From broken windows to bulldozers
- July 17, 2020
- Adam Tooze
The story of the Cleveland Housing Renewal Project illustrates the tensions at the heart of capitalism and property – between growth and conservation, creation and decay.
On 10 January 2008 the Cleveland Housing Renewal Project, soon to be joined by the city of Cleveland itself, brought suit against Deutsche Bank and a cluster of other big banks for failing to maintain post-foreclosure homes. As the Sixth Circuit Court of Appeals summarized the case in September 2010, Deutsche Bank was alleged to own twenty-five decayed properties in Cleveland that were a ‘public nuisance’, ‘being a menace to the public health, welfare and safety’. The negligent ownership by this international bank resulted in a ‘post-foreclosure death spiral’ summarized for the court in the following causal chain:
Vacancy → boarded windows and doors → break-ins and vandalism → theft of the home’s assets (copper, aluminium, iron) → haven for criminal activity → decrease in neighboring housing values.
Amongst the great theorists of capitalism of the early twentieth century, Lenin and Schumpeter both posed the question of growth and decay as a question of large-scale dynamics. For Lenin, imperialism and its violence were an expression of capitalist decay. Schumpeter foretold the stagnation that would follow bureaucratization and the dwindling of entrepreneurial energy. Down to the present, the history and politics of economic growth, the drama of Asian development and the fear of secular stagnation in the West continue to fascinate. The Cleveland case is manifestly entangled with this larger historical drama. It was brought against the backdrop of the greatest financial crisis since the 1930s; in their plea the plaintiffs knowingly pitched ‘main street’ against ‘Wall Street’. The black-market salvaging of copper, aluminium, and iron that is ripping apart the fabric of tens of thousands of abandoned buildings across North America is a street-level response to surging global prices for raw materials fuelled by the rise of China.
Clearly the Cleveland case could be read symptomatically as a gritty local recapitulation of the global drama of the Rise and Fall of Great Powers. But in its fantastically literal coupling of global finance and domestic hardware, it also opens up some less familiar dimensions of the question of capitalism and decay, in particular the tension between the dynamic force of growth and creative destruction and the conservative principle at the heart of capitalism, the principle of the protection of property. In the Cleveland case, this tension becomes embodied as a practical question of urban government and ‘policing’ in its most classic sense.
If the drama of growth is the centrepiece of the capitalist spectacle and property rights are its institutional bedrock, then the business of upkeep and maintenance are backstage activities at best. Our histories of technology give pride of place to invention and innovation, not repair, restoration and maintenance. Depreciation and the costs of upkeep are ‘netted out’ in macroeconomic statistics, or excluded on grounds that much of the work involved is ‘unproductive’, non-market activity. In budgetary debates, maintenance is the least glamorous of line items. It is no one’s political priority. As feminist scholars were amongst the first to point out, there is a structural bias in the thinking of modernity towards ‘production’ as opposed to ‘reproduction’. Hannah Arendt’s lopsided distinction between the endless drudgery of the labour of reproduction and the creative activity of work has the merit, at least, of making this asymmetric evaluation explicit. And yet, the ideological investment in property as the stable and static anchor of society is all too real and its upkeep essential to the political and legal order of capitalism. Capitalism offers itself both as a source of endless dynamism and the guarantor of an essentially conservative order. A complete set of property rights will ensure that capitalism is not just innovative, but neat and tidy. Woe betides the commons. In the age of the Cold War one of the most basic and oft-repeated critiques of Communism was precisely that once private property was abolished, ‘no one cared’. The run-down inefficiency of a Soviet collective farm was living proof that neglect and decay inevitably follows on the deprivation of ownership.
