Financial Analysis of Gentrification in China Artists' District
Y C Guo
1,*
, Y D Xiao
2
and W H Qi
3
1
TongJi University, Siping RD 1239, Yangpu District, Shanghai, China
2
TongJi University, Siping RD 1239, Yangpu District, Shanghai, China
3
Shenyang Ligong University, Nanping RD 6, New Hunnan District, Shenyang,
China
Abstract. Gentrification has played an important role in the neighborhood regeneration. This
paper mainly studies on gentrification process in Chinese megacities and financial analysis of
gentrification in China artists' district.
1. Introduction
In China, one of the fastest growing countries in the world, in the process of social and economic
transformation in Chinese cities, the phenomenon of the western middle class has begun to appear in
large Numbers. [1] After more than 20 years of reform and opening up, with the transformation of
social economy and economic globalization, Chinese cities have undergone a dramatic
transformation. Gentrification has progressed at a tremendous pace since the 1990s under the
background of urbanization. The gentrification process is emerging as a new model of neighborhood
regeneration.
Art village or artist zone, which has played an indispensable role in initiating and facilitating
gentrification, is a new spatial outcome in China's economic and urban transformation. The rise of
self-employment and easier migration has further allowed artists to practice in their preferred cities.
As such, China's Artists zones started to take shape in the 1990s. Some well-known artists zones,
such as Songzhuang in Beijing, Tianzifang in Shanghai, Xiaoguwei in Guangzhou, Landing (The
Blue House) in Chengdu, have become artistic and cultural symbols in these cities (Yang & Wei,
2008).
In this process, artists, residents, merchants and government have interacted with each other and
influenced by different effects. Through the comparison of two cases, this paper mainly study the
gentrification process in suburban areas and historic neighborhoods.
2. Gentrification situation
2.1. Gentrification in the world
Gentrification was first mentioned in a case study of London (Glass 1964: 18). In this study it figured
out “Larger Victorian houses, down-graded in an earlier or recent period - which were used as
lodging houses or were otherwise in multiple occupation - have been upgraded once again. Once this
process of “Gentrification” starts in a district it goes on rapidly, until all or most of the original
Guo, Y., Xiao, Y. and Qi, W.
Financial Analysis of Gentrification in China Artists’ District.
In Proceedings of the International Workshop on Environmental Management, Science and Engineering (IWEMSE 2018), pages 631-636
ISBN: 978-989-758-344-5
Copyright © 2018 by SCITEPRESS – Science and Technology Publications, Lda. All rights reserved
631

working-class occupiers are displaced and the whole social character of the district is changed.”
（Figure 1）
Figure 1. Phases of Gentrification [2]
.
Source: Author's self-drawn.
Today, more than 1,000 studies on gentrification are counted, mainly undertaken in geography
and sociology. Since the 80s, there is no conceptual consensus on what gentrification could be,
“chaos of gentrification“(Beauregard).
There are many different definitions of gentrification, such as “the rehabilitation of working-class
and derelict housing and the consequent transformation of an area into a middle-class neighborhood”
(Smith and Williams, 1986) [3]. “Exchange of one status lower group by one status higher in one
housing area.” (Friedrichs, 1996)[4] A report Kennedy&Leonard wrote in 2001 was written:
“Gentrification is a process, in which households with a higher income pressure out households with
a lower income and by which the principal character and the flair of this neighborhood is changed.”
It seems that though many research they come to the conclusion that the impact of gentrification
process is negative. “Because the language of gentrification tells us the truth about the class conflict
implied by ‚regeneration', it has become a dirty word for developers, politicians and financial
industries” (Smith, 2002) [5]. “Gentrification has been a largely negative process driven by capital
accumulation and resulting in the breaking-up and displacement of poorer communities.”(Rowland
Atkinson, 2004)[6]. However, whether all gentrification process do harm still need to be proved.
2.2. Gentrification in artist zone in China
Art Village or Artists Zone is a new spatial outcome in China’s economic and urban transformation.
In the immense and rapid urbanization of China, there are many artist zones appears in megacity.
Tianzifang became well known as a creative park in the late 90s when internationally renowned artist
Chen Yifei moved into the area and rented one of the factories as his art studio. Following him, there
was a surge of Shanghai based artists wanting to rent studio spaces in the area. [7, 8]Most of them are
undergoing the process of gentrification. Gentrification is emerging as a new model of neighborhood
regeneration in China which based on the adaptive reuse of historic dwellings for upscale shopping,
dining and culture. (Stephen Wei-Hsin Wang, 2011)[9].
