Rofe, M.W. (2000) Gentrification within Australia’s ‘problem city’: Inner Newcastle as a zone...

Gentrification within Australia’s ‘Problem City’:Inner Newcastle as a Zone of Residential Transition

M.W. ROFE

Inner Newcastle has undergone a significant reorientation of both itsresidential composition and physical form over the last decade. Theprocess of gentrification within two inner city suburbs (Cook’s Hill andNewcastle East) indicates the existence of an emergent consumer classwithin inner Newcastle. The spatial occurrence of this group within innerNewcastle can be considered as a strategy for the creation of a distinctiveidentity based upon inner city residency and conspicuous consumption.Consumption of the inner city operates at a variety of scales including therefurbishment of historic terraced housing and cottages and participationwithin inner Newcastle’s developing cafe´ culture.

Newcastle: problem city?Declining national significance, resulting from anerosion of its economic base, has earnedNewcastle the title of ‘problem city’ (Dunnetal., 1995, 156). Employment cutbacks at the BHP(Broken Hill Proprietary Ltd) steel-works sincethe early 1980s, combined with other heavyindustry labour reductions and closures havecharacterised Newcastle throughout the last twodecades1. While narratives of decline are seem-ingly synonymous with Newcastle, reinvestmentwithin inner Newcastle’s property market appearsparadoxical. Since the mid 1980s, large tracts ofresidential property within inner Newcastle havebeen restored. Revitalisation of inner city housingstock, combined with the emergence of a thrivingcafe community indicate that gentrification isoccurring.

Gentrification is indicative of changing econ-omic and residential structures within the innercity, stimulated by a shift from an industrial to apost-industrial production base (Ley, 1980).This shift in the production economy hastriggered a symbiotic change in the symboliceconomy of the inner city (Zukin, 1995). Conse-quently the gentrification process manifestsitself as both an economic and social reorien-tation of the inner city’s physical environment.This paper seeks to assess the degree to whichgentrification is occurring in inner Newcastle.To this end, a multi-methodological examin-ation of the gentrification process within innerNewcastle is undertaken. This paper argues thatthe emergence of physical indicators ofgentrification implies the occurrence ofresidential transition within inner Newcastle.The evidence of gentrification would seem torefute the city’s ‘problem city’ narrative,suggesting that, rather than simply resulting ineconomic problems, Newcastle’s shift in

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Australian Geographical Studies• March 2000• 38(1):54–70

Matthew W. Rofe is a doctoral student in the Department ofGeography and Environmental Science, The University ofNewcastle, Callaghan, New South Wales 2308, Australia.

productive base may also have initiated socialtransformation.

This paper considers both the consumptionand supply-side theories of gentrification, andfollows the reconciliatory work of Hamnett(1984; 1991) and Bridge (1995). This holisticanalysis requires the use of multiple methods,seeking to combine what Ley (1996, 82) hasreferred to as the quantitative establishment ofthe ‘. . . outer bounds of the geography ofgentrification’ with the qualitative interpretationof the ‘. . . structure of feeling in the gentrifiedinner city’. In the words of Lees (1994, 138),this synthesis is undertaken as ‘I do not want tochoose between economic Marxism and culturalpostmodernism; I want the stability of theformer and the destability of the latter. I wantto utilize a productive tension between the two’.Adopting such an approach enables some of thecomplexities of the social, cultural, physical andeconomic elements of the gentrification processto be teased out.

The social framework provided by Ley (1980;1996) and Jager (1986) envisages gentrifiers aswell-educated professionals whose lifestyles areconsumption oriented. Notions of consumptionvary widely. This paper utilises the socialframework of consumption-oriented gentrifiers,but considers consumption primarily as aprocess of symbolic appropriation, rather thana function of economic exchange. In thismanner, gentrification relies upon consumptionas a ‘. . . process by which artefacts are notsimply bought and ‘‘consumed’’, but are givenmeaning through their active incorporation inpeople’s lives’ (Jackson, 1993, 209). As such,the gentrifiers are considered to constitute anemergent consumer class, concerned withconsuming those amenities and attributes ofthe inner city conducive to the expression oftheir identity. Furthermore, it is argued that theprocess of identity construction is closelyrelated to the consumption of heritage symbolswithin inner Newcastle. The residentiallocational choices of the gentrifiers may beconsidered an implicit attempt to utilise thesymbolism of heritage and history as a

mechanism of class representation (Jager,1986).

Site descriptionFounded in 1801, the city of Newcastle is theregional capital of the Hunter valley, locatedsome 120 km north of Sydney, New South Wales.With a population of 270 324 (Australian Bureauof Statistics, 1996), Newcastle is Australia’s sixthlargest city. Focusing specifically upon two innercity suburbs, Cook’s Hill and Newcastle East(Figure 1), this paper asserts that the process ofgentrification has been active within specificareas of inner Newcastle since the mid 1980s.Included within Newcastle East is an elevatedarea referred to as The Hill. Despite containingnumerous physical indicators of gentrification, itcannot be said that The Hill has recentlyexperienced this phenomenon. This is becauseThe Hill has always been occupied byNewcastle’s social elite. Discussion of The Hill’shistoric legacy and its implications for theories ofgentrification are addressed later in the paper.

