THE CHANGING STATE OF GENTRIFICATION
JASON HACKWORTH* & NEIL SMITH**
*358 Bellamy Building, Department of Geography, Florida State University, Tallahassee, FL 32306-2190,
USA. E-mail: jhackwor@mailer.fsu.edu
**Center for Place, Culture, and Politics, The Graduate Center, City University of New York, 365 Fifth
Avenue, Room 6107, New York, NY 10016-4309, USA. E-mail: nsmith@gc.cuny.edu
Received: May 2000; revised November 2000
ABSTRACT
Gentrification has changed in ways that are related to larger economic and political restructuring. Among these changes is the return of heavy state intervention in the process. This
paper explores heightened state involvement in gentrification by examining the process in three
New York City neighbourhoods: Clinton, Long Island City, and DUMBO (Down Under the
Manhattan Bridge Overpass). We argue that state intervention has returned for three key
reasons. First, continued devolution of federal states has placed even more pressure on local
states to actively pursue redevelopment and gentrification as ways of generating tax revenue.
Second, the diffusion of gentrification into more remote portions of the urban landscape poses
profit risks that are beyond the capacity of individual capitalists to manage. Third, the larger
shift towards post-Keynesian governance has unhinged the state from the project of social
reproduction and as such, measures to protect the working class are more easily contested.
Key words: Gentrification, New York City, governance, neighbourhood change, state restructuring, economic restructuring
INTRODUCTION
Late in 1998, real estate developer David
Walentas was given permission by the city
of New York to redevelop a portion of the
northern Brooklyn waterfront next to the
neighbourhood of DUMBO (Down Under
the Manhattan Bridge Overpass). Walentas
has been trying to gentrify DUMBO since the
early 1980s, and has been seeking permission
to do so for almost as long. Turning the waterfront into a commercial arcade, not unlike
South Street Seaport, directly across the East
River, is an important component of his bid to
bring the gentry to DUMBO. Yet for most of
the 1980s and early 1990s Walentas encountered nothing but resistance from City Hall
and Albany (the state capital). He lacked the
experience and funding, they said, to be given
permission to redevelop the site (Ennen 1999).
If the private market did not have enough
faith to back Walentas with lending capital,
why, asked public officials, should tax dollars
be used to support it?
Recently, the city changed its stance towards
Walentas’ plan. Not only was he given the
planning permission that he coveted for the
waterfront, but he was also given important
zoning concessions as well. This occurred
despite the fact that neighbourhood residents
were unified against the plan (Ennen 1999).
While this case could be simply discarded as
another example of the Giuliani Administration repaying campaign contributors, other
(very different) examples of recently increased state involvement in gentrification
imply that something larger is afoot. Several
years earlier, for example, the Federal Housing Administration awarded MO Associates – a
firm trying to gentrify Long Island City (LIC)
– unprecedented mortgage insurance for a
luxury condominium project in Queens. Not
long before this, the city’s department of
Housing Preservation and Development (HPD)
Tijdschrift voor Economische en Sociale Geografie – 2001, Vol. 92, No. 4, pp. 464–477.
# 2001 by the Royal Dutch Geographical Society KNAG
Published by Blackwell Publishers, 108 Cowley Road, Oxford OX4 1JF, UK and 350 Main Street, Malden MA 02148, USA
465
THE CHANGING STATE OF GENTRIFICATION
all but eliminated its anti-gentrification enforcement in the neighbourhood of Clinton.
After years of laissez-faire politics regarding
gentrification – i.e. to encourage it only if the
private market has proven it viable and in
some cases, even help in its resistance – local
governments, state level agencies, and federal
administrations are assisting gentrification
more assertively than during the 1980s. In
the USA, some of this shift has been formalised into urban policy, but much of this
change has been played out less formally,
in the form of increased local government
assistance to gentrifiers, relaxed zoning, and
reduced protection of affordable housing.
Why is this the case? This essay explores the
reasons for the return of state intervention by
examining the nature of recent gentrification
in three New York neighbourhoods: Clinton,
Long Island City, and DUMBO (Figure 1).
Each avoided a major bout of gentrification
during the 1980s but all are presently the
focus of reinvestment, largely though not exclusively because of recent state intervention.
As such they represent useful case studies for
exploring why – in an epoch of continual
deregulation – the state is suddenly more
involved in the process.
In order to address this question, a short
history of gentrification is chronicled. Following this, explicit attention is focused on why
the state’s role in gentrification has increased,
by drawing on the available literature and
exploring the process in the aforementioned
neighbourhoods.
WAVES OF GENTRIFICATION
While most gentrification researchers would
agree with Loretta Lees (2000, p. 16) when
Ma
nh
at
ta
n
Bronx
Clinton ?
Clinton
Long Island
Island CityCity
Long
Kilometres
Kilometers
0
Queens
6
DUMBO
DUMBO
Brooklyn
Staten Island
Figure 1. Case study neighbourhoods in New York City.
# 2001 by the Royal Dutch Geographical Society KNAG
466
she explains that, ‘gentrification today is quite
different to gentrification in the early 1970s,
late 1980s, even the early 1990s’, little explicit
attempt has been made thus far to chronicling,
much less theorising, these changes. In order
to understand the changing role of the state in
gentrification, it is first necessary to understand (at a minimum) the context for changes
to the process as a whole.
Systematic gentrification dates back only to
the 1950s but has evolved enough to assemble
a periodised history of the process. Figure 2
is a schematic summary of this history. Each
phase of gentrification in the diagram is demarcated by a particular constellation of political
and economic conditions nested at larger geographical scales. Though the timeline draws
heavily from the experience of gentrification
in New York City it has wider applicability
insofar as studies from other cities were used
to assemble it. Specific dates for these phases
will undoubtedly vary from place to place, but
not so significantly as to diminish the influence of broader scale political economic events
on the local experience of gentrification.
First-wave gentrification: sporadic and stateled – Prior to the economic recession that
settled through the global economy in late
1973, gentrification was sporadic if widespread. Disinvested inner-city housing within
the older north eastern cities of the USA,
Western Europe and Australia became a target
for reinvestment. While highly localised, these
instances of gentrification were often significantly funded by the public sector (Hamnett
1973; Williams 1976; Smith 1979), as local and
national governments sought to counteract
the private-market economic decline of central
city neighbourhoods. Governments were aggressive in helping gentrification because the
prospect of inner-city investment (without
state insurance of some form) was still very
risky. While state involvement was often justified through the discourse of ameliorating
urban decline, the effect was of course highly
class specific. Conditions generally worsened
for the urban working class as a result of such
intervention (Smith 1996).
If the global economic recession that affected various national economies between
1973 and 1977 also depressed national hous# 2001 by the Royal Dutch Geographical Society KNAG
JASON HACKWORTH & NEIL SMITH
ing markets, its effects on gentrification were
more ambiguous. The recession was triggered
by the international oil embargo but provoked
at a deeper level by various developments:
falling profit rates in the productive sectors
of the economy; increasing global competition and integration as Germany and Japan
emerged as industrial powers; competition
from the cheap labour of newly industrialising
countries; and crises in the financial sector
(Harvey 1989a). Despite the severity of that
recession, there is little evidence that gentrification was radically circumscribed in the mid
1970s, though disinvestment intensified in
certain US cities (Sternlieb & Hughes 1983).
This was certainly the case in New York City
where landlord abandonment and arson rose
to an all-time high in the 1970s. At a more
general level, the economic downturn also
encouraged the shift of capital from unproductive to productive sectors, setting the stage
for a reinvestment in central city office,
recreation, retail and residential activities
(Harvey 1985).
Second-wave gentrification: expansion and resistance – When depressed markets began to
revive in the late 1970s, gentrification surged
as never before. New neighbourhoods were
converted into real estate ‘frontiers’, and cities
that had not previously experienced gentrification implemented far-reaching strategies to
attract this form of investment. Most local
state efforts, however, focused on prodding
the private market rather than directly orchestrating gentrification. Federal programmes
like block grants and enterprise zones encouraged this relatively laissez-faire role. Despite
slow economic growth between 1979 and
1983, gentrification activity remained largely
unaffected (see Ley 1992 for the case of
Canadian cities). In New York, sales prices in
gentrifying neighbourhoods like Harlem did
drop somewhat in 1982–83, apparently in
response to the recession, but rebounded
sharply thereafter (Schaeffer & Smith 1986).
