Creative destruction and rent gap exploitation: debating the process of urban renewal in the south-west peri-central area of Santiago de Chile between 1990 and 2005

Abstract

In urban peri-central areas, the increasing disparity between capitalised ground rent (which is reduced by devalued fixed capital) and potential ground rent (produced by the “highest and best” use in a plot) generates a rent gap which can be captured and accumulated through spatial reconfigurations. Nevertheless, in areas where the fixed capital has not been sufficiently devalued, the euphemism “reconfiguration” implies some state intervention in the destruction of that capital, as a way to clear space for large-scale private reinvestment. This process is part of what is known as “creative destruction”, and its most political and social dimensions can be verified in the south-west peri-centre of Santiago.