History of US public housing: Part 3, the slum-clearance era
So far in our multi-part history of public housing using MIT Professor Lawrence Vale’s comprehensive study, From the Puritans to the Projects, we’ve covered the pre-urban era (the Puritans and their almshouses, poorhouses, and Houses of Industry), and the Progressive period that ended the nineteenth century and opened the twentieth.
[For more on my views of public housing, see Public housing: the Ghost of Christmas Yet to Come (June, 2006), Public housing's Gordian's knot (December, 2006), and The essential housing authority (September, 2007).]
This was a time of American sunshine, yet both here and in
Ignore them and hope they’ll go away. Sometimes you pay them to go away. It doesn’t work.
Locate them out of sight and out of mind. Hope they get better. They usually don’t.
But as the economy grows and the city grows with it, the swarms overwhelm some neighborhoods – often the oldest, because they are the closest-in. These buildings are old, overcrowded, unsanitary, and decrepit – because those conditions are economically rational in a slum:
Tenement yard, 1926
The private sector has a straightforward and economically rational solution to the problem of unsustainable renters, consisting of the following steps:
1. Compress rentable space each unsustainable renter occupies. This has the effect of increasing the revenue per unit.
2. Reduce operating expenses to a bare minimum. This results in an accelerating cycle:
Inadequate operating expenses. The result is deferred maintenance and a decline in property physical condition.
Declining property condition. With lower curb appeal, the property has difficulty attracting good tenants, so it takes marginal tenants (often those with no formal income or another reason to evade scrutiny).
Rear-yard tenement (almost certainly illegal),
Rear-yard shacks are a staple of slums in the global south today.
Accepting marginal tenants leads to higher collection/ bad debt losses, higher maintenance, secondary problems (e.g. vandalism), and the loss of market tenants.
Loss of market tenants means lack of rentability except by those who have no other economic choice.
3. Adverse-select location to find the ones with the lowest acquisitions/ operating costs and the tenancy residing in them has the fewest alternatives and the least economic imperative for (as an example) transportation and public services.
Slums were a-brewing in America, and then came the Great Depression, which swept in
April, 2008: Double shooting at Mary Ellen McCormack Homes
As the 1930s opened, slum clearance appeared a panacea – it would improve water and sanitation infrastructure …
… replace overcrowded urban hovels with clean, modern apartments, improving neighborhoods and bringing precious construction jobs. It would also improve the city’s budget economics:
In its 1933-34 report, the State Board justified the need for slum clearance and new housing by analyzing “the cost to the community of maintaining a substandard area,” using the specific example of Census Tract M-3 in South Boston.
I’ve often thought this exercise to be worth doing, even if I tend not to like the results. Cities are economic organisms, and municipal government is a sub-organism within the city, and it’s legitimate analysis for a city to deduce which property uses make it money, which cost it money. I suspect that office buildings make money for cities because they generate both real estate taxes and payroll taxes – plus jobs, which mayors like.
Their method of analysis is instructive. The board itemized land and building values, then compared the income from real estate and water taxes to the district’s share of direct public expenditures needed to support its schools, library, hospital, parks, infrastructure, police and fire stations, and relief roll. It added to these the less significant pro-rated cost of thirty-five other city departments whose service to the district was more indirect.
Residential property costs money – and I fear family apartments cost a lot of money – because you have to handle all of people’s byproducts, including children who need to be educated in those schools you build. Even so, city economics has always seemed to me the best argument for formalizing informal communities. At some point, the volume of humanity and their earning potential is such that the revenue you gain from building the infrastructure to legitimize (and hence to tax) them outweighs the costs you incur by providing them with services (versus the cost you incur by trying to exclude them from your city).
The bottom line was this: Census Tract M-3 brought the city $27,000 in income, while absorbing $275,000 in city expenses, so this slum cost the city $248,000 a year.
The very poor could pay only 10% of the costs of their municipal infrastructure; as we’ve seen elsewhere, municipal infrastructure’s hard costs are usually non-recoverable, and the Basic Model of infrastructure finance requires the very poor to pay only the minimal operating costs. I’m intrigued that this ratio has persisted for nearly a hundred years.
Slum in downtown
Even though they are provided few services, slums are expensive because of their externalities, as we saw with Guarapiranga. Formalizing could be cost-effective – at least, that’s what the city concluded.
