By: David A. Smith

Yesterday we encountered sad New London, Connecticut, whose expansionist dream has died with Pfizer’s announcement it is closing its plant and moving the jobs to nearby Groton.  Some, like The Washington Examiner, see in this a redemptive tale of brave and plucky small property owners standing athwart the powerful’s bulldozers.  Others, like the New York Times (in Times New Roman indigo), cannot make up their minds.

The New York Times, long a fan of eminent domain among other big-government tools (after all, the paper had recently scooped up its Times Square property through eminent domain) –

Touche!

A touch, a touch!  I do confess it.

– applauded the ruling as “a setback to the ‘property rights’ movement,” (note the scare quotes)

True enough point.

– and explained: “New London’s development plan may hurt a few small property owners, who will, in any case, be fully compensated.”

We cannot lose sight of this; eminent domain pays fair market value, and that appraisal/ condemnation process is stacked in favor of the property owner.  The issue’s not fair value, it’s displacement – an issue that resonates powerfully, by the way, in the slums of the global south.

“But many more residents are likely to benefit if the city can shore up its tax base and attract badly needed jobs.”

That too is true.  It’s why the Supreme Court deferred to NLDC’s judgment.

In that deferral lies the root of the Institute For Justice’s complaint.  (For much more on AHI’s perspectives, see the posts listed in the inset box.)

ED4ED is an essential tool.  It is also a powerful tool.  Being powerful, it is subject to exploitation and abuse.  Kelo shows a modern audience what Poletown showed twenty-five years ago – political power asymmetries make it too easy to dispossess the small semi-formal neighborhoods in exchange for an ethereal and often unrealized shining city on the hill. 

Cleared away were 16 churches, 144 businesses, 1,500 homes, and 4,200 people … and it

If local bodies can make these decisions and confiscate people’s property, even ‘just compensation’ may not be enough.  Uprooting the neighborhood destroys the city’s cryptobiotica, its social fabric, and provides an easy means to shove ‘those’ people to the sidelines. 

”We all need to sacrifice,” Ms. Gaudiani said, adding, ”If this city can become a lively, diverse hub of activity that improves life for people of color, for poor people, for middle income, for working poor and for upper-income people, then it is going to be a great American city.”

If we all need to sacrifice, why is it that only some are uprooted?  Who decides who is uprooted and who is not? 

A woman who didn’t want to be shoved: Susette Kelo

Opponents of ED4ED believe – and the evidence supports them – that when those in power are weighing benefits and costs, they undervalue costs on ‘those people’ and overvalue gauzy promises:

Conservative justices, including Clarence Thomas, dissented. Justice Thomas called New London’s plan “a costly urban-renewal project whose stated purpose is a vague promise of new jobs and increased tax revenue, but which is also suspiciously agreeable to the Pfizer Corporation.”

Since the harm is visible and irreversible, shouldn’t the burden of proof be high, higher still when confronted with a private beneficiary that finds the plan ’suspiciously agreeable’?

The decision was widely criticized, and spurred lawmakers across the country to adopt statutes to prevent similar uses of eminent domain.

Representative of many people’s reaction

Make no mistake; New London’s civic leaders were convinced that unless they did something dramatic, the town could continue to leak jobs. 

The city had created the New London Development Corporation to buy up the ninety-acre neighborhood and find a developer to replace it with an “urban village” that would draw shoppers and tourists to the area.

In December, 2000, the New London Development Corporation was within an ace of finishing its parcel assembly, having cleared the site and relocated most of the residents:

Already, the development corporation has bought 65 properties in the 90-acre neighborhood and is in the process of seizing 21 more from owners who have refused to sell, said Chris Riley, a spokesman. Some of those owners, like Ms. Kelo, have already received orders to move out.

New London’s commitment was matched by a substantial and irrevocable capital commitment by Pfizer:

Economic development officials in Connecticut used that plan — and a package of financial incentives — to lure Pfizer to build a headquarters for its research division on 26 acres nearby. With an agreement that it would pay just one-fifth of its property taxes for the first 10 years, Pfizer spent $294 million on a 750,000-square-foot complex that opened in 2001.

Bought with the promise of eminent domain: Pfizer’s research facility

NLDC’s promises had borne fruit: $300 million in new money, and the promise of substantial additional jobs.  They were so close, and then:

Seven property owners in the Fort Trumbull neighborhood, including the Cristofaros, filed a lawsuit today [December 21, 2000 – Ed.] in State Superior Court here seeking to prevent the condemnation of their homes and businesses. Their efforts are being backed by the Institute for Justice, a nonprofit public interest law firm in Washington that specializes in helping property owners fight confiscation under eminent domain.

Supreme Court notwithstanding, ED4ED does not have strong enough checks in place to counterbalance the power advantage held by local government and its private-beneficiary ally.

“It’s a fair fight, isn’t it?”

That also makes it a potential source of abuse:

New London was really another example of political cronyism and politicians using the might of government in order to benefit well-connected big business at the expense of those poorer and less influential.

Consider that the head of the New London Development Corporation was Claire Gaudiani, who was married to David Burnett, the Pfizer executive who wanted “a nice place to operate.”

