents (most of whom had fled the country owing to their association with the opposition Guomindang party), and then redistributed to pledged socialist workers. The population of the neighbourhood increased almost tenfold after this redistribution process, as these luxury ‘crescent-styled’ townhouses were turned into compact social housing. According to the official data publicly provided by the local neighbourhood committee (juweihui) during my time there, the new residents, including myself, accounted for 438 out of the total number of 3172 residents who were ‘actually living in the neighbourhood’ (as opposed to those only having their names registered as residents but not actually living there, or changzhurenshu). These data have also been crosschecked with the data on the population of localities from the yearly almanac of the district in which the TLN is located (Arkaraprasertkul, 2016c). The population of registered residents did not fluctuate much from 1999–2011: the number of families (hu) was between 1280 (in 2011) to 1558 (2010), and the number of residents (ren; headcount) increased from 3893 (in 1997–1998) to 4423 (2009). As the basic statistical analysis of these data shows – assuming that the data collection process was done correctly – there is no direct correspondence between the number of families and the residents. This does not mean that the size of the families changed drastically during these years of data collection. Quite the opposite, there were incoming residents, whose presence constitutes a different set of numbers. From an interview with district officials, the seemingly uncoordinated fluctuation of these numbers was a result of, what they call the influx of migrants (liudongrenkou) who moved in and out renting rooms from the original residents. The district officials are responsible for recording the names and household registration status of all households. Although there is a set of detailed data that would precisely show this influx – the differences between the registered ‘changzhuren’ (long-term tenants), and the registered and non-registered short-term tenants – it was only made available to the government, and not made available to the researcher.

The demographics of these renters, or the so-called ‘outsiders’ (wailairenshu) was mixed: white- and blue-collar migrants from other cities (waidiren); foreign students and experts (including those who were on student or tourist visas, but were in fact working); business owners using the residential spaces as their offices, who were attracted to the neighbourhood’s central location as well as its architectural uniqueness, which did not seem to have the same appeal to the original residents as it had with the renters from outside. During the decade preceding Shanghai’s Expo in 2010, there were attempts by the local entrepreneurs who saw the opportunity to develop TLN into a ‘commercial/artsy’ space, using its unique historical edifices as a selling point. Such attempts, however, did not turn into a permanent alteration of the designated function of the neighbourhood mainly because of resistance from some of the original residents who did not see the benefits from this process (Arkaraprasertkul, 2016a). Nevertheless, these attempts to re-appropriate TLN by the new residents had indeed put it on the map and given the future residents the impression that TLN was a ‘special’ place. As of the conclusion of this research, the local government had yet to decide on any plans that would involve such processes owing to the complicated legal and financial issues specific to the site, the residents themselves had to rely on their own resources, which, in this case, were the heritage structures in which they had been given the right to reside. To understand the complex situation in which the residents are living, I also conducted several open-ended interviews with officials, planners, and architects who worked for the municipal government as well as for the private companies involved, usually as third parties to whom the municipal government outsource real estate development projects.

Housing and middleclassification

The ‘original residents’ of TLN (known to the renters as fangdong or landlords) who rent out their spaces to outsiders learned about the similar process which they would eventually call ‘middleclassification’ thanks to the local academics who had visited them to study the changes in TLN and provided them with this technical term. In the words of my informants, the reason that the term had been widely adopted in the neighbourhood was because, ‘We love them [the middle-class residents] … they who bring us money!’. Given the Marxist–Maoist doctrine embedded in the inculcation process of its residents by the Chinese Communist Party (CCP), this remark may be surprising since the middle class are the enemies of the diligent working class in this doctrine. Through ethnography, I hope to point out through the findings of this research how the residents in an urban community used certain discourses to enhance their access to new economic opportunities.