Less systematic evidence from other neighbourhoods in the city suggests that the
recession was similarly mild throughout the
inner city.
The second-wave, lasting almost to the end
of the 1980s, was characterised by the inte-
467
Transition
Gentrification slows: The recession constricts
the flow of capital into gentrifying and
gentrified neighbourhoods, prompting some to
proclaim that a ‘degentrification’ or reversal
of the process was afoot.
The anchoring of gentrification: The process
becomes implanted in hitherto disinvested
central city neighbourhoods. In contrast to the
pre-1973 experience of gentrification, the process
becomes common in smaller, non-global cities
during the 1980s. In New York City, the presence
of the arts community was often a key correlate of
residential gentrification, serving to smooth
the flow of capital into neighbourhoods like
SoHo, Tribeca, and the Lower East Side.
Intense political struggles occur during this
period over the displacement of the poorest
residents.
Transition
Second-wave
Gentrification returns: Prophesies of
degentrification appear to have been overstated
as many neighbourhoods continue to gentrify
while others, further from the city centre
begin to experience the process for the first time.
Post-recession gentrification seems to be more
linked to large-scale capital than ever, as large
developers rework entire neighbourhoods, often
with state support.
Gentrifiers buy property: In New York and
other cities, developers and investors used the
downturn in property values to consume large
portions of devalorised neighbourhoods, thus
setting the stage for 1980s gentrification.
First-wave
1999
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1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
1982
1981
1980
1979
1978
1976
1977
1975
1974
1973
1972
1971
1969
1968
Third-wave
THE CHANGING STATE OF GENTRIFICATION
Sporadic gentrification: Prior to 1973, the
process is mainly isolated in small
neighbourhoods in the north eastern USA
and Western Europe.
Figure 2. Schematic history of gentrification (recessions in grey).
# 2001 by the Royal Dutch Geographical Society KNAG
468
gration of gentrification into a wider range of
economic and cultural processes at the global
and national scales. Nowhere was this more
true than in New York, where the city’s
emergence as a world city, the inflation of
the real estate market, and the burgeoning
of an internationally recognised ‘alternative’
art scene in SoHo and the Lower East Side
went hand-in-hand with powerful and at times
ruthless gentrification (Zukin 1982, 1987;
Deutsche & Ryan 1984). Although celebrated
by some (Caufield 1994), gentrification was
also challenged in and around places like
New York’s Tompkins Square Park, where
homelessness, eviction and the increasing
vulnerability of poor residents was directly
connected to gentrification (Smith 1989,
1996). To the north, in Clinton, activists used
the apparatus of local government to fight
gentrification, but like the resistance in the
Lower East Side, their efforts struggled to
offset the overwhelming advance of the process in these neighbourhoods by the decade’s
end.
Third-wave gentrification: recessional pause
and subsequent expansion – The stock market
crash of 1987 provided the first warning signs
of another imminent recession, but it was not
until 1989 that inner-city residential land
markets crashed along with the rest of the
US economy. Unlike previous recessions in
which gentrification slowed very little, during
the recession of the early 1990s, gentrification
came to a halt in some neighbourhoods and
was severely curtailed in others. The effects
of the recession certainly varied, but it was
sufficiently severe to lead some critics to
speculate that the 1990s were witnessing ‘degentrification’ (Bagli 1991). Bourne (1993),
for example, predicted the ‘demise of gentrification’ due to an ageing of the baby boom,
declining real incomes, and a relative reduction in the supply of inner-city housing. Since
1993, however, the expectation of degentrification has evaporated as reinvestment has
again taken hold and a third-wave begun. In
New York, all of the key inner-city housing
market indicators – housing unit sale prices,
rent levels, tax arrears, mortgage levels – have
reversed themselves (from the recessional
downturn) with the onset of the third-wave
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JASON HACKWORTH & NEIL SMITH
of gentrification, while growth in the suburbs
has been slower to recover. The recession
appears in retrospect to have been a transition
period to the third-wave more than the advent
of degentrification or any curtailment of
inner-city reinvestment.
Post-recession gentrification – the thirdwave of the process – is a purer expression of
the economic conditions and processes that
make reinvestment in disinvested inner-urban
areas so alluring for investors (Smith &
Defilippis 1999). Overall, economic forces
driving gentrification seem to have eclipsed
cultural factors as the scale of investment is
greater and the level of corporate, as opposed
to smaller-scale capital, has grown. In particular, third-wave gentrification is distinct from
earlier phases in at least four ways.
First, gentrification is expanding both within
the inner-city neighbourhoods that it affected
during earlier waves and to more remote
neighbourhoods beyond the immediate core.
Second, restructuring and globalisation in the
real estate industry has set a context for larger
developers becoming involved in gentrifying
neighbourhoods (Logan 1993; Coakley 1994;
Ball 1994). While such developers used to be
common in the process only after the neighbourhood had been ‘tamed’ (Zukin 1982; Ley
1996), they are now increasingly the first to
orchestrate reinvestment. Third, effective resistance to gentrification has declined as the
working class is continually displaced from the
inner city, and as the most militant antigentrification groups of the 1980s morph into
housing service providers. Fourth, and of most
relevance to this paper, the state is now more
involved in the process than the second-wave.
The remainder of this paper focuses on the
possible reasons for the latter change to
gentrification.
THE CHANGING STATE OF
GENTRIFICATION
After a curious departure from direct involvement in gentrification during the second-wave,
the state has become more interventionist
in the third-wave. There are several salient
aspects to this history. First, the private market
expansion of gentrification in most cities has
generally exhausted itself. In classic first-wave
THE CHANGING STATE OF GENTRIFICATION
neighbourhoods, like Society Hill in Philadelphia and SoHo in New York City, the state
(mostly at city and federal level) had a very
direct role in organising and encouraging
gentrification (Smith 1979; Zukin 1982). Innercity reinvestment was still very risky (during
the 1960s), so land assembly, tax incentives,
and property condemnation were all orchestrated by the state, as were more informal
attempts to convince conservative lenders and
patrician families to move to such neighbourhoods (Smith 1979). After initial footholds in
neighbourhoods like Society Hill and SoHo,
gentrification radiated outward without such a
direct need for the state because inner-city
real estate investment was becoming less risky.
During the 1980s, a private-market gentrification congealed into a reinvested core close to
the central business district (CBD) of many
cities (Hackworth 2001). But after almost two
decades of this type of expansion, most of the
easily gentrified (i.e. high amenity, close to
the CBD) neighbourhoods have already been
fully reinvested. By necessity, gentrifiers and
outside investors have begun to roam into
economically risky neighbourhoods – e.g.
mixed-use neighbourhoods, remote locations,
protected parcels like public housing – which
are difficult for individual gentrifiers to make
profitable without state assistance. The privatemarket expansion of gentrification has generally exhausted itself; state assistance (or
some other form of assistance) is increasingly
necessary for the process to swallow ‘underdeveloped’ parcels further from the CBD.
But the return of state intervention is more
than the product of gentrification’s spatial
expansion. It is also encouraged by the secular
tendency away from the maintenance of mass
consumption – Keynesian governance. While
Keynesian governance was certainly on the
ebb by the mid 1970s, it would be a mistake to
conclude that it had summarily expired with
the election of Ronald Reagan and Margaret
Thatcher. State attempts to encourage gentrification during the second-wave were still
partially impeded by internal vestiges of the
Keynesian state – in the USA, the Department
of Housing and Urban Development (HUD)
is the best example. By the late 1960s, social
movements had forced the creation of the
cabinet level housing agency (HUD), which,
469
in part, restricted the private market pursuits
of local government by redirecting public
funding to affordable housing. As Feldman
and Florida (1990) note, the effect of this
change in the USA was swift and prohibitory
for pro-business local states. Removing public
housing – long seen as anathema to gentrification – was, for example, made practically
impossible by HUD, and affordable housing
construction dramatically increased between
1968 and 1973. Though the Reagan and
Thatcher administrations actively assaulted
such regulatory obstacles during the 1980s,
their work was only partially completed by the
time both left office.