But if we investigate not the moral aura but the business logic of private ownership, a troubling doubt haunts this picket fence vision of the ‘market economy’. For a profit-seeking capitalist, maintenance is not a moral duty but a business proposition. Whether to recognize and actively exercise property rights is itself a choice. Often assets are enmeshed in such opaque and entangled legal structures, clarification involves such prohibitive costs, and the benefits are so uncertain, that it is far better for those who might be the legal owners to turn a blind eye to ownership, or simply to delay the definitive assignment of ownership for as long as possible. Capital makes no ‘until death us do part’ commitment to the objects it invests. When value departs the material body, interest, upkeep and maintenance rapidly fade. For decay to manifest itself in a conspicuous way, however, there is one more condition: the owners who are abandoning an asset must leave it in place, exposed to the forces of decay. This too is part of the calculation of profit and loss and the politics of property so powerfully exposed by the Cleveland case. Is capital required to clean up after itself? What residual obligation on the property owner remains once an asset has become practically worthless? What should a community do with these empty shells of value?
These are not new questions, of course. All of these vectors of neglect and decay, along with their attendant processes of revalorization and occupation, are recurring features of economic development. One thinks of the neglected Latifundia of Andalusia, eyed hungrily by land-starved peasants, or the abandoned hillside fields of Italy and France in the 1960s and 1970s, waiting for the invasion of holiday home gentrification. But if the basic dynamic is not new, the crucial point to recognize is the way that quantitative change passes into qualitative difference. Modern economic growth in its material as well as its strictly economic sense is an exponential process. The accumulations of people, factories, infrastructure, buildings and homes since the nineteenth century are unprecedented. So is the scale of the churning process of investment, devaluation, decay and revaluation, which operates on an order of magnitude larger than anything previously seen.
In mainstream economics the self-consuming aspect of modern economic growth is captured by the core prediction of any neoclassical growth model. Barring the intervention of technical change, the steady state will be approached as upkeep on the ever-larger capital stock consumes an increasing share of investment spending. The scale of this phenomenon is strikingly visible in the statistics. Though the couplet of Gross Domestic Product/Gross National Product is the standard metric of macroeconomic discussion, national accounts also include remarkable estimates of Net National Product, the difference between ‘gross’ and ‘net’ being the consumption of fixed capital that must be made good through maintenance, repair or replacement. In 2014, with Gross National Product at $17.611 trillion, the expenditure required simply to keep America’s capital stock in its current condition was a staggering $2.75 trillion dollars, of which $1.78 trillion was accounted for by business capital, $454 billion by households and $517 billion by government.
Maintaining the domestic housing stock alone was estimated to cost owner-occupiers $335 billion in 2014, with $39 billion allowed for maintenance of rental properties. To put this figure in perspective, in 2014 total government spending, discretionary and non-discretionary, amounted to $3.15 trillion dollars. Gross investment, meanwhile, ran at $2.86 trillion. The share of new net investment relative to total investment spending is thus increasingly small. And given the scales involved, the consequences of failing to keep up this gigantic labour of maintenance are correspondingly dramatic. As the economy underwent wrenching transformation in the late twentieth century, entire cities that once stood at the centre of industrial development fell into ruin.
The tension between growth, maintenance and decay affects every part of society. The abandoned plantation mansion is a cliché of Southern culture; every small American town has its ‘haunted house’. But it is in the city that the struggle between dynamic change, maintenance and decay is most visible and most liable to politicization. Great historical forces have driven this devaluation of industrial urbanity: technological change, the triumph of the motor car, unchecked suburban sprawl, the relocation of industries and, in the US, the brutal logic of racial segregation. But as the crisis spread, urban decay was more and more often identified as a causal force in its own right, not merely seen as the end product of a process, but as a self-reinforcing syndrome.