Owing to its distinct architectural style, clustered in a cohesive group form, as well as its low-rise nature, TLN stands out from the high-rise buildings surrounding it in the city centre of Shanghai. In fact, many visitors to TLN explicitly expressed their surprise to find the low-rise characteristic of its structures, which has become rare in urban of Shanghai. Two ‘official’ reasons explaining why TLN has yet to be razed to make way for the high-rise buildings which would yield higher financial returns per unit of the built footprint: legality, as discussed in the previous section, and heritage architecture status (youxiulishijianzhu). In the past two decades the municipal government of Shanghai has also become increasingly interested in protecting heritage structures in order to use them as a selling point (Peh, 2014). According to the Development Research Center of Shanghai Municipal People’s Government (2014), the idea behind it is the belief that a mixture of economic modernity and history is required for Shanghai to achieve global city status. TLN was built using a particular type of architecture, and is known among the local Shanghainese as the lilong (lit. neighbourhood lane). Lilong is basically a series of row houses organised around the main path or longtang (literally meaning living hall, used to refer to the importance of those lanes, see Lu, 1999). ³ Combining the compactness of Western row-house architecture and the spatial efficiency of China’s courtyard structures, lilongs mushroomed in Shanghai’s economic heyday during the Treaty Port era. Historians have estimated that there were more than 9000 lilong neighbourhoods in the city, each housing between 500 and 1500 residents. In the 1930s, about one-third of the three million residents lived in the lilong constituting about half of the city’s formal housing stock (Bracken, 2013; Yang, 2013). The lilong houses, however, also became a symbol of capitalism to many, especially migrants and the working middle-class who could not afford to live in the neighbourhoods. There are many stories about how the landlords and ‘second landlords’ (erfangdong) profited a great deal by renting a room from the original owners of the lilong houses and then subletting those rooms to the people who had no choice but to pay a large portion of their income to live in Shanghai. These rural migrants, poor students, writers and artists, as well as poor residents in general came to Shanghai to escape the violence of war and poverty elsewhere in China, but still faced the greed of the second landlords (Lee, 1999; Liang, 2008; Lu, 1999). The change that turned this status symbol on its head began, as mentioned earlier, when the CCP took control of Shanghai in 1949. The CCP first abolished private property and collectivised all housing for the purpose of equal redistribution to all working-class residents. Before 1949, TLN was one of the ‘most prestigious’lilong neighbourhoods. Right after the takeover of the CCPP in 1949, it was turned into a worker’s housing neighbourhood (gongfang). Originally built for a single family, each row house has since been subdivided into multi-family worker housing to maximise the building’s occupancy (Zhao, 2004). It was during this period that the meaning of the lilong shifted from houses representing the economical design of full-fledged capitalism to the collective living arrangement of socialism (Morris, 1994). No additional lilong houses have been built since 1949 thanks to how the CCP sees the typology, as closely associated with the middle class, as previously discussed (also see Lu et al., 2001).

The lilong have, therefore, fallen out of favour and been replaced by Soviet-inspired ‘socialist’ architecture, namely low-cost six-storey apartment buildings. It was also during this period of heavy use that the lilong houses rapidly deteriorated. The combination of heavier use than intended by the builders and the lack of maintenance over a period of more than half a century has resulted in the rapid decline of the physical condition of these dwellings. Some of them have reached the point of becoming unhealthy places to live, creating not only fire hazards but also sick building syndrome as a result of the lack of ventilation, sunlight and adequately hygienic conditions. Despite all of these shortcomings, however, these old cramped, and rundown lilong houses have unexpectedly become the defining characteristic of Shanghainese dwelling culture. Most of the city’s residents have lived in them for the decades since the 1940s (Pellow, 1993). Many historians have claimed that it is not an exaggeration to say that every Shanghainese who lived in Shanghai before the economic reform and opening up era of the 1980s–1990s has memories of the lilong.

So, for almost two decades since the late 1990s when, along with 70 other lilong neighbourhoods, the TLN received official recognition as a ‘tangible urban heritage site’ (see Peh, 2014), its demographic has changed from being fully occupied by the working class to, at its peak around 2008, 70% original residents and 30% ‘new residents’ (or those who simply rented rooms from the original residents). In this paper, I will refer to the working class whose homes in the TLN were allocated to them between 1949 and mid-1950s and during the massive housing reshuffling process in the 1970s (Dwyer, 1986; Parish and Whyte, 1985), as ‘original residents’.

There was an influx of ‘new residents’ during the three-year period preceding the Shanghai Exposition in 2010, an international event that drew more than 73 million people worldwide to Shanghai. These new residents, most of whom were between their late 20s and late 30s, rented rooms in TLN to live as single occupancy tenants, and set up their small businesses in the TLN. They were attracted to TLN thanks to the neighbourhood’s location and the affordable rent. The original residents were happy with the extra income they could receive from these new residents. Since the concerns of these original residents were often either their medical care or the wellbeing of their offspring, the extra income from subletting their rooms was perceived as essential support especially in the face of the inadequate healthcare system (especially when the pretext of getting ‘safety net’ service includes bribing the doctor to pay more attention to the patient, see Blumenthal and Hsiao, 2005; Hesketh et al., 2012 ) and ruthless market-oriented competition for basic services (Feldstein, 1999).