Retrofitted municipal drainage: Guarapiranga,
The board’s conclusion, following a logic that would have been utterly incomprehensible to the residents of the neighborhood, was that “Substandard areas of this character are indeed a luxury for the City to maintain.” The entirety of tract M-3 was leveled in 1941 to make way for the eventual construction of the West Broadway public housing development. Page 187.
West Broadway was unusually contentious as it involved the Federal government. Six years earlier, the City of
… an eleven-block area of South Boston adjacent to the abortive site of the [never-built]
What could be more logical than that the government, about the sole economically viable entity, should move into the business of being everyone’s social landlord: building new public housing, locally owned and operated under the municipal government?
As codified in the 1937 National Housing Act, which built on the 1934 National Housing Act creating FHA, public housing was tied to slum clearance. New construction must be accompanied by the –
“elimination by demolition, condemnation, and effective closing, or the compulsory repair and improvement of unsafe or unsanitary dwellings situated in the locality or metropolitan area, substantially equal in number to the number of newly constructed dwellings provided by the project.” Page 184
From the beginning, public housing and slum clearance were a political pitched battle by progressives and big-government advocates against an unlikely alliance of slum incumbents. The residents distrusted their government:
One man shouted: “They call it a slum district. Well, it’s good enough for me and it has been good enough for you. Why didn’t they find out what the people of the district thought before they decided to throw people out of their homes and out of small businesses they have taken years to build up? They kept quiet about it until the last minute because they knew there would be a roar of protest which would balk at the land grab … This move smacks of plain communism.” Page 173.
As did the property owners. As eloquently argued by the attorney for a small owner whose property was to be taken by eminent domain slum clearance:
“No doubt bad housing conditions are an evil, and so is an insufficiency of food and clothing. All result from the ever present curse of poverty. But it does not follow that it is the function of government to attempt to remedy these evils by the expenditure of public money raised from the people by taxation and by the taking of private property. The doctrine is a dangerous one that everyone is entitled to be well fed, well clothed, and well housed, and if one by reason of misfortune, incompetence or sloth cannot achieve that end by his own efforts the public will pay the bill. No permanent improvement of mankind can result from the attempt by government to remove the necessity of the struggle for existence.” Page 216.
Adding to the objections was the belief that giving people cheap income-eligibility-restricted housing would discourage their work ethic:
“What will happen … when a privately employed worker, living in a subsidized housing project, is offered a raise in pay or a better job? Will he joyfully accept the opportunity or reluctantly refuse it rather than move back to the ‘cold-water flat’? How would the boy or girl, fresh from school, react to a chance for a job if by accepting it, the family would have to leave their home? In other words, will public subsidized housing tend to ‘fix’ low wages, dull the worker’s initiative and ambition and encourage subterfuge? Such eventualities are more than imaginary, for tenants at
Despite the neighbors’ protestations, the properties went ahead, and between 1935 and 1943 both
Public housing production, City of
Page 167 of From the Puritans to the Projects – image supplied by the author
To provide positive incentives and eliminate perverse ones, the BHA established eligibility requirements:
· Income. May not exceed five times the rent (or six times the rent for a family with three or more minor dependents). [Inference: Rent equals 17% to 20% of income.]
· Previous housing. The family must have been living under substandard conditions detrimental to health, safety, and morals for six months immediately before filing of the application.
· Residency. The family must have resided in the City of
· Citizenship. The head of the family must be a
As always happens when slums are cleared and replaced with better housing, the new apartments cost more to rent than the informal housing the residents left behind:
Boston Housing Authority (BHA) analysis shows that average pre-clearance rent was $15.88 per month, with post-clearance public housing $23 a month for a family of the same average size and income. Page 200.
Moving in to public housing, East River Townhouses,
As a result, the tenancy changed. The new public housing residents were better off than the average pre-clearance slum inhabitants:
In June, 1939, 152 families who had been ordered to vacate the
One exasperated local commentator, observing the impasse, concluded that “these so-called ‘slum clearances’ as far as many people can see are … ‘a lot of hokum.’ The people the clearances are supposed to benefit get left out in the cold, as the rent is too high for them to meet.” Page 209.
Family moving in to Sojourner Truth public housing,
Despite all these challenges, the New Deal swept all before it. During the late 1930′s and into 1940 and 1941, city slums were demolished; waves of public housing were undertaken in all of America’s large cities, among them Boston, New York, Washington, Atlanta, St. Louis, Chicago, New Orleans, Los Angeles, San Francisco.
Remaking the map: public housing sites in East Harlem, New York
President Roosevelt signing the declaration of war against
[Continued in Part 4.]