History of US public housing: Part 3, the slum-clearance era

October 2, 2008 | Cities, Essential posts, History, Markets, Public housing, Tenure, US News

[Continued from the previous Part 2 and Part 1.]

 

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).]

 

Arizona_progressives

Arizona progressives, circa 1900

 

This was a time of American sunshine, yet both here and in England, prosperity produced what seemed a paradoxical blot: the slums.  Slums, as we’ve seen, arise from the rapid urbanization that accompanies economic growth and technological advance (for city infrastructure).  In general, communities react to slums in predictable stages. 

 

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

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.

 

Slum_tenement_1880

Tenement, 1880

 

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).

 

Lwa_rear_tenement_1959

Rear-yard tenement (almost certainly illegal), New York City, 1959

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.

 

Slum_thailand

Thailand, 2005

  

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.

 

Slum_camden_1938

Camden, New Jersey, 1938

 

Slums were a-brewing in America, and then came the Great Depression, which swept in Franklin Roosevelt and the New Deal’s vast expansion of the Federal government’s role in just about everything, including affordable housing. 

 

Los_angeles_1935_2

Homes in Los Angeles, 1935

 

Led by Massachusetts and New York (two states that throughout American history have been in the vanguard of affordable housing developments), governments embarked on dramatic slum-clearance efforts.  The nation’s first public housing property was in BostonOld Harbor Village, later renamed Mary Ellen McCormack Homes, and still in use.

 

Public_housing_double_shooting_mary_ellen_mccormack

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 …

 

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Philadelphia, 1930’s: St. Albans Street, street Arabs with open drain

 

… 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. 

 

South_boston_high_school

 

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.

 

Los_angeles_great_depression_1935

Slum in downtown Los Angeles, 1930s

 

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.

 

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Retrofitted municipal drainage: Guarapiranga, Sao Paulo, Brazil

 

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 Boston had moved on its own, picking:

 

… an eleven-block area of South Boston adjacent to the abortive site of the [never-built] Columbia Gardens project.  At present, the [Federal Public Works Administration] administrator noted, the neighborhood “is occupied principally by old three-story, frame, two-family houses.”  The site had been strongly recommended to the PWA by a disparate variety of groups, including a citizens coordinating committee chaired by Dean William Emerson of MIT, the State Housing Board, the housing committee of the Boston City Planning Board, the Women’s Industrial Union, the Boston Council of Social Agencies, the Boston Housing Association, and the Little House (a welfare organization).  Page 173.

 

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? 

 

Roosevelt‘s New Deal included a medicine-cabinet full of nostrums for the body politic and economic, and what more logical place to start than with housing?

 

New_deal_remedies

 

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.

 

Lwa_movein_riis_houses_1948

Kitchen, Brooklyn tenement, 1948

 

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 Old Harbor Village are reported to have faced such decisions, and to be still living in the project.”  Page 180.

 

Despite the neighbors’ protestations, the properties went ahead, and between 1935 and 1943 both Boston (which led) and the Federal government (right behind it) constructed larger number of new public housing apartments. 

 

Puritans_page_167

Public housing production, City of Boston (top) and nationally (bottom)

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 Boston for at least one year immediately before filing of the application.

·         Citizenship.  The head of the family must be a U. S. citizen.  Page 196.

 

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.

 

Lwa_movein_east_river_1941

Moving in to public housing, East River Townhouses, New York, 1941

 

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 Lenox Street site went on record as being unable to find alternative affordable accommodation.  Having paid monthly rents of twelve to sixteen dollars in the buildings about to be razed, they found that it would cost them 25% to 35% more to live elsewhere.  Moreover, many claimed, these alternatives were frequently less desirable than the accommodations that were about to be torn down. 

 

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.

 

Public_housing_family_1942_detroit_sojourner_truth

Family moving in to Sojourner Truth public housing, Detroit, 1942

 

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.

 

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Remaking the map: public housing sites in East Harlem, New York

 

Then came Pearl Harbor, and public housing and housing policy stopped dead, not to resume until after World War II.

 

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President Roosevelt signing the declaration of war against Japan

 

 

[Continued in Part 4.]


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