Anyone who has ever owned property of any kind is painfully familiar with the tiresome folk wisdom of maintenance: ‘A stitch in time saves nine’. Amongst transport engineers it is lore that a $1 crack not repaired will give rise within a surprisingly short period of time to a $6-14 dollar bill for road reconstruction. Amongst urban activists, urban blight is commonly described as spreading like an infection. Notoriously, the real estate economist Homer Hoyt referred to urban blight in 1943 as spreading ‘through all the tissues of the urban body’ like a ‘cancer’. It had to be fought root and branch if necessary by ‘major surgery’. To prevent the blight developing in the first place required comprehensive preventative measures. In recent decades ‘blight’ has taken on a new significance in light of the so-called ‘broken window theory’ of social disorder, first expounded in the 1980s and taken up as the governing logic of policing in cities like New York from the 1990s. This extended a physical model of decay in a remarkably literal way to the sphere of criminology: one broken window, it was argued, would attract countless window-breakers. The policy implication was to try to control the urban crisis by means of a revived form of old-school public order policing that focused on cracking down on small-scale symptoms of disorder. Window breakers, graffiti artists, panhandlers and prostitutes would be repressed so as to protect the community against invasion by more high stakes criminals and outsiders – drug dealers, gang leaders, and so on.
In the 1990s, ‘zero tolerance’ and the new public order policing were the toast of the town. Crime did indeed come down. But the costs have been huge. At the sharp end, the struggle to contain the racialized crisis of urban America manifested itself in militarized policing and mass incarceration. Given the bludgeoning force that has been deployed, it is far from obvious that the reduction in crime was not simply the result of oppressive policing rather than effective, light-touch social engineering.
Critical legal scholars, notably Bernard Harcourt, have illuminatingly applied a Foucauldian reading to show the way that public order policing sought to segment and refashion the subjectivities of the urban population. For pressing reasons, these critics have focused squarely on relations between the police and those suspected of being agents of crime and disorder. But if we return to the original scenario of the ‘broken windows’ narrative, we find not two but three protagonists. Trouble didn’t start with the law-breakers or the police but with the feckless property owner, who left a car or a building conspicuously untended. It was their visible lack of proprietorial concern that unleashed the avalanche. To address this problem, as the complement to the new emphasis on zero tolerance policing, so-called ‘legacy cities’ began a widespread but little noticed campaign to rebuild public order not just by targeting the window breakers, but by disciplining the owners of the windows. One prong of these strategies was the familiar tactic of investment, to raise the value of the inner city by development and economic growth. But the economic effort to reverse urban decay also demands explication in Foucauldian terms. In the struggle to reverse blight from the 2000s onwards, decay and deterioration were identified not just as a problem of a lack in investment and growth, but as an abdication of the responsibilities of ownership, an erosion at its base of the behavioural and institutional order of capitalism and more specifically the capitalist city. What was at stake, as in the case of the criminals, was a question of subjectivity. A window-breaking vandal obviously demanded police attention. But what kind of property owner could not be counted on to replace the shattered glass? It was that question that was put to the court by Cleveland’s suit against Deutsche Bank et al. in January 2008.
In truth, by the 1980s broken windows were the least of urban America’s problems. Across the country entire tracts of homes, factories and warehouses were left to rot. It was not for nothing that the North East industrial corridor was redubbed the ‘Rust Belt’. Untended and exposed to vandalism and squatters, once valuable possessions became disutilities, populated by the homeless, drug addicts, prostitutes and gang members. Every year, thousands of properties fell victim to arson. The smouldering, scorched ruins of burned out cars, factories, offices and homes were amongst the commonplace images of the American city. Cars, once the acme of consumer aspiration, became a public order problem as they were abandoned en masse. It was not by coincidence that an abandoned car featured prominently in the original ‘broken windows’ research. In the 1980s and 1990s in cities like Philadelphia tens of thousands of abandoned vehicles had to be hauled off the streets every year. But it was vacant and derelict buildings that were the centre of concern for urban planners, politicians, community activists and the police.
It was clear that the problem of abandoned property was huge; but its exact extent was unclear. Systematic data were scarce: decay and dilapidation on this scale resist quantification and falling out of the grid of assessment, quantification, and valuation is constitutive of the syndrome itself. In 1991, after a decade of urban decline, the Population Housing Vacancy Survey estimated 9.1 million vacant units suitable for year-round occupation. By 2000, when the Census Bureau began compiling a regular time series of properties vacant for more than a year, the initial figure was fixed at 10 million, or perhaps 6 per cent of the national housing stock. Meanwhile, local surveys made clear that in the post-industrial cities of the East and Midwest the problem was far worse. In the early 2000s, the city of Cleveland guestimated that there were 36,000 vacant and abandoned properties within the city limits.