The rise of outside renters

When I arrived in TLN for my research in the summer of 2013, more than half of the rooms on the ground floor were shops catering to the tastes of middle-class residents and downtown office workers, such as coffee shops and bars; milk tea and grab-and-go lunchbox vendors; collectible antique, souvenir and small independent clothing stores. Foreign and the Chinese visitors alike flocked to TLN, especially during the weekends and holidays, and the numbers of visitors would sometimes rise to a combined total of 3000, or the total residential population of TLN itself. As the writers of a popular international contemporary design magazine dwell put it:

What is attractive about these lilong houses and neighborhoods beyond its architectural style are ‘how, though intimate and neighborly, the lilong still afford residents the privacy and seclusion of living in one’s own multi-story home’. (Rose, 2013)

This ‘privacy and seclusion’ did not seem to be the case for this neighbourhood that was on the verge of becoming another commercial district. The impression of the neighbourhood, as expressed by journalists and mainstream media, were along the same lines as that of the hip, new retail districts of the time such as Tianzifang and many others that were mushrooming out of the international and touristic perception of the lilong neighbourhoods (for a detailed discussion of this particular case, see Yung et al., 2014). In fact, a famous travel blogger posted in 2012, ‘Given up on the crowded streets of Tianzifang and looking for something new? We show you the 10 best stores in the TLN shopping paradise’. The owners and employees of these shops constituted only about half of the approximately 400 registered new residents of the TLN. During the time of my research most of these new residents rented 87 of the rooms on the ground floors of the buildings in the TLN to operate their commercial businesses. Only a small number of the businesses that did not need to be on the ground floor, such as offices, rented the much cheaper second floor of the buildings. The other half of the new residents were white-collar workers. They were renting the rooms on the second and third floors as residential spaces. The original residents converted the kitchens, storage rooms, communal corridors, balconies and almost all spaces they could make use of in the buildings into commercial spaces and bedrooms to rent out to the new residents. Despite the municipal government’s regulation prohibiting such practices as some of them induce both health and public hazards, there were always local agents (zhongjie) who would help new residents find spaces to rent for a fee – including those that were smaller than 5 m², which was smaller than what regulations permitted for a single tenant (Wang and China Daily, 2011).

Jack, a 26-year-old American man of European origin with a master’s degree in humanities, who, up to the moment that I got to know him in the summer 2013, had lived in the TLN for two years remarked, ‘The only reason anyone would call this “gentrification” is because of the presence of white people like us [referring to his American friends who also lived in the TLN at the time]’. Jack spoke to me with a sense of anger, as his landlord was about to ask him to pay more rent once his current contract was over. What he meant by that was, as a timely rent-payer resident of TLN, he did not see himself as a gentrifier, who used money to drive the original residents out of the neighbourhood. ‘I am just a foreigner in my mid-twenties who wants to live in the middle of the city’, said Jack. Jack continued, sharing his perceptions of how his original resident neighbours saw him:

My landlord is a greedy man, who always tried to tell us that we have done something wrong to get us to pay even more … There were many of us – educated, white, and classy, foreigners – in this neighborhood; and we are the ones who are clean, peaceful, responsible, and – guess what – care more about this neighborhood than anyone else.

The public demographic data provided by the neighbourhood committee did not go into the detail of the ethnicity of the renters. It was a series of interviews with realtors that had gotten me to realise that a handful of foreigners of European origin in the neighbourhood were not just passers-by, but renters who actually rented a place, and lived as registered residents in the TLN. According to Mr Cai, an original resident who was known in the TLN as a local real estate agent (his motto: ‘want a room, come find Mr Cai’):

It was only a few years ago [around 2007] that white foreigners (bairen) begun to ask me if there are any rooms for them here … I was puzzled, of course, why would foreigners want to live here – in a rundown neighborhood. They also pay a lot more because many of them receive housing remuneration from the transnational companies that hired them to work in Shanghai. Then, some of them who could speak Chinese told me that TLN was, to them, very ‘unique and special’ (tebie he weiyi), and that they would like to live in a unique and special place.