According to her Web site, “Claire Gaudiani is an idealist and an activist. Her writings call on colleagues, students, and fellow citizens to leave the world a better place.”

Not exactly a conflict of interest, but a cozy propinquity.

Pfizer vice president George Milne also sat on the development corporation’s board.

So he should have!  Pfizer is an enormous employer and there was nothing hidden about Pfizer’s interest in expanding the site. 

In the courtroom, former development consultant Jimmy Hicks called Pfizer the “10,000-pound gorilla” in the planning process, and said “the entire municipal development plan – it was related back to Pfizer.”

Color me unimpressed by that.

The connections may be fishy but I’m still unimpressed

So Pfizer got its loot – free land, special tax breaks, and government-funded cleanup of the neighborhood (including clearing out the unsightly neighbors) – and the area prepared for economic “rejuvenation,” as Justice Stevens put it.

What loot did Pfizer get?

It didn’t work out that way.

Why not?  Because it took so long to assemble the sites and clear away the legal roadblocks that by the time they had done so, the economic case for expansion was gone, and Pfizer did what it had always feared it would have to do – it consolidated away from New London.

Those delays were occasioned by the plaintiffs’ invocation of their right to challenge the eminent domain, a challenge they could not have mounted on their own (money asymmetry leads to power asymmetry).  Instead, the Institute For Justice, primus inter pares, picked Kelo as the ideal test-case to challenge the expansion of ED4ED and litigated it cleverly, ferociously, and protractedly, all the way to the Supreme Court:

They’re my lawyers, and they worked for free

The litigation totaled five years from filing to decision and another two years to complete site clearance, during which time the ice cream cone melted, as Dharavi’s ice cream cone is melting. 

After Pfizer completed its $67 billion acquisition of Wyeth, another drug giant, in October, [Pfizer spokeswoman Liz]. Power said, “We had a lot of real estate that we had to make strategic decisions about.”

Can there be much doubt that, had New London completed its redevelopment, Pfizer’s decision would have been different?  Imagine that waterfront area with retail shops, a hotel, apartments, and high-end condos?  Even if we assume that the condos would be partially unsold, the apartments cutting rents, and the hotel struggling with occupancy, there would have been all that massive co-investment, and the visual and physical landscape of shoreline New London would have been permanently altered for the better.  Now Pfizer’s facility stands as lonely as unoccupied Fort Trumbull:

Another monument to an outdated mission

She said Pfizer would try to sell or lease its buildings in New London and would “continue to pay our taxes to the city as scheduled.”

ED4ED depends on economic circumstance.  It is premised on the judgment – right or wrong – that a neighborhood is in decline, and that unless something dramatic is done to revive the neighborhood, it will sink into profound blight.  Delay the relief for nearly a decade and you stop the revitalization, but you do not stop the decay – and you allow the business cycle to swing against you.  You don’t get the co-investment.

Nobody has built the high-rise hotel or the luxury condos the city’s planners had envisioned. The credit crunch and housing collapse took the air of out of that grand plan.

Correct.  Also the delays added costs.

Pfizer’s sparkling R&D facility that was supposed to anchor the city’s “rejuvenation?”  It’s being shuttered as a cost-saving measure following Pfizer’s merger with Wyeth. Some of the 1,400 jobs there will move across the river to Groton. Some will be terminated.

After the merger, Pfizer called the shots

Had NLDC done it, then the merger might have brought Wyeth jobs to New London.  Cities compete on their business-friendliness, and New London lost – in large part because it was unable to use ED4ED.

The best-laid plans of central planners, it seems, have once again gone awry – unless you look at it from Pfizer’s perspective.

Nonsense.  Pfizer’s no winner either.

The complex is currently assessed at $220 million, said Robert M. Pero, a city councilman who is scheduled to become mayor next month. The company pays tax on 20% of that value and the state pays an additional 40%, Mr. Pero said. That arrangement is scheduled to end in 2011 [When Pfizer will have to pay 100% taxes – Ed.], around the time Pfizer, which is currently the city’s biggest taxpayer, expects to complete its withdrawal.

New London is no winner:

But for New London? No more R&D jobs. No development of Fort Trumbull. Just some rubble where families once lived.

New London now has a wasteland where a neighborhood once stood, and no jobs or business to show for it. It’s another travesty of central planning.

Or just as much a travesty of litigation.  No medicine works if it is withheld from the patient for a decade.  No redevelopment strategy can survive a decade’s delays.

Crossing the legal no-man’s land is expensive

So who won in New London?  As far as I can tell, nobody.  New London lost: the jobs crossed the river to Groton.  Pfizer lost: it spent $294 million on a property that is now vacant and on which it will lost $75 million or more.  Ms. Kelo lost:

“In all honesty, I’m not happy about what happened to me,” Ms. Kelo said. 

Financially, she would have been better off selling when NLDC came calling.

But, she added, “With 43 states changing their laws, in that sense I feel we did some good for people across the country.”

Everybody lost.

The little house that became a symbol: relocated and refurbished

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The soaring plans for New London’s revitalization finally died last week [November 11, 2009 – Ed.], and in failure’s aftermath the opponents of eminent domain for economic development (ED4ED) cannot resist gloating, as illustrated by this story in The Washington Examiner:

Pfizer deserts its monument to corporate welfare

No spin there, surely.

