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While gentrification in some contexts has been analysed as a profit-driven process best explained by the rent gap, state governance, e.g. through social mixing, has elsewhere been seen as the main driver of this urban process. With the concept of rent gap governance, the aim of this article is to show that profit and governance can be mutually constitutive parts of gentrification in the neoliberal city. Even when gentrification is a political premise, the rent gap can remain important, but its formation and closure might be unconventional. Empirically, the article centres on Denmark’s 2018 ‘Ghetto Law’, a social-mix policy aiming to govern a racialized surplus population by reducing non-profit housing in stigmatized areas through privatization of housing and land and new-build. Building on recent elaborations of rent gap theory, I suggest three mechanisms for rent gap governance in the Danish case: increased potential rent, depressed ground rent, and subsidized and envisioned rent gaps. I ground this model with a case study of the sale of the non-profit housing complex Schackenborgvænge. I analyse rarely-available qualitative and quantitative data and consider the immediate social consequences of the sale. The result is a murky picture of localized rent gap governance.

Rent gap governance State-led gentrification in the Danish ‘ghetto’