The assault took the form of funding
reductions for welfare and affordable housing, but more subtly it also encouraged nonKeynesian modes of local governance (Gaffikin
& Warf 1993). The latter typically involved the
encouragement of the ‘entrepreneurial local
state’ (Harvey 1989b) through programmes
that prodded the private market (‘enterprise
zones’, for example) rather than direct subsidy. Direct intervention by the local state was,
however, still constrained by agencies like
HUD, which forced cities to address affordable housing issues if a gentrification plan was
unveiled (Hackworth 2000). In the USA, many
of these constraints were dissolved in 1994,
with the swift devolution of much of the
regulatory capacity (over the affordable housing sector) that was still nested in the federal
state (Staeheli et al. 1997). HUD was disemboweled – ‘reinvented’ to use the euphemistic
parlance used to justify it – and significantly
restricted from offsetting gentrification at the
local level. Their HOPE VI programme, for
example, now allows municipal governments
to remove public housing units for the purpose of redevelopment without one-for-one
replacement (Wyly & Hammel 1999). The few
remaining obstacles (within the federal state)
to gentrification (which partially restricted
state involvement in the second-wave) have
largely been removed since the onset of the
third-wave.
Paralleling heightened deregulation in the
third-wave is a reduction in federal redistribution to localities. With a decline in federal
redistribution during the 1990s, some of the
pressures that originally encouraged the for# 2001 by the Royal Dutch Geographical Society KNAG
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mation of the entrepreneurial local state
(Molotch 1976; Harvey 1989b; Leitner 1990)
have been ratcheted up even further. The
imperative to generate tax dollars has, for
example, become even more pressing for
localities because federal funds are now more
scarce. As such, many cities have embarked on
a partnership with capital that exceeds even
the pro-business 1980s (Smith 1999). Compounding the necessity to generate tax dollars
is the need for cities to appear business
friendly in order to maintain their credit
rating (Gaffikin & Warf 1993, p. 78; Sassen
1996, pp. 15–16; Sinclair 1994). Ever since the
well-publicised bankruptcies of several large
cities in the 1970s (Tabb 1982; Lichten 1986),
the lending community has become more
demanding of municipalities to maintain a
businesslike ledger sheet. Losing a good credit
rating can be devastating for an urban regime
that has leveraged the future of a given city on
the redevelopment of its downtown or the
gentrification of a given neighbourhood. With
the decline in federal outlays to cities, the
need to borrow funds for redevelopment has
increased during the third-wave. In order to
retain the fiscal viability necessary to keep
receiving such loans, many cities have, more
unabashedly than in the past, turned to the
attraction and retention of the middle class to
increase tax revenue (Varady & Raffel 1995).
Altogether, the state shift towards a more
openly supportive role in gentrification has
helped facilitate a rapid expansion of the
process during the third-wave. Yet while the
larger reasons for this shift are common, its
local articulation is more varied.
Clinton – In Clinton, for example, the most
notable shift in state involvement during the
third-wave is the departure from Keynesian
regulation, manifest through the Special
Clinton District (SCD). The SCD was the
result of community organising during the
1960s. It restricted the power of property
owners to gentrify their holdings in the neighbourhood, and was enforced (somewhat effectively) by the city until the 1990s.
The genesis of the Special Clinton District is
embedded in the history of the Clinton
Planning Council (CPC). The CPC was established in the mid 1960s to organise against
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JASON HACKWORTH & NEIL SMITH
urban renewal plans that were directed at the
neighbourhood. In 1968, the CPC became
prominent with its opposition of the newly
written New York City Master Plan, which
identified Clinton as the ideal location for
several large renewal projects. The Plan called
for the construction of 3,000 hotel rooms,
7.5 million square metres of office space, and
25,000 new apartments in the neighbourhood
(Sclar 1993). Clinton residents felt that the
plan would eventually lead to their displacement and began to organise through the CPC.
By 1972, this opposition to development
coalesced into the ‘Save Clinton Committee’,
which wrote an alternative ‘People’s Plan’,
and dedicated itself to the specific task of
resisting the siting of a proposed convention
centre in the neighbourhood (HKNA 1999;
Sclar 1993). The opposition movement attracted the attention of Congresswoman Bella
Abzug who pressured city leaders to explore
other neighbourhoods for the proposed centre.
In response to pressure from Abzug and
others, City Planning Commissioner John
Zuccotti proposed special district status for
Clinton, so that residents could more effectively oppose the project. In November 1973,
the proposal was formalised into a one-year
interim special district for Clinton (Sclar 1993).
The interim district emboldened popular
support for the neighbourhood’s efforts so
local elected officials began to warm to a more
permanent designation. Shortly thereafter,
Manhattan Borough President Percy Sutton
took the bold step of conditioning his support
of the convention centre on the establishment of a permanent district for the neighbourhood (Sclar 1993). In October 1974,
the New York City Planning Commission,
under increasing pressure, acquiesced, and
voted to create a permanent special district for
Clinton.
The goals of the permanent Special Clinton
District were fairly straightforward. The District was established to protect against widespread development that might displace
existing residents. The goal was to maximise
the number of affordable, family-sized units
within the neighbourhood to counterbalance
mounting development pressure. The most
restrictive clause of the district designation
prohibited demolition of any structurally
THE CHANGING STATE OF GENTRIFICATION
sound building and prohibited any alteration
permit where a history of tenant harassment
could be found. Harassment violations were
determined by the HPD working in conjunction with the Clinton Neighborhood Preservation Office. If the proposed development took
place at a site free of past tenant harassment,
a certificate of non-harassment was issued by
the HPD, and construction was permitted.
Predominant focus was placed on a portion of
the neighbourhood deemed ‘the preservation
area’, where building heights were kept at
no more than 19.8 metres (or seven stories,
whichever was lower). Special variance permits
could be sought for new construction, alteration, or demolition within the SCD, but only
after a hearing with the city’s HPD.
Yet while provisions were made for those
wishing to build in the neighbourhood, most
developers abhorred the District’s power. It
created an obstacle that many felt was excessively punitive. In 1986, BACO Fifty-Fourth
Street Corporation formalised this sentiment
by suing the city and the neighbourhood
preservation office for establishing an unconstitutional barrier to development (HKNA
1999). BACO argued that the SCD was unconstitutional because it shackled current
builders to the harassment of past owners.
Tenant harassment was tied geographically to
a particular plot of land rather than to a given
developer so there was no way for current
owners to remediate the wrongs of the past.
The clause was originally created because
New York developers and landlords have a
long-established record of shifting properties
between one another to conceal ownership,
thus making it difficult, if not impossible, to
trace tenant abuse (Deutsche 1996). BACO
argued that, regardless of its intent, the clause
was unconstitutional because landlords were
unable to ‘cure’ the harassment of previous
owners. In 1987, a federal court judge partially
agreed with the company by stating that while
it is entirely constitutional for the neighbourhood to define the future of development, a
‘cure clause’ must be added to the existing
SCD that would enable developers to ‘exonerate’ properties from harassment committed
in the past (Dunlap 1989).
More trouble for the SCD and its advocates
came in 1990 when the New York State Senior
471
Citizen Foundation (NYSF) tried to build a
retirement home in Clinton. The proposal
violated the 19.8-metre height limit and the
anti-demolition clause of the SCD and as such,
deeply divided the community between those
who wanted to protect the sanctity of the SCD
and those who thought that senior citizen
housing was too important to limit because
of District regulations (Dunlap 1988; HKNA
2000). HPD eventually made an exception for
this case but because developers would now
have a legal precedent to resist the SCD, city
officials were forced to modify the District’s
regulations more generally. Later in 1990, the
terms of the SCD were renegotiated by the
City Planning Commission to accommodate
the court order and the NYSF controversy
(Sclar 1993). First, developers were given
permission to ‘exonerate’ their properties in
order to obtain a demolition or alteration
permit if they agreed to devote 28% of their
new structure to affordable housing units.
