Does the failure of urban renewal necessarily mean that the free market could solve the problems of poor neighborhoods?

Reason looks at what happened to one New York City neighborhood in the name of urban renewal:

In 1949, President Harry Truman signed the Housing Act, which gave federal, state, and local governments unprecedented power to shape residential life. One of the Housing Act’s main initiatives – “urban renewal” –  destroyed about 2,000 communities in the 1950s and ’60s and forced more than 300,000 families from their homes. Overall, about half of urban renewal’s victims were black, a reality that led to James Baldwin’s famous quip that “urban renewal means Negro removal.”

New York City’s Manhattantown (1951) was one of the first projects authorized under urban renewal and it set the model not only for hundreds of urban renewal projects but for the next 60 years of eminent domain abuse at places such as Poletown, New London, and Atlantic Yards. The Manhattantown project destroyed six blocks on New York City’s Upper West Side, including an African-American community that dated to the turn of the century. The city sold the land for a token sum to a group of well-connected Democratic pols to build a middle-class housing development. Then came the often repeated bulldoze-and-abandon phenomenon: With little financial skin in the game, the developers let the demolished land sit vacant for years.

The community destroyed at Manhattantown was a model for the tight-knit, interconnected neighborhoods later celebrated by Jane Jacobs and other critics of top-down redevelopment. In the early 20th century, Manhattantown was briefly the center of New York’s black music scene. A startling roster of musicians, writers, and artists resided there: the composer Will Marion Cook, vaudeville star Bert Williams, opera singer Abbie Mitchell, James Weldon Johnson and his brother Rosemond, muralist Charles Alston, writer and historian Arturo Schomburg, Billie Holiday (whose mother also owned a restaurant on 99th Street), Butterfly McQueen of “Gone with the Wind” fame, and the actor Robert Earl Jones.

Designating West 99th and 98th Streets a “slum” was bitterly ironic. The community was founded when the great black real estate entrepreneur Philip Payton Jr. broke the color line on 99th Street in 1905. Payton, also credited with first bringing African Americans to Harlem, wanted to make it possible for a black man to rent an apartment, in his words, “wherever his means will permit him to live.”

While Reason is a conservative website, there are plenty of others on the other side of the political aisle that also agree that urban renewal had a negative impact on many neighborhoods. Ultimately, this policy was used to clear “slums” and to use that land for more profitable development, typically for wealthier residents and businesses. Additionally, what actually counted as “blight” or as a “slum” was contentious as it tended to frown upon cheaper, ethnic or non-white neighborhoods. Blacks weren’t the only ones displaced; Herbert Gan’s classic work Urban Villagers looked at the fate of an Italian-American neighborhood which was ripped apart by urban renewal.

Since this comes from Reason, I assume that this is a critique of liberal policy and of eminent domain: you can’t trust the government with these kinds of powers as they will use it to trample people they don’t like. But can we swing all the way in the opposite direction and suggest that the free market will eventually get rid of the issues that poorer neighborhoods face and that lead them to be ripe for urban renewal?

I would argue no. Left to its own devices, the free market can also result in harmful policies that hurt less than wealthy neighborhoods. Here are a few examples:

1. Redlining. This was based on the practice of marking urban neighborhoods in terms of the security of their real estate by the Home Owners’ Loan Corporation which arose out of the New Deal. But this practice really took off when private lenders and institutions adopted the government agency’s markings and then only made loans to the better neighborhoods, effectively shutting out poor neighborhoods from mortgages.

2. Exclusionary zoning. After the Fair Housing Act of 1968 ruled out discrimination in the sale or rental of housing, exclusionary zoning became a hot topic in the 1970s. A number of court cases looked at how the zoning guidelines of communities and counties effectively kept poor people out of suburban locations. By only allowing higher priced housing or certain kinds of housing (like single-family homes on a minimum of 2 acres), these zoning guidelines were very effective in maintaining the exclusivity of certain areas.

3. Still existing discrimination in obtaining mortgages and other loans. There have been plenty of studies that show when equally matched whites and blacks apply for a mortgage or a car loan or another loan, blacks are rejected at higher rates. Similar research has shown this also applies to jobs. Read an overview of this research in a 2008 Annual Review of Sociology article.

