Democracy and the Challenge of Affordability: The Politics of New York City’s Grand Vision
By: Harvard Ash Center
Tags: Affordable Housing, Politics, New York, Housing

This post is the fifth in a month-long series of blog postings on affordable housing as a challenge to the health of American democracy, and in particular local democracy in the United States. The series, edited by Harvard Kennedy School Assistant Professor Quinton Mayne, is part of the Ash Center’s Challenges to Democracy series, a two-year public dialogue inviting leaders in thought and practice to name our greatest challenges and explore promising solutions.

In this post, we invite Harvard Graduate School of Design Doctoral Candidate Adam Tanaka to comment on Mayor Bill de Blasio’s ambitious plan to build 80,000 new and preserve 120,000 existing affordable housing units in New York City by 2025. Tanaka looks back to large-scale development efforts from the post-war era as a model for the politics of coalition building necessary for the ambitious projects required to meet the Mayor’s goal, illuminating how public and private sectors might “divide and conquer” in their attempt to meet the housing needs of both low- and moderate-income groups. The principal lesson that emerges from this retrospective is on mayoral leadership bringing together a network of pro-development and progressive institutions including public and union pension funds, financial institutions, affordable housing advocates and neighborhood groups, non-profit and for-profit developers, and large employers like hospitals and universities.

By Adam Tanaka

The biggest surprise of Bill de Blasio’s State of the City speech earlier this year was the mayor’s announcement that Sunnyside Yards, an active, 200-acre rail yard in western Queens, would be covered over and converted into an enormous affordable housing project. Much of the debate surrounding the proposal in recent months has focused on the site and its complexities.

What fewer pundits have discussed, however, is the planning vision driving the mayor’s proposal. Calling for a redevelopment project this big is a dramatic shift in tone for the administration. It’s a sign that Mayor de Blasio is increasingly comfortable in his role as a “pro-development progressive,” solving the city’s affordability crisis through more development, not less.

Photo of Stuyvesant Town courtesy of Adam Tanaka

For the past year, Mayor de Blasio’s housing plan has emphasized incremental, infill approaches to solving the affordability crisis, subsidizing non-profit development in the outer boroughs and piggybacking on market-rate construction to secure affordable units in more expensive neighborhoods. The plan has been lauded as the most ambitious municipal housing program in U.S. history, and the numbers are indeed impressive, with the mayor setting the goal of building and preserving 200,000 units of affordable housing over the next ten years. But the small-scale strategies outlined in the plan — from inclusionary zoning and aggregation of city-owned parcels to reductions in parking ratios and revamped building codes — are out-of-scale with the enormous numbers attached to them.

The Sunnyside scheme is a different proposition altogether. Rather than squeezing developers for a few units here and there, the mayor has called for a massive, integrated affordable housing project. With this project alone, the mayor would come 11,000 units closer to his target of 80,000 new homes.

The scheme might sound far-fetched, but it’s not the first time that the city has attempted such large-scale housing production. At the end of the Second World War, New York confronted an equally severe housing crisis — and responded by building, and building big. A closer look at the politics of development in this period offers instructive lessons for affordable housing advocates today. In particular, it illuminates the forms of political coalition that may be necessary to achieve the mayor’s ambitious targets for both low- and moderate-income New Yorkers.

Revisiting the Post-War Unholy Alliance

While the city’s current housing crisis is primarily a crisis of quantity — or lack thereof — 1950s New York faced a crisis of both quantity and quality. Following two decades of depression, disinvestment, and war, the city’s building stock was in dire condition and returning soldiers contributed to pent-up demand for housing. At the local level, citizen groups advocated for public intervention in the housing market, as families doubled and tripled up in crowded tenement apartments across the city. At the federal level, influential real estate and construction interests lobbied for incentives to stimulate residential production, memorialized in the Housing Act of 1949.[1]

What happened next is a well-worn story: the baby boom hit, middle-class whites took advantage of cheap mortgages and moved to the suburbs, and low-income minorities were marshaled into federal housing projects in the inner city.[2]

But the truth is not that simple. There was another strand to the story. Local economic and political elites were eager to root the city’s white middle class to the urban core and pursued a range of development strategies to ensure that the city remained desirable to their constituents. As suburban developers and public agencies were unable to meet soaring demand, a number of non-traditional development actors stepped in to offer a “third way” between the suburbs and public housing.