Additionally, demolition of sound structures
would be allowed if: a) the project was not
eligible for subsidised rehabilitation funds;
b) affordable housing was included in the
overall project; and/or c) substantial preservation was required (over 20% of the residential
floor area) to improve the structure (Sclar
1993). The ostensibly benign technical modifications to the SCD and the palpably less
enthusiastic enforcement by the HPD (Gwertzmann 1997; Lobbia 1998) have been effective
at lowering developer aversion to the neighbourhood. The local real estate press lauded
the neighbourhood as one of the trendiest
gentrifying districts in the city during the
1990s (Lobbia 1998; Cawley 1995; Deutsch
1996; Finotti 1995). As each of these reports
have also pointed out, however, the previous
ability of the SCD to retain affordable housing
has slipped away. Much of this is because the
new regulations are so hard to enforce,
particularly determining whether 28% of the
units are affordable. Community activists have
also noted that HPD under the Giuliani
Administration is much quicker to deliver a
requested permit than earlier administrations
(Gwertzmann 1997). Paraphrasing one longtime housing activist, reporter J. Lobbia
(1998) explains, ‘the Department of Buildings
readily gives permits to owners who, for a
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472
number of reasons, should not have them, or
allows those with permits to do construction
and demolition work well beyond what the
permit allows’ (p. 49). As housing becomes
less affordable in Clinton, progressive neighbourhood activists are leaving, along with the
working class residents whose housing is no
longer protected (Gwertzmann 1997). As Bob
Kalin, another long-time activist in the neighbourhood, explains, ‘There will always be
an element of poor people in this community
but it will be smaller and smaller and we
[activists] will end up organizing in more
and more buildings where the tenants have
enough money to access attorneys’ (Gwertzmann 1997). Overall, the recent experience
of Clinton provides a useful example of how
the (few) internal (to the state) obstacles to
gentrification during the second-wave have
eroded to such a point as to be ineffectual
during the third.
The goal of state power to resist gentrification was partially achieved with the creation of
the SCD. But within the context of political
deregulation, devolution of the federal state,
and growth of the reinvested core, pressures
to gentrify Clinton intensified and percolated
through the local state to dissolve the SCD.
Removing the power of the SCD was crucial
for gentrification to expand in Clinton, but
the impetus and backing to do so have only
recently coalesced.
Long Island City – Recent state involvement
with gentrification has also intensified in Long
Island City, albeit in a form different than
Clinton. Though local government has been
trying to assist luxury residential development
in LIC since the early 1980s, it is only since
the onset of the third-wave that the political
environment changed sufficiently for this
activity to intensify without effective resistance.
Banks have been squeamish about lending
in Long Island City for many years, largely
because it is a mixed-use neighbourhood, with
many active warehouses, factories, and workingclass apartment buildings. Because so much
of the neighbourhood is zoned commercial,
property is expensive enough to all but rule
out the involvement of small-scale gentrifiers,
who tend to be more dependent on traditional forms of lending capital. The state
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JASON HACKWORTH & NEIL SMITH
holds a crucial role in offsetting the high risk
that even corporate gentrifiers face when the
‘frontier’ diffuses into such (relatively) remote
locales.1
The key piece of LIC’s state-facilitated
gentrification is the Queens West Project – a
massive plan to bring luxury residential, office
and commercial space to the neighbourhood.
After years of planning, the city’s Economic
Development Corporation (EDC) and the
Port Authority of New York and New Jersey
(PA) unveiled a $2.3-billion plan in the mid
1980s, which called for the construction of
6,385 residential units, 600,000 square metres
of office space, a 350-room hotel, 67,500
square metres of retail space, 12,000 square
metres of community facility space, and offstreet parking for 5,331 cars (HPCC 1996; Port
Authority 1999). The project was to be completed in three phases.
Tipped off by public officials that the waterfront area of Hunter’s Point in Queens was
being considered for redevelopment, William
Zeckendorf Jr. and several other major developers, investment bankers and real estate
brokers, began acquiring property in the
neighbourhood (Moss 1990). The entry of
major real estate capital into the neighbourhood, inspired a reinvestment in the housing
market and emboldened City Hall to offer tax
breaks to Queens West. The Koch Administration offered a 16-year tax abatement and
$30 million in city money to assist the project
(Moss 1990; Fainstein & Fainstein 1987).
Despite such support, Queens West was still
risky, but City Hall was unable or unwilling to
ameliorate this risk by offering more. Other
obstacles existed: community opposition to
the project was beginning to coalesce by the
early 1990s, and the residential portion of the
project would need some form of mortgage
insurance to become reality.
Local opposition became an obstacle with
the formation of the Hunter’s Point Community Coalition (HPCC) in 1990. The HPCC
did not want the bulky project built in its
neighbourhood without some guarantee that
jobs and working-class residents (particularly
the elderly) would be protected (HPCC 1996).
Not long after the local opposition materialised, the New York State Urban Development
Corporation (UDC) entered the Queens West
THE CHANGING STATE OF GENTRIFICATION
development team (Moss 1990). The resultant
behemoth (which already included the EDC
and PA) was deemed ‘the Queens West Development Corporation’ (QWDC). The entry of
the UDC substantially undermined the ability
of the HPCC to resist the project and its impact. Originally established to site low-income
housing complexes, the UDC has the power to
override local opposition to development proposals (Gutfreund 1995). The UDC’s participation satisfied a crucial requirement for the
completion of Queens West – a way to overcome neighbourhood opposition.
By 1995, the QWDC had begun making
formal plans for the first phase of the project
which involved a small community park and
the Citylights Building – a 42-storey, 522-unit
apartment building. Though the building was
slated as the project ‘loss leader’ (apartments
were to be sold at under market value), the
building was still viewed as a risky prospect
(Passell 1996). Convincing banks to invest
luxury housing dollars into Long Island City’s
mixed-use landscape would require further
state intervention – namely mortgage insurance. The needed support arrived in 1996
when the Federal Housing Administration
(FHA) awarded the Citylights builder, Manhattan Overlook (MO) Associates, mortgage
insurance for the first residential structure
(Passell 1996). Though the FHA was originally
established to provide home loans for working-class buyers, it backed the mortgage here
even though there was an openly stated goal
to make the project semi-luxurious. FHA
involvement was reportedly motivated by the
‘pioneer’ hyperbole that the local real estate
press used to frame the project (Passell 1996).
Said one FHA official, ‘One of the FHA’s
primary roles is to help the pioneers’ (Passell
1996, p. 6). But given its long history of
aversion to such projects, there are likely less
capricious reasons for the Administration’s involvement. It is perhaps more usefully framed
within the gradual reorientation of such
agencies away from Keynesianism.
Whatever the reason, the effect was unambiguous. After the insurance was in place, the
AFL-CIO Housing Investment Trust provided
the $85.6 million in mortgage capital to MO
Associates and construction began (Passell
1996). Citylights was completed in 1997, and
473
though some relatively inexpensive units were
set aside, the majority of its apartments now
command luxury rents (Oser 1998). Though
construction of the first Queens West building
has not translated into an immediate gentrification of the surrounding neighbourhood, the
intense effort of government (manifest through
the QWDC) to actuate this goal provides a
useful window into the nature of the stategentrification nexus in the third-wave.
The involvement of the state as profit
protector in this instance is not only part of
a larger return of the state to gentrification
in the third-wave but also evidence that this
return is not limited to the local state. As
gentrification moves further from the CBD,
and becomes more risky for individual investors, the state becomes more necessary to
rationalise the conditions for profit. During
the second-wave (when the development
process for Queens West began), the federal
state was not as likely to guarantee mortgages
for luxury housing, primarily because of
Keynesian relics in the federal state which
directed attention to affordable rental housing rather than risky attempts to bring affluent
living to mixed-use neighbourhoods like
LIC. The Queens West case also reveals how
agencies of redistribution (like FHA and
UDC) are being morphed into powerful
progenitors of gentrification as their regulatory capacities get removed through state
restructuring.
DUMBO – Like Long Island City, DUMBO is a
difficult neighbourhood to gentrify. The small
loft district in northern Brooklyn is relatively
isolated, zoned non-residential, and still home
to competing industrial land users. As described earlier, the gentrification of DUMBO
is being largely orchestrated by one real estate
developer, David Walentas. But despite his
power as a developer, he was until recently
unable to begin implementing his plan for the
neighbourhood.
Walentas first purchased property in the
neighbourhood – nine turn-of-the-century industrial loft buildings at a cost of $16.5 million
– in 1982 (Dunlap 1998). His plan was to
transform the neighbourhood into an upscale
office and residential enclave. Shortly after
purchasing the buildings, Walentas was tenta# 2001 by the Royal Dutch Geographical Society KNAG
474
tively selected by the city – eager to bring some
(any) productive activity to the derelict landscape – to redevelop the waterfront of
DUMBO. Redeveloping it would be crucial if
gentrification in DUMBO were to work, so
Walentas was pleased with the nod from the
city. But before he could even assemble a
formal plan for the site, the city summarily
removed Walentas after anti-abatement (and
anti-Walentas) council member Ruth Messinger and deputy mayor Kenneth Lipper
publicly objected to the support (Ennen
1999). The deputy mayor justified the removal
by arguing that Walentas’ Two Trees Company had neither the experience nor the
financing to pull off such an extravagant plan.
