The 'Redevelopment' Hoax
by Thomas Sowell
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Why are so
many people who are opposed to development nevertheless in favor
of "redevelopment"?
The short answer
is that development involves decisions made in the market by large
numbers of people in the general population, in their own personal
interests, while redevelopment involves taking decisions out of
the hands of the population at large and putting the power to make
those decisions in the hands of elites.
Developers
who build housing to sell to the public are the focus of many denunciations
by elites in places like coastal California. But developers would
not even exist if there were not vastly larger numbers of people
ready to buy or rent what they build.
All these people
who make the developers' work economically viable vanish into thin
air in political rhetoric that is focused on the developer and his
"greed."
The people
who are against development dare not come right out and say in plain
English that they want other people's desires squashed by the government,
so that the desires of the small, self-congratulatory elites can
prevail, while housing prices skyrocket because of the restricting
on building.
If development
is considered to be so bad, why is redevelopment considered to be
good, by many of the same people?
Redevelopment
imposes the supposedly superior wisdom and virtue of an elite on
the rest of us. That is its ideological appeal to self-congratulatory
elites.
Its political
appeal is more mundane. By bulldozing low-income neighborhoods and
replacing them with upscale malls and condos, local political leaders
get more tax money into their coffers, offering more opportunities
for them to do things that enhance their chances of being reelected.
A politically
successful redevelopment project enables those who promoted it to
show "before and after" photos of the neighborhood that has been
bulldozed and replaced by shiny new buildings, tree-lined vistas
and clearly upscale new housing. This is easily portrayed as a welcome
new addition to the community, both aesthetically and economically.
In reality,
what redevelopment does is transfer wealth from one place to another
place, with no net addition to the wealth of the country as a whole.
But it increases tax revenues in the local jurisdiction, which is
what local politicians care about.
When money
that would have been spent and taxed elsewhere is transferred into
a particular jurisdiction, that is no net increase in tax revenues,
or of jobs, in the country, however.
Redevelopment
exports low-income people and imports high-income people – with
no net addition or subtraction of either segment of the population
in the country as a whole. The huge costs of redevelopment projects
turn what would otherwise be a zero-sum process into a huge net
loss for society as a whole.
Between restrictions
on development and the destruction of existing low-income housing
by redevelopment, low-income and even moderate-income people are
forced out by high housing costs.
Often this
process takes the form of ethnic cleansing. Blacks, for example,
have been driven out of communities up and down the San Francisco
peninsula, including East Palo Alto, which was once 61 percent black,
and is today only 17 percent black.
But that 17
percent is still the highest proportion of blacks in any community
in three whole counties on the San Francisco peninsula. None of
the 38 other communities in those three counties has a population
that is even 5 percent black.
Other
segments of the population are likewise forced out by the economics
of the development restrictions and the redevelopment hoax. Only
7 percent of Palo Alto's police force actually lives in Palo Alto.
A fourth of them live all the way on the other side of the San Francisco
Bay.
Families with
children are also forced out of communities on the San Francisco
peninsula, on such a scale that many schools are closing down for
lack of students.
All this is
a high price to pay for a political hoax. But the dozens of redevelopment
agencies in California are up in arms at the suggestion that the
money they get be cut, in order to deal with the state's financial
crisis. Local politicians are of course on the side of these agencies,
so the hoax may well continue.
March
16, 2011
Thomas
Sowell is a senior fellow at the Hoover Institution at Stanford
University. His Web site is www.tsowell.com.
To find out more about Thomas Sowell and read features by other
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2011 Creators Syndicate
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