These actors ranged from labor union co-operatives to wealthy insurance companies like Equitable, New York Life and, most famously, Met Life. Their product? A series of vast, moderate- and middle-income housing projects, built within New York City limits from the 1940s to 1970s. These developments were close to jobs, transit, schools, and other amenities of urban life and many of them were built by the private sector for the competitive housing market.

They offered a critical alternate vision of middle-class life, one characterized by soaring tower blocks rather than single-family homes. More than that, these developments worked, stabilizing neighborhoods and providing a safe, livable, and affordable alternative for working families who wanted to stay in the city they called home, but earned too much to be eligible for public housing and other subsidy programs for low-income New Yorkers.

Politically, these projects were the product of a seemingly “unholy alliance” between public and private actors. Political scientists studying this era of urban development have described it as the “Growth Machine” period.[3] The growth machine — a term coined in Harvey Molotch’s classic 1976 article of the same name — referred to a locally constituted, public-private-civic coalition with a shared interest in land use intensification and population growth.

Photo of Starrett City courtesy of Adam Tanaka

According to this view, city politics was land-use politics, dominated by the growth machine. The cogs in the machine were diverse: politicians eager for reelection; unions hungry for construction jobs; media outlets looking for more readers; and of course landowners and developers keen to reap the profits from new development.[4]

At first glance, this conceptual framework is a neat fit for post-war New York, with famous power broker Robert Moses greasing the wheels of the pro-growth coalition.[5] However, a closer look at the history of these middle-income projects — particularly large co-operatives like Rochdale Village and Co-op City, financed through the state’s Mitchell-Lama program — adds nuance to the growth machine hypothesis.[6]

According to Molotch, the losers in the growth machine equation were city residents, who were politically excluded from the development process, even as they suffered from more congestion, pollution, and higher taxes. But these projects had mostly equitable impacts, providing decent housing for (white, working- and middle-class) city residents at reasonable cost — and lots of it. Molotch’s pessimistic take on development politics does not quite hold up.

What explains the variation? The support of politically powerful institutions with large constituencies — most notably, labor unions of various stripes and anchor employers like insurance companies. Charismatic labor leaders like Abraham Kazan and Harry Van Arsdale aggressively lobbied public authorities to ensure that the city’s labor force had a seat at the table with the other power players.[7] The motivations of corporations like Met Life were also critical to ensuring the production of high-quality workforce housing.

The 1950s represented the apogee of the business corporation’s presence in American life. At its post-war peak, Met Life employed 20,000 people in Manhattan alone. In order to keep payroll down, the company had a vested interest in providing housing that was affordable to its own vast base of employees — accountants, clerks, and secretaries, as well as higher-level management. The tenants of these projects were also the kind of blue- and white-collar workers likely to hold life insurance policies, so providing these policyholders with high-quality housing was not only a civic gesture on the part of Met Life but also a sound business tactic.[8]

Reproducing these kinds of institutional incentives for the private sector to produce low- and moderate-income housing will be critical for Mayor de Blasio to implement his housing plan, which largely relies on leveraging private funds to achieve its targets. Granted, the post-industrial context in which the mayor is operating is more politically and economically disaggregated than the centralized industrial base of the immediate post-war period. But that doesn’t mean that potential sources of financial and political support are now entirely absent at the local level.

A 21st-Century Growth Machine

In his speech, Mayor de Blasio pointed to the Met Life-sponsored Stuyvesant Town-Peter Cooper Village as a model for Sunnyside Yards. But using Stuy Town as a template is risky, given the project’s controversial origins in eminent domain and mass displacement. Recent experiences with lawsuits, rent hikes, and mortgage default under real estate magnates Tishman-Speyer have further eroded the development’s affordability and compromised its reputation as Manhattan’s middle class mecca.

Other lesser known projects offer more optimistic lessons. Starrett City, a vast, 5,800-unit complex of rental apartments in south Brooklyn, was recently saved from predatory acquisition by the intervention of local, state, and federal agencies. Parkchester in the southeastern Bronx, which was the largest housing development in the world when built in 1943, has recently undergone a $220 million renovation and offers some of the most affordable condominiums in New York. And of course there’s Co-op City, an extraordinary example of co-operative living and now the city’s largest stronghold of middle-class African-Americans.

