Paradise Lost: A Recipe for Gentrification in Chicago, San Francisco, and Beyond

by Peter Feng on May 26, 2006

(Part 3: A Prescription for Progress)

A recent report by the U.S. Census Bureau provides further confirmation of this fact. The report, entitled Domestic Net Migration in the United States: 2000 to 2004, reveals that the 25 largest metropolitan areas experienced a net outflow of residents between 2000 and 2004, as spiraling housing prices and low-paying jobs sent low- and middle-income families in general and blacks and Latinos in particular into economic exile. Specifically, New York, Los Angeles, and Chicago lost the most residents, while cities such as Tampa, Phoenix, Atlanta, and Dallas gained the most. In San Francisco, Daniel Homsey, the director of the Mayor’s Office of Neighborhood Services (MONS) made the following observation: “If you were living here [San Francisco] in 1992, which wasn’t that long ago, today there’s more than a 50 percent chance that you no longer do.”

These developments highlight the need for a minimum wage that is tied to inflation to offset inadequate job creation, universal health care to provide workers with greater security and flexibility in moving from job to job, and increased affordable housing options for the City’s most economically vulnerable. A 2006 report by the Center for Urban Research and Learning at Loyola University of Chicago also cited the following strategies and policies as ways to combat the negative effects of gentrification:

Housing Assistance and Housing Development

• Develop mortgage assistance programs
• Create more loan opportunities for people with poor credit or fixed incomes
• Establish a rent control board
• Enact broader inclusionary zoning policies or affordable housing set-asides
• Create a citywide “balanced development” policy
• Adopt higher median-income thresholds to qualify for existing affordable housing programs
• Provide tax relief for long-time homeowners
• Change zoning laws to more strictly regulate size of new developments in some neighborhoods
• Increase tax incentives to encourage building more rental housing units
Community Participation in Community Planning

• Establish community planning commissions
• Create a “required community process that’s truly community driven for all [housing and retail] development”
• Enforce existing fair housing laws
• Use local ballot referendums to regulate zoning
• Appoint community zoning panels to oversee development in all communities of Chicago

Public / Governmental Action

• Invest more in public facilities and infrastructure in low-income communities
• Support community retail business incentives that will build wealth for community residents and provide local employment opportunities
• Continue emphasis on school improvement for all children
• Focus on employment development for lower-skilled workers and residents in low-income communities

Instead of making progress on these fronts, however, the current logic behind economic development demands that the benefits of economic development accrue to the wealthy among us. Part of the reason for this is because development deals are presently structured in such a way so as to socialize the costs of private development projects administered and managed by the private sector. In other words, economic development in the U.S. consists of using taxpayer dollars and the power of public agencies to underwrite and facilitate the activities of private companies and individuals (e.g., developers/contractors/consultants/etc.) who are in the business of pursuing private interest and private profit in the name of public development.

Proponents of this approach routinely claim that this is a reasonable state of affairs, since those who possess the most capital to invest in such ventures should derive the greatest benefit. However, these selfsame supporters of private enterprise hypocritically ignore the fact that economic development fundamentally begins and ends with resources provided by the public sector, nor are they shy about relying on public handouts and government contracts to spur their own pet projects. In the end, though, individuals who support policies that have the effect, if not the appearance, of ethnically cleansing cities of their poorest residents cannot be characterized as anything other than segregationists.

Aside from serving to transfer wealth from the poorest members of society to the richest, there is little evidence that the current model of taxpayer subsidized economic development results in better-paying jobs or improved living standards for the general public. Indeed, in his book The Great American Jobs Scam: Corporate Tax Dodging and the Myth of Job Creation author Greg Leroy demonstrates how state and local governments have been continually taken to the cleaners by private companies whose demand for vast public subsidies as a condition for setting up shop in a given area often results in a net loss of jobs, reduced wages, and falling living standards.

In order to counter these occurrences, state and local governments must institute a public monitoring program to instill responsibility and accountability into the process. At he federal level, the Department of Housing and Urban Development (HUD) already employs public trust officers to monitor public sector organizations for compliance. In the event that a public sector organization is found to have violated the terms of its loan or grant agreement with HUD, that organization is required to repay the funds it has misspent in exchange for averting criminal charges. There is no reason why this practice cannot be extended to the state and local level.

Finally, the fact that the various policies and recommendations outlined above have widespread public support but no political support shows that the practice of allowing private corporations to contribute to political campaigns in the U.S. has resulted in a situation where private companies have the de facto ability to purchase or influence public officials who will be sympathetic to their interests.

This has resulted in the enactment of policies that are antithetical to sensible economic growth and sustainable development in the U.S. and beyond. A strong public financing system for political campaigns, in which free air time is granted to candidates for public office during election season, will help to prevent much of this corporate skullduggery.

It will also free public officials to vote their conscience and partake in actions that are more representative of the common good. In short, American democracy will be enriched, and representative government will become more responsive to the calls of the citizenry.

At the micro level, local communities, local governments, and NGOs are already involved in various projects aimed at resolving problems of hunger and homelessness, overpopulation, political and social oppression, foreign debt, nuclear proliferation, fair trade, environmental pollution, energy consumption, corporate wrongdoing, and economic injustice.

However, much of the work that is being undertaken to address these issues is occurring in isolation. As these issues are all interrelated, greater emphasis must be placed on identifying the common thread that runs through these topics in order to formulate holistic strategies that can eliminate their root causes. It is only through efforts such as these that it will be possible to shift the emphasis of economic development and/or redevelopment away from boosting the gross domestic product (GDP) to enhancing GDH or gross domestic happiness.

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