The little house that focused the ruckus:

Susette Kelo’s home in New London

Susette Kelo’s little, pink house in New London, Conn. – like the houses of all her neighbors – is now a pile of rubble, overgrown with weeds.

But the story has quite a different side, as revealed in this contemporaneous New York Times feature (in Times New Roman indigo).  The Kelo house wasn’t demolished:

Ms. Kelo, a nurse who works in New London and Norwich, Conn., said she was still bitter about the loss of her house, which she sold for $1 to Avner Gregory, a preservationist. Mr. Gregory dismantled the house and moved it across town.  [He also upgraded it – Ed.] It now stands as a bright-pink symbol of the divisive dispute that drew so much attention to New London.

I am fairly certain that it was, in fact, moved to the Fort Trumbull site previously.  So the house whose immovability figured at the center of a landmark eminent-domain case proved its movability afterwards.

Perched on the rock, ready to creep away?

But Pfizer, the company that called for the demolition in order to build a new research and development plant, announced Monday it is packing up and leaving town in order to cut costs after its merger with fellow drug-giant Wyeth.

Yes, because the eminent domain failed. 

Pfizer said it would pull 1,400 jobs out of New London within two years and move most of them a few miles away to a campus it owns in [nearby] Groton, Conn., as a cost-cutting measure.

New London loses; Groton wins.

It would leave behind the city’s biggest office complex and an adjacent swath of barren land that was cleared of dozens of homes to make room for a hotel, stores and condominiums that were never built.

The Examiner sees one thing; we see quite another.

What do you see here?

“I’m not surprised that they’re gone,” said Susette Kelo, who moved to Groton from New London after the city took her home near Pfizer’s property. “They didn’t get what they wanted: their development, their big plan.”

Jobs are mobile; cities are static.  Cities represent a massive investment in permanent infrastructure that goes to waste unless that infrastructure produces jobs.  Cities are like plants, needing the pollinating bees of employers to fertilize and propagate their economies.  Flowers compete for bee attention with bright colors and appealing scents; cities compete for employer attention with tax breaks and eminent domain offers.

Looks like a great place to settle, doesn’t it?

In fact, that’s just what New London did, luring Pfizer into settling:

The city had created the New London Development Corporation to buy up the nine-acre neighborhood and find a developer to replace it with an “urban village” that would draw shoppers and tourists to the area.

The power relationship is unbalanced and fluid.  When the economy is good, cities have the power of levy.  When the economy is bad, companies have the power of mobility.

Economic development officials in Connecticut used that plan — and a package of financial incentives — to lure Pfizer to build a headquarters for its research division on 26 acres nearby. With an agreement that it would pay just one-fifth of its property taxes for the first 10 years, Pfizer spent $294 million on a 750,000-square-foot complex that opened in 2001.

In terms of site appeal, Fort Trumbull is a jewel: on the Thames River, views of Long Island Sound, proximity to downtown. 

The redevelopment area is scraped

Pfizer’s research facility is in far low left, almost out of the picture

Yet it lacked accessibility or a reason to stop.  I-95, the interstate from New Haven to Providence and Boston, runs alongside, crossing the Thames on a high bridge and giving passers-by only fleeting glimpses of the waterfront.

If you got off the highway, you’d be home now

Nor is there an economic base.  Not enough jobs, not enough reasons to invest or spend money.

In the late 1990s, New London’s politicians were desperate to fix up their aging and ailing town.

Had the elected and appointed officials done nothing, Ms. Kelo’s little house would still be there, true enough, but the neighborhood around her would still have deteriorated.

The city revved up a private, non-profit entity called the New London Development Corporation, which went to work drawing up a plan of a new New London.

Imagining its future: New London City Hall

Was NLDC a Mission Entrepreneurial Entity?  No, because it was vested with government proxy powers, namely eminent domain for economic development.  NLDC was an instrumentality of New London.

Eminent domain has always existed for public-use developments – highways, bridges, parks.  ED4ED differs in that the redevelopment is intended to be a private use, undertaken by a private party.  Eminent domain is a use of government power to override normal private-property rights, and while it’s potent enough when the property taken is used publicly, when the transfer is private-to-private ED has enormous potential to favor the powerful at the expense of the powerless.

The central planners decided that their white knight would be Pfizer, already operating a plant across the river in Groton, but looking to build a massive research and development facility.

Groton, the Istanbul of this story: with Fort Trumbull the orange bulge on the Thames’s West Bank

Like competing apothecaries across a village green, Groton and New London face each other across the wide Thames River.  Southeastern Connecticut has long been an economic backwater, and unless the state grows its jobs broadly, there will not be enough of an employment base to support both cities.  Groton had the edge, through its US Navy connections with Electric Boat (the submarine builders), and New London needed to do something dramatic if it was to compete.

So the politicians picked a 24-acre lot and sold it Pfizer for $10, adding on special tax breaks.

Sounds like a giveaway, except that sometimes land has negative value – as in when it’s contaminated.

Also, state and local governments promised $26 million to clean up contamination on the lot and a nearby junkyard.

Without which nobody would develop anything – particularly not a pharmaceutical company, for can you imagine the headlines?

