Thank you to Karl Peterjohn for this excellent, well-researched article.
Urban Renewal: A Flawed Idea That Failed 50 Years Ago
By Karl Peterjohn, Executive Director Kansas Taxpayers Network
1) Urban renewal failed across the United States in the 20th century. The urban renewal efforts from the 20th century that are the foundation for the newly proposed redevelopment agency in Wichita rely upon these old Kansas laws that require an increase in local government’s powers. There are no clearly defined steps that will avoid repeating these past mistakes in the public hearing discussions so far.
2) The financing mechanism for this new redevelopment agency is not clear. Other communities might have agencies with this label and operate their Community Development Block Grants (CDBG) money through them, but integrating the current CDBG programs into this new agency have not been made clear. The revenue need to fund this agency is unspecified. The city has property, sales, and fee revenues that can be raised to provide the substantial funding needed for this proposed new agency.
3) No efforts have been clearly defined to avoid repeating the mistakes that occurred in the 20th century urban renewal redevelopment process. If the city is going to make mistakes, let’s not repeat the errors of the past.
4) Current city activities will be impacted by this redevelopment agency. This includes and is not limited to central inspection, zoning, and planning.
5) The city will need to restore the eminent domain powers that the 2006 legislature removed from state law for many of the proposed redevelopment efforts to work. While the eminent domain reform enacted in 2006 does not take effect until July 1, 2007, the city needs a plan that will fit within the boundaries of state law.
6) A disproportionate amount of the burden created by urban renewal fell upon low income and largely minority groups. Urban renewal programs provided disproportionate benefits to high income, developers, and citizens with close ties to these programs at city hall.
INTRODUCTION ON WICHITA
The Wichita City Manager is promoting a new city redevelopment agency and using the existing urban renewal statutes that exist in Kansas law for this community. Sedgwick County officials have joined both appointed and elected city officials in discussing this concept.
Urban renewal was an important post World War II program that tried to rehabilitate and improve cities all over the United States. Unfortunately, urban renewal and the government dominated and controlled redevelopment process that was the essence of urban renewal in the 20th century failed. It was also a very expensive failure.
Wichita has gone through two rounds of urban renewal. The first effort was in parallel with the national efforts that ran from 1949 to 1974.(1) Downtown Wichita changed significantly when urban renewal programs used their eminent domain powers to acquire large chunks of property in Wichita. The City of Wichita has been one of the largest property owners in this community since this program began. Century II was one of the major redevelopment projects in downtown Wichita during this period of time.
Fortunately, the troubled history of urban renewal is one that is readily available. This is particularly critical for a city like Wichita that went through a second stage that it has been following with a city directed special redevelopment program since the late 1980’s.
Developer Jack DeBoer issued his “DeBoer Plan” for downtown redevelopment in Wichita almost 20 years ago. DeBoer’s vision was for the construction and development of a large number of new and enhanced existing facilities in downtown Wichita. The focus would be in turning the downtown area into an entertainment/tourist destination with a variety of primarily enhanced public facilities. The DeBoer plan was largely implemented in stages with the “crown jewel” being the recently approved downtown arena. This private-public partnership was expected to transform and revitalize downtown Wichita. A large amount of public and private funds were expected to be spent to turn this vision into a reality.
The centerpiece for this revitalization proposal was three major projects downtown: a 500 foot keeper of the Plains that would be for Wichita what the space needle is for Seattle; a new downtown hotel; a new downtown arena. In addition a variety of other attractions would be built to attract people, particularly tourists, to downtown Wichita. The Wichita ice arena and Childrens Museum were two of the other significant attractions that were built.
The irony of the DeBoer proposal, was the fact that almost 20 years later, DeBoer is most prominently attached to the East Bank/Waterwalk development proposal and was NOT specifically part of his 1980’s era proposal. This redevelopment project, which included a large amount of city owned parcels, included land that had originally become city property back in the urban renewal era.
The DeBoer redevelopment proposal went well beyond the arena and a 500 foot Keeper of the Plains statue. Downtown Wichita was supposed to become an urban tourist destination location with a variety of attractions to get both residents and out-of-town tourists to flock to see. Naturally, accommodations like a new hotel would be needed to go with the recent expansion of the Bob Brown convention center complex attached to Century II.
The expansion of museums on and by the river, a new ice rink, remodeled Lawrence-Dumont stadium (roughly 20 years ago) and other improvements were all supposed to stimulate a new form of local development that went beyond the traditional businesses and industries existing in Wichita. The City of Wichita and Sedgwick County spent huge sums to build, expand, or remodel facilities in and around downtown. Meanwhile, the private sector that was already downtown quietly continued to shrink and diminish.
