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The U.K. capital is undergoing its own great inversion.

When it comes to wealth, London is currently being turned inside out.

That’s the condensed verdict of a report released last week by think tank Centre for London. Looking at the U.K. capital’s demographics since the millennium, the study found that key trends that had dominated the city for at least a century have recently been reversed—often dramatically so.

Once a visitor to London looking for evidence of poverty would have headed straight for the high-density working-class neighborhoods grouped around the downtown area. In 2015, a visitor returning to these areas would find a more-affluent set of residents living in some of the city’s most highly priced homes. If you want to find London’s fastest-growing concentrations of poverty today, the report notes, you need to head for the city’s leafy, low-density suburbs.

This trend—the return of the wealthy to city centers—is of course mirrored by many cities across the West. What makes London’s case particularly striking is the remarkable swiftness and intensity of the change. In some areas, wealth levels have risen so rapidly that long-term residents must be blinking in disbelief.

A great London inversion

Take East London’s Hackney—a gentrifying, formerly working-class borough that is London’s closest equivalent to Brooklyn. In 2010, it was the sixth poorest borough in all of the U.K. Now, just five years later, the Centre for London’s study reports that it’s the 50th poorest. In the neighboring borough of Newham, site of London’s 2012 Olympic Park, the change has been even more dramatic. In 2010 it was the U.K.’s 14th poorest community. In 2015, its place in the poor league has plummeted to 104th.

The reasons for this shift are easy to find. Higher-skilled professionals have been flocking to these areas, pushing up average incomes as well as rents, thus pushing longer-term residents further out. In Hackney, the borough with the largest swing, the share of adults with skilled jobs rose 15 percentage points between 2004 and 2014, from 49 to 64 percent.

This increasing wealth sounds like good news, but it comes with some counterbalances. Average income levels in East London boroughs may be rising, but they still have the highest U.K. proportions of children living in poverty. This suggests that wealthier people moving in have done nothing to improve conditions for the poorest residents of these areas (not all of these will have been displaced, because they have tenancies in public housing).

Meanwhile, poorer residents who rely on the private housing market aren’t necessarily getting richer. They’re simply moving to the ’burbs.

In Northwestern Hillingdon, a borough that contains Heathrow Airport and large areas of single-family homes, the share of poor residents has risen from 21 to 29 percent. It’s far from alone in its drop in wealth. In 2001, only one of London’s outer boroughs was listed among the city’s 10 poorest (out of a total of 33). By 2011, the number of outer boroughs among the 10 poorest had risen to five. While those are the most recent figures cited in the report, it’s possible that more outer boroughs have joined this rank in the past four years.

What the changes mean for the future

London will be substantially reshaped by this exodus of high earners to the center and low earners to the periphery. Already, it is tearing up old preconceptions about how the city is organized.

Once it was a given that London’s inner city was poor and ethnically diverse, while the suburbs were wealthy and populated almost exclusively by white Britons. Bar a few islands of extreme wealth downtown, the inner city leaned left, while the suburbs leaned right. So clear was this division that the fat ring of low-density districts sprawling between the city core and London’s border had its own name: the doughnut.

When it came to mayoral campaigns, candidates would (unofficially) take an either/or approach—aiming to woo either the inner city or the doughnut but aware that they couldn’t please both. One common complaint about the early, more car-friendly days of Mayor Boris Johnson’s term, for example, was that he had been granted control of city services by conservative suburbanites who rarely used them.

Some of this division lingers, but probably not for much longer. Outer London still has a white majority, but as minorities are squeezed out of the inner city by high rents, the suburbs are becoming more diverse. They’re increasingly populated by renters rather than owner-occupiers; the former’s share of the outer borough population rose from an extremely low 12 percent to a still modest 21 percent between 2001 and 2011. Already, this shift is having a political effect. In the 2015 election, the Labour Party gained four new seats in outer London, against a backdrop of substantial failures elsewhere. Mayors will no longer have the option of playing to one sector rather than the other—surely a good thing.

As London is turned inside out, it will have to face a host of new challenges. Outer borough services were designed with smaller, wealthier populations in mind. In the coming decades, hospitals and schools will have to expand to avoid severe strain. London will also have to deal with poorer residents living farther from centers of economic opportunity. As office space migrates to the city core, London’s suburbs are increasingly becoming dormitory towns with few jobs outside the retail sector. The move to the suburbs could thus be a move towards greater social exclusion.

At the same time, if the city becomes more economically and ethnically integrated, the change could also have some positive effects. So often, urban debates are painted as simple stand-offs between inner cities and suburbs. If trends in London are truly replicated across the West, that sense of blunt division could soon become obsolete.

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