As illustrated in Figure 1, the area underexamination is bounded by Newcastle Harbourto the north and the Pacific Ocean to the east.These boundaries tightly constrain the innercity’s morphology. As the site of initialEuropean settlement, Newcastle East and itsimmediate environs contain a significantproportion of historic cottages and terracedhousing, many of which are protected byheritage orders and conservation areas.

The perceived significance of these dwellingsis reflected in the battle to save many of themfrom demolition following the 1989 earthquake.On 28 December, an earthquake measuring 5.6on the Richter scale struck the city. Within theHunter Valley, some 10 000 buildings werestructurally affected, resulting in an estimatedproperty damage bill in excess of A$800 million(at 1990 prices). Following the earthquake, theinner city area was declared a natural disasterzone. With an estimated half of the inner city’sbuildings structurally unsafe (Purser and CoganAssociates, 1990) the city was closed to thegeneral public, residents included, until 8

Gentrification within Inner Newcastle 55

ß Institute of Australian Geographers 2000

January 1990. Exemption from this closurecould only be obtained upon the declaration ofa place of residence being safe by the CityCouncil. Some 70% of the study area wasaffected by this closure. Campaigns to preservespecific housing stock following the earthquakeare indicative of increased politicisation byNewcastle’s emergent consumer class.

Gentrification: theoretical and practicalcomplexitiesAs an agent of urban renewal, gentrification hasreceived a great deal of academic attentionduring the last 20 years. Generally defined as animprovement of the inner city environment,facilitated by a change in residential structure ashigh-income professional households displacetraditional inner city residents, gentrification hasbeen considered as one strategy whereby theeconomic potential of inner city environments isreclaimed. Such a view is highly simplistic.Encoded within such a definition are

assumptions legitimising the gentrificationprocess as a logical phase of urban succession.However, as Kary (1988, 54) has observed,traditional urban theories are ‘. . . of limitedvalue in providing an understanding ofgentrification.’ The emergence of a processseemingly contrary to accepted models of urbanchange has led to a radical re-conceptualisationof modern urban theory.

Consequently, gentrification studies havecome to represent more than theories accountingfor the changing nature of inner city environ-ments. As Hamnett (1991, 174) has stated,‘. . . the gentrification debate is one played forhigh theoretical stakes . . . between radicallydifferent theories and explanations’. This debatehas largely revolved around the primarymechanisms initiating and driving the gentri-fication process. Two broad theoreticalpositions have evolved, one theorisinggentrification as a production driven process(Smith, 1979a; 1979b; 1987; Badcock, 1989),

Figure 1 Newcastle, New South Wales, showing the location of the study sites.

56 Australian Geographical Studies


the other as a consumption oriented experience(Ley, 1980; 1994; 1996; Jager, 1986; Mills,1988; 1993). While both theories have con-tributed much to the understanding of gentri-fication, due to the complex and spatially-specific nature of the process, it is doubtful thata single explanation alone is sufficient.

Production driven interpretations: the rent gapthesisMost notable amongst theories proposing gentri-fication as a consequence of property marketfluctuations is the rent gap thesis proposed bySmith (1979a; 1979b; 1987). According toHamnett (1984, 298), Smith’s work representsthe ‘. . . most sophisticated theoretically devel-oped explanation available . . . and that anyattempt to develop a systematic explanation ofgentrification must take his work as a major pointof departure.’ While acknowledging the actions ofthe gentrifiers themselves, Smith (1979a) assertedthat to focus on the actions of individuals as amechanism of inner city transition is excessivelynarrow. Rather, Smith conceptualised the actionsof the gentrifying class within the operations ofthe property market economy. The actions ofinvestors and developers were regarded asproviding a more solid theoretical foundationfor a conceptualisation of gentrification than didclass and consumer preference. Smith hastherefore sought to explain the stimulus behindand spatial occurrence of gentrification ineconomic terms, driven primarily by developers.

Within this conceptualisation, the key toexplanation lay in the ability to ‘. . . explainthe detailed historical mechanisms of capital’sdepreciation in the inner city and the precise wayin which this depreciation produces thepossibility of profitable reinvestment’ (Smith,1979a, 542). The very process of disinvestmentprimes the inner city’s property market forpotential reinvestment in the form of gentri-fication (Horvath and Engels, 1985, 147). Inorder to explain how the relationship betweenactual and potential market values provided astimulus for reinvestment, Smith developed therent gap thesis.

The rent gap represents the ‘. . . disparitybetween the potential ground rent level and theactual ground rent level capitalised under thepresent land use’ (Smith, 1979a, 545). Clark(1992, 17) identified actual ground rent as theamount earned by a property and potentialground rent as the amount achievable if theproperty were utilised in the best possible way,economically speaking. The rent gap thereforerepresents the opportunity for profitablereinvestment due to the disparity between actualand potential ground rents. Theoretically, withinsuch a schema, the wider the gap the greater theopportunity for profitable reinvestment.

