The Fountainhead: Who’s Afraid of a Little Gentrification?

The Fountainhead: Who’s Afraid of a Little Gentrification? February 22, 2019

The Fountainhead, part 4, chapter 9

Last week, we discussed Gail Wynand’s plan to raze the slum where he was born and erect the tallest skyscraper in New York in its place. What will happen to the people living there is a question that The Fountainhead doesn’t think to ask, let alone care about the answer. But an Objectivist would surely point to a passage like this as proof that the Wynand Building will be good for everyone, including the poor:

“The best structures of New York are wasted because they can’t be seen, squeezed against one another in blocks. My building will be seen. It will reclaim the whole neighborhood. Let the others follow. Not the right location, they’ll say? Who makes right locations? They’ll see. This might become the new center of the city — when the city starts living again.”

This reminds me of a story that I was close to, Amazon’s New York City debacle. The tech behemoth announced in 2017 that it was seeking a site for its second headquarters, which kicked off a national competition of cities promising tax breaks and subsidies if they were chosen. Finally, with much fanfare, Amazon chose the Long Island City neighborhood of Queens – and only a few weeks later, pulled out in ignominy after a wave of opposition.

I live in Queens, but I had no strong feelings about the deal pro or con. On a selfish level, it might have been good for me: I work in tech, and Amazon’s presence would have rippled out to other companies, which would have had to raise salaries to compete. On the other hand, it would have put more traffic on the roads and more strain on New York’s already-creaking mass transit system. Most of all, it would have raised our already ludicrous real-estate prices even higher, pricing more low- and middle-income people out of owning a home. I like to think Paul Krugman backed me up on this, in a Twitter thread where he argued that, because of these externalities, there’s no way to know if Amazon would have been good or bad.

However, regardless of the economic figures, the way that Amazon conducted itself left a sour taste in a lot of people’s mouths. In particular, there was this:

In retrospect, the helipad was probably a bad idea.

The proposed transportation hub for senior Amazon executives was supposed to sit atop one of the company’s gleaming new skyscrapers along the East River, part of its planned second headquarters in Queens, New York. But the image of Amazon Chief Executive Officer Jeff Bezos and his well-heeled lieutenants bypassing the city’s congested subway system grated even on proponents of the deal. It also handed political opponents a convenient catch phrase — “Stay the helipad out!” (source)

With an ugly symbol like the helipad to rally around, plus Amazon’s well-known hostility to unions, plus public grants and giveaways so lavish they amounted to $48,000 per job, opponents of the deal had a lot of points to make. Amazon didn’t help their case with their history of hardball opposition to paying its taxes, like in Seattle when they threatened to stop all local development in a (successful) bid to repeal a new tax that would have raised money to help the city’s disastrous homelessness epidemic.

Even so, New Yorkers were far from united in opposition. Locals backed the deal by a healthy majority. That includes many tenants of Queensbridge Houses, a housing project very close to where it would have been:

Late Thursday night, I got a call from Billy Robinson, a community activist who lives in Queensbridge Houses.

He was furious. He knew that residents weren’t going to get many of the highest-paying Amazon jobs. But they were going to get more jobs than they had now.

“I want to know what plans do they have to replace the 1,500 jobs our community was going to get from the Amazon deal,” Robinson said. “Hell, I’d take half that — what plans do they have to create 750 jobs? What is the backup plan? You kicked the big bad company to the curb,” he said. “So now what are you going to do?” (source)

The usual anti-gentrification argument, which was heard in Amazon’s case, is that an influx of wealthy new residents leads to rapidly rising rents, forcing out long-term tenants and small businesses that give continuity and stability to a neighborhood. Worse, it ends up replacing them with bland apartment blocks and soulless corporate chains, killing the unique character that made it a desirable place to begin with. On the libertarian side, the counterargument is that gentrification of a poor area, even if it causes some people to be displaced, brings better-paying jobs which benefit everyone else.

The newest studies suggest a middle path: gentrification is neither inherently good nor inherently bad, but brings a mixture of benefits and harms. Long-term residents may be hurt by rising rents, but they also stand to benefit from amenities like green spaces and better schools that pop up as a neighborhood improves. (Better to pay high prices at Whole Foods than to live in a food desert.) And it can be most beneficial when existing residents own property in places that are being revitalized:

The key… is to make sure that residents and shopkeepers in low-income neighborhoods have equity and a political voice — before a real-estate surge. African-American residents of Bed-Stuy who managed to cling to their brownstones through the misery of the sixties, the heroin and crack years, and the devastating epidemic of foreclosures can finally reap the benefit that any longtime homeowner takes for granted: selling the house for a profit. (source)

In addition, this article argues that the fear of rising rent displacing long-term residents is exaggerated. Obviously, there are predatory landlords who engage in sleazy tactics to force tenants out. But on the whole, the ethnic composition of neighborhoods tends to change at a slow and steady rate regardless of real-estate prices. The real problem, the article argues, is areas of concentrated poverty – urban ghettos, decaying Rust Belt towns – that are bypassed by gentrification and can’t attract the good jobs or investment they need.

As Justin Davidson points out in New York magazine, every place changes over time. Gentrification isn’t a black-and-white morality play in either direction. It’s not a story of honest, hardworking folks who’ve put down roots fighting a tide of greedy developers; nor is it heroic architects and real-estate barons bulldozing the shiftless poor to build gleaming towers of productivity. Too much change too fast can be bad, but everyone wants to move to where they can better their own lives, and a smart philosophy of urban design will allow progress without either granting unchecked power to developers or holding the present captive to the past.

Image credit: Tony Vincelli, via CC BY 2.0 license

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