A new local bus station was built downtown in the 1990’s. Macy’s retail store disappeared to be replaced by the Finney State Office Building that the city helped arrange by providing a nearby parking facility.
The initial reaction to the DeBoer revitalization plan was mixed. The family of the late Black Bear Bosin quickly sank the idea of inflating his statue into a 500 foot city landmark. That was the only idea that was not substantially implemented, and by raising the base, a good argument can be made that the intent of the DeBoer plan to increase the height of the keeper has been partially met.
The city has just finished spending a large amount of tax funds raising the pedestal for the Keeper of the Plains statue so that the original statue is more visible to the public. However, it is not clear to what degree this statue is attracting either local or outside the Wichita area visitors into downtown. The city supported Indian Museum that is adjacent to the Keeper of the Plains statue has continued to struggle and this facility continues to have a variety of operational problems that continue to appear in the news from time-to-time.
Both the city’s ice arena as well as the Children’s Museum have struggled over financial operating costs and budget problems at several points since these facilities were opened. Downtown Wichita’s Old Towne area has seen an influx of restaurants and nightclubs. Many of the private projects have required a variety of taxpayer funded support that included but is not limited to parking. The high amount of turnover in the ownership and operation of many of these private facilities raised performance questions. Similar firms outside of the downtown area did not receive the same benefits that many of the downtown firms received. This situation raised equity issues for similar businesses. Is local government capable to step in? The sizable financial losses from the operations of the now city owned Hyatt Hotel during its first few years of operation raises questions about the effectiveness of the public-private redevelopment efforts that occurred in the last few years of the 20th century in Wichita.
Wichita has struggled both with the explicit urban renewal along with the rest of the country in the middle of the 20th century. Follow up redevelopment programs during the last 20 years have created a number of changes downtown but the growth in this community had largely eluded the downtown area. This Wichita history is important for city council and other local officials to keep in mind when examining the redevelopment agency proposal and resurrecting urban renewal.
I. NATIONAL URBAN RENEWAL: A BRIEF HISTORY
Urban renewal failed. Even before the federal urban renewal efforts ended in the 1970’s the academic critics were pointing out major problems. The goals were not being met and costs far exceeded initial projections.
In my September 6, 2006 letter to city leaders discussing urban renewal I pointed out the wide range of literature discussing urban renewal and redevelopment that dated back over 40 years ago. This history was wide ranging and featured prominent scholars from that era who included several who went on to national prominence in other public realms like the late Senator Patrick Moynihan who was also a White House staffer for several presidents, and White House staffer to former President Reagan, Martin Anderson. In addition, major urban scholars like Jane Jacobs, Harvard professors Edward Banfield, and Nathan Glazer who focused upon city improvements and trying to reduce and ameliorate the urban poverty problem had a major impact at looking at city issues.
Now a case can be made that urban renewal has never totally ended. That is a certainly a reasonable position in light of the existence in some states of the urban renewal statutes in state law that were enacted roughly 50 years ago. The late Ronald Reagan jokingly commented that there was nothing as eternal as a government program. The echoes of urban renewal and similar redevelopment efforts continue like a governmental version of the scientists “Big Bang” echoes detected by the Bell Laboratory scientists who won Nobel Prize in Physics for their effort.
As far back as 1963 then professors Glazer and Moynihan wrote in their classic “Beyond the Melting Pot” described urban renewal and its ethnic and sociological impact this way, “There have been difficult (sociological) problems, but not different from those in other great American cities. The major attempt to deal with these problems has been through urban renewal—the rebuilding of the area so as to reduce the low-income and increase the middle- and high-income population. This movement has been supported by all the middle-class groups and institutions in the area, who of course would like to see less crime and disorder and crowding and dirt around them.” (2)
Urban renewal had impacted the natural evolution of the neighborhoods that were in transition in New York City in the 1950’s as the Irish, Jews, and Germans moved out to be replaced back then what Glazer and Moynihan referred to as “Negroes” and Puerto Ricans. Glazer and Moynihan comment on the paucity of Puerto Rican community organizations and attribute this in part to the impact of urban renewal, “Aside from the storefront churches, organizational life is not strong among the Puerto Ricans….but Puerto Rico, just as the rest of Latin America, has always been weak in spontaneous grass-roots organization. Probably the rise of organization has been inhibited too by the factors that have dispersed the population and prevented the development of a great center for the Puerto Rican population—housing shortage, slum clearance, and the availability of public housing….The demolition of the houses that affront the neighborhood means precisely the demolition of those that house vast numbers of Puerto Ricans—families living in single rooms, families taking in migrant relatives, displaced children, and temporarily homeless friends. Ironically, ‘improving a neighborhood’ means moving out those who are most crowded, have the least room, and whose resettlement offers the most difficult problem for themselves and city agencies.”(3)
Slum clearance is just a synonym for urban renewal. Slum clearance is the argument being put forth by the advocates for new city redevelopment agency. Glazer and Moynihan identified over 40 years ago simply bulldozing buildings does not address the underlying problems. These are problems of crime that result in the dilapidation that is being used to justify a new city agency.