4. The ongoing presence of residential segregation in the United States. Many of our major cities, particularly in the Northeast and Midwest, are still very segregated. View maps of some of these cities here.

5. Gentrification. While the influx of residents may “improve” a neighborhood, it often has the effect of pushing the poorer residents into other poor neighborhoods because of increased housing prices and property taxes.

So urban renewal was not the answer. But it is unlikely that a completely unfettered free market is as well. So perhaps the real question to address is how to craft effective public policy that provides aid to neighborhoods and their residents so that these neighborhoods truly improve, add jobs, and experience revitalization. The key here is “effective,” policy that does not become cost prohibitive, works with local residents and organizations rather than just applies a top-down approach, and achieves attainable and worthy objectives while minimizing unintended consequences. This is likely a difficult task but swinging the pendulum all the way to the free market side isn’t the solution.

MLK in Chicago

While many of the tributes to Martin Luther King, Jr. talk about the important marches and speeches in the early 1960s regarding civil rights (and the subsequent legislation), the last three years of King’s life are less well-known. Having grown up in the Chicago area, I was not aware that King spent a significant amount of time in Chicago in 1966 until I was doing some research in recent years. The Encyclopedia of Chicago has a brief summary:

But in the summer of 1965, the nature of King’s connection to Chicago changed. Responding to requests from local civil rights forces, King and the Southern Christian Leadership Conference (SCLC) joined the fight against school superintendent Benjamin Willis and Chicago’s segregated public schools. By the fall, SCLC had allied with the Coordinating Council of Community Organizations to launch a campaign to end slums in the city, which would become known as the Chicago Freedom Movement.

King relied on his lieutenant James Bevel to energize the first phases of the campaign, but in January 1966 he captured national headlines when he moved his family into a dingy apartment in the West Side ghetto. It was not until June that King and his advisors, under pressure to produce results, settled on a focus for the Chicago movement. King himself participated in two dramatic marches into all-white neighborhoods during a two-month open-housing campaign during the summer of 1966. These fair-housing protests brought real estate, political, business, and religious leaders to the conference table for “summit” negotiations.

In late August, King and Mayor Richard J. Daley announced that an agreement had been reached: the marches would stop, while city leaders promised to promote fair housing. King hoped that the “summit” accord would be an important step toward making Chicago an open city, but black militants denounced the settlement and the Daley administration never fulfilled its promises.

Several things are notable about this effort:

1. This was a large-scale movement in the North. Most depictions of the Civil Rights Movement imply that all the action or the problems that needed to be solved were in the South. This was not the case then or now. Indeed, measures of housing segregation show that the most segregated cities in terms of race are still in the North.

2. Even with the passing of Civil Rights legislation, this issue of housing discrimination and segregation is one that has plagued America. While the housing discrimination of today is less overt than that of the past (exclusionary zoning, differential treatment, and high prices today vs. redlining, blockbusting, and restrictive covenants in the past), King’s efforts are notable. Of his efforts in Chicago, King said something like “if we can solve the issue of housing in Chicago, we can solve it anywhere.” Chicago was notorious then for its segregation and this is still the case today.

3. Perhaps we don’t hear about these issues from King’s later years, such as housing or his thoughts about Vietnam or his efforts on behalf of labor, because they don’t seem to have clear solutions. Civil rights is an issue that seemed to have been solved with the Civil Rights Acts (though this isn’t quite the case). But housing is a long-standing concern in many cities and metropolitan areas. Viewpoints on Vietnam are still mixed and get brought up again in discussions of current wars.

4. This part of Chicago’s history is not one that is widely talked about. King and his followers led numerous marches in 1966 that were met with much resistance, particularly when marching in white neighborhoods. Chicago and the region has a longer history of negative incidents: one, in particular, in Cicero in the 1950s is often cited as a black family who moved into an apartment was met by an angry mob (including many housewives) who firebombed the apartment building. As the Encyclopedia entry suggested, the older Mayor Daley did meet with King but didn’t follow through on his promises. These sorts of moments are often scrubbed or ignored in history as they don’t reflect too favorably on communities. At the same time, we need to know about these to help understand the present reality.