This premise is flawed, however. Hamnett(1984, 308) identified its most serious drawbackas its inability to explain why areas with a well-developed rent gap fail to gentrify. GivenSmith’s (1979a, 546) argument that‘. . . gentrification is not a chance occurrence. . . it is to be expected’, this failing is extremelyserious. Other limitations have been noted byBourassa (1993, 1733) who has called for therent gap thesis to be put aside due to semanticproblems which make the theory extremelydifficult to apply. Despite such calls, it isunrealistic to by-pass the rent gap hypothesis,particularly given a lack of alternative economictheories (Badcock, 1990, 460).

While extremely useful in accounting for theeconomic manifestations involved in gentri-fication, the supply-side thesis can be con-sidered to be overly deterministic. Its inability toexplain why some areas with well-developedrent gaps do not gentrify is a prime example ofthis. In this case, the explanation may lie beyondeconomics and may be attributed to thestigmatisation of particular parts of the city(White and Winchester, 1991). An over-emphasis on market forces and the actions ofdevelopers and investors implicitly undervaluesthe part played by the gentrifiers themselves inthe reinvestment process. Production-driveninterpretations of gentrification clearly need toincorporate the actions of the gentrifiersthemselves and the socio-spatial identity theyseek to display in the urban form.



Consumer led interpretations: an emergentsymbolic economyDrawing upon the work of Bell and Habermas,Ley (1980) sought to identify the socialmechanisms behind a ‘new ideology oflivability’ within present day inner cityenvironments. While not referring directly togentrification, Ley’s discussion of what hetermed a newly emergent consumer class hasbeen pivotal in subsequent studies ofgentrification as a consumption orientedprocess. Perhaps the most striking attribute ofthis emergent consumer class is the similarity ofthe gentrifier’s socio-economic characteristicsin different urban environments. Attempting toaccount for the recent development of a processwith seemingly uniform characteristics, severalresearchers have claimed that gentrification isindicative of highly developed capitalistsocieties (Ley, 1980; 1986; Smith, 1986). Ley(1980) has argued that the key cities of thesesocieties have been transformed from beingindustrial to post-industrial. The characteristicsof these emergent post-industrial cities differfrom those of industrial cities. The mostprominent of these differences are thereplacement of unskilled labour by newtechnology, an economic transition from goodsto service production, and the politicisation ofemergent community groups (Ley, 1980).

The post-industrial landscape is both createdand recreated by the class in emergence.Operating from a stable economic base, theemergent class seeks to define itself viaconsumption and self-actualisation. Thus, ratherthan seeking to account for gentrification as aresult of market forces, Ley (1993, 232)attributed changing physical patterns withinthe inner city to changing social-residentialpatterns. Recognition of the ‘. . . capacity ofhuman agency to initiate significant urbanchange’ (Cybriwskyet al., 1986, 92) challengestraditional supply-side arguments. Such a viewrepresents a liberation of consumer choice fromthe economic confines of production-sideexplanations (Smith, 1979a; Badcock, 1989;Engels, 1994). Bourassa (1993) has claimed that

this liberation may assist in explaining whysome areas undergo reinvestment while othersdo not (see also Hamnett [1991]).

Typically described as young, well educated,highly paid professionals (Legates and Hartman,1986), the gentrifiers are often constructed ascommunity destroyers (Smith, 1991; Reid andSmith, 1993). However, Australian research haschallenged several previously acceptedassumptions. Most notable is a lack of socialconflict and marginalisation resulting fromgentrification compared to other internationalexperiences (Kendig, 1984; Horvath and Engels,1985). Jager (1986) has attributed thesedifferences to higher rates of dwellingownership amongst traditional inner cityresidents and Australia’s distinctive wagestructure, which in some instances providesgreater remuneration to blue collar employeesthan to some white-collar occupations.

Jager (1986) stressed the need to identify theimportance of residential aesthetics to theconsumer class. The desire for aestheticallypleasing surroundings results in the spatialconcentration of gentrification in selectedhistoric and physically attractive inner cityareas. In the inner city ‘. . . housing has toconfer social status, meaning and prestige, buton the other hand it has to obey the social ethicof production: it has to function economically’(Jager, 1986, 79). Hence some inner city areasare considered neither socially attractive noreconomically viable. Thus while some areas areconsidered ‘redeemable’, others suffer fromgreater stigmatisation and as such may resistgentrification (White and Winchester, 1991).

Several reconciliatory works have sought topresent a more unified, balanced critique ofgentrification and have attempted to bridge thegap between polarised ‘production’ and‘consumption’ driven explanations (Hamnett,1984; 1991; Bridge, 1995). Nonetheless, thegentrification debate remains. Negotiationbetween the opposing theories largely concernsterminology (Rose, 1984; Bourassa, 1993) andthe centrality of the fiscal economy as opposedto that of the symbolic (Zukin, 1991; 1995;



1996; Podmore, 1998). Illustrating thispositional struggle, Smith (1979a, 540) assertedthat ‘. . . the relationship between productionand consumption is symbiotic, but it is asymbiosis in which production dominates.’Reflecting upon such struggles, Rose (1984,50, 56) observed that ‘. . . gentrification is notreducible to the behavior of individuals . . .’ norare the gentrifiers the ‘. . . mere bearers of aprocess determined independently of them.’Unable to reconcile these positions, Rose, likeSayer (1982), concluded that gentrificationembodied a ‘chaotic conception’. Similarly,employing a play on the title of Hamnett’s(1991) reconciliatory work, ‘The blind men andthe elephant: the meaning of gentrification’,Redfern (1997, 1276) observed that while:

Hamnett’s imagery of the blind men iscompelling . . . it does highlight anotherfundamental principle about elephants —that they are in fact impossible to define, butyou will know when you see one.