What will be done differently in 2006 than what was done in 1956? If local officials are going to make build a new city bureaucracy and expand the city’s role in controlling property within the city limits, Wichitans need to know why the local officials should repeat the same mistakes that were exposed over 40 years ago?
Aesthetically, urban renewal was a failure creating a monotonous diversity that the leading urban scholar of her day Jane Jacobs described, “Anything looks ugly if it is done badly. But this belief implies something else. It implies that city diversity of uses is inherently messy in appearance; and it also implies that places stamped with homogeneity of uses look better, or at any rate are more amenable to pleasant or orderly esthetic treatment. But homogeneity or close similarity among uses, in real life poses very puzzling esthetic problems. If the sameness of use is shown candidly for what it is—sameness—it looks monotonous.”(4)
In fact, the converse according to Jacob is true for cities, “Intricate minglings of different uses in cities are not a form of chaos. On the contrary, they represent a complex and highly developed form of order…Nevertheless, even though intricate mixtures of buildings, uses and scenes are necessary for successful city districts, does diversity carry, too, the disadvantages of ugliness, warring uses and congestion that are conventionally attributed to it by planning lore and literature? These supposed disadvantages are based on images of unsuccessful districts which have not too much, but too little diversity. They call up visions of garish, sprawling, unremitting commerce. None of these conditions, however, represent flourishing city diversity. On the contrary, these represent precisely the senility that befalls city neighborhoods in which exuberant diversity has either failed to grow or has died off with time…. Flourishing city diversity, of the kind that is catalyzed by the combination of mixed primary uses, frequent streets, mixture of building ages and overheads, and dense concentration of users does not carry with it the disadvantages of diversity conventionally assumed by planning pseudoscience.(5) Jacob then proceeds to criticize the urban planners and urban renewal advocates of her day for their failures to understand the intricacies or the spontaneous order created by the marketplace operating under a rule of law.
The problems outlined in a practical sense by Jacob are examined in much greater detail that extends well beyond urban renewal and municipal revitalization and into a broader discussion of the role of urban experts, government planners, city residents trying to live their lives and how this exists in an America where the role of the government has been expanding during the 20th century and the first decade of the 21st century.(6)(7)
The most recent national explosion of this issue is the eminent domain battles that lead up to the U.S. Supreme Court’s recent and highly controversial, Kelo decision ratifying forced land acquisition powers for private developers at the expense of current landowners when exercised by local units of government. That has led some Wichita city leaders to put this city behind an effort to have broad based powers to condemn private land using eminent domain and then be able to turn that property over to other private hands. This led the 2006 Kansas legislature to pass legislation that will limit municipal eminent domain powers for redevelopment beginning July 1, 2007.
These failures go far beyond the sociological analysis offered by Glazer, Jacob, Anderson, and Moynihan. Hoover Institute scholar Martin Anderson identified a number of problems with urban renewal.