Baltimore had 42,000 vacant housing units, 14 per cent of its stock—a scene of decay shockingly displayed in living rooms across the world by the TV series The Wire. Along the blighted Amtrak corridor to the North, Philadelphia was pockmarked by 60,000 vacant properties. Of all the larger cities in the 1990s, St Louis had the highest abandonment rate, with nearly 17 per cent of its housing, or 29,000 units empty. In smaller places such as Camden, New Jersey and East St Louis, the rate could go even higher.
In such places, where entire tracts could be picked up for a few dollars, property had lost all value. This inverted the conventional terms of urban policy. Since the days of the ‘urban renewal’ movement in the 1950s, weighing up competing private property claims and the public interest in economic development had been one of the most hotly contested problems of urban government. In 2005 the case of Kelo v City of New London once more headlined this familiar script. The Supreme Court caused a huge stir by allowing very wide licence to the city to exercise ‘eminent domain’ in bulldozing private property in the interests of city development. Defenders of private property were up in arms about the infringement this implied. But amongst the decaying post-industrial cities of America the hotly disputed waterfront of New London, Ct was very much the exception. In large parts of urban America, those who owned the inner city had lost all interest in it. The first and most immediate aim of policy, the flip side of public order policing, was to reattach property to its legal owners.
To do so, under their long-established ‘police powers’, American cities took more and more measures to control and eliminate the ‘public nuisance’ of vacant properties. In 2003, three NGOs launched the National Vacant Property Campaign to provide technical assistance to blighted areas. So-called community stabilization programmes that had been developed since the late 1990s in three of the worst hit cities – Baltimore, Indianapolis and Philadelphia – were touted as examples of particularly comprehensive approaches. The aim, as a report on Cleveland put it in 2005, was to do nothing less than ‘change the ground rules for owners of vacant properties’ in the city. In an earlier era such a slogan might have been the clarion call for a programme of radical social transformation; even in the early 2000s there was talk of a new era of ‘urban land reform’. But the language is misleading. The aim of this campaign to rebuild the inner cities of twenty-first-century America was not to redistribute or to expropriate, but to call those with titles back to the basic responsibilities of ownership.
As formulated by groups such as the National Vacant Property Campaign, the operation to restore the order of private property in America’s abandoned urban areas was four-pronged:
Register and record
All the community stabilization programs sought to develop unprecedentedly sophisticated Geographic Information Systems (GIS). These were high tech and attracted grant money and academic expertise. In Philadelphia, Penn’s cartographic modelling laboratory helped the city build a neighbourhood information system to link property, tax and utility records. Baltimore computerized its real estate records, which were then linked to a comprehensive GIS data warehouse. Case Western Reserve University implemented the NEO CANDO (Northeast Ohio Community and Neighborhood Data for Organizing) property information system for Cleveland and Cuyahoga County, Ohio. These systems produced dramatic visualizations of the urban space and helped to identify particular problem properties. But the practices of compiling and maintaining them also served a more basic structural purpose. America’s battered cities were re-enacting an elementary cadastral exercise. The first step towards reconnecting the abandoned spaces of the city to the market and to establishing government over them was to place them in a grid of registration, to identify for each building and lot the unpaid taxes, mortgages in arrears and code violations that would have to be resolved before it could be regarded once more as a conventional asset.
Once registered, like a prisoner on parole, the vacant property could be subject to a systematic programme of concerted monitoring and code enforcement under the city’s long-standing police powers. Wilmington Delaware and Cleveland, for instance, required multi-phase strategies for each registered vacant property for return to occupancy, rehabilitation or demolition. Flint Michigan in 2004 instituted a Clean and Green programme to maintain and stabilize thousands of abandoned properties, including collectively organized and supervised lawn mowing to hold nature at bay.