As mentioned earlier, there were multiple owners in each individual structure, since the original rooms in each three-floor row house were allocated to different households as a result of the redistribution of confiscated private properties in the post-1949 period. So, on one floor, for instance, there could be up to three families – one in the original bedroom, study and storage (the latter two turned into bedrooms afterwards) – who shared the same kitchen and washing facilities. This spatial arrangement was far from ideal for foreigners who often, if not always, ‘required that the room they would like to rent include at least a private bathroom’, according to Mr Cai. The first batch of foreigners, in fact, not only spent their own money refurbishing the room to fit their basic needs and suit their tastes, but also encouraged the landlords to install additional amenities, such as gas stoves and private bathrooms by providing them with the incentives such as doubling the amount of deposit (so that the landlords could use it to carry out the renovations), and signing a long-term lease (usually, also, with a clause to pay upfront) to guarantee the landlords received stable, uninterrupted rental income.

Globalisation and the cultural capital of heritage

Many of the original resident landlords preferred to rent out their rooms to foreigners rather than Chinese tenants (local Shanghainese and from other parts of China, or waidiren, included). Similar to what the social anthropologist Michael Herzfeld (2009) found in Rome, locals are considered not to be dependable renters. In TLN, the primary reason was that the foreigners usually paid higher rent than the Chinese tenants. According to my interviews with many foreign residents, the rent in TLN was relative cheap given its location compared with what they would have to pay for a similar location in the cities from which they came. Many of these renters were earning a high income compared with the local Chinese in similar positions. Many of them also received housing allowances in addition to their base salaries from their companies, making the decision to rent at the asking price by the landlords in the TLN an easy choice. In Mr Cai’s words, they were also ‘more straightforward’ than Chinese tenants. In Mr Chai’s testimony, he said that Chinese residents had a more frequent tendency to be ‘problematic’ such as not paying rent on time, and sneaking in more people than agreed in the contract to stay in the room. That said this was only a generalisation. There were also foreigners who, according to the tenants and the neighbourhood committee, ‘partied all the time’, to the extent that the original residents filed noise complaints to the police. Nevertheless, even when foreign and Chinese persons of equal socioeconomic status would make the same offer, most of the original residents would still prefer to sublet the place to foreigners. As I have observed through participant observation, original resident landlords saw having foreigners renting their rooms as a form of cultural capital. In practice, they would have more ‘stories’ to share with their fellow neighbours regarding the importance of their houses. ‘See, even the foreigners want to live here’, said one of the original resident landlords who had been renting her best room on the second floor to a foreigner. This resident continued:

I don’t mind giving up the best room in the house that even has a small balcony and the best view facing the desirable south side [according to Chinese belief in geomancy of fengshui that the south is the best direction] of the lane to my renter; and that’s because he’s laowai [foreigner] – he pays the rent on time and is always friendly to us.

She gushed of her laowai renter before going on at length to complain about her previous Chinese tenant who never treated her in any manner close to how her current tenant did. According to my interviews, there is some truth to the perception that foreigners were more ‘friendly’ with their landlords and that may have to do with how they planned to stay only for a short period of time (around one to two years); hence, in general they were more satisfied with their situations. On the landlords’ side, they saw renting their rooms to foreigners as a way to claim, implicitly, an access to much coveted cultural capital. Half a dozen of my informants were among the first group of foreigners to arrive in the TLN. At its peak before a sudden crackdown on illegal commercial and noncommercial subletting took place in the autumn of 2013 (see Arkaraprasertkul, 2016a), foreigners and creative entrepreneurs constituted about half of the approximately 400 renters in the TLN.

Charlie, a 24-year-old renter from an English-speaking country who also studied Chinese in college, shared with me the reason why, prior to his arrival, not many foreigners had thought about living in such a prime location, and in his words, ‘a classy-looking and historical-looking house’ like those in the TLN:

The fact that we’ve gotten to know more about China through many sources of media – official or otherwise – did help, and now that we have a better grasp of Chinese, we have been able to ‘bust’ a lot of myths about ‘living with the Chinese,’ and live with them with mutual respect.

