Power at the Local Level:
|Source: Gotham (2002) p. 34.|
This rapid increase in the African-American population had not gone unnoticed by the builders within the growth coalition who specialized in constructing residential homes, especially those who built whole communities. As early as World War I, real estate boards in many cities had endorsed measures to keep neighborhoods racially homogeneous. These measures included racially restrictive clauses in deeds of ownership, a legal strategy that was endorsed between 1918 and 1930 by state supreme courts in California, Colorado, Kansas, Michigan, and Missouri as well as nine Southern states (Gotham, 2002, p. 38).
The first step by the growth coalitions to involve the federal government in reviving land values at the local level was a December, 1931, conference on home building and home ownership called by President Herbert Hoover. This conference led to the establishment of a Federal Home Loan Bank Board in 1932. Well before the dreaded New Deal that would eventually be blamed for becoming involved in local matters, Hoover's loan board "recommended a new direction in federal housing policy that included the creation of long-term amortized mortgages, encouragement of low-interest rates, federal housing subsidies to aid private home-building efforts, and reduction of housing construction costs" (Gotham, 2002, p. 53).
All of these recommendations were built into law in the first years of the New Deal. First, the Home Ownership Loan Corporation created in 1933 provided low-interest loans to home owners who no longer could pay on their current mortgages. Between July, 1933, and June, 1935, this program refinanced 10% of all owner-occupied, non-farm housing in the United States. Not coincidentally, these new loans from the federal government also bailed out the banks holding the mortgages.
Then the Housing Act of 1934 established a program of government insurance to banks for their mortgage loans through an agency called the Federal Housing Administration (FHA). This agency made possible longer term mortgages with lower down payments and lower interest rates, which of course stimulated the housing market. In the process, it created a secondary market for mortgages, which was a boon to insurance companies.
For the most part, the bill was written and advocated by the National Association of Real Estate Boards, the National Association of Building Owners and Managers, the Mortgage Bankers Association of America, and the U.S. Building & Loan League. Key lobbyists in favor of the bill included the president of the General Motors Holding Company and the president of the U.S. Chamber of Commerce, who was very close to President Franklin D. Roosevelt and the New Dealers. However, there was not unanimous support among land investors: minor players in the growth coalitions, such as small builders and local savings and loans, opposed the legislation because they feared (rightly, as it turned out) that it would soon crowd them out.
Once the bill was passed, the leaders within the growth coalitions played the key role in shaping and staffing the agency. In addition, the president of the General Motors Holding Company and vice presidents from two large New York banks became deputy administrators. A vice president from Standard Oil of New Jersey, a personal friend of President Franklin D. Roosevelt, became head of the agency.
The Federal Housing Administration then used longstanding real estate industry guidelines in shaping its loan program. In particular, it would not provide mortgage insurance for housing in mixed-race or black neighborhoods, or even in white neighborhoods near black neighborhoods. The program thus promoted both suburbanization and segregation. When liberals resisted these guidelines, they met with enormous resistance (Dreier, Mollenkopf, & Swanstrom, 2004, p. 120).
As the comment about resistance to the racist guidelines implies, the growth coalitions now began to face opposition from a new liberal-labor coalition that advocated a program for subsidized rental housing for both the middle class and low-income people. The coalition was lead by reformers from the 1920s who admired the public housing projects in some European cities. They also called for the rehabilitation, not removal, of slum housing.
In 1933 the "public housers," as they called themselves, had been able to convince the Public Works Administration, headed by the Progressive Republican Harold Ickes, to include two small demonstration projects in its long list of construction efforts. One involved seven housing developments, sponsored for the most part by unions. The other involved 49 housing developments with over 21,000 units, built by the Public Works Administration itself between 1934 and 1937 (Radford, 1996). Flush with success, the reformers joined with unions to create the Housing Labor Conference in 1934 to lobby for more such programs.
The pro-housing group saw the growth coalitions as "the reactionary real estate lobby," which was embodied in the aforementioned National Association of Real Estate Boards, the National Association of Building Owners and Managers, the Mortgage Bankers Association of America, and the U.S. Building & Loan League, along with the real estate committees of the U. S. Chamber of Commerce. On the other hand, those in the growth-coalition lobby called the public housing advocates "the housers," and often claimed their programs were socialistic or communistic.
The public housers joined with organized labor, civil rights activists, and consumer activists to oppose the Housing Act of 1934. The American Federation of Labor called it the "anti-housing bill." However, they were unable to have any impact on the bill (Gotham, 2000, p. 303).
With the Housing Act of 1934 as a starting point, the growth coalitions next turned their attention to ways to halt the decline in their downtown land values. It might be thought that the slum land could just be purchased, but it was usually not that simple, as later explained by an expert on American housing legislation:
Problems of land assembly and costs, however, stood in the way of any slum clearance program based on private redevelopment. Inner-city industrial and lower-income residential areas, however unsightly, were generally profitable. Located near city centers and major transportation routes, these sites were in demand for factories, stories, and low-rent residences. Hence, slum landowners were reluctant to sell their properties at low prices or sometimes at all. After assembling tracts of land, private developers faced the expense of demolishing existing structures and building new ones. As a result, few private developers undertook the redevelopment of slum tracts. (von Hoffman, 2000, p. 304.)