In addition, liberty and control over property by citizens was diminished for all and in some cases eradicated for the people living in the targeted “redevelopment” areas. “Who wants urban renewal? Certainly not the lower income groups—they get displaced from their homes to make way for the modern apartments they cannot afford to rent. It is hard to know whether the middle class is much concerned with the changes that have occurred in the cities…Then who is behind the tremendous push for urban renewal? Raymond Vernon, former Director of the New York Metropolitan Region Study, has speculated that the main stimulus for urban renewal comes from two elite groups—the wealthy elite and the intellectual elite. Both groups have strong economic and social attachments to the central city.”(8)
In a book examining eminent domain abuse and its ties to urban renewal, Steven Greenhut looked at Anderson’s analysis and warned: “Nothing much has changed today.”(9)
Greenhut also pointed out, “Without eminent domain, very little of the destruction could have taken place. But once the government had the right to take whatever it pleased in the name of the ‘higher good’ then the sky was the limit.”(10)
Urban renewal did do massive amounts of damage. Let’s look at one well examined and very costly case: Pruitt-Igoe in St. Louis that was described: “Few people could have missed the demolition of St. Lous’ Pruitt-Igoe and other hideous housing projects that came to epitomize wht the urban-renewal program was all about: creating high-rise, crime-ridden slums that eventually had to be dynamited before any real urban progress could be made.”(11)(12)
Von Hoffman’s Harvard University study went on to describe this redevelopment tragedy this way, “St. Louis’s Pruitt-Igoe housing project is arguable the most infamous public-housing project ever built in the U.S. A product of the postwar federal public-housing program, this mammoth high-rise development was completed in 1956…Only a few years later, disrepair, vandalism, and crime plagued Pruitt-Igoe. The project’s recreational galleries and skip-stop elevators, once heralded as architectural innovations, had become nuisances and danger zones. Large number of vacancies indicated that even poor people preferred to live anywhere but Pruitt-Igoe. In 1972, after spending more than $5 million in vain to cure the problems at Pruitt-Igoe, the St. Louis Housing Authority, in a highly publicized event, demolished three of the high-rise buildings. A year later, in concert with the U.S. Dept. of Housing and Urban Development, it declared Pruitt-Igoe unsalvageable and razed the remaining buildings.”(13)
If the city of Wichita is going to resurrect the urban renewal that led in it worst cases to problems like the one listed above, a specific program is needed to make sure that these past mistakes are not repeated. In addition, it must be clear where the public funding sources will come from to provide for this redevelopment.
Avoiding the government redevelopment/urban renewal model is needed. This problem remains a national challenge for communities across the country. In Abuse of Power, Steven Greenhut describes the 21st century challenge this way: “For as bad as the old urban renewal was—and almost everyone from every political perspective has criticized the outcome of this massive federal program—at least it was done to remedy what its proponents saw a genuine urban problems of substandard housing and rundown neighborhoods. Since at least the early 1980s, urban renewal has morphed into something known mainly as redevelopment. Advocates of modern redevelopment projects often use the same language of blight to justify their efforts, but the purpose has changed dramatically.”
“Whereas the old urban renewal was designed largely to wipe away areas that unquestionably were down on their heels, the new urban renewal is basically about filling city coffers with money. It’s about building tax bases. It’s about luring new commercial retailers into older areas to bring in additional property and sales taxes. Just because these financial motives are sometimes (but not always) dressed up in the language of the New Urbanism or downtown revitalization or blight removal should not fool one into thinking that the new urban renewal is about anything more than money.”(14)
For local government to proceed, it must have eminent domain powers to remove the wrong people from the targeted property. This has led to condemnations of property across the country and destroyed the property rights for homeowners in many cases. Lakewood, Ohio is one example but books have been written outlining a large number of cases that cross the country.
“As there were no structural problems with the houses, the City (Lakewood, OH) relied upon terms like ‘economic and functional obsolescence’ to find blight. Translation: The houses lack two-car attached garages and second bathtubs and their yards are too small. No modern family could possibly want a historic, well maintained house without a two-car attached garage.”(15)
The author of this study “Public Power, Private Gain,” issued by the Institute for Justice in 2003 provided numerous abuses similar to Lakewood’s that are occurring throughout the country. Dana Berliner’s book is filled with outrages to individuals, a variety of businesses, churches, farmers, and others in the name of eradicating “blight” or “neglect” or “distressed” properties.
Many of these outrages occurred in Kansas. “Unfortunately, for the citizens of Kansas, their state is one of the worst abusers of eminent domain, especially in comparison to other states with similar population size.”(16) Problems with redevelopment in the context of eminent domain abuses were specifically cited in Kansas City, the infamous Gross case out of Merriam, and Topeka. Kansas was ranked second worst out of the 50 states behind only California in this national study.
In the Gross case a small businessman operating a used car lot lost his property because the city of Merriam condemned it so a neighboring BMW dealership could acquire the property.(17)
These abuses were part of the foundation for the effort to reform Kansas eminent domain laws in the wake of the Kelo decision on eminent domain by the U.S. Supreme Court. In addition, there is also a similar and even more anti-property owner case coming out of the Kansas Supreme Court recently. Unlike Kelo that has been extensively covered in the news media, the Kansas case has received almost no local news coverage.