But Pfizer executive David Burnett thought New London needed to do some more cleaning. “Pfizer wants a nice place to operate,” the Hartford Courant quoted Burnett in 2001. “We don’t want to be surrounded by tenements.”

I’m sure he could have been better coached, but his point is legitimate.

The old Victorian houses in the Fort Trumbull neighborhood next door did not match Pfizer’s vision – a high-rise hotel or luxury condominiums would be more fitting.

The issue wasn’t their quality, but their density (or lack thereof) and their suitability to making Pfizer’s installation into a research campus.  If you bring people to work in your big research plant, you want a place for them to stay, and to eat out, and to tour your town.  Fort Trumbull was and is isolated; the Pfizer plant would have been an enclave.

The few homes sprinkled in had been excised

So, the development corporation, empowered with eminent domain by the city government, cleared out the Fort Trumbull neighborhood, condemning the homes of anyone who wouldn’t sell at its appraised value. Kelo, and other residents who didn’t want to move, sued to block the condemnation.

Nothing left but weeds and a shuttered warehouse, awaiting redevelopment

Eminent domain protects property owners in two ways: with just compensation for the taken property, and even before that, by requiring the government to demonstrate that this particular taken property is necessary to be taken.  When a highway is involved, necessity is geographically demonstrable.  For economic development, the finding is abstract – that the neighborhood is ‘blighted’ (a term cooked up in the mid-1950s’ cases of Berman and Midkiff), which as many commentators have pointed out, is a very slippery slope.

They lost, but they fought all the way to the U.S. Supreme Court.

There, the four liberal justices joined with moderate Anthony Kennedy to rule in favor of the developers — the takings were perfectly legal.

Deferring to municipal government: Kennedy

As I’ve discussed, it was a questionable decision, although it is the logical culmination of the line of reasoning in Berman and Midkiff and others.  Recognizing politically that ‘blight’ could be a code-word for ‘poor,’ advocacy groups kicked up a substantial political backlash that is still ongoing.

The Court cited the redevelopment plan’s “comprehensive character” and the politicians’ “thorough deliberation.”  

Reading the judicial record, I agree with critics who thought the NLDC’s approach was sketchy and roseate. 

Justice John Paul Stevens wrote, “The city has carefully formulated a development plan that it believes will provide appreciable benefits to the community, including, but not limited to, new jobs and increased tax revenue.”

And I believe the city

This isn’t the place to rehearse all the complexities, issues, and policy risks of eminent domain; I’ve covered them in many other blog posts [See box – Ed.].   

For Kelo, we need only that, as Poletown and similar developments have showed, and as Atlantic Yards in Brooklyn continues to demonstrate, elected officials go all dewy with visions of new jobs.  Along the way, they are dazzled by insubstantial promises, and they tend to steamroll small property holders.  This trampling on property rights they justify as incidental damage, small costs for the greater good.  ED4ED gives elected officials moral cover for using their power to benefit those pollinating bees they so desperately wish to attract.  Here’s a quote from 2000, when the Institute for Justice’s lawsuit was filed:

‘Going back to John Locke, the concept of private property, after due remuneration, being transferred to public benefit is a longstanding tradition in the United States,’ said Claire Gaudiani, the president of the New London Development Corporation, a private nonprofit group authorized by the city to direct the redevelopment plan.

Ms. Gaudiani, who will step down in June after 13 years as president of Connecticut College here, has led the economic redevelopment effort and is largely credited with persuading Pfizer to put its new research headquarters on a formerly polluted site. Her husband, David G. Burnett, is a Pfizer executive, the director of Pfizer Research University.

That was the hope.  What changes a decade wrings.

[Continued tomorrow in Part 2.]

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“Either you bring the water to LA or you bring LA to the water.”

– Noah Cross, Chinatown

“‘Course I’m respectable.  I’m old.”

Someday I’ll post in detail about Chinatown, because it (and its spiritual cousin, True Confessions) is a great film about housing development and municipal infrastructure, whose economic power did much to define Los Angeles – a city that grew where it wanted to grow.

Self-gerrymandered with self-interest in mind: Los Angeles

In a similar way, the typhoon-battered city of Manila is now proposing to grow by relocation, moving those who lived on its squalid and polluted river banks out to a new city a-building.  As reported in Bulatlat:

16 Oct 2009: Relocation Solution Poses a Dilemma to Slum Dwellers Made Homeless by Ondoy

Days after Ondoy struck, the government declared that it would no longer allow these poor Filipinos to return to their shattered homes.

Manila waterway slums before the typhoons

What is the ‘home’ to go back to?  Disaster can create an urban palimpsest, wiping away everything but the land itself.  So, as in Joe Slovo in Cape Town, we have the tension – an urgent need to do something very quickly, and a unique opportunity to do something very profound.

MANILA – In the aftermath of typhoon Ondoy, many were quick to blame the urban poor living along the creeks, waterways and riverbanks of Metro Manila. Their shanties and their garbage block these sewage systems, hence worsening the impact of the typhoon, so goes the familiar criticism.

Nonsense.  While I have not toured the now-destroyed riverbank slums, the pictures I saw at the Asia-Pacific Housing Forum, coupled with the scale of flooding, make this claim just about impossible. 