Photo of Co-op City courtesy of Adam Tanaka

Amidst growing inequality, these developments represent a holdover from an era of big visions and progressive values. Visit them, and you slip into a sixties pipedream: a beguiling vision of collective living in the world capital of capitalism. Despite their often Soviet demeanor, these projects were not the product of “big government,” but of private actors serving the public good, in some cases with the help of public dollars.[9]

Thus, they provide particularly instructive models for today’s private sector-driven development paradigm.[10] They suggest that Mayor de Blasio needs to come to an understanding with development interests, convincing those with the requisite financial clout that producing public goods like affordable and workforce housing are not just sound policies but also sound investments.

Of course, replicating such massive projects today won’t be easy. Limited public funding, a shortage of developable land, and a cultural rejection of the “tower-in-the-park” model make this vision a hard sell. The political situation is also difficult, with the de facto veto power of NIMBY neighborhood groups making large-scale development an increasingly dicey (and litigious) proposition.

Municipal officials will need to come up with inventive public-private deals to finance new projects. New methods of land acquisition and readjustment should be explored. Some limited demolition might be necessary to free up land, particularly in underutilized, transit-accessible areas. And innovative forms of political compromise will be needed to appease anti-development community boards.

Most importantly, the mayor has to figure out how to harness the 21st-century growth machine in service of his goals. In this increasingly globalized and financialized world, determining exactly who comprises this local coalition is a challenge. But there are certainly possibilities for strategic alliances: between New York-based financial institutions, public and union pension funds, affordable housing advocates and neighborhood groups, non-profit and for-profit developers, and anchor institutions in ‘eds and meds’ with employees strained for housing.

As economists, legal experts, and other urban scholars have argued in recent years, progressive politics and profit-oriented real estate development need not be opposed.[11] Rather, they can — and should — be allied. Fostering a new coalition of pro-development progressives, with the mayor at its head, is critical to expanding supply and unlocking affordability in expensive cities like New York. It’s happened before, and it can happen again.

Adam Tanaka is a Ph.D. student in urban planning at the Harvard Graduate School of Design and a Meyer Fellow at Harvard’s Joint Center for Housing Studies. His research focuses on housing policy and development in the contemporary United States, drawing from the fields of political science, law, urban planning and real estate to develop methods for understanding and improving upon urban housing provision.

References/Further Reading

[1] Goetz, Edward Glenn. Shelter Burden: Local Politics and Progressive Housing Policy (Temple University Press, 1993).

[2] Kenneth T. Jackson, Crabgrass Frontier: The Suburbanization of the United States. (New York: Oxford University Press, 1987).

[3] See: John R. Logan and Harvey Luskin Molotch, Urban fortunes: The Political Economy of Place (University of California Press, 2007), John H. Mollenkopf, The Contested City (Princeton University Press, 1983), and Alan Altshuler and David Luberoff, Mega-projects: The Changing Politics of Urban Public Investment (Washington, D.C.: Brookings Institution Press, 2003).

[4] Harvey Molotch, “The city as a growth machine: Toward a political economy of place,” American Journal of Sociology 82: 2 (1976): 309–332.

[5] Robert A. Caro, The power broker: Robert Moses and the fall of New York (New York: Vintage Books, 1975)

[6] Peter R. Eisenstadt, Rochdale Village: Robert Moses, 6,000 Families, and New York City’s Great Experiment in Integrated Housing (Cornell University Press, 2010)

[7] There were of course still losers in this urban development game, such as the minority groups whose neighborhoods were often sacrificed for new expressways and redevelopment projects.

[8] Charles Bagli, Other People’s Money: Inside the Housing Crisis and the Demise of the Greatest Real Estate Deal Ever Made (New York: Penguin, 2013).

[9] It should be noted that these developments rarely benefited from federal subsidies, aside from occasional Title I Urban Renewal Funds (Lincoln Towers and Penn South are two iconic examples of such slum clearance projects). This lack of support from higher levels of government provides an instructive parallel to today’s era of austerity, where national support for urban redevelopment and affordable housing is virtually non-existent.

[10] Alexander Von Hoffman, “Calling Upon the Genius of Private Enterprise: The Housing and Urban Development Act of 1968 and the Liberal Turn to Public-Private Partnerships,” Studies in American Political Development, 27: 2 (October 2013): 165–194.

[11] See: John Mangin, “The New Exclusionary Zoning,” Stanford Law & Policy Review, 25 (2014): 91; Roderick M. Hills Jr. and David Schleicher, “City Replanning,” George Mason Law & Economics Research Paper # 14–32 (2014); and Matthew Yglesias, The Rent Is Too Damn High: What To Do About It, And Why It Matters More Than You Think (Simon and Schuster, 2012).