Charlie, a native of Manhattan, also proudly shared with me his achievement in renovating his landlord’s 20 m² half-storage-half-bedroom into a compact-sized bedroom in which he would live for the next four years until he returned to the USA: ‘Given the location – and more important, its historic appearance – TLN is equivalent to a neighborhood in Manhattan where you’d have to be someone like (CNN Anchor) Anderson Cooper to be able to afford to live there.’ Charlie was obviously no Anderson Cooper, and his income as a manager of a local English language school where he was teaching Chinese students was less than US$4000 per month (2007 exchange rate), but the fact that he could live right in the centre of China’s largest city, and have stories to tell about his lifestyle in, what he called, ‘an authentic alleyway-house of Shanghai’ is representative of the globalisation of culture and the ideology of consumerism at work. As the sociologist Leslie Sklair (Sklair, 1999) suggests, the study of globalisation should extend beyond the realm of phenomena limited by the scope of the study of the ways in which transnational corporations have induced capital and production at the global scale, into the realm of everyday cultural consumption. When the sociologist Michael Thompson (1979) made an observation about how and why people regard old objects as collectible (as well as their fetishisation), he was simply making a theoretical claim about the structural idea behind the process of ‘heritagisation’ and conservation (also see Silvia, 2011). Rather than the ‘nostalgically perceived’ aesthetics, the major factor in the process is the rarity, the uniqueness, and the class-based association of a particular object – which, in the case presented in this paper, is the lilong house. A fact that the original renters became increasingly aware of leading them to drive the gentrification of TLN themselves. The Chief Executive of one of the world’s most respected advertising agencies and a long-term resident of Shanghai Tom Doctoroff (2009) writes:

Yes, lilong life, is certainly not for everyone, has charm. But, with an open eye and mind, one can plumb the scene for insights on the fundamental motivations of Chinese people, even the structure of Chinese society … [T]his foreigner’s experience in the Shanghai lanes has been more than satisfying. I am reminded – vividly, on a daily basis – that the Chinese, even those who have not benefited directly from the winds of economic reform, are noble. Their sense of community, not to mention an instinct of finding pleasure in the moment, suggests the masses will march, head held high, towards the future. Despite inevitable setbacks and unpredictable twists and turns, the Chinese will adapt and, finally, thrive.

Since 2009, Doctoroff, has deliberately opted out of living in a handful of glass high-rise apartments for expatriates, and bought a four-story low-rise lilong house in Shanghai, which he renovated himself into what The New York Times columnist Casey Hall (2014) calls ‘a modern authentic piece of old Shanghai lane house (nongtang lao fangzi), with twists of tradition’.

The possession of a house whose significance and therefore economic value is raised by the attention of agents of the global community rather than the locals is the construct of an unfamiliar means of value judgement that Herzfeld (2004) calls ‘the global hierarchy of value’. When he began working as a realtor, Mr Cai clearly did not believe that anyone, let alone foreigners, would like to live in a ‘rundown (louhou) neighborhood’ such as TLN. But, as the economic returns have proven beneficial to the original residents, such disbelief has gradually been converted into a window of opportunity, through which, simply by keeping oneself in touch with this the global hierarchy of value through everyday discourses, one could continue to benefit until the walls of these profitable heritage houses come down and the residents have to move elsewhere. The original residents saw this particular process of demographic change as beneficial thanks to the voluntary agreement between the original and potential new residents on the rent and the length of the contract. Thanks to the high demand for residences in a neighbourhood located in a prime location like TLN and also for heritage architectural structures, there was no single instance, where an original resident was forced to accept rent that was lower than what he or she could live on elsewhere. The majority of the original residents, during the term of this research, were living elsewhere either with their children or relatives.

As Doctoroff (2009) has pointed out, ‘lilong life is certainly not for everyone’, but the fact that it was possible even for young foreigners to experience this kind of lifestyle in a big city that they would not otherwise have back at home, as Charlie pointed out above, certainly played a role in the rise of this alternative housing market. By 2013, the average rent in TLN had increased twofold from RMB50 per month in 2007 to RMB100 per square metre per month. So, for example, Charlie’s rent for the four year term of his contract was RMB2000 per month (approximately US$416–420). The landlord did not increase his rent because Charlie had helped to renovate the room and also because of the long-term contract that he signed – in fact, as Charlie expressed, he ‘wasn’t sure whether the landlord would stick to her word to not increase the rent had he not signed that contract with her to freeze the rent for four years’. By the time Charlie left the TLN, the room was put up for rent at RMB4000 per month, and was snapped up right away by a German expatriate working for a transnational market research company based in Shanghai.