Days after the disaster, the government declared that it would no longer allow these poor Filipinos to return to their shattered homes.  Vice President Noli de Castro, who also chairs the Housing Urban Development Coordinating Council, confirmed in a news report that the families who were living along waterways and riverbanks would no longer be allowed to rebuild their homes in those areas.

Mr. de Castro’s long been interested in housing and slums

Anti-poor, or another reason?

He said government-acquired lands outside of the metropolis are more than enough to give homes to the displaced victims of Ondoy.

A good idea … if built fast enough.

De Castro offered 1,400 houses that may be utilized as relocation sites for displaced victims of Ondoy.

Sounds better …

Of these, 400 units are located in Towerville Resettlement in San Jose del Monte, Bulacan; 250 units in Southville 4 in Sta. Rosa, Laguna; 500 units in Southville 5 in Biñan, Laguna; and 250 units in Southville 5-A, also in Biñan.

Metro Manila – growing like Los Angeles

That’s the alternative offered – not a return to the insecure, filthy, disease-ridden rabbit warrens you knew, but to cleanly blocked and properly built new house.  There’s a powerful case for it.

“Our cities are so bad I sometimes wonder if we should just build completely new ones from scratch.”

– Quote from a Mexican expert at the AHI symposium

Mexico City, 28-30 October, 2009

Manila waterway slums before the typhoons

Imagine if you could de-densify the slums by expanding the city.  Can you?

He said there are 5,721 lots that may be developed to accommodate the displaced families.

Reblocking – Solly Angel’s arterial grid of dirt roads, plus security of tenure in your own plot of land – is a powerful combination.  Give people s plan and confidence in their piece of it and they will build.

“Technically, there is nothing wrong with the relocation of the families living along the areas that the government deems as danger zones,” Jon Vincent Marin, spokesman of the urban-poor group Kadamay, told Bulatlat.

A group worthy of your support

I bumped into Kadamay at Asia-Pacific.  I liked their thinking and tend to trust their perspectives.  Nor is he an unthinking doomsayer:

Marin emphasized that their organization understands the direct and immediate threat that storm surges could bring to these families.

Yet he’s a further realist:

“But if they will be relocated to areas where there is no social services and job opportunities, then there is something wrong with the relocation,” he pointed out.

Ay, there’s the rub.

Will the government follow through by creating not just a relocation camp but an actual city beyond the city?

“The government thinks that the only solution to the problem is to relocate urban-poor communities outside Metro Manila where they would not survive,” Marin said.

People move to cities in search of a better life.  Relocating them to the far countryside without income opportunities is like pulling up weeds and transplanting them to the desert; they’ll die, and your city will still have weeds.

He said these families would eventually return to the metropolis and live along the riverbanks and waterways because their condition in the relocation areas are worse than what they would be leaving behind in Metro Manila.

One cannot repatriate people into the rural poverty and expect them to stay here.  But you can bring the city to the country.  Paging Noah Cross.

Or should we?

“I’m going to bring LA to the water.”

As a participant at AHI’s recent Mexico City symposium on land irresolution commented, “People can become urbanized without moving.”

Manila waterway slums before the typhoons

Chinatown’s Noah Cross wanted the valley to become Los Angeles simply to boost the value of its land.  He had no thought of affordability except insofar as it could be achieved by building blocks and locks of houses.  “The future, Mister Gitts, the future!” 

Marin said the mere location of the resettlement areas pose problems to the families. “Most of these relocation sites are located in remote areas. They would have no source of income there. Naturally, they would want to go back to the metropolis, where at least they would have something to eat.”

He didn’t foresee that LA would grow so vast that even the valley would be built-up and dense, or that its most enduring feature would be the marvelous grid of streets, not the boxy bungalows he scattered like a human orchard.  He can be excused his lack of foresight regarding the need for social infrastructure, but the Manilans have no such excuse.

“At the right time, and in the right place, a man is capable of just about anything.”

In a recent relief operation, the Citizen’s Disaster Response Center found that most of the houses in the resettlement area in Marilao, Bulacan, had been washed away. “The houses there were made from substandard materials,” deputy executive director Carlos Padolina told Bulatlat. He said the walls were mere layers of hallow blocks and without the thick metal braces inside that would have supported these.

You must fix the houses.  You must fix the income-generation possibilities.

Should the “relocatees” choose to continue working in Metro Manila, they would have to spend so much for their fares to go home to their new homes, the transportation cost eating into the little income they have.

Manila waterway slums before the typhoon: bathing

In such a case, the families would solve their problem by geographically dividing: the earner in the city, his or her family in the country.  That’s family-destabilizing.  So is this:

Marin added that most of the relocation sites do not have access to basic services such as hospitals and schools.

City-building involves building new economies.  If you want people to come, you must build it.  Build a social infrastructure: homes, schools, jobs, shopping, safety.  Expand the city; bring it to the country.

And since the framework of the housing services of the government is profit-oriented, the resettlement units are not given free.

That’s sound policy: People value only what they pay for.

Be it ever some humble, you should pay something for it

Only this week, de Castro said that the resettlement for the victims of Ondoy will be offered at an “affordable” package of two-year moratorium on their payments, with a monthly amortization of roughly P200 at 6% per annum that is payable in 30 years.