To register a property as vacant, owners were required to pay a fee – a tax by another name. These started at a few hundred dollars per year. But Wilmington, Delaware made the model far more effective by introducing escalating charges that rose after ten years of vacancy to as much as $5000 per year. Soon this model was adopted by other cities including Cleveland and Delaware. City governments were resorting to a basic technique of commodification, tried and tested since the medieval period. A property, which the owner had been required to register and which due to city charges costs thousands of dollars to maintain, is a property that demands attention. The choice was simple: let it, sell it, or demolish it. Those properties for which no fees were paid could be declared tax-foreclosed and taken into public ownership.
If the aim was to re-commodify abandoned urban real estate there had to be a potential purchaser, so an essential feature of the community stabilization agenda was to provide a buyer of last resort. Land banks to serve this role had been set up in St Louis in 1971, in Cleveland in 1976, in Louisville in 1989 and Atlanta in 1991. By the early 2000s they had spread to dozens of cities. In 2005, Michigan, at the epicentre of the deindustrialization crisis, introduced state-wide legislation to enable the rapid establishment of land banks and to speed up procedures to allow them to take possession of vacant land and abandoned property. The Genesee County Land Bank, struggling to contain the implosion of urban life in Flint Michigan, became the most dynamic operator of its type. It established itself as the automatic recipient of all tax-foreclosed properties in the county, maintaining, packaging and reselling them in batches.
Through the mediation of the National Vacant Property Campaign and other activist and expert groups, ‘community stabilization’ in the early 2000s began to take on a relatively standardized form. Dozens of cities and counties assembled ‘toolkits’ to speed up and coordinate the work of concerned local agencies and to diffuse best practice. The programmatic conservatism of the movement, however, betrayed it. In light of what lay ahead for the US economy and the real estate market in particular, the apparent modesty of ‘stabilization’ would prove to be nothing short of utopian. The nuts and bolts approach to restoring the property system would face a challenge of an altogether bigger order than the problem of broken windows.
Already in 2005, activists in cities like Cleveland could feel the ground moving beneath their feet. As they well understood, what little revival had been sparked in local housing markets since the 1990s had less to do with public order measures than the boom in new forms of subprime lending, specifically targeted at vulnerable borrowers in communities like theirs.
With good reason the subprime crisis is commonly thought of as a disaster of California, Florida and the Sunbelt. In terms of sheer numbers of defaults, this was where it was at its most dramatic. But in terms of sheer intensity, it was struggling post-industrial cities with their financially marginal minority populations that were hardest hit, and their crisis started early. By 2007, Cleveland already faced 15,000 foreclosures, four times the rate it suffered in 1995. Between 2006 and 2014, thirty per cent of all mortgaged properties in the Slavic Village neighbourhood would be foreclosed. As Kermit Lind, one of the chief legal advisors of the Cleveland housing activists, put it in 2011, the subprime crisis was, a ‘force’ that threatened ‘three decades of … neighborhood stabilization and rebuilding efforts’. As the crisis spread, Cleveland became a model and a laboratory for municipal policy responses across the nation. By 2014, its strategy of compulsory registration and taxation of vacancy had been taken up by as many as 1,700 cities. While tens of thousands of properties fell into foreclosure and were abandoned by their original owners, a cat and mouse game developed between city officials and the servicing businesses that were paid by the banks to manage their swelling portfolios of Real Estate Owned (REO) properties. Under the sign of the broken windows theory, Code Compliance Officers became the ‘first responders’ in the greatest shipwreck of private property that America had seen since the 1930s. Whilst the new absentee owners sought to minimize their costs, stagnant swimming pools, uncut grass, graffiti, squatting and unlicensed parties became the objects of relentless local police action.
