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Gentrification is, at best, a complex term that is difficult to define. It is a process that has inherent class connotations and is an extremely visible process, which plays a key role in the physical and social form of contemporary cities. Sociologist Ruth Glass, in 1964, came up with one of the better definitions of gentrification, which she defined as follows (using London as her example):

"One by one, many of the working-class quarters of London have been invaded by the middle-classes - upper and lower. Shabby, modest mews and cottages - two rooms up and two down - have been taken over, when their leases have expired, and have become elegant, expensive residences....Once this process of 'gentrification' starts in a district it goes on rapidly until all or most of the original working-class occupiers are displaced and the whole social character of the district is changed."

At a more specific level, however, gentrification refers to the physical, social, economic, and cultural phenomenon whereby working-class and/or inner-city neighbourhoods are converted into more affluent middle-class communities, as by remodelling buildings, resulting in increased property values and in the displacement of the poor. Gentrification is intertwined with change; not only do the buildings, themselves, undergo renovation and beautification, but so too do the people, as such neighbourhoods often see an influx of highly educated, highly skilled, and highly paid residents moving in.

Explaining why gentrification occurs is no easy task. Early explanations of why it occurs saw a conflict between the production-side and consumption-side arguments. The production-side argument, which is associated primarily with the work of geographer Neil Smith, explains gentrification through economics and the relationships between flows of capital and the production of urban space. Smith argued that low rents on the urban periphery during the two decades after World War II led to a continuous movement of capital towards the development of suburban areas. This caused a 'devalorization' of the inner-city capital, resulting in the substantial abandonment of inner-city properties in favour of those in the periphery, and a fall in the price of inner-city land relative to rising land prices in the suburbs. This forms the basis for Smith's rent-gap theory, which he described as the disparity between "the actual capitalized ground rent (land value) of a plot of land given its present use and the potential ground rent that might be gleaned under a 'higher and better' use" (Smith, 1987b, p.462).

Smith believed that the rent-gap theory was the necessary piece of the puzzle to explicate the process of gentrification. He argued that, when the rent-gap was wide enough, developers, landlords, and other people with a vested interest in the development of land will see the potential profit to be had by reinvesting in abandoned inner-city properties and redeveloping them for new inhabitants. This effectively closes the rent-gap and leads to a higher and better use of the land.

The de-industrialization of the inner-city is seen as a prerequisite, which is often coupled with the growth of a divided 'white-collar' employment sector, one part of which is engaged in professional/managerial positions which follow the spatial centralization of capital. This is a product of corporations requiring spatial proximity to reduce decision-making time.

There are many criticisms of the production-side theory. ...

The consumption-side theory, on the other hand, has gained more credibility as an explanation for gentrification. Researchers that support this argument generally view the characteristics of gentrifiers to be of greater importance in the understanding of gentrification.

Gentrification can be a politically contentious issue. Usually this conflict is limited to the local level and therefore many who live outside urban areas may not be aware of it. In response to gentrification pressure, cities in which there are more renters than owners often pass rent control ordinances.