“A good example is the Kansas Supreme Court’s 2003 decision in the case of General Building Contractors and Robert Tolberg v. Board of Shawnee County Commissioners. The justices not only affirm the county’s right to take virtually any property they chose in the name of economic development, but they also show open disdain for the property owners who are challenging the taking of their properties. Throughout the ruling, one sees an emphasis on process rather than on rights. As long as the government followed the letter of the law and the proper redevelopment process, then the court couldn’t see what the controversy was about. Yet, courts are supposed to serve as a check on the government’s edicts, holding them up to timeless constitutional principles rather than the planning ideologies of the day.”(18)
This was the perspective of a California eminent domain author in looking at the problems in Kansas recently. The Kansas events where eminent domain was used to favor private parties helped set the stage in 2006 for the legislature’s efforts to limit eminent domain takings for non public purposes. This is primarily for economic development efforts but in some other states even the traditional eminent domain powers for public purposes are now being questioned or even limited. In other states, the voters have been specifically asked to decide the proper role for eminent domain powers in the case of redevelopment.
November 7, 2006 the voters in Florida, Georgia, Michigan, Nevada, New Hampshire, North Dakota, Oregon, and South Carolina all passed initiatives that would restrain the government’s power to seize private property. If Kansas powers would receive a similar opportunity, a similar outcome by voters speaking out to defend their property rights is likely.
Naturally, for an elite few who are at the center of local government power, this is not an outcome that they approve of in their vision to improve their communities. The genius of the founders in providing a system where power was supposed to be spread widely among the people also puts a crimp in the utopian planners. “As in all utopias, the right to have plans of any significance belonged only to the planners in charge.”(19)
In the wake of the Berman, the U.S. Supreme Court decision in the 1950’s that provided the foundation for the expanded eminent domain powers for government became the foundation for the loss of private property rights and a sizable expansion in government’s ability to modify property ownership into the hands that the state prefers.(20)
Lower court decisions had problems with this concept but their argument, “One man’s land cannot be seized by the Governmnt and sold to another man merely in order that the purchaser may buildupon it a better house or a house which better meets the Government’s idea of what is appropriate or well designed.”(21)
Urban renewal failed nationally over 35 years ago across this country. Wichita’s effort to redevelopment within the national urban renewal and outside it have at best a record that is incomplete and continues to require significant public support even for nominally private, albeit many are not-for-profit entities.
The city should not proceed precipitously in once again proceeding down the “urban renewal/redevelopment” path. The experiences in the last 20 years should make city leaders sanguine in proceeding down the proposal coming out of the city manager’s office.
All possible avenues should be examined. “By the end of the federal urban-renewal program in 1974, cities that refused Title I funds and let the market hold sway over downtown redevelopment projects generally had more more impressive downtown revitalizations than those that relied so heavily on federal power and that abused property rights so egregiously.”(22)
Wichita needs to avoid repeating past mistakes. Providing a strong level of property rights actually enhances development. A stable system of government that is not excessively large and expensive is a stronger incentive to growth than a new governmental body promoting “redevelopment.”
Individual states are engaging in a number of experiments: on November 7, 2006, the voters in the city of Nashville, TN approved an ordinance requiring that the city get voter approval before any and all taxes could be raised. This question arose in light of that community’s high property tax rates.
1) Abuse of Power, Greenhut, 2004, page 107
2) Beyond the Melting Pot, Glazer & Moynihan, page 179.
3) Ibid, page 107-8.
4) The Death and Life of Great American Cities, J. Jacobs, 1961, page 223.
5) Ibid, page 223.
6) Constitution of Liberty, F.A. Hayek.
7) Vision of the Anointed, T. Sowell.
8) The Federal Bulldozer: A Critical Analysis of Urban Renewal, 1949-1962, page 218.
9) Abuse of Power, Greenhut, page 111.
10) Ibid, page 110.
11) Ibid, page 111.
12) “Why They Built Pruitt-Igoe,” A. Von Hoffman, Joint Center for Housing Studies at Harvard U., 2000, http://www.soc.iastate.edu/sapp/PruittIgoe.html.
14) Abuse of Power, page 114.
15) Public Power, Private Gain, D. Berliner, Institute for Justice, Washington, D.C., 2003, page 166
16) Ibid, page 78.
17) “Condemnation Is Used to Hand One Business Property to Another,” D. Starkman, Wall Street Journal, Dec. 2, 1998, page A1.
18) Abuse of Power, page 150.
19) The Death and Life of Great American Cities, J. Jacobs, 1961, page 17.
20) Takings Private Property and the Power of Eminent Domain, R. Epstein, 1985, page 178.
21) Ibid, page 178-9.
22) “Urban Renewal and Its Aftermath,” J.C. Teaford, page 458 cited in Greenhut.