That’s an extremely affordable monthly payment. 

But Marin said that “even if it’s just P300 to P500 a month, we have to consider the kind of jobs that they have. They have children to feed and to send to school.”

Yes, affordability is measured relative to income.  It has to be.

“For a genuine housing service for the poor,” Marin said, “a big fund is needed.” But he told Bulatlat that these projects of the government only receive 0.4 to 0.6 percent of the total budget for the expenditure of the government.

Affordable housing is expensive for government.  Money is a gating factor. 

No entry into housing without money

More money is better – but some money is much better than no money, and smart money is best of all.

 “Relocation should not only include houses. It should include social services and livelihood for the people,” Marin said.

In a statement, Kadamay reiterated that the devastation that Ondoy has brought could be the perfect opportunity for the government to change their housing projects for the poor.

Yes, if one can move quickly and wisely.  Not easy.

“We should all remember that the poor communities living along the riverbanks and waterways are only there because of too much poverty, lack of job opportunities, source of livelihood and social services,” he said. “They are not dusts that the government can sweep under the rug.” (Bulatlat.com)

If that happens, it will be as Noah Cross put it:

“‘Course I’m respectable.  I’m old.  Politicians, ugly buildings, and whores all get respectable if they last long enough.”

– Noah Cross, Chinatown

“And I lasted long enough”

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By: David A. Smith

It’s taken three days’ worth of posting to describe the three days’ worth of disaster-recovery reblocking that occurred at Joe Slovo township in Cape Town, and like the reblocking, we weren’t quite done in that interval.  Now for the most important part – what we can learn from this?

Joe Slovo, March 2009

(A large set of pictures is here, from which this post’s images are drawn.  My quotes are from a report, written by Tom Herbstein of the University of Cape Town’s African Security and Justice Program (ASJP), and circulated by SDI member affiliate FED-UP, South Africa’s Federation of the Urban Poor led by Rose Molokoane )

What went right

When the palimpsest is suddenly scrubbed clean, action must be swift and coordinated.  As it can take a lifetime to become an overnight success, it takes months and even years of community-building to establish trust. 

[1.  Idea preparation]  iKhayalami invested a great deal of time into building a relationship with the Joe Slovo leadership over the previous year.  Many barriers that would normally be development obstacles were rapidly overcome through a level of trust that, even after a traumatic fire, allowed iKhayalami to move in and start blocking with the community.

The trust can lie dormant until catalyzed by a spark – in this case, a tragic fire.

Joe Slovo, March 2009

In a palimpsest environment, all things are possible; the universe has not formed.  So it’s imperative that everyone be included, because anyone excluded will become the process’s enemy.

[2.  Public democratic process]  The public meeting, held on the Monday morning, achieved a buy-in from the community and although cut short – before all voices could be heard – was nonetheless critical for the success of the blocking.

Joe Slovo, March 2009

As we’ve seen with SDI, for an effectiveness process, the slum dwellers themselves have to be in charge:

[3.  Self-managed] An effective decision was to only supply materials, knowledge and advice to Joe Slovo, and leave the process of blocking to the community to manage and negotiate. 

As a consultant, I learned this lesson a long time ago.  Although I know more than my client does about how to solve a particular problem technically, that knowledge should never put me in charge of the client’s goal-setting. 

A good consultant never tells his client what to want, only the consequences of pursuing what the client wants.

What resulted was a community coming together, and helping the process grow.

A good client learns to hear what the consultant is advising about consequences, and to adapt her desires in light of the consultant’s expert advice.

iKhayalami is a non-profit organisation whose primary aim is to upgrade informal settlements. It focuses on designing and manufacturing affordable housing solutions that are easy to transport, quick to erect and offer a range of opportunities for future upgrading.  This is primarily an immediate solution to the national crisis of inadequate shelter, but also provides an effective and rapid response in the event of township hazards such as fire and flooding.  

Joe Slovo, March 2009

Equality of opportunity does not need equality of loss, nor necessarily equality of outcome:

[4.  Fair process and fair outcome]  Deciding what should happen when people’s original shacks were larger than the new iKhayalami shelter. 

While iKhayalami were happy to provide larger shelters in these instances, the leadership was adamant that all new shelters should be of uniform size so as to not create a sense of inequality amongst the community.  This was firmly adhered to.

Men in particular are bonded by uniformity; as every army’s induction and boot camp know, to anneal them into new forms you must hammer out the old ones.  We become brothers when we are all miserable together – and if it is as a community that Joe Slovo’s residents gained the leverage that brought them free homes, then it is up to the community to adjudicate what constitutes equality in that case.  I wouldn’t have expected that.

Joe Slovo, March 2009

Learning by doing is important, as is persuading by showing:

[5.  Piloting] This was further strengthened by the decision to initially block just six shelters, to create a visible an example and help people understand the concept.  It also ensured shelters kept in line, as material was only released once bordering properties had been upgraded.  This maintained active community participation, as people had a vested interest in blocking reaching their area.

Interesting dynamics: the grid exists in everyone’s imagination, but before anyone can build a house into the grid, the buildout has to reach this part of the grid.  Conversely, beneficiaries who wanted free materials were obliged to buy into the community grid vision – freedom came with a price.

