Government and private control over impoverished minorities

By Ryan C. Napoli (for Safe Democracy)

Ryan C. Napoli argues that while politicians are now championing urban revitalization projects as the remedy to cure the ills suffered by American cities, in reality the only people to benefit are the rich and the private corporations. In Napoli‘s opinion, the past practice of redlining, whereby Federal and State government policies and practices pushed America‘s minority communities and poor into isolation in impoverished neighborhoods, is very much alive today in urban renewal projects. Today, with government approval, private corporations are again pushing minority communities and the poor out of their neighbors to make room for the rich and their expensive businesses.

Ryan C. Napoli is a public interest lawyer at MFY Legal Services based in New York City. He has represented indigent individuals and groups in a wide range of cases including housing, civil rights, poverty law, family law and immigration. Napoli is an advocate of a vast array of social justice issues including having represented post-9/11 detainees. He has also worked for the Grameen Foundation implementing micro credit in the Americas and drafting legislation on Capitol Hill.

THE TERM URBAN REVITALIZATION is appearing more and more frequently in reference to US cities. Politicians have been championing urban revitalization as the godsend to bring people back to the cities, garner reinvestment in urban areas where cities have been losing money, increase tourism and spending, and make cities safer.

But, as with most things political, the road to hell is too often paved with good intentions. And in this case, it is unclear whether the intentions are good at all. Urban revitalization has serious side effects and tends to destroy the culture and vitality of the communities in its target cities. City officials, urban planners and developers claim to be re-vitalizing neighborhoods and communities, but at what cost? Urban revitalizaiton projects often end in gentrification, forcing the poor out of their neighborhoods to make way for upper-class residents with greater expendable income. Will city officials fulfill their promise to build more affordable housing for these low-income communities, and bring economic opportunities to the poor and working class, or will this urban revitalization serve as a guise for a new forced exodus of the city’s disadvantaged?

Ironically, the first urban exoduses took place between the late 1940s and the early 1970s when the wealthy classes fled the urban areas en masse in favor of the tranquil suburbs, where minority populations were small. As the rich began to leave, the poor were denied mobility and relegated to isolated neighborhoods, which federal and city governments, as well as banks, ignored following a practice known as redlining. Redlining involves a refusal to invest in as well as an increase in the costs of services for residents of certain, often racially designated, neighborhoods.

Redlining, together with urban renewal, radically altered the face of the urban landscape by the end of the 20th century. Urban renewal was envisioned as a way to redevelop residential slums and blighted commercial areas. Nevertheless renewal often resulted in the creation of suburban sprawl, which more accurately should have been called urban destruction. Urban renewal isolated or divided neighborhoods and resulted in vast urban areas being demolished and replaced by freeways, expressways and vacant lots. Urban renewal and redlining have been the main causes of the economic devastation faced by many of the major industrial cities in the United States since the 1940s.

With the advent of redlining in the National Housing Act of 1934, the then Federal Housing Administration created a de facto system of apartheid in US cities. The poor and minorities lived in isolated urban areas while wealthier Americans moved to the suburbs. Ironically, decades after having moved out of the cities, the wealthy began to want to move back. And as if to appease the rich man’s whim, the government is renewing American apartheid under the guise of urban revitalization and eminent domain. But, this time, the rich get the city, and the poor –instead of getting the wealthy suburbs– are pushed to new Sowetos on the city fringes.

Today, government officials and city planners claim to have found a new panacea to urban blight: renovation, selective demolition, commercial development, and tax incentives. The terminology related to urban renewal has not changed, and neither has the practice. In fact, the only major difference between the exodus of a few decades ago and the present is that now the wealthy are moving back to the cities and the low-income communities are being isolated and marginalized to undesirable neighborhoods. That which was considered undesirable a few decades ago has suddenly become prime property, leaving the poor with nowhere to turn.

In efforts to expand urban revitalization the law has also changed. Traditional legal notions, such as eminent domain, are providing less protection for private citizens, while handing over powers to private corporations, which were exclusively reserved for the government. Eminent domain is the power of the state to expropriate private property without the owner’s consent, for public use with just compensation. As seen in the recent U.S. Supreme Court decision, Kelo v. City of New London, the courts will grant great deference to the government’s justifications for expropriating private property for a wide array of quasi-public interests. As such, eminent domain is increasingly being employed in revitalization projects, where seizures are used to enable new commercial (private) development.

In other words, the private sector has obtained access to exclusive government powers. Permitting such expansion favors large redevelopers at the expense of individual taxpayers and property owners, and encourages questionable private projects that often fail to attain the promised public benefits.

The New York Stock Exchange (NYSE), a private corporation, was looking for a location in lower Manhattan on which to build a new headquarters for its operations: obviously a large-scale proposition. The plans involved building a 900-foot skyscraper in a location that was (inconveniently) already occupied. In 2001, the New York City Economic Development Corp. (NYCED) began the process of condemning the residential buildings on the proposed site. Despite appeals by the tenants of the residential apartments, a state appeals court agreed with the NYCED’s findings, citing the public benefit of increased tax-revenue and economic development.

Due to an inability to find a developer willing to build a skyscraper in lower Manhattan, the NYSE eventually gave up its claim on the property, putting the City and its redevelopment agency at a loss of about 109 million dollars: all taxpayer money. This failed NYSE deal highlights the risky nature of using eminent domain for a private end.