Redfern’s observation is extremely pertinentto this study of inner Newcastle, wheregentrification is seen as both a physicalexpression and an indicator of social change,but is also a social process reciprocallyinfluencing and influenced by the economicprocess of production within the inner city.Hence, the term gentrification is utilised in thispaper as both a social process and a physicalattribute of the inner city environmentsdiscussed. This duality of usage seeks toembrace the complex, yet recognisable, natureof gentrification within inner Newcastle.

Suburbs of social transitionSignificant dwelling refurbishment withinNewcastle East and Cook’s Hill has occurredsince the mid 1980s. This process has resulted inthe revitalisation of substantial tracts of thesedistricts. Dwelling refurbishment and theemergence of consumption oriented landscapesare indicative of inner Newcastle’s changingresidential composition. Thus the physicalattributes of gentrification are clearly visible

(see Redfern [1997]), while the complexitiescausing them often escape detection or defymonocausal explanations.

In order to unravel the relationship betweendwelling refurbishment and residential transitiona multi-method approach was employed.Quantitative investigation of changes within innerNewcastle’s property market involved examin-ation of both changing tenure patterns andproperty market fluctuations. Data pertaining tothe tenure of dwellings were obtained from theAustralian Bureau of Statistics and questionnairesampling. Records of property transactions wereobtained from the Estate Agents Co-operative(EAC)2. Discussions with the EAC revealed thatthe co-operative controlled an estimated 85–90%share of inner Newcastle’s residential propertymarket. Investigation of these data sourcesprovided considerable insight into innerNewcastle’s residential property market.

Assessing issues of residential transitioninvolved both qualitative and quantitativeanalysis of census data (Australian Bureau ofStatistics, 1986; 1991; 1996), questionnairesampling of 450 households and semi-structuredinterviews with several property market actors.Questionnaire sampling sought to verify generaldemographic trends as well as collectinginformation concerning dwelling refurbishmentand influences on residential decision makingprocesses. Four hundred and fifty questionnaireswere distributed with a 39% response rate,representing information on and the opinions of441 inner city residents. In order to validategeneral observations regarding gentrificationwithin the inner Newcastle property market,semi-structured interviews were conducted withmanagement level personnel from several land-residential development firms. Interviewsubjects included real estate agents, propertydevelopers and architects. Key informants wereselected on the basis of their involvement in anumber of collaborations involving majorredevelopment schemes within the study area.Combined, these sources provide a highlytextualised account of residential transitionwithin inner Newcastle.



Detecting the ‘outer bounds’ of gentrification

Indicators of residential upgradingUse of census data within gentrification researchhas a long tradition and continues to be aninvaluable methodological tool (Hammel andWyly, 1996; Ley 1996). Beyond the occurrenceof physical indicators of upgrading, census datapresent a temporal portrayal of an inner cityenvironment’s changing socio-demographicprofile. Demographic profiling enablesresearchers to confirm trends of residentialupgrading in a quantifiable manner. This isparticularly apt considering that widercommunity descriptions of the inmovers arebased upon their socio-economic status. Hencethe terms YUPPIE (Young Upwardly-MobileProfessional Person) and DINKS (DoubleIncome No Kids) are used to characterise thegentrifying class. The use of census data enablesan initial profile of the gentrifying class to beconstructed based upon their education andemployment structure.

Comparison of census data from 1986, 1991and 1996 reveals a sustained trend of residentialupgrading within the study area. As indicated inTables I and II, an identifiable shift in theemployment and educational profiles of resi-dents has occurred. Notwithstanding declines inthe proportion of people identified as managersand administrators, both Newcastle East andCook’s Hill experienced growth in theproportion of residents employed in high statuswhite-collar occupations. This growth isattributable to significant increases in the

proportion of those in professional occupations(Table I). Between 1986 and 1996 theproportion of professionals increased by 9%and 13% in Newcastle East and Cook’s Hillrespectively. These increases consolidated thosein professional employment as the largestoccupational group within inner Newcastle.Overall the proportion of those employed inhigh status white-collar occupations increasedfrom 48% and 43% in 1986 to 56% and 53% in1996 within Newcastle East and Cook’s Hillrespectively. In comparison the proportion ofthose in high status white-collar occupationswithin New South Wales increased from 30% to38% between 1986 and 1996. Despite appearingmodest when considered in the light of statetrends, the increasing consolidation of white-collar employees within the study areas isindicative of residential upgrading during theinter-censal periods.

Alternatively referred to as marginal (Rose,1984) or bridge gentrifiers (Zukin, 1995),people employed in low status white-collarservice industries often ‘pioneer’ inner citysites, raising their cultural and symbolic status.While not strictly gentrifiers themselves, thisgroup is significant to the upgrading process,often being composed of migrants from non-English speaking backgrounds within theAustralian context (Kendig, 1984). Classifiedby the census as clerks, sales and personalservice personnel, these people are oftenemployed within consumption-oriented facilitiesfrequented by the gentrifying class. As indicatedby Table I, the proportion of those in this

Table I Occupational status, Newcastle East and Cook’s Hill (Source: Australian Bureau of Statistics, 1986; 1991; 1996).