To compound his difficulty, he also failed to
procure the zoning concessions necessary
to turn DUMBO into a residential enclave
(Tierney 1997). Walentas had apparently
failed the private-market litmus test that the
local state often employed during the secondwave.
Yet while Walentas encountered difficulty in
garnering support for his original plan, he did
receive important support of another form. In
1986, the state of New York agreed to move its
Department of Labor into one of Walentas’
buildings for ten years (Ennen 1999). This
provided him with the stability of a long-term
renter and time to attract the necessary
support from both City Hall and the lending
community for his original plan. During the
period 1987–97 (while the Department of
Labor was present), Walentas focused on
‘taming’ the neighbourhood for the type of
investors he was seeking. Primarily, he offered
rent concessions to artists to relocate in
DUMBO. By 1997, Walentas had successfully
attracted three ground-floor art galleries and
numerous working artists to his portion of the
neighbourhood alone. DUMBO had not only
been ‘tamed’ but it had actually become one
of the city’s trendiest art enclaves by the mid
1990s (Trebay 1999). A yearly arts festival and
several boosterish articles by the local press
(for example, Dunlap 1998; Garbarine 1998)
fuelled this perception and lowered investor
reluctance.
When the state’s labour department left
the Clocktower Building in 1997, Walentas
acted quickly to convert the structure into
# 2001 by the Royal Dutch Geographical Society KNAG
JASON HACKWORTH & NEIL SMITH
an up-scale residential apartment complex. In
March of 1998, Two Trees was able to procure
a construction loan – $30 million from the
Emmes Asset Management Company – after
being rejected by several (more traditional)
commercial institutions (Garbarine 1998). He
used the loan along with $3 million of his own
money to convert the structure in just under
one year. Demand for Clocktower units was
astonishing. By May of 1999, all but one of the
building’s 124 units had been sold or were
under contract. Two Trees was even able to
raise asking prices several times during the
sales process (Ennen 1999). With demand
proven, Two Trees is currently renovating
several nearby loft buildings to create 1,000
more housing units.
While Walentas has done much independently to gentrify DUMBO, his effort, power,
and influence would have been insufficient
without the support of the local state. In
addition to finally receiving the zoning concessions necessary to convert the Clocktower
Building, Walentas was re-appointed as developer of the nearby waterfront just as Clocktower units were coming on the market
despite community opposition. The decision
by the city played no small part in fuelling and
stabilising demand for the luxury units, and
for the larger project of gentrifying the
neighbourhood.
This case highlights yet another aspect of an
interventionist state in gentrification. As large
corporate developers become more involved
in gentrification, the contours of the process
begin to change. Such development actors are
more able to hold their property until support
from the lending community and state materialise. Walentas had difficulty in getting the
state to support his project during the 1980s,
but has found support at several levels during
the third-wave. The state has made important
zoning decisions and given him uncontested
approval to redevelop the waterfront despite
public opposition (Sengupta 1999; Finder
1999) and ambivalence from the lending community. By removing these obstacles, City Hall
has removed much of the risk associated with
gentrifying DUMBO, and to this extent has
mirrored a larger shift towards increased state
involvement in gentrification during the thirdwave.
THE CHANGING STATE OF GENTRIFICATION
CONCLUSION
While heightened state involvement has very
real consequences for localities, it is important
to frame it within the broader shift that is
fueling the third-wave of gentrification. This
shift has translated into an expansion of reinvestment from pockets created during the
first and second-waves. It has translated into
larger, more corporate developers involved
in the early stages of gentrification, and a
palpable decline of community opposition.
These changes are mutually reinforcing in
complex ways and worthy of another paper in
their own right.
This paper is an attempt to understand only
one aspect of this larger shift – namely how, in
an environment of privatisation, the state has
become more direct in its encouragement of
gentrification. In each of the cases described
above, the state was deeply implicated during
both the second and third-wave of gentrification, but it was only in the latter context that
such support overwhelmed community opposition, land-use obstacles, and Keynesian relics
designed to offset the process. Though work
remains to be done on how the restructuring
state is affecting other aspects of capitalist
urbanisation, it is evident at this point that a
systemic change in the way that the state
relates to capital is afoot.
Note
1. Although only a kilometre (across the East
River) from the most expensive neighbourhood
in NYC (the Upper East Side of Manhattan), LIC
is still considered ‘remote’ by the real estate
community because it is in Queens.
Acknowledgement
The support of NSF Grant #: SBR-9724988 is gratefully acknowledged.
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CHAPTER FIVE
CHINATOWN:
UNPROTECTED
AND UNDONE
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For years, the immigrant and working-class neighborhood of Chinatown
was able to resist gentrification, even as all nearby downtown neighborhoods turned into segregated citadels for the rich and the white. Today,
in large part due to zoning actions taken by the city in 2008 and 2011,
Chinatown is in the midst of a swift and severe transformation into yet another exclusive enclave.
First, a contextual “downzoning” that limited development in the
neighboring affluent East Village, absent zoning protections for Chinatown,
pushed development pressures further into Chinatown. The subsequent
rezoning of a large parcel of public land for large-scale, high-end development was a missed opportunity to create low-income housing to help
mitigate displacement, and instead created opportunities for new luxury
units that bolster speculation in surrounding areas. Luxury development,
rent deregulation, condo conversion, and tenement demolition have all
increased significantly since these rezonings, resulting in declining Asian
and Latino populations.
Attempts to create a community plan that would push back against
these trends have so far been rebuffed by the de Blasio administration,
which is moving forward with similar rezoning actions, despite evidence
of their racially discriminatory impact. The city’s refusal to take corrective action amounts to intentional discrimination against current residents
and those who would be expected to reside in Chinatown if corrective fair
housing measures were undertaken by the city.
HISTORY AND CONTEXT
Chinatown and the Lower East Side have long been home to new immigrants
and working-class communities. Chinatown is an economic and cultural hub
for Chinese and other Asian communities that, over the past century and a
half, has developed a complex and evolving network of migration, finance,
employment, and land ownership, which, though far from ideal, has provided housing and jobs for generations of immigrants (Kwong 1996).
A recent report found that the neighborhood has 116,722 residents
living in 2,118 buildings (AALDEF, 2013). According to According to 2013
American Community Survey data—figures that likely undercount immigrants—the racial composition of Community District 3 is 45 percent Asian, 19 percent white, 26 percent Hispanic, and 7 percent black.
While the median income for the metro area is $64,786, the median income in Chinatown and the Lower East Side is just $37,996, and on several
Chinatown blocks average income is closer to $16,000.
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The average structure is a five-story tenement with stores on the
ground floor. Most of these buildings were built in the 19th and early 20th
centuries during one of the Lower East Side’s immigration-driven population booms. Its far eastern edge is home to some of the city’s first public housing projects, including Smith, LaGuardia, and Baruch Houses, as
well as Confucius Plaza, a 762-unit Mitchell-Lama cooperative complex.
For nearly a century, New York City government and real estate interests have viewed Chinatown and the Lower East Side as opportunities for
growth and development. Located in the heart of lower Manhattan, south
of Midtown, and near the towers of Wall Street and the iconic East River
bridges, these neighborhoods have been subject to one scheme after another aimed at spurring high-end construction and dispersing its population of working-class people of color (Lin 1998).
One of the first such schemes was the Lower Manhattan Expressway, a
1929 plan for an elevated highway that would have carried 120,000 cars per
day from the Holland Tunnel to the Manhattan and Williamsburg bridges.
Cutting through Canal, Broome, and Delancey streets, it also would have
displaced at least 2,000 families and 800 businesses employing 10,000 people. Over the years, the plan was supported by powerful city interests, including Robert Moses, the influential Regional Plan Association, Governor
Rockefeller, and a group of finance and real estate interests known as
the Lower Manhattan Association. Opposition, however, was furious and
05.A Neighborhood Map: Chinatown—Manhattan Community District 3
Eas
t 14
th
S
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Sara
Bow
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D. R
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Seward Park
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sustained, bringing together Chinatown community leaders with famed activist Jane Jacobs and her Greenwich Village allies (Flint 2009). The plan
was eventually shelved, but the impulse to “redevelop” Chinatown lived on.
