National political leaders used to talk about fixing up urban America. They mostly don’t now. Even pretending to have a broad vision for what the cities could be, or should be, let alone having a plan to pay for it, is no longer required or expected.
Yet even as the federal government has retreated, many cities, and notably New York, are seeing levels of investment and development in poor and once-blighted areas that were unimaginable not all that long ago.
That raises some quietly insistent questions. Was this chain of events–big government runs away, cities improve–a matter of cause and effect, or mere coincidence?
Would the blossoming of Harlem in the 1990s as a retail destination, the flow of stock market capital into shopping centers in Newark, N.J., or the renaissance of Times Square be occurring, or happening in the same way, if the heavy tread of the Department of Housing and Urban Development bureaucracy still walked the Earth? Is the absence of policy, or even debate, about the nation’s cities actually a blessing?
There is little doubt that the spirit of hope and enterprise that urban experts talk about in cities did arrive at the same time that the old trappings of big government were taking the last train out of town.
In a kind of baton handoff of devolution, the federal presence gave way to a mostly local presence, which in turn gave way to the market.
Urban renewal is dead. Long live urban renewal.
But proving a direct link of cause and consequence is another matter. Urban planners, investors and politicians say that to attribute everything about the improving condition of cities to the federal government’s paying less attention to them–essentially the logic of congressional budget hawks–is as incorrect as saying government played no role at all.
It was, after all, the free market, not government, that first told cities to drop dead, beginning in the 1960s as retailers began fleeing for suburban malls. To a generation of urban politicians, including some who lined up in New York last year to oppose the expansion of suburban-style big-box retailing in the city, the market is simply not to be trusted or depended upon when it comes to poor neighborhoods. Banks discriminate, they say. Grocers overcharge.
Similarly, people who think there should be a national policy on the cities are loath to credit the federal government with any aspect of urban improvement. The government simply created a vacuum, those critics say. If it was filled with something positive, then everybody just got lucky, nothing more.
“I don’t want to let them off the hook that easily,” said Thomas O’Brien, research director at the Horizon Institute for Policy Solutions, a non-partisan research organization that favors a greater government role.
O’Brien said that a nation with no society-wide goal of making its urban centers livable has little to be proud of, however much some poor city residents may now be able to buy a Mickey Mouse watch or to get a prescription filled without taking a bus.
The story of the brownfields offers a textbook case of how all those forces combined. Brownfields are former industrial sites, many of them in poor urban areas, that are vacant and polluted, but not polluted enough to qualify for clean-up money from Washington.
Beginning in 1994, the Federal Environmental Protection Agency quietly relaxed its formulas for the brownfields. A retail use, for example, would require a less rigorous, and less expensive, clean-up than a residential use. That change created a new industry, which arose to clean up and resell the properties.
At the same time, the cataloguing of brownfield sites became a function of local government, which can respond to the needs of business faster than the federal bureaucracy. And perhaps most crucially, investors who were looking for returns greater than the 12 to 15 percent typical in mainstream real estate saw urban values appreciating as the crime rate declined.
“On a brownfield site, you can make 20 percent to 30 percent, if you do the numbers right,” said Christopher J. Daggett, president of Chadwick Partners, an Edison, N.J., company formed 19 months ago to get into the brownfields business. “When the market is tight, people look for other alternatives.”
Retailers rediscovered cities for the same reason: higher returns than the suburbs, with too many stores, could offer. Companies like Disney went to Harlem not to do economic development, but to make money.
Real estate investment trusts have also made a contribution–though indirectly–by buying up so much property outside the cities. That has nudged traditional lenders like banks toward urban markets because of a shrinking universe of properties that are available.
“There’s a flood of cash chasing a limited number of deals,” said Anne Habiby, research director for The Initiative for a Competitive Inner City, a Boston-based group founded in 1994 by Harvard Business School professor Michael E. Porter.
Indeed, there is some evidence that government has forgotten what little bit of urban policy it still has. A presidential executive order, issued in the ’70s and still in effect, says federal agencies should situate new offices in urban areas whenever possible, to help boost economic activity.
But development experts say the order is ignored with impunity.
The Federal Aviation Administration, for example, with more than 800 employees at Kennedy International Airport, has looked for a new home for years. New York officials said downtown Jamaica, Queens, best fit the presidential order, but this year the FAA instead designed a site selection plan that specifically ruled out Jamaica. Congress promptly approved it.