Newcastle East Cook’s Hill

1986 1991 1996 1986 1991 1996

Managers and Administrators 10% 13% 9% 9% 8% 6%Professionals 38% 39% 47% 34% 36% 47%Clerks, Sales and Personal Service Personnel 27% 26% 26% 30% 33% 29%Tradespersons 10% 7% 9% 10% 11% 9%Plant Operators, Labourers and Related Workers 12% 10% 8% 15% 10% 7%Inadequately Described/Not Stated 3% 5% 2% 2% 2% 2%



category has remained relatively constant.Despite some fluctuations, this group declinedby only 1% within both suburbs between 1986and 1996. Table I indicates that within Cook’sHill between 1991 and 1996 this group declinedby 4%. This decline may be indicative of thisgroup’s limited economic resources in relationto rising living costs at a time of rising inner cityproperty prices. As stressed by Knopp (1990),despite ‘pioneering’ many inner city areas, thisgroup comes under increasing economicpressure as gentrification proceeds, eventuallybeing displaced themselves. Regardless,combining the three white-collar occupationalcategories indicates that between 1986 and 1996inner Newcastle has been consolidated as a siteof white-collar residency (Newcastle East 75%–82%, Cook’s Hill 73%–82%). These figures areconsiderably higher than state averages (NewSouth Wales 61%–68%), highlighting innerNewcastle as a site of white-collar residentialconcentration.

The dominance of high status white-collarresidents was even more pronounced amongstthose sampled by questionnaire (Figure 2). Thisrevealed a resident population dominated byprofessional employment (62%). In total, 96%of questionnaire respondents claiming either full

or part-time labour force participation identifiedthemselves as being of white-collar employ.

Interviews with key informants furthersupported linkages between occupational statusand residential upgrading. Constant referenceswere made to the gentrifiers as being uppermiddle-class, such as those described as havingan ‘. . . arty . . . academic type personality.’When asked about the appeal of inner cityresidency, one informant responded that‘Doctors and lawyers especially will seek outan inner city terrace to feel that they are havinga better lifestyle . . . which is a bit of a myth.’Beyond the obvious spatial expression ofeconomic power, this informant drew stronglinkages between the tenancy of terracedhousing and the creation of social differentiationthrough consumption.

Occupational upgrading inherently implieseducational upgrading. Increasingly, it isnecessary to hold a degree in order to obtainemployment within high status white-collaroccupations. Table II reveals a significant trendof educational upgrading between 1986 and1996. During this period Newcastle East andCook’s Hill experienced an 11% and 13%increase respectively in the proportion of peopleholding tertiary qualifications (for comparison,

Figure 2 The occupational status of inner Newcastle residents (Source: Questionnaire Survey, 1996).



New South Wales experienced a 12% increase).Declines were recorded in the proportion ofthose holding trade qualifications, while themost significant declines were recordedamongst people holding only basic qualifi-cations. This category experienced a decline of12% within Newcastle East and 11% withinCook’s Hill between 1986 and 1996. Bycomparison, those holding trade qualificationsactually increased by 1% within New SouthWales over the same period. The proportion ofpeople holding no formal qualification remainedrelatively static, the most significant change a4% decline within Cook’s Hill. This trendsuggests the continuation of residential diversitywithin inner Newcastle throughout the period inquestion. However, the declines recordedbetween 1986 and 1996 for both sites areindicative of an increasing consolidation of thehighly educated in the gentrifying suburbs.

Capital reinvestment as an indicator of residen-tial upgradingThe capital reinvestment which is a physical andvisible indicator of gentrification manifests itselfin a number of ways. Perhaps the most notable ofthese is the incidence of dwelling refurbishments.Dwelling refurbishment, increasing homeownership rates and housing costs are positivelycorrelated within specific inner city areas.

On a streetscape level the most obviousindicator of gentrifier activity is dwellingrefurbishment. Questionnaire sampling revealedthat 72% of respondents had undertakenrefurbishment upon their dwellings. As all the

dwellings sampled are located withinconservation areas, refurbishment requiresCouncil approval. Given the strict nature ofheritage guidelines the undertaking of refur-bishment represents a considerable investmentof time and capital. Further, as all work must be‘sympathetic’ to the intrinsic historic value ofthe inner city, dwelling refurbishment satisfiesJager’s (1986) notion of the symbolic as well asthe economic value that inner city residencyaccords to the gentrifiers.

As extensive refurbishment is usually under-taken by owner-occupiers, dwelling upgradingtends to occur concurrently with increasing ratesof dwelling ownership. Supporting thisassertion, 74% of the 173 terraces sampled ininner Newcastle were either owned or beingpurchased. Comparison of questionnaire datawith census data reveals a disparity in homeownership rates related to dwelling structure.Census data (1996) reveal that within bothNewcastle East and Cook’s Hill only 34% ofoccupied dwellings were either owned or beingpurchased. However, the questionnaire dataconfirmed that home ownership rates tend tobe higher within historic dwellings such asterraced housing.