Many of the same public officials and business groups later came up
with a Title 1 Urban Renewal proposal called “China Village.” Declaring the
neighborhood “one of the worst slums in New York,” the State Housing
Division proposed demolishing fifteen acres of Chinatown and replacing it
with eight high-rise housing projects and an Orientalist tourist market (as
quoted in Umbach and Wishnoff 2008, 220). In the face of opposition from
Chinatown residents and dwindling finances, the plan was vastly scaled
down, and resulted in a much smaller urban renewal action.
In 1981, the Department of City Planning (DCP) proposed a Special
Manhattan Bridge District for Chinatown’s east side. The plan would have
encouraged the construction of private high-rise condominiums at prices very few Chinatown residents could afford. Several community organizations resisted the plan and sued the city; the most significant lawsuit,
Chinese Staff and Workers Association v. City of New York, argued that environmental impact reviews must evaluate the secondary economic impacts of private development, including indirect displacement.2 The judge
sided with the community, and the rezoning plan was halted.
2008 AND 2011 REZONINGS AND
DISPARATE RACIAL IMPACTS
By the early 2000s, years of rising land values and rents had brought significant new, often out-of-scale residential and commercial development to
the East Village, Lower East Side, and parts of Chinatown. After years of advocacy for preservation measures by residents and Community Board 3, in
2008 DCP proposed to rezone 111 blocks of the East Village and Lower East
Side. The plan called for contextual rezoning and height limits to “preserve
the established neighborhood scale and character” as well as increased
residential density. In the final iteration of the plan, DCP stated that the
city would also provide incentives for affordable housing.3 DCP presented
a plan for balanced growth throughout the Lower East Side and Chinatown;
however, the downzoning covered the more affluent East Village and the
whitest blocks of the Lower East Side. At the same time, the proposed
upzoning included a number of blocks with a high proportion of Asians,
Latinos, and blacks, including Avenue D and Chrystie Street.
DCP followed its longstanding policy of mixing preservation with new
development, with the assent of the community board. The city’s rezoning
Stein
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05.B East Village-Lower East Side Rezoning, 2008
Community District 3
East Village
Village
View
Co-op
Str
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t
Ave
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Ch
Sar r ystie
a D Str
. Ro ee
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Par
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E.
Ho
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Square Park
Rezoning
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Chinatown
0 .04 .08
.16
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.32
Miles
Downzoned Residential (Contexual)
Upzoned Residential
Upzoned Commercial
New York City Department of City Planning, NYC GIS Zoning Features, December 2015.
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was sold to the community as a way to preserve the East Village’s low-tomid-rise residential character, and drive development towards its widest
corridors. The upzoned area included a voluntary inclusionary zoning program, through which participating developers could receive a floor area
bonus and/or tax benefit in exchange for allotting 20 percent of units as
income-targeted.
There were a number of problems with this plan. The proposed inclusionary housing, for example, would create only a small number of income-targeted rental and condo apartments, and even those would be far
too expensive for most neighborhood residents. Qualifying income ranges
for the proposed housing were typically $43,000 to $61,500; the median
income within the rezoning’s boundaries was just over $25,600 (Angotti
and Ervin 2008). This was bound to have a disparate racial outcome, as
white incomes in the district greatly exceeded those of Asians, Latinos,
and blacks.
The biggest problem with the plan, however, was what it excluded.
Despite shared concerns over unmitigated development and displacement, most of Chinatown and the Lower East Side’s least gentrified blocks
were excluded in the contextual rezoning. Median household incomes for
census tracts inside the rezoning’s boundaries ranged as high as $51,413.
Meanwhile, all of the community board’s poorest census tracts, with median incomes as low as $11,963, were left out of the proposal. The plan left
out the Lower East Side and East Village’s racially diverse waterfront, and
did nothing to protect public housing residents.4 Though whites made up
just 29 percent of Community District 3, 73 percent of the white population was covered by the Bloomberg administration’s proposal. And while
Asians, Latinos, and blacks made up a broad majority of the population,
just 37 percent of the area’s Hispanics and 23 percent of its Asian populations were covered by this protective zoning.5
Most of Chinatown and the Lower
East Side’s least gentrified blocks
were excluded in the contextual
rezoning.
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At public events and in communication with the press, community members argued that the city’s proposal was part of a plan to divert development into low-income communities of color. Josephine Lee, an organizer
with the Chinese Staff and Workers Association (CSWA), told a reporter:
It’s really blatantly racist, the way they drew their boundaries. The rezoning
plan is not so much to protect the East Village as it is to displace the communities of people of color within and around it (Tucker 2008).
Wing Lam, founder of the CSWA, asked rhetorically:
How can you put a plan like that on the Chinese? Only white [people] like
low buildings and sunlight and Chinese don’t like low buildings and sunlight?
(Anderson et al. 2008).
CSWA and other groups ultimately sued the city, arguing that its
Environmental Impact Statement significantly underrepresented the plan’s
potential displacement of Chinatown’s working-class people of color.
In the course of the debates over the rezoning plan, many also questioned why public housing, home to many Asian, Latino and black residents, was excluded from the rezoning. The zoning on these sites had been
established decades ago, when gentrification and public housing seemed
incompatible. In public forums, some falsely claimed that NYCHA, which
was established under state legislation, was exempt from zoning rules. In
the end, public housing residents were not included in conversations and
plans for the future of their neighborhood.
Public housing residents were not
included in conversations and plans
for the future of their neighborhood.
The community board responded to these concerns with enormous hostility. They refused to provide key information to opponents of the plan.
The board denied entry to Chinese and Latino members of the public, even
when meetings were not full to capacity; at one point, a community board
member even shouted at the crowd to “be quiet and stop your Chinese
rebellion” (Li 2010).
After a series of blistering hearings, Community Board 3 voted to
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05.C Division Street.
Photo: Sarah Friedland, 2016.
approve the rezoning. In response to the community outcry, the board
also recommended that the city introduce programs to address harassment and eviction of rent regulated tenants, monitor and attempt to halt
demolition of existing buildings in the district, and identify publicly owned
sites for affordable housing. When the plan moved on through the land use
review process to the City Planning Commission, however, all of these recommendations were dropped, and the commission voted to approve the
plan as written (Xu 2013). By the time the plan made it to the city council,
it was virtually assured a victory. Alan Gerson, the city council member
who represented the bulk of Chinatown, called Wing Lam, director of the
Chinese Staff and Workers Association, and asked for his blessing to vote
for the rezoning. A no vote, Gerson argued, would be a useless protest.
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When Lam refused to accept this compromise, Gerson offered funding for
anti-eviction support work. This suggests that public officials understood
that the East Village/Lower East Side rezoning would result in displacement in Chinatown, yet proceeded to support it. On November 19, 2008,
the city council voted unanimously to approve the rezoning.
During the public review process, proponents of the rezoning claimed
that the plan was too far along to modify. City officials were also firm and
sought to placate the opposition with promises that they would support a
future rezoning of Chinatown. The city bulldozed ahead.
THE 2011 SEWARD PARK
MIXED-USE DEVELOPMENT
PROJECT AND REZONING
The 2008 rezoning affected most of the Lower East Side but excluded one
significant area: 20 acres of largely vacant land known as the Seward Park
Urban Renewal Area, or SPURA. In 1967, as part of the federal urban renewal program, the city demolished 14 blocks of “blighted” housing and
displaced 966 Puerto Rican families, 762 white families, 193 black families,
and 178 Chinese families. Eighty percent of them were low-income households (Turner 1984). The city promised to create new housing in place of
the “slums” it bulldozed, but instead SPURA languished for decades. The
site includes a few isolated public or subsidized housing projects, but the
original promise of large-scale low-income housing was never realized.
Most of the lots have been used as parking or were fenced off and left
vacant.
Over the years there have been both city-led and community-driven proposals to redevelop the site, but they were repeatedly quashed
in racially charged political battles. For decades, residents of nearby
Cooperative Village, a complex built by and for garment workers — 97.6
percent of whom were white — fought with Chinese, Puerto Rican, and
black activists over the site’s future (Turner 1984). White leaders, including the long-term New York State Assembly Leader Sheldon Silver, lobbied
and maneuvered to ensure that no low-income housing was built on the
cleared SPURA land, largely as a way to preserve their enclave and protect
their positions of power. Meanwhile, organizations led by and representing
working-class people of color fought for public and subsidized housing on
the site. They were often promised parcels that were never delivered. The
struggle simmered and raged on and off for over 40 years (Buettner 2014).
