Urban Renewal: Time to Declare Victory and Go Home

The San Francisco Chronicle reports that an urban renewal project that began in the City’s Fillmore District in 1948 is about to sunset. The City’s web site claims the project “has set the stage for the rebirth of a rich and vibrant street life.”

But the director of the City’s Redevelopment Agency tells the Chronicle a different story. “The agency’s time there has not been a happy story,” he says. The little good that has happened in recent years is not “making up for the damage that was done in the early days.”

San Francisco’s Western Addition, of which the Fillmore District is a part. Some of the apartments in the foreground were no doubt built on the sites of former Victorian homes.
Flickr photo by pbo31.

California passed an urban-renewal law in 1945 giving cities the authority to clear out “blighted” areas. Cities were allowed to determine whether a neighborhood was blighted by, among other things, the percentage of non-white people who lived in the neighborhood. The Fillmore District was 60 percent black, ergo it was blighted.

By declaring the neighborhood blighted, San Francisco was able to use eminent domain to evict 883 businesses and 4,729 families from their homes. The city then demolished, among other things, 2,500 Victorian-era houses. Residents of the area were promised first dibs on housing that the Redevelopment Authority would build in the area, “But there wasn’t a lot of housing built for a long time,” says an agency official. Instead, “the area sat empty for many years,” and when housing was finally built, the former residents no longer cared to move back.

Today, the agency brags that the area has a few nice restaurants and a popular jazz club. But, given the high cost of San Francisco real estate (caused by the region’s slow-growth policies), you would expect to find nice places even without government redevelopment. What you don’t expect to find is some of the worst crime in the region.

A declaration that an area is blighted is a self-fulfilling prophecy. Banks won’t make loans to property owners whose homes or businesses are likely to be taken by eminent domain, so the buildings aren’t adequately maintained.

Some of the Victorian homes that escaped the urban-renewal program.
Wikipedia photo by Christopher Beland.

The Fillmore story is only one example of the urban-renewal binge that cities went through in the 1950s and 1960s. The best estimates are that more than a million families were displaced, most of them black. Today, of course, we recognize that this was racist and say it was a bad idea.

But the basic tools of urban renewal — eminent domain and tax-increment financing — remain in place, so urban renewal continues, though its targets may be a bit more equal opportunity. Slow-learning San Francisco, for example, is about to begin redevelopment of the 1,300-acre Bayview-Hunters Point neighborhood. But the new schemes are as likely to fail as the old ones, and for the same reason: government planners pay no penalty when their plans fail, so they have no incentive to get them right. Instead, their plans are based more on ideology than on what works.

The Institute for Justice has documented numerous urban-renewal failures. The Institute is mainly concerned about eminent domain abuse, but tax-increment financing is the real culprit. Without TIF, cities couldn’t finance of lot of the eminent domain they want to do. Without eminent domain, but with TIF, they can still do a lot of damage.

Giving cities the right to use TIF is like giving a 10-year-old a hammer: suddenly, everything becomes a nail. TIF, of course, takes property taxes that would otherwise go to school and other services and dedicates them to urban renewal instead. Since schools are usually separate from the cities, the cities regard them as rivals for tax dollars, and use TIF to capture some of the money that would otherwise be “wasted” by the school districts.

The sad truth is that government is not a good agent of urban redevelopment. On the other hand, most blighted areas in cities not named Detroit have pretty much gentrified with or without government help. States should declare victory and repeal their TIF and other urban-renewal laws.


18 thoughts on “Urban Renewal: Time to Declare Victory and Go Home

  1. D4P

    government planners pay no penalty when their plans fail, so they have no incentive to get them right

    The only possible incentive that people have in life to “get things right” is to avoid penalties…?

  2. craig

    The anti planners blog is so successful, that D4P posts every day.

    The private sectors penalties for building a bad project is, they can go out of business and lose nearly everything.

    Government planners just make excuses, extend Urban Renewal districts, add tax breaks etc. and so on.

  3. Pingback: American Dream News » Unintended Consequences

  4. craig

    In Portland the Government planners, planned a walkable transit oriented development called Cascade Station.
    The land was farmland, rezoned by planners without all the farmers support.