This resulted in shelters being constructed quicker and cheaper, due to increased man-power, but also resulted in significantly fewer disputes as the community was now actively involved in their own development and given the opportunity to guide it themselves.

Joe Slovo, March 2009

Not everything worked exactly as the technical advisors would have wished.

What went wrong

[6.  Refusniks]  Some shack dwellers were unwilling to replace their structures with iKhayalami shelters, some even to move theirs back within the demarcated lanes.  While attempts to move shelters were made through negotiation between them and leadership, in cases where resistance continued, the lanes were simply redrawn around the offending shack, and carrying on beyond.

In effect, the non-conforming uses have been grandfathered into the community.  Will the grid be strong enough that over time they will be brought one by one into conformity?  Or will it revert to randomness and inefficiency?

Joe Slovo, March 2009

Back in the present, variation and individuality appeared as they always do.  So did a gradual erosion of unanimity:

[7.  Quality variation]  It proved hard to maintain quality control, as the situation was one that developed organically.  There were instances where building material was released, when neighboring properties were yet to be blocked.  This meant some shelters ended up not lining up with others. 

People become impatient and the inevitability effect takes over.

Control needs to be maintained as it is the promise of materials which turned out to be the most effective tool for negotiation.

Joe Slovo, March 2009

Real estate is also a professional business, and slum dwellers are not real estate professionals.

[8.  Lack of training]  Problems also emerged with people erecting shelters too fast, and without proper supervision, resulting in weaker structures, and in some cases ground that was uneven.

In general, people who own property are entitled to renovate, refurbish, and remodel it – but in the formal city, such alternations are subject to zoning and building codes.  A perfectly informal slum has neither, and when Joe Slovo was reborn after the fire, in accepting the free assistance it accepted the city’s dominion over structure and zoning.

Joe Slovo, March 2009

The better housing is, the more formal it is; and that makes it more structural, more technological, and more complicated.

[9.  Uncoordinated materials]  Khayalami intended to only supply material to construct the walls of the shelter, and then use material supplied by the City for the roof.  However, the City’s material was incompatible with iKhayalami’s design, the wood being to short and stout and the zinc sheets too thin. 

As a result, more haphazard construction of the roofs resulted, making any future installation of ceilings more difficult.  Future coordination between iKhayalami and the City, as to what materials to supply, would result in a far higher quality structure while minimizing costs.

Before the fire, I doubt the City and iKhayalami would have thought it worthwhile to collaborate on rebuilding standards.  The fire forged a linkage between them.

Joe Slovo, March 2009

[10.  Interruption]  The City, suspending the distribution of material and food resulted more time and energy being spent by iKhayalami and the leadership in securing additional resources than in managing the development process, hampering efforts to block adequately.

It’s hard to fault the City on this point; they announced a three-day window and they held to it.  Perhaps more illuminating is the necessity for disaster-relief planners to recognize that it’s not enough to rush replacements to the site – you should take a deep breath and imagine not replicating the old but improving it.

Joe Slovo, March 2009

In the end, it always does come down to money.  Slum upgrading is municipal infrastructure, and that has a large non-recoverable cost.

[11.  Lack of subsidy]  Finance was the single biggest issue facing iKhayalami’s efforts to upgrade Joe Slovo and the biggest single hindrance to the wide spread roll-out of blocking. 

Not finance – subsidy.  These costs are non-recoverable, and the homes will have minimal resale value.  Although they have high occupancy value and that makes them a worthwhile expenditure of public or charitable resources, no one should be deluded that turning on a lending tap will magically transform the slums.

While iKhayalami did admirably in securing private funding to sustain construction, this is a government issue, one which can only succeed with buy-in and support from the City.

Donors are scaffolding; they bridge from vision to pilot, and from pilot to political change.

Joe Slovo, March 2009

The story has a happy ending:

In conclusion

While these shelters are not perfect, and certainly dissimilar to more formal housing projects, iKhayalami was able to re-shelter a significant number of people:

Joe Slovo, March 2009

1. In conditions far above what they had before

2. In situ

3. In a way which prepared the site for future introduction of basic services. 

All these are enduring achievements.   Because slums are places where private investment has outrun public infrastructure, the rationalization of informal private settlements should lead public investment – in fact, it should induce public investment.  The city has granted the Joe Slovo residents tacit citizenship by handing them disaster packages and working with them in their deployment; it will be hard for them to retract it when the infrastructure can now be laid down logically.

Joe Slovo, March 2009

This was all done at a cost of less than 10% of what more formal structures cost and in just a few weeks.

Self-built means self-labored, which means cheap.

Remarkably given the circumstances, it was the community that came to the table in this instance and not government. 

Not remarkable at all: networks and markets always move faster than government.

Joe Slovo, March 2009

In South Africa, decent housing is a fundamental right enshrined in the ANC Charter, but that doesn’t mean everyone is well housed.

Estimates suggest a government house may only be delivered 30 years after being on the waiting list. 

Or until there’s a cleansing fire, which creates the urban palimpsest.