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For decades, residents of nearby
Cooperative Village, a complex built
by and for garment workers—97.6
percent of whom were white—fought
with Chinese, Puerto Rican, and
black activists over the site’s future.
After the 2008 East Village/Lower East Side rezoning, the city was
finally ready to take action on SPURA. Mayor Bloomberg, in concert with
Speaker Silver, insisted that any new residential construction on the site
be largely “market-rate,” with some percentage carved out for lower income tenants. Groups like CSWA and NMASS (National Mobilization Against
Sweatshops) rejected this framework. In order to fight the tide of gentrification, and to right the wrongs of the 1967 demolition and displacement,
they demanded that this rare tract of publicly owned land be used entirely
for low-income housing. The city moved forward with planning and negotiations, often excluding these organizations.
In 2011, the city’s plan for SPURA was adopted: about 1,000 apartments would be built, of which 20 percent would be low-income, 20 percent middle-income, and 10 percent senior housing. In their guidelines for
development, the city insisted that “the mixed-income character of the
neighborhood must be reflected in the development plan for the sites.”
However, the final plan represents less a picture of Chinatown’s current
diversity than a model of its gentrified future.
At market rates, 500 of the new apartments would be affordable to less
than 1 percent of current Community District 3 residents. Monthly rents
in the “affordable” units would be no more than 30 percent of net household income, as per federal and city standards, for those who meet income
qualifications. A unit can be considered “affordable” even if it serves persons earning far above the city median income, which is far higher than
the neighborhood median income. Thus, among the 500 income-targeted
units, at projected rents, 100 units at $3,000 per month would be affordable to only 14 percent of the population in the area; 100 apartments at
$2,500 a month would be affordable to 17 percent of the population; and
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300 apartments at $1,000 per month would be affordable to a slim majority (53 percent) of neighborhood residents.
In this vision of a mixed-income neighborhood, less than 1 percent of
the population gets half of the housing, half of the apartments go to middle- and upper-middle-income residents, and low wage earners—47 percent of the existing population—cannot afford to live there at all (Chou
and Miranda 2011).6
In 2015, Sheldon Silver, whose shadow hovered over the site for 40
years, was convicted of massive fraud (unrelated to the project) and
forced to resign from the New York State Assembly.
In this vision of a mixed-income
neighborhood, half of the
apartments go to middle- and
upper-middle-income residents, and
low wage earners—47 percent of the
existing population—cannot afford to
live there at all.
THE IMPACT OF THE REZONINGS:
DISPLACEMENT AND LOSS OF
AFFORDABLE HOUSING
In 2008 and 2011, when the city’s zoning actions took place, Chinatown
was already experiencing gentrification pressures, felt most intensely by
the neighborhood’s Chinese and Latino communities. Since then, the displacement has only persisted and grown.
Between 2008 and 2011, nearly 6,000 existing and newly developed
neighborhood apartments became unaffordable to households making
middle-class wages.7 In 2010, median rents for newcomers to the neighborhood were $1,762, a third higher than the citywide figure.8 By 2014,
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05.D The Coalition to Protect Chinatown and The Lower East Side and
its supporters march to City Hall demanding passage of the Chinatown
Working Group community plan.
Photo: Samuel Stein, 2016.
median asking rents had reached $3,000 a month (Furman Center 2014).
Much of this change is due to the deregulation of rent-stabilized apartments, which are disappearing through both legal inaction and illegal
transformations at a rapid rate.
The prospect of rising rents, according to then-Democratic District Leader
Paul Newell, “gives [landords] the incentive to have short-term residents—to
flip people in-and-out” who pay more and are less likely to challenge deteriorating conditions (Barbino 2011). This, in turn, encourages landlords to harass
long-term or low rent paying residents. As one community organizer told reporters in 2011: “Pretty much every day we have someone coming to us with
a new story of a landlord harassing them” (Barbino 2011).
As rents rose, income disparities expanded. Average incomes for
whites in the neighborhood took off from $35,504 in 2000 to $58,265 in
2010. Meanwhile, wages did not keep up for people of color. Average incomes for Asian Chinatown residents actually decreased between 2000
and 2010, from $31,368 to $29,524. One-third of Asians in Chinatown live
below the poverty line.
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05E
Loss of Latino, Asian, and Black Populations, Growth of White Population in
Chinatown and the Lower East Side, 2000-2010
Absolute Change in Number of Residents
6,000
19%
4,000
2,000
0
-2%
-2,000
-4,000
-11%
-6,000
-11%
-6%
-8,000
Total Population
White
Black
Asian
Hispanic/Latino
Demographic
*Percentages represent the percent change in number of
residents within a demographic between 2000 and 2010.
Asian American Legal Defense and Education Fund, Chinatown
Then and Now: Gentrification in Boston, New York, and Philadelphia, 2013, p.29 www.aaldef.org/
Between 2000 and 2010, according to an analysis of U.S. Census data
by the Asian American Legal Defense and Education Fund, the number
of residents of color drastically declined, with a loss of 6,707 Asian residents, 3,823 Latinos, and 131 black residents, while the white population
increased by 3,785 residents.
This widespread gentrification and displacement of people of color is
directly linked to the city’s zoning actions: when landowners find that rezoning has increased the potential value of their land, they typically sell
the property for upscale redevelopment, or employ legal and illegal tactics to remove low-income tenants and charge higher rents. If Chinatown
had been included in the rezoning with zoning designations that protected
existing buildings, the pressures of gentrification and displacement could
have been minimized.
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05.F A new hotel in Chinatown built after the 2008 rezoning.
Photo: Sarah Friedland, 2016.
NEW LUXURY DEVELOPMENT
In the absence of zoning protections, Chinatown has experienced a rash of
new upscale construction. A 2008 survey found 26 new luxury buildings in
Chinatown; since then dozens more have been built (CAAAV 2008). These
new buildings are easily identifiable: on the whole, they are taller and wider than most Chinatown buildings, they lack affordable retail spaces, and
they tend to feature sheets of reflective glass or protruding balconies.
Chinatown realtors are not shy about the people they are looking to attract. One agent marketing 123 Baxter, a new luxury building that claims to
be in “SoHo South,” told a real estate newspaper she was looking for tenants who are “young and come from a lot of money” (Weiman 2007). The
same realtor told The New York Times that their target was people “who
want luxury but want to stay under the radar and who think SoHo is too
trendy already—I think trust-fund babies with ripped jeans is the profile
we’re looking at” (Toy 2006).
Hotels are also rising throughout Chinatown. They are typically discouraged in residential neighborhoods, but permitted under Chinatown’s
zoning. On blocks zoned for manufacturing, hotels can be built as of right.
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Now that Chinatown is no longer a garment-manufacturing hub, many of
the spaces that once housed sweatshops are being converted into luxury
hotels or demolished for new hotel construction (Kwong and Stein 2015).
These properties include:
•
At 54 Canal Street, DLJ RE Capital Partners, an investment firm with
developments in the US and China, is working on a 140-room conversion.
•
On 154 Madison, a new Comfort Inn squeezed into a slender lot.
•
On 185 Bowery, Brack Capital, a Dutch real estate conglomerate with
properties around the world, is opening “CitizenM Downtown,” a new
300-room hotel that is larger than its Times Square counterpart.
•
At 50 Bowery, Alex Chu of Eastbank is demolishing the old Silver Palace
restaurant, site of one of the longest and most militant labor strikes in
Chinatown’s history, and building a 22-story hotel.
These developments will do nothing for Chinatown’s existing population,
and will only advance the neighborhood’s transformation into a tourist attraction along the lines of the 1950s “China Village” plan.
05.G Development in Chinatown.
Photo: Sarah Friedland, 2016.
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ADDING INSULT TO INJURY:
THE EXTELL BUILDING
One of the most alarming new developments is a proposed 80-story, 800unit super luxury apartment building along the waterfront in Chinatown.