Throughout the study period, property valueswithin inner Newcastle have increasedconsistently. Figure 3 shows changes in theaverage cost of residential housing since 1987.Plotted using a three-year moving mean in orderto smooth irregular price fluctuations, Figure 3highlights property value trends in NewcastleEast and Cook’s Hill. These suburbs have

Table II Educational and training qualifications, Newcastle East and Cook’s Hill (Source: Australian Bureau of Statistics,1986; 1991; 1996).

Newcastle East Cook’s Hill

1986 1991 1996 1986 1991 1996

Persons with Tertiary Qualifications 18% 24% 29% 16% 22% 29%Persons with Trade Qualifications 10% 9% 7% 10% 10% 8%Persons with Basic Qualifications 14% 3% 2% 13% 3% 2%Persons Not Qualified 49% 52% 50% 52% 53% 49%Inadequately Described/Not Stated 9% 12% 12% 9% 12% 12%



provided an environment of consistent capitalaccumulation. Further, property values inNewcastle East and Cook’s Hill have beenconsistently above those for the inner city ingeneral (Figure 3).

Despite the earthquake, rising rates of homeownership within the study area have provided aclimate of capital accumulation since the mid-1980s. Increasing ownership rates and propertyvalues reflect the heightened demand placedupon inner city residency by Newcastle’semergent consumer class. Several recentconversions of commercial buildings intoapartments have further stimulated the propertymarket. Such large-scale developments arguablyattract production gentrifiers. Productiongentrifiers are considered to differ fromconsumption gentrifiers in their motives forinner city residency. Production gentrifiers areconsidered to be investors in a pre-fabricatedidentity, rather than individuals activelyconstructing their own place-based identity3.

Rising property values directly influenceaverage rental costs. Although not specificallyinvestigated, rising rental costs were

commented on by numerous questionnairerespondents. Recognition of the potentialconsequences of rising accommodation costs,namely displacement, prompted one elderlyresident to comment ‘I’ll stay here until I dieor the cost gets too high. Whichever comesfirst.’ Similar observations were made byseveral real estate agents, with one keyinformant stating that living in the ‘. . . city isgoing to continue to get more expensive.’

Residency and the consumption of innerNewcastle’s amenitiesAs a site of consumption, the inner city operateson different spatial scales. Likewise, theconsumption of the inner city by the gentrifiersoperates at varied spatial scales. By consumingspecific housing stock, the gentrifiers arecompelled to consume specific areas withinthe inner city. Further, the gentrifiers areattracted to sites of consumption-orientedfacilities. This helps to account for the failureof some inner city areas to gentrify — they mayhave good housing stock but lack suitableconsumption facilities.

Figure 3 The mean cost of housing in Newcastle East, Cook’s Hill and inner Newcastle, 1986–95 (Source: EAC propertytransaction database). The values represent three-year moving means. Prices are indexed to 1986 values using the ConsumerPrice Index. Inner Newcastle includes Wickham, Carrington, Newcastle West, Cook’s Hill, Bar Beach and Newcastle East.



According to key informants, Cook’s Hill wasthe first of Newcastle’s inner city suburbs toexperience this ‘back to city living trend’. Morespecifically, those areas experiencing upgradingwithin Cook’s Hill are adjacent to Darby Street.Promoted as ‘Eat Street’, Darby Street providesthe inner city’s focus of consumption andlifestyle acquisition. As such, Darby Streetfulfils Zukin’s (1991) concept of cuisine as alandscape of power which provides expressionfor the newly emergent consumer class. Duringthe mid-1990s this concentration of consump-tion facilities has expanded into Laman Street(Figure 4) and Bull Street, the latter beingspecifically promoted as ‘Art Street’. So great isDarby Street’s influence that it not onlyprovides a consumption focus for NewcastleEast and Cook’s Hill, but also a major focus forthe outlying suburbs of Newcastle.

Questionnaire results reveal a locationaldecision making process distinctly influencedby proximity to such consumption-orientedfacilities. Figure 5 illustrates that proximity torecreation and consumption facilities isconsidered a major determinant in residentiallocation. Recreational facilities are categorisedas being sport-oriented. Proximity to highquality sports facilities was commented on bynumerous respondents. These facilities includeathletics tracks, cycle-ways and walking paths;specific reference was also made to the severalbeaches within close proximity of both suburbs.Facilities classified as consumption-orientedinclude cafes, museums, theatres and artgalleries. The value placed upon proximity toconsumption-oriented facilities reflects thespatial concentration of gentrification withinthe study site. All households within the sampleare within walking distance of both recreation-and consumption-oriented facilities.

The historic appeal of the place of residencywas a major residential determinant for 59%of questionnaire respondents (Figure 5).Similarly, most respondents were aware thatthey lived in a conservation area (57%). Thesequestionnaire results indicate the importanceplaced upon the historic significance of specific

dwellings and the area of residency. Similarly,the inherent quality of the surroundingdwellings was rated by 40% of respondents asbeing of major significance. These responsessupport Jager’s (1986, 79) assertion that forAustralian gentrifiers, investment in inner cityproperty provides both a symbolic andeconomic return.