Both the recent slowdown in Chinese economy and the heritage status of the TLN put the developers at odds with the tactic of ‘bulldoze-and-rebuild’ that had been the main transformational force of the city for the previous two decades. The discussion on how to make use of the heritage structure has been put back on the table, but this time with the municipal, local and global agents all being represented. It would have been only two of these three groups of actors who would get to determine the trajectory of the heritage structure if not for the mixed ownership of the properties. Most of the legal residents with government-issued property ownership certificates of TLN were former employees of the now dissolved work-units, who were paying a nominal rent (i.e. rent control) to the government. That said, the issue with properties does not stop at the economy of compensation for these residents should the municipal government want them out to make way for an urban development project. In fact, this was the area that is most difficult to enquire about for two reasons: First, because of the nature of the buildings’ structure, the boundary of ownership is unclear. For instance, if three families shared the bathroom and kitchen areas; to whom then should the right to sell and renovate those spaces belong in the case that there is no consensus on what to do with those spaces? Second, the original residents were deliberate about being strategically ambiguous about the rights that they had, as a result of the history of forced eviction and the use of eminent domain. This was the case even with the residents who possessed actual paperwork stating their rights. There were also discrepancies among the original residents themselves: although most of them were pragmatic about their future and were prepared to be relocated, they somehow held firm to the fiction that they ‘belonged there’. Those who had already moved away or rented their rooms to someone else were still fully retaining the right to compensation in absentia by using their networks of former neighbours to keep them updated about the latest developments in the housing market. Encouraging these residents to strategise even more carefully was the rising number of foreign residents in Shanghai whom the old residents deemed much more ‘desirable’ tenants than the locals.

Conclusion

In addition to developing an alternative understanding of gentrification in which the existing residents themselves were the key actors in the active urban process resulting in changing demographic diversity, the goal of this paper was to engage in contemporary debates regarding the use of the term gentrification. At present, the term implies that, the two categories of winners and losers are often established as a result of the process of social change and urban transformation. It may be true, as my informant Jack has informally observed, that there were more expatriates with middle-class tastes in the neighbourhood, and therefore, by definition, the neighbourhood was much more ‘gentle’ than the typical working class neighbourhoods. Buildings, lanes and communal spaces were physically much better maintained as well as more hygienic thanks to both the personal funds and particular tastes that these new residents had brought with them. By this ‘gentleness’, we may be able to understand the change as the subjugation of the young educated middle-class gentries against the retired uneducated working class poor. But, as I have shown in this paper, that was only one side of the story. Now that we know the contexts of the housing policy vis-à-vis social welfare, the impact of the globalisation, and the nature and consequence of the subletting process, should we still consider this phenomenon ‘gentrification’?

Through the case of TLN, I have illustrated a case of gentrification in which the original residents not only received adequate income from the process, but also, in many cases, substantial economic gain, and, as a result, became economically and physically better off. In my case of TLN, the reciprocal economic understanding between the two sides lead to a collaboration between them, resulting in the upgrading of the houses, which otherwise would not happen. In addition, as opposed to homogenisation, the process seems to have led to much more diversity among the residents. With the presence of the new residents drawing even more attention to the cosmopolitanism of this particular urban place that, to the original residents, was free publicity that benefited them by offering new opportunities to rent out the rooms that they did not use at economically advantageous terms.

I argue that the term gentrification should cease to be automatically understood as referring to a process with clear winners and losers. In downtown Shanghai, there is a case of a new district undergoing urban renewal whereby the local government guaranteed each of the original residents the right to receive a commercial unit so that they could continue to ‘maintain their lifestyle and the sense of our community’; yet, as soon as this new district was complete and the big corporations saw the opportunity to invest in the area, the original residents, almost unanimously, agreed to rent out their spaces to the corporations so that, according to an interview with the original residents, ‘we would no longer have to work, and simply be benefactors of passive income’. This process was by no means forced. It was the changing of economic circumstance that the residents themselves saw as best for their families that was crucial in how they made the decision to no longer continue, sometimes, businesses that they had engaged for generational and move out. A former owner of what was once one of Shanghai’s most famous wonton stalls (who happened to live near TLN) shared with me, ‘it would be nice if I could still sell wontons – since I had been doing that for years – so did my father, my grandfather, and my great-grandfather’. ‘But that said I would like to rest, as selling wontons, as you know, is a lot of laborious work and I am too old for that’, the 64-year-old stay-at-home father shared with me. When asking whether his son could help, his response was: ‘Oh, that’s another thing. My son has no interest in selling wontons – he doesn’t even like eating them! By renting out my space to someone else, I could afford to send him to a good school, and perhaps abroad if he wishes to pursue his study overseas afterwards’. This case of the wonton stall owner exemplifies an alternative form of gentrification, as the decision to move out was initiated by the original resident himself thanks to the benefits of renting out his old space.