Until recently, it was the site of a 24-hour Pathmark, the only accessible
supermarket for the neighborhood’s low-income population. On March
15, 2013, Extell Development Company purchased the land for over $103
million. Since Pathmark had 30 years left on its lease, Extell also bought
out their lease for an additional $46 million, bringing the total acquisition
price to just under $150 million.
The new building will feature such absurdist amenities as a golf simulator room, a dog spa, and a cigar room, and is designed as a virtual gated
community. The developer, however, is financing their project with public
money (including Low Income Housing Tax Credits and 421-a tax abatements), and is building a separate, smaller, lower quality building with below-market rents. The plan is to build a 13-story, 205-apartment structure
next to the high-rise, for families making up to 60 percent of New York’s
Area Median Income. A qualifying family of four could earn up to $51,540
(Litvak 2014) while the median income for that particular census block
is just $20,450 (Pratt Center for Community Development et al. 2013).
This segregated development will exclude people of color and low-income
families currently living in the area, while also creating secondary displacement pressures by fueling rising rents and land prices.
DISPLACEMENT OF PUBLIC
HOUSING RESIDENTS
Luxury development has also been proposed on the neighborhood’s public
housing campuses, which were also excluded from 2008’s contextual rezoning. Smith, LaGuardia, and Baruch houses were chosen as potential development sites in a 2013 proposal for infill development at eight Manhattan
public housing projects. The new buildings would be placed either on parking lots or on land now used for parks and playgrounds. At Smith Houses,
plans were released for one 50-story luxury building (with 20 percent “affordable” housing), which would tower 33 stories over the current buildings,
and two 35-story buildings, including one on top of the project’s baseball
field (Smith 2013). Smith resident leader Aixa Torres told reporters: “They’re
going to literally squeeze my residents like they’re roaches and they’re going
to build this huge beautiful complex” (Smith 2013).
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While Mayor Michael Bloomberg’s infill proposal was defeated by resident organizing, NYCHA (the New York City Housing Authority) has sold and
leased property for private development on a piecemeal basis throughout the city, and is planning a new iteration of the large-scale infill plan.
Since 2013, NYCHA has sold 54 plots (441 square feet) to private developers (Smith 2015). In 2015, Mayor de Blasio proposed the “NextGeneration”
plan for NYCHA; activists were quick to dub it “NextGentrification” (Pinto
2015). The plan’s centerpiece was a proposal to lease large amounts of
NYCHA land to private developers, who would build 7,500 new units of
housing at 50 percent market rate and 50 percent “affordable,” though
even these income levels would be significantly higher than public housing
averages (Nahmias 2015). The plan also included steps towards privatizing
select developments and increasing rent collection levels, with the implied
threat of evictions for non-payment (Navarro 2015). Many fear that these
actions, undeterred by zoning changes, are creating a pathway to privatization and laying claim to one of the last guarantees of affordable housing
for low-income people of color in Chinatown and beyond.
EXACERBATING INEQUALITIES
By restricting development in the more affluent East Village and pushing development demand further into Chinatown, and by rezoning SPURA
to stimulate high-end construction, the city’s land use policies have increased displacement pressures on the Asian, Latino, and black populations of Chinatown and the Lower East Side.
The real-life impacts of displacement go far beyond losing one’s home.
Many tenants face constant landlord harassment, rising rents, and deteriorating conditions. Residents of aging tenement buildings frequently confront landlord negligence, often a form of harassment, that results in leaks
and mold, chipping paint and plaster, vermin infestations, and more serious structural deterioration. Many of these low-income tenants are paying
upwards of 50 percent of their incomes to live in such hazardous and inhumane conditions, often while facing housing court battles and off-therecord conflicts. Most recently, in May 2015, Chinatown tenants brought
these issues to light in a protest of a local slumlord. Tenants and activists
described living conditions:
rats [are] all over the place coming out from the holes. [Tenants] have to knock
on the door to make the rats leave before they can even enter their own bathroom (Airoldi 2015).
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One resident has to hold an umbrella when she uses the restroom to protect herself from leaks. As David Tieu of the National Mobilization Against
Sweatshops stated:
A lot of luxury development has been pushed into our community […] and it
encourages landlords […] to use these slumlord tactics to push out long-time
residents (Airoldi 2015).
A 2010 tenant lawsuit claimed that landlord harassment tactics included:
disrupting three tenant meetings by calling the police; rejecting rent payments;
frivolously pursuing legal eviction proceedings; suspending essential services
for a prolonged period of time; and ordering tenants to remove Chinese cultural symbols and decorations from their doors (Lee 2009).
Residential and commercial displacement is particularly impactful in immigrant communities, where locally run businesses and organizations
serve particular linguistic and cultural needs. These losses of community
and culture are both emotional and practical. As Chinatown and the Lower
East Side’s Asian and Latino residents, stores, and cultural centers are displaced by new development and rising rents, those who are able to stay
lose local resources and are increasingly isolated. As their communities
shrink, they are increasingly underrepresented and underserved.
Residential and commercial
displacement is particularly
impactful in immigrant communities,
where locally run businesses and
organizations serve particular
linguistic and cultural needs.
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THE COMMUNITY PLAN
FOR CHINATOWN:
HOW THE CITY DESTROYED
THE EQUITABLE ALTERNATIVE
One way to curb displacement and segregation is to engage in and implement genuine community planning, which can manage development and
protect existing residents and businesses. After Chinatown was excluded
from the 2008 rezoning, the three community boards that contain pieces of Chinatown—Manhattan’s community boards 1, 2, and 3—came together with over 40 neighborhood organizations to form the Chinatown
Working Group, a body tasked with creating a planning and zoning document that would help shape Chinatown’s future. Rather than creating a
formal 197-a plan, a slow and cumbersome process that ends in a legally
non-binding plan, the Chinatown Working Group aimed to build internal
consensus, then hire an outside consultant to turn their ideas into a formal rezoning proposal.
In consultation with DCP and other agencies, planners from the Pratt
Institute developed a formal plan, which included a special zoning district, strict anti-eviction and anti-harassment provisions, a very targeted
05.H The Plan for Chinatown and Surrounding Areas:
Preserving Affordability and Authenticity
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and comparatively affordable inclusionary zoning program, restrictions on
big box stores and hotels, and more allowances for light manufacturing in
character with the neighborhood’s existing economic activity.
As the plan was being approved by Community Board 3, however, DCP
Director Carl Weisbrod sent a letter to the board, informing them that they
had no intention to approve the Chinatown Working Group’s plan. Calling it
too ambitious, they offered to consider the portions of the plan that emphasized development over preservation (Litvak 2015). This suggests that
the problems of racially unequal zoning practices were not limited to the
Bloomberg administration, but constitute a pattern and practice of discriminatory planning policies, deeply imbedded in city government. In response, Chinatown and Lower East Side residents and workers have been
protesting the mayor and his planning priorities at the Extell development
site, at city hall, at Gracie Mansion, and at real estate banquets. With their
own community plan in hand, Chinatown activists are demanding an end
to racist rezonings, and the beginning of a new era of community planning.
Endnotes
1. The author would like to thank Wendy Chang, Kai Wen Yang, Gui Yang, Wing Lam (Chinese Staff and
Workers Association), and David Tieu (National Mobilization Against Sweatshops) for all their input
and guidance, and recognize Peter Kwong for his many years of mentorship and insightful analysis.
2.
Chinese Staff and Workers Association et al., Appellants, v. City of New York et al., Respondents.
Court of Appeals of the State of New York. Decided November 18, 1986. 68 N.Y.2d 359 (1986).
3. “East Village/Lower East Side - Approved! Overview,” Department of City Planning, accessed
January 23, 2016, http://www.nyc.gov/html/dcp/html/evles/index.shtml.
4. For more on the exclusion of most public housing from the 2008 rezoning, see Martinez 2010,
143–145.
5. Coalition to Protect Chinatown and the Lower East Side (2008), Bloomberg’s Racist Rezoning,
accessed May 4, 2014. http://protectchinatownandles.org/english/DCP_plan.html#affordable.
6. These calculations assume the federal Department of Housing and Urban Development’s standard
guidelines for affordability.
7. During this period, Manhattan’s Community District 3 (which includes most of Chinatown and the
Lower East Side) saw 5,890 apartments become unaffordable to households making under 80
percent of Area Median Income (ANHD 2013).
8. In 2010, New York City’s median monthly rent was $1,184 (Furman Center 2011).
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