[LINK] "Red-light gets the green light"

[rfmcdonald]

Troy McMullen's article in the Financial Times strikes me as believable, considering how gentrification of some districts risks pricing many people living in these poorer neghbourhoods out of their old turf.

The maze of narrow alleys and dingy, cobblestone streets that surrounds the red-light district in Hamburg, Germany, has been attracting revellers for years. Lined with dozens of sex shops, strip clubs and prostitutes preening behind windows, the gritty area known as the Reeperbahn is as popular as the Michelin-starred restaurants and upscale boutiques that encircle the Alster, the centuries-old lake at the centre of this affluent port city.

Despite its notorious reputation, however, the Reeperbahn is gaining some unexpected new residents. As property values have risen sharply in Hamburg during the past decade, smart residential buildings have increasingly crowded the area. The latest addition is the Bavaria, a 28,000-sq metre complex that includes dozens of luxury residences with panoramic views of the city, and a boutique hotel designed by architect David Chipperfield.

"There was a time when real estate developers would not have considered building in an area with this kind of reputation," says Nina Riedel, a managing partner at Engel & Voelkers, a Hamburg-based property firm. "Now we see more and more of them doing it and I really don't believe it will stop any time soon."

[. . .]

Gentrifying gritty urban areas is nothing new, of course. Times Square in New York City, and Las Vegas, Nevada, spent decades infested by high crime, drugs, and prostitution until ambitious redevelopment plans took hold. London's Notting Hill was a poor, troubled city district with racial tensions some 20 years ago. Today it's one of London's - and Europe's - priciest areas for real estate. And the city's King's Cross area is also shaking off its down-at-heel, seedy image as a large regeneration initiative progresses.

What is different today, property experts say, is that in spite of a push in many places for affordable housing, almost all of the new residential projects crowding these shady districts target high-end property shoppers. "In years past you had a much wider distribution of property prices when developers ventured into undesirable areas," says Michael Ball, a professor of real estate at Reading University in England, who advises the UK government. He says an unprecedented rise in land prices throughout the past decade has left developers struggling to find buildable plots in many expensive world capitals. "Property developers see financial opportunity in these areas so they invest with the idea of actually getting a better than expected return on their money."