These concerns emphasise the pivotalposition historic dwellings occupy in the spatialmanifestation of the gentrification process. Thelocation of historic dwellings close toestablished consumption-oriented facilitiesmeans that they act as a locus attracting furthergentrifiers. In this manner the existence ofgentrification reproduces the gentrifying class.According to Knopp (1990), this results in a

Figure 4 Art gallery, Cook’s Hill.



spatial expansion of gentrification, as additionalgentrifiers are attracted into an area by thepioneering work of prior gentrifiers. Thisprocess of establishment and reproduction isvisible in Newcastle East and Cook’s Hill.

Heritage, political action and thepreservation of distinctionTo the gentrifiers, inner city residency isinherently symbolic. As one Newcastle Eastresident recently stated, ‘I’m not a suburbanite. . . If I’m going to live in the city I want to livein the inner city.’ (McNally, 1997). Of keysignificance is the notion of social distinctionand status. Gentrification is equally anexpression of not only whom the gentrifiersare, but also of whom they are not, namelysuburban dwellers. If the consumption of innercity residency and its historic symbolism isutilised as a mechanism of distinction, then thepreservation of these physical attributes will beof inherent concern to the gentrifiers.International research has documented theactivities of resident action groups in preservingaspects of the inner city’s built environment

conducive to their expression of difference(Ley, 1980; Knopp, 1990; Rothenberg, 1995).Similar community action has been noted withinAustralian inner city environs (Kendig, 1984;Logan, 1985; Jager, 1986).

Interaction between community groups andlocal government empowers the objectives ofthese groups. Access to the political processtransforms these groups into quasi-politicalorganisations with the ability to enshrine theirvision of the inner city via heritage legislation.This process enables the gentrifiers to gainrepresentational access to public space for thepurpose of private symbolic display (Zukin,1995). Central to this ability is the mobilisationof individual will into an articulate vision byresident action groups ‘. . . whose membershipis largely drawn from the articulate middleclasses.’ (Burtenshawet al., 1991, 157).

Increased heritage awareness since the 1989earthquake has been a source of empowermentfor several community based groups withininner Newcastle. The Citizens EarthquakeAction Group and The Hill Residents’ Groupare organisations similar to those described by

Figure 5 The factors influencing residential location for inner Newcastle residents (Source: Questionnaire Survey, 1996).



Ley in 1980 as powerful politicisedorganisations of the emergent consumer class.These resident action groups have been heavilyinvolved in campaigns to preserve railwayaccess to the city centre, to preventunsympathetic hotel development and to limitthe construction of apartment buildings whichwould be higher than the cathedral whichclearly dominates the historic city skyline. Thewillingness to campaign for and invest inhistorical preservation explains why many innercity conservation areas correspond with thespatial limits of gentrification (see alsoBurtenshawet al. [1991]).

As stated previously, it is misleading to referto The Hill, an elevated area within NewcastleEast affording panoramic views of the city andocean, as having undergone residentialupgrading. This area has retained its historicalreputation as Newcastle’s most prestigiouslocation; the ‘home to millionaires’ (House,1992). Despite not having undergone thebroader social upgrading associated with

gentrification, The Hill has experienced anupsurge in the number of dwellingrefurbishments affording it a classic gentrifiedappearance (Figure 6). This is illustrated in theactions of The Hill Residents’ Group and thenumber of applications for financial assistancemade to the Newcastle City Council’s HeritageRestoration Fund in 1992.

The amount of restoration undertaken reflectsthe economic ability of The Hill’s residents.This is indicated by the fact that the HeritageRestoration Funding scheme required thecommitment of matching funds on the part ofthe dwelling’s owner. Further, the quasi-political actions of The Hill Residents’ Groupillustrates the high degree of articulation andorganisation Ley (1980) cited as a key attributeof the emergent consumer class. Despiteresiding within the inner city prior to thecommencement of gentrification, The Hill’sresidents have only recently adopted those widerheritage concerns commonly associated withgentrification. This suggests that in some

Figure 6 Refurbished dwelling, The Hill.



circumstances gentrification may not representan invasion (Smith, 1991; Reid and Smith,1993), but rather the assertion of a new ethic ofconservation and representation giving cohesionto an existing community (Zukin, 1995, 120–122).

Suburbs of diversityThe changes occurring within inner Newcastlehave been noted by many members of the widercommunity. As one key informant stated, the1980s was a period during which ‘. . . there wasthe commencement of this getting back intotown, getting back into living in the inner city.’This ‘getting back into town’ movement waslinked to the growing perception that ‘there wassomething better being offered in the city’.However, the ability to define this ‘somethingbetter’ eludes many observers. Likewise, theability to describe or characterise the inmoverswas limited at best to obvious socio-economicterms. Other questionnaire respondents werelimited to expressions of rage at the residentialchange surrounding them, one respondentemphatically stating ‘Yuppies suck!’