Joe Slovo, March 2009

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By: David A. Smith

Within twenty-four hours of a fire that destroyed more than 5900 homes in the Cape Town informal settlement of Joe Slovo, more progress had been made in community redevelopment than had been accomplished in the previous fifteen years’ of confrontation.  The palimpsests had been scraped, but what would be written on the newly-clean parchment?

 (A large set of pictures is here, from which this post’s images are drawn.  My quotes are from a report, written by Tom Herbstein of the University of Cape Town’s African Security and Justice Program (ASJP), and circulated by SDI member affiliate FED-UP, South Africa’s Federation of the Urban Poor led by Rose Molokoane )

Joe Slovo, March 2009

Would, in fact, the government do what it said?

Tuesday 10th March 2009

On Tuesday, blocking continued throughout the day.  A tense scenario unfolded around 09:00 when Disaster Management informed the community that only fire victims who were resident on the original Government “Thubelishe“ list, compiled many months previously, would receive a starter pack.

When free goodies are being handed out, everybody wants one … but not everybody deserves one.  Residency is used as the proxy for entitlement, which can be a challenge because even if the slum is resilient, individual slum households emigrate and immigrate continuously.  This challenge was solved in the usual way possible only after a disaster:

The Joe Slovo leadership, together with a large crowd of community members, held an informal meeting with members of the Informal Housing Department and after a heated discussion agreed that everyone who had lost a shack in the fire would receive a starter pack.

Incumbency defined as presence at the catastrophe; entitlement lubricated by another dollop of government money.

Joe Slovo, March 2009

Although Ikhayalami’s efforts to reblock were often hampered by these sorts of issues, by the end of Tuesday there were two clear lanes of plots marked out, each 4m x 5m, back-to-back with three lanes each 1.5m wide in between. The leadership, together with the community, then began allocating these plots to the fire victims who had been in that area.

Just as Manhattan was gridded first and then developed, here too it was critical that the grid be laid down before settlement occurs.  As AHI Affiliate Solly Angel observes in his seminal paper, An arterial grid of dirt roads, without the plan there will be no structure and no efficiency.  But if you lay out the plan first, then everyone can build individually and entrepreneurially within the plan. 

Joe Slovo, March 2009

Wednesday 11th March

blocking carried on throughout Wednesday, with iKhayalami continuing to work with the leadership and community to lay out plots and ensure people adhered to the lanes.

Traffic cops are useful if they are transparent and impartial.

Joe Slovo, March 2009

The first batch of iKhayalami material was delivered at noon, just enough for four shelters, but enough to show the community what was involved and what the upgraded areas might look like.  The arrival of this material proved to be a key turning point as people now had a clear understanding of what iKhayalami, and the leadership, were describing.

As I’ve said repeatedly, the solution is its salesware.

Joe Slovo, March 2009

Residents began to approach iKhayalami directly with requests to support blocking in their areas.  In many instances people were willing to even dismantle their shacks and relocate in-line, in expectation that they would receive building material at a later stage, which speeded up the process considerably. 

What a turnaround.  In 2½ days, the same people who had spent fifteen years resisting calls for demolition and rebuilding were now eager to demolish their own homes, because they could visualize what they would be getting, they could grasp why it would be better, and they could trust that they would receive what they had been promised.

Joe Slovo, March 2009

People are suspicious, but people are smart.

This process led to greater community participation, and negotiating patiently with the community speeded up the process considerably.  While all decisions as to the relocation of sites, and the allocation of materials, were handled by the Joe Slovo leadership, the Ikhayalami team assisted families in construction the panels. By 20:00 that night, 15 families had shelters in various stages of completion.

Joe Slovo, March 2009

It’s so critical to provide some short-term tangible progress.  Words and personal credibility will take you only so far.

The community, now more mobilised, also organised nightly patrols, aimed both at guarding the building materials from theft and to keep order in Joe Slovo while people slept in tents.  This resulted in almost no material going missing, even when considering the high degree of hands-on involvement by the community

Self-policing, Jane Jacobs’ “eyes on the street,” is a hallmark of a genuine community; it’s an index of formalization and citizenship.

Joe Slovo, March 2009

Thursday 12th March

On Thursday, Disaster Management failed to arrive on site and announced their involvement in Joe Slovo had ended. 

They would no longer be distributing food or government materials, even though 120 families remained without.  This caused a serious problem for the partnership that not only had now to find materials for these remaining families, to supplement what iKhaylami could offer, but also to secure food for those still busy rebuilding and unable to work.

Joe Slovo, March 2009

Here is Stone Soup at work, though.  Everybody wants in on success.  Get a project going, demonstrate that it will be completed and will be something to be proud of, and people come out of the woodwork bringing ingredients and seasoning.

While donations of both were eventually secured, this seriously slowed the process of blocking as the partnership was directed away from the negotiation and planning of the new township, critical in sustaining momentum, to one of logistics and emergency fundraising.

Nonetheless, blocking has continued in Joe Slovo, and by the end of March, 120 new iKhayalami shelters had been constructed, almost all in accordance with blocking.

Joe Slovo, March 2009

The community was transformed – physically in rational grids, socially in the development of leadership, and in network connection to the city and to assistance providers.  All in three days.

Joe Slovo, March 2009

Was this a fluke?  If not, why did it work?

[Concluded tomorrow in Part 4.]

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