Chicago under Mayor Richard M. Daley became the site for a particularly high stakes battle between housing activists and the Mortgage Banking Association of America and its service providers headed by the Safeguard Corporation. In a populist move, Daley demanded onerous new registration and preservation requirements for abandoned properties. To prevent a slide into decay, all vacant houses were to be fully glazed or secured with professional grade steel sheeting as well as twenty- four-hour lighting and security system protection. The costs for the stabilization of each property ran into the thousands and as the housing crisis settled in, they extended out into the indefinite future. Spearheaded by Safeguard, the absentee landlords of America began a nationwide campaign to contain the wave of expensive ordinances. In Chicago they succeeded in persuading the city to permit cheaper plywood cladding, at least for the first six months, and to reduce requirements to provide lighting and security. Meanwhile, the stock of properties in protracted ‘zombie foreclosures’ continued to increase at an alarming rate. Properties with no clear owner were nobody’s responsibility. In 2011 an activist Chicago city assembly took the radical step of amending its property maintenance ordinance to define any owner of a mortgage note, whether or not they had taken title, to be the responsible owner of a property. Within months, concerted opposition from mortgage lenders convinced Chicago to withdraw this menacing extension of the responsibilities of ownership.
Assertive and disruptive though mortgage industry lobbying may have been, if a city was dealing with Safeguard Corporation, at least it was a known quantity. This was not the worst case. As one of the campaigners of the National Vacant Properties Campaign commented:
The global nature of the mortgage industry adds yet another layer of complexity. The fungible nature of mortgages as financial investments encourages out-of-state lenders, such as Deutsche Bank, to purchase large loan portfolios of foreclosed properties form a collapsing lender. Without warning, the code official who invested hundreds of hours to track down the right person in the original mortgage servicer must start over with representatives of an entirely different, often complex, institutional owner. Establishing lines of communication with out-of-state and now foreign lenders exceeds the legal reach and capacity of local code enforcement departments. Such bulk loan purchases also increase the chance the new owner might not even know they own the mortgage.
It was this attenuated and irresponsible absentee form of ownership – ‘lawless property owners’ in Lind’s words – that led to the suits against Wells Fargo, Deutsche Bank and dozens of other banks after 2008. After trying to discipline local homeowners, America’s struggling cities sought to use the resources of the law to hold responsible the ultimate financial string-pullers. At best they may have hoped to receive enough financial compensation to pay for local remedies. The suits made headlines on both sides of the Atlantic and did considerable reputational damage to the banks. But in financial terms, the pursuit of public order through ‘public nuisance’ suits against global banks has yielded disappointing results. The cases were dismissed.
As the crisis dragged on it became clear that efforts both to stem foreclosure and to keep properties occupied were doomed to failure. In the second quarter of 2010 the number of vacant properties unoccupied for a year peaked nationwide at 14.5 million, 45 per cent up relative to 2000. Of Chicago’s 18,200 vacant and rotting buildings in 2011, 69.2 per cent had been foreclosed after 2006. Since then the figure has receded agonizingly slowly. Time, when it comes to decay, is all-important. Community stabilization had promised much. The toolkit was sound; but the crisis was too much to handle by such means. From 2011 onwards, America’s cities have resorted to the last and most definitive tactic for fighting decay: large-scale and wholesale demolition.
By the 1950s and 1960s, demolition was already a standard element in the repertoire of urban renewal. But demolition in today’s crisis is on a different scale. It involves not single buildings or streets but sizeable percentages of entire cities. It is not generally conceived of as preparatory to a specific project of redevelopment. Again, the New London case, which caused so much political furore, seems to belong to an earlier era. The void left by the current wave of demolitions will not be filled with a concrete development plan, or a specific investment in a particular future.
Modern-day mass demolition is rationalized as part of a continuous negative adjustment or ‘down-sizing’ of a physical environment to fit a smaller population.