Despite such expressions of resistance, innerNewcastle still retains a high degree ofresidential diversity. Considered a hindrance tothe reinvestment process during the 1980s,social diversity is currently perceived by severalproperty market actors as contributingsignificantly to the ‘vibrancy’ of the inner city.However, it is important to note that there existsdesirable and undesirable diversity. Desirablediversity includes the presence of families withyoung children and elderly residents4, whereasundesirable diversity includes the presence ofthe unemployed and public housing tenants.One key informant referred to an area of publichousing within Newcastle East as ‘. . . the[area’s] biggest eyesore’, likening the estate to‘Beirut’ and describing it as a ‘waste’ of primewaterfront land. Regardless, the maintenance ofsocial diversity within inner Newcastleundermines the assumption that gentrificationproduces an affluent residential monoculturewithin inner city environs.

Problem city or city of promise?Beneath Newcastle’s problem city narrativelies the more cosmopolitan and optimisticnarrative of gentrification. Increasingly, tacitrecognition is being made concerning this‘Renaissance of Newcastle’ (Towndrow, 1997).However, despite the undeniable effectgentrification is having upon the city’senvironment, Newcastle is still perceived asAustralia’s ‘problem city’.

The fact that inner Newcastle is experiencinggentrification is revealed by the visible changesin the physical and residential fabric ofNewcastle East and Cook’s Hill. This paperargues that these changes are the consequenceof the actions of an emergent consumer class.The development of this group, whose broadsocio-economic characteristics parallel those ofgentrifiers in other inner city areas (Legates andHartman, 1986), is both instrumental in andindicative of Newcastle’s ‘renaissance’. As suchNewcastle’s consumer class is simultaneouslythe agent and product of gentrification.Recognition of this dualism is reminiscent ofLey’s (1980) assertion of the post-industrialtransformation both creating and being(re)created by the gentrifiers.

In some ways, Newcastle’s gentrificationexperience appears to be unique. Perhaps moststriking is the maintenance of significant socialdiversity despite consistent residentialupgrading during the period examined. Themaintenance of diversity is important to thecontinued function of the inner city as aprovider of affordable housing and relatedservices. The high proportion of children andthe elderly living in the study areas, as revealedby the questionnaire results, is indicative of thistrend. Other differences include the mixedquality of the inner city environment and theresultant patchiness of gentrification. Factorsspecific to Newcastle include the occurrence ofthe 1989 earthquake, which despite being ablow for the city’s morale, had no discerniblelong term impact upon the city’s propertymarket, and actually brought property invest-ment from insurance payouts.



The evidence presented in this paper confirmsthat inner Newcastle is indeed undergoinggentrification. It is argued that this ispredominantly a social and symbolicrevaluation, although it is underlain byeconomic reinvestment. The occurrence ofgentrification within Newcastle East and Cook’sHill undermines Newcastle’s ‘problem city’image. Indeed, as gentrification is oftenconstructed as a process reclaiming the valueand potential of many inner city areas, it is notunreasonable to assume that recognition ofgentrification within Newcastle may assist inreclaiming wider public opinion of the city ingeneral and may facilitate its transition awayfrom its traditional industrial base.

ACKNOWLEDGEMENTSI should like to thank Professor Hilary Winchester for herpatient and invaluable assistance in the writing of this paper.Thanks are also extended to the key informants and to theEstate Agents Cooperative for granting access to theirproperty transaction database.

NOTES1. BHP’s recent announcement of the closure of its steel

making operation in Newcastle, with a projected loss ofsome 2000 jobs, has caused a resurgence in the‘problem city’ narrative. Banner headlines have referredto the announced closure as a ‘Steel ‘‘betrayal’’ ’(Kirkwood, 1997a). Most interesting has been thecreation of a metaphoric link with the 1989 earthquake:‘. . . steel making demise another earthquake’(Kirkwood, 1997b). Such metaphoric links are notunexpected. Metcalfe and Bern (1994) and Dunnet al.(1995) have shown that in the past Newcastle’sproblems have been blamed upon external andimplicitly uncontrollable influences.

2. The EAC property transaction database contains alltransactions in chronological order of date of sale.Specific information contained within the databaseincludes suburb, post-code, street name and number,structural description, property type, age of dwelling,date placed on market, list price, date of exchange,exchange price and period on market.

3. While the available literature does not draw adistinction between terrace and apartment dwellers,popular opinion certainly does. Recent interviewsundertaken in both inner Newcastle and Sydney haverevealed a hierarchy based upon residential choicewithin the gentrifying class. Residents of apartment

developments are considered to be vacuous individuals,interested in simply consuming a pre-packaged lifestyle.As one respondent stated ‘. . . you can see them, theythink the world is their oyster. They are brainwashed bythe advertising bullshit . . . That style of developmentmakes the city soul-less, it has no community . . .because these people do not belong to Newcastle East,they belong to that apartment building.’ Furtherinvestigation into the distinctions between consumptionand production gentrifiers is currently being undertaken.Beyond residential choice, it is becoming apparent thatthese distinctions also contain gendered and racialovertones.

4. Of those people sampled by questionnaire, 16% werebeneath the age of 15 years, while 11% were aboveretirement age. Sampling also revealed that 30% ofrespondents considered that inner Newcastle provided agood atmospherewithin which to raise children.

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Rofe, M.W. (2000) Gentrification within Australia’s ‘problem city’: Inner Newcastle as a zone...

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