China, Art villages are also found in outer suburbs, urban fringes and remote areas. Farm houses
and abandoned rural factories close to urban services are especially sought after by artists. This is
significantly different from the location of art villages observed in New York, London, Sydney and
other world cities where artists once clustered in the inner city. (Xin Liu, 2013). There is a notable
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tendency for artists to seek rural locations for cultivating cultural capital and seeking affordable
spaces of artistic production. Artists have passion on the landscape appeal in rural settlements, and
the slow-pace lifestyle. The cheap housing and spaces for artistic production and easy access to urban
centers are also important for the migration of artists. ( Junxi Qian,2013)
Although there are some differenced in the location, the process and outcomes are similar. In
some case, conscious of the synergistic value of restored urban heritage with conspicuous
consumption, tourism and even the creative industries, local officials have utilized their urban
planning authority to open up urban heritage to a host of gentrifiers. In terms of social outcomes,
some local residents have capitalized on inflated property values and gained the opportunity to move
out of poverty. Nevertheless, socially exclusive outcomes have also been evident, as
commercialization eroded the living environment of rural migrants and other poor residents. (Stephen
Wei- Hsin Wang, 2011) [9].
3. Financial Analysis of gentrification affection in artists zone
3.1. Changes of rents in Songzhuang and Beijing
In 1995, due to policy reasons, Yuanmingyuan artist village is forced to disband. Comparing the
average daily rent, one of the more obvious advantages of Songzhuang is its low rents. This is
consistent with the affordable range of free artist.
Figure 2. Comparison of rents in Beijing.
Source: Author's self-drawn, map from www.google.map.
Financial Analysis of Gentrification in China Artists’ District
633

Due to the village committee in coordination with the higher levels of government played an
active role in making Songzhuang develop freely. Self-built rental housing by the villagers, the
village committee will be transformed vacant scrap factories into lease studio or rent land for the
artists build house by themselves. This approach retains the original living creation structure of artists
and maintains rural pastoral style. Compared to 798, the cost of living in Songzhuang is relatively
stable in a long-term
.
[10] （Figure 2,3）
Figure 3. Comparison of rents between 798 Art Village and Songzhuang Art Village
Source: Author's self-drawn, statistic source from authors’ research.
3.2. Changes of rents in Tianzifang
Statistics shows that the fastest rising period of rents is from 2006 to 2008 with the broadcast by
news media. Because of the cultural and art environment created by artists, the rents continue to rise
since 2008 when the commercial areas adjacent to Tianzifang were developed. The rent of Shikumen
has reached 29.2Yuan/ (m
2
·day) in 2014, which has increased by seven times. In the investigation,
83% of the respondents think the rents are too high. （Figure 4）
Figure 4.Rents of the plant building and first floor of residential house (Shikumen)/
(Yuan/ m
2
·day).
Source: Author's self-drawn, statistic source from authors’ investigation.
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3.3. Comparison
Statistics shows that rent trends in Songzhuang are changed tardily while Tianzifang is changed
drastically.
Figure 5. Phases of Gentrification in Tianzifang and Songzhuang
Source: Author's self-drawn.
From the analyses above we can see that Songzhuang located in suburbs while Tianzifang in
Downtown, the difference of location lead to the rent trends go tardily in Songzhuang and drastically
in Tianzifang; also the distinguish of “agriculture to culture and arts industry” policy guidance of
Songzhuang and the “industrial to cultural and creative industries” policy guidance of Tianzifang is
caused by the same reason. (Figure 5)
4. Conclusions
Renewal and protection of artist zone in China Megacity should be seriously considered in urban and
rural development process. "Artists Village" or "Artists Zone" is a form artists gathering to live. It
appears in the late twentieth century China and has its particularity. Through empirical research on
"Songzhuang Artists Village" in suburb Beijing and "Tianzifang artist Zone" in central Shanghai, the
paper attempts to explore gentrification issues in the metropolis artist village space developing along
with urban evolution.
Once the process of gentrification starts, it is irreversible. Through the various aspects of Beijing
Songzhuang and Shanghai Tianzifang analysis, we found that not all of the gentrification process has
a negative effect. If well controled economic factors by policy, gentrification will bring a positive
impact on individuals and urban development.
Acknowledgement
Financial support from the “double hundred” project of Shenyang (the significant technology
research under grant No. Y17-0-039) is gratefully acknowledged.
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