    Years after the Portland city council pass the emergency ordnance to build Cascade Station and add light rail to it, the empty development sat for years. For years the light rail stopped at the empty transit oriented development.

    Now that it has been rezoned to a auto oriented development, they are claiming success.

    see Cascade Station: Ikea to the rescue


  5. the highwayman

    It’s ironic that this “Urban-Renewal” stuff was pushed by the highway lobby, the same people the pay Mr.O’Toole to run this blog.

  6. Unowho

    Programs may “sunset” but agencies just keep on going…

    As far as the shipyard redevelopment goes, it will be done a little differently this time. SFRA (and the voters of San Francisco) have effectively turned over control to Lennar. That relationship should make for an interesting thread in 2-3 years.

  7. Kevyn Miller


    I fail to see the irony. America had just been through a Depression and a world war, from which it had profitted handsomely (as had Canada, Australia, New Zealand and Sweden). This was when the utopian Great American Dream was born. Everybody was pushing urban renewal as the way to create that Great American Dream because in their post war euphoria they really believed they could turn that dream into reality.

  8. prk166

    “It’s ironic that this “Urban-Renewal” stuff was pushed by the highway lobby, the same people the pay Mr.O’Toole to run this blog. ”
    — highwayman

    I suppose you’ve got some proof on this one, right?

  9. Dan

    “What Maricopa has been doing is unusual, especially for a distant suburb. This city about 35 miles south of Phoenix is asking builders not to develop just isolated subdivisions behind walls, but whole communities that encourage walking by including stores, schools and services nearby.

    “’The people of Maricopa don’t want to be a bedroom community, a city of rooftops,’ Smith says. ‘They want a self-sustained community.’

    “Especially today. As gas prices hover around $4 a gallon, the nation’s far-flung suburbs which have boomed because they could provide larger homes at cheaper prices to those willing to drive farther are losing their appeal . . .

    “Suburbs on the far edge of metro areas are turning aside strip malls and creating new downtowns and neighborhoods that favor pedestrians. They’re trying to attract more employers and services such as hospitals, colleges and small airports.


    Even the McPaper has caught on that slavish dependence on the automobile might just be a bad idea, by gosh by gee.

    How marginalized can certain ideologies get before the light goes on?


  10. prk166

    DS, that sort of story has been around the last 10-20 years. Only recently have they added the twist on gas prices. Most newer cities have been talking about downtowns and the other touchy-feely stuff because they’re coming of age a time when across the country we’re seeing the old 1950s pure bedroom community style cities having all sorts of problems. Many of them are experiencing sharp rises in crime, property values that long ago stopped keeping pace with their metro average, overly reliant on residential property taxes, etc. They’re trying to do the same things that lead to the problems those other communities are experiencing today. In that regard what Maricopa is talking about doing isn’t that different from the buzz words many of these cities are using. But like these other cities that are talking about it, what matters at the end of the day is what actually occurs. Up until now, from what I can tell, Maricopa has been your usual edge of the metro boomtown. That is, they talk about these things, eagerly await the day enough development occurs around them to become a mini-hub for the region, and more or less build the same sort of housing as before. I mean, we’re talking about a city that hardly has any jobs today within it’s borders and like much of the edge of booming Phoenix, token bus service (if they even have any). Let me know when cities like Maricopa actually start building developments in mass that have significantly higher density, refrain from allowing them to be built until they have a significant number of jobs within their borders, and have some sort of transit up and going. Until then it’s the same ol, same ol’ just with some new buzz words. I mean, come on, this is Phoenix. Who chooses to walk everywhere they go when it’s 90+ 8 months of the years?

  11. Dan

    Who chooses to walk everywhere they go when it’s 90+ 8 months of the years?

    I agree. What’s going to happen to these places (Denver too – look at the moisture variability on the plain and the temps) when cheap energy is no longer available to keep little boxes temperate and to maintain auto dependency?

    Right! People will move to more moderate climes and bid up the rents to be there.

    This likelihood, however, shouldn’t preclude us from building sustainable and supportive places.


  12. Dan

    government planners pay no penalty when their plans fail, so they have no incentive to get them right

    I guess caring doesn’t count as an incentive – there’s no greed or self-interest money involved, so it can’t be valid, right?



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