The aim is Malthusian: to restore balance by reducing the stock of properties. The urgency of the programme, however, is better conveyed in a different register of metaphors. The aim is not regeneration but amputation. As Frank Ford policy advisor to Thriving Communities Institute of Cleveland put it, ‘for the larger body – the neighborhood – to survive, you have to remove those cancer cells.’ Translated into less drastic economic language, the aim of demolition is to raise average property prices by removing the negative externalities that radiate from abandoned and dilapidated properties.
The case for demolition needs to be argued, not because anyone has a more positive vision of what to do with the remains of America’s most desperate inner cities, but because the process of demolition itself is expensive and funding is scarce. To tear down and recycle a house costs between $7,500 and $40,000 per unit, considerably more as a one-time expense than simply boarding it up. The famous rows of brick houses in Baltimore are particularly expensive to take down. Given the 10-14 million vacant properties across the US, to address the problem nationwide would require an expenditure of billions of dollars. There is no prospect of that. But city by city, hundreds of millions of dollars have been mobilized since the crisis. The financial crisis generated not just the epidemic of foreclosures, but also an unprecedented flow of funds for large‐scale demolition.
In the panic-stricken days of 2008, when Paulson, Geithner and Co. dreamt up the Troubled Asset Relief Program (TARP) to absorb toxic Mortgage Backed Securities, they had in mind a wholesale transfer of ownership. In the heat of the moment, this solution to the entangled problem of housing and debt proved impractical. Instead, the money went to recapitalizing the banks. But as the panic ebbed, state-level and city government began to eye the dregs of the TARP fund as a potential source of funding for the radical, bottom up surgery they were proposing. Since demolition was not originally an admissible purpose for TARP funding, making the case required a combination of political effort, local organization and expertise. Crucially, as one of the Cleveland activists who had arrived in Congress in 2008 explained, ‘we had to make the case for internalizing the externalities of blight and vacancy.’ ‘We had to prove to Treasury that abolishing vacant structures that will not be repurposed will reduce foreclosure from abandonment and that this is, in fact, primary prevention of foreclosures.’ Cleveland, with its remarkable GIS information systems, became a laboratory for estimating the rewards of demolition.
Between 2009 and 2014 Cleveland spent $57 million on demolition, taking down 6,000 structures. Thanks to the magnificent resources of the NEO CANDO data warehouse, the effects can be calculated with uncanny precision. According to Case Western economists, the boost to the remaining property values in the city was in the order of $77 million dollars, yielding a net benefit of $20 million. Demolition paid. It was a ‘positive’ multiplier of a perverse new kind. A city could ‘grow’ in economic terms by spending money to shrink physically. With the Treasury open-minded, in the spring of 2013 Michigan started the process by applying for $100 million of the funds allocated to the state under the Hardest Hit program to be dedicated to demolition. Ohio asked for $60 million, Indiana for $75 million and Illinois for $30 million. Additional funds were provided from the $25 billion settlement reached with the mortgage providers by state attorney generals. In the case of Ohio, the activist attorney general decided that $75 million were best spent in a radical programme of clearance.
If no one wants to own the properties and their existence contaminates those that do, they must be eliminated. The logic of the proposal is simple enough. But hidden amongst the visually compelling GIS maps and the technical econometrics are a series of telling qualifications that suggest the complexity behind this draconian logic. Demolition is haunted by a paradox. The decay that is most dramatic and extensive, that calls most obviously for removal on public order grounds, has least economic value. And its removal, though most expensive, is also least useful. The widespread demolition of properties in the poorest parts of Cleveland had the effect, according to the City’s own calculations, of further reducing the already depleted assets of the poorest neighbourhoods. It was in the richest most stable parts of the city that the multiplier truly operated. There, surgical demolition of the few abandoned properties had huge financial benefits. If the aim of the game was to generate economic benefits, there was little point in wholesale demolition across those parts of the city where there was the most decay and the most spectacular collapse of public order. Instead, the resources would be concentrated on eliminating those pockets of blight that threatened the remaining high-functioning parts of city life and used to shield those zones by clearing firebreaks around them, fighting decay ‘from the edges’. The rest would simply be left to rot. Cleveland has no option but to be selective: the $50 million bond raised in October 2014 would pay for the demolition of only one third of the 15,000 abandoned properties waiting for processing.
When Schumpeter coined the phrase ‘creative destruction’, he captured an essential feature of economic growth. In the struggle to mobilize and put scarce resources to work, technological innovation and visionary, credit-fuelled entrepreneurship ride roughshod over existing investments. Despite its contrary inflexion, the environmentalist critique of externalities and the struggle to make corporations responsible for their legacy costs works within the same framework. It is a critique of growth. Its premise is that there is someone to hold to account, someone who must be made to bear the costs of remediation. Costs can be set against profits and assets. At a national and even regional level that growth paradigm continues to hold. But in the post-industrial cities of America it is the basic premise of on-going growth that has broken down. Land has lost its value. It is no longer scarce. Local government has constructed a rationale for public borrowing to finance demolition by way of invoking externalities; visible decay threatens the property that continues to be valued. But the lack of a plausible vision of the economic future haunts the entire exercise, down to the econometrics.
Cleveland’s experts produced a powerful argument for spending tens of millions on shrinking the city. But as they carefully acknowledged, their calculations suffer from the problem that afflicts any attempt to formally model investment decisions. Their data is historical. The best they can do is to project forward existing patterns. What they cannot capture is the future outlook that is in fact decisive in determining the value of the surviving properties. As the econometricians admitted, they simply have no way of modelling such expectations. And yet one suspects that it is precisely the emptiness of future imagination that is in fact the strongest argument for clearance and demolition. Buildings are knocked down not because anyone has any idea of what comes next, or because the econometrics can provide us any grasp on the uncertain future. City managers are clearing derelict inner cities because everyone prefers the promise of an empty lot to the haunting presence of a decaying economic past. There is no better way to persuade the inhabitants that do remain that it is still worth their while to fix their windows than to remove the rotting ruin next door.
But it would not be entirely fair to say that the demolition programme is purely negative, or that it is entirely void of future vision. In fact, the way that the reoccupation and reuse of the vacant sites is being imagined is extremely telling. Cleveland’s vacant spaces have attracted eager speculation and much grant-writing on the theme of urban agriculture. Around the formerly industrial city, brownfield sites have been repurposed into orchards and greenhouses. A new generation of urban farmers has emerged. Some, inevitably, are graduates of the food culture of Brooklyn. Others are recent migrants to the US, skilled in small-scale farming, who bring with them foodways from Asia and Africa. Amongst the most ballyhooed of Cleveland’s urban homesteaders is Mansfield Frazier, an African American entrepreneur, reformed ex-conman turned activist and grant-writer, who was given his pick of sites to start an ambitious agribusiness. His ventures include a three-quarter acre vineyard named Chateau Hough in a lot once occupied by a thirty-unit apartment building – 290 vines were provided from upstate New York courtesy of a $15,000 grant. He is also experimenting with an abandoned basement repurposed as a sandstone-lined ‘biocellar’ in which to grow shitake mushrooms at $12 per pound. To do the work of ground clearance, Frazier has recruited fellow ex-cons performing mandatory community service in a nearby halfway house and a trickle of college professors from nearby Case Western University. ‘Digging down’, Frazier remarked, ‘I found everything but dead bodies’, a remark that takes on its full significance when you recall that in the hot summer of 1966 only blocks away from the Hough vineyard, four people were killed and thirty critically injured in one of the bloodiest race riots of that troubled period. Frazier’s White Traminette vines may still be immature, but they satisfy the desperate need for a narrative resolution of the crisis of private property and public order in America’s cities. The void left by the decay of industrial America is filled with the image of the robust urban peasant, tending to his vines and leading young African American men away from window breaking, back to the family farm.
From broken windows to bulldozers by Adam Tooze was first published in Decadence and Decay, 2019, Axess Publishing