Downtown growth-coalition leaders, usually with the National Association of Real Estate Boards as their spokesperson, began complaining about these problems very frankly in their publications. As early as 1935, the National Association of Real Estate Boards called on the government for help through clearing "blighted" neighborhoods and providing loans to developers so they could buy and build on the cleared land (Gotham, 2002).
The battle between the growth coalitions and the liberal-labor coalition over these issues was fully joined in the Housing Act of 1937. This act started out as a liberal initiative sponsored by Senator Robert Wagner of New York, a champion of organized labor and one of the first "urban liberals." It embodied the public housers' desire for subsidized rental housing sponsored by unions and other nonprofit organizations. Moreover, they wanted this public housing to be built on vacant land in order to deflate what they saw as irrational land values in the city. The founding director of the United States Housing Authority (USHA), a wealthy real estate-owner from New York who was wise to his conservative brethren, explained the issue as follows:
It would indeed have been a betrayal of a public trust to allow the USHA program to become a means of bailing out owners of slums at "values" of three, five, or ten dollars a square foot when such fictitious values arose out of use of property in a manner which was dangerous to the health of tenants and detrimental to the well-being of the community. The USHA program accordingly was planned to enable local authorities to build some of their projects on low-cost land outside of slum areas. (Straus, 1944, p. 59.)
Needless to say, the growth coalitions saw this program as a dire threat. Not only did they want the middle-class people as their customers, but they wanted the vacant land for new private developments. And they certainly did not want to see a further decline in their downtown land values. They also saw the program as a thin entering wedge into "socialized housing," a not unreasonable supposition.
So, with the hearty backing of the Southern Democrats, the real estate lobby then gutted the plans of the public housers by:
Still, some housing was built. By 1941, there were 130,000 units in 300 different projects (Jackson, 1985, p. 224). With the onset of World War II, however, Congress finished off the program by eliminating its funding in 1942.
Although the growth coalitions were able to cripple the housing program, they had not solved the problem of declining downtown land values because they could not win provisions that would aid them in their program for "urban renewal." As urban renewal apologist Jeanne Lowe, who worked for downtown real estate boosters, wrote in her colorful history of urban renewal:
Business interests, particularly downtown property owners and realtors, wanted a clearance and rebuilding program that would be on a more "economic" basis--that would allow private entrepreneurs to participate as developers; permit reuses other than public housing, especially in centrally located slum areas; and let cities reap the higher tax returns which private developers promised. Equally important, these interests had come to accept the fact that in order to assemble land for feasible rebuilding, local government's power of eminent domain would be required to eliminate hold-out prices. (Lowe, 1967, p. 28.)
Even with the power of eminent domain, however, it was likely that the high cost of slum land in many cities would make it too expensive for those who wanted to renew and expand downtown areas. In 1941 the National Association of Real Estate Boards therefore put forth a plan developed by its research arm, the Urban Land Institute. The plan called for metropolitan land commissions that would have the power of eminent domain to clear slums. They were to receive loans from the federal government to pay for the "write-down" on the land that was purchased, i.e., on the difference between what they had to pay the slumlords and the price that developers could pay and still make a profit on their new buildings. However, it was not clear that cities would be able to pay back these federal loans.
A better answer to this financial problem was provided in the early 1940s by two economists, Alvin Hansen and Guy Greer (1941). Their work was part of the large-scale postwar planning already underway in 1940-1942 under the auspices of three national-level policy-planning organizations, the Council on Foreign Relations, the Committee for Economic Development, and the smaller and more liberal National Planning Association. From the point of view of these organizations, urban renewal was one of several spending programs that might be utilized if economic depression returned after the war (Domhoff, 1990, Chapter 5).
The general Greer-Hansen proposal for redeveloping the cities was very similar to one developed by the planners at the Urban Land Institute. But there were two major differences. First, Hansen and Greer suggested that the federal government might have to pay much of the cost for buying and clearing the land instead of merely granting long-term loans, as in the Urban Land Institute plan. Local government was to pay the remainder of the cost, which was set at one-third when the act was passed several years later. Second, the land would then be leased under the Hansen-Greer plan to private developers at a lower price than the government had paid, a lower price that supposedly reflected the true earning power of the land when redeveloped.
In other words, small property holders, mortgage holders, and slumlords would be bought out at a handsome price by the government. Then the bigger real estate interests would be able to obtain the land at a reduced price that supposedly was necessary if they were to make a reasonable profit with non-slum structures. The difference was to be absorbed by the ordinary taxpayer. However, at least the taxpayers and the city government would realize some of the long-term profits if the land was leased to the developers, which made the Hansen-Greer plan a little more palatable to liberals.
Greer and Hansen realized that their new plan might be viewed in the way I have just characterized it, as "a bail-out of the owners of slum properties and the lending institutions that held the mortgages;" they therefore argued that "the social and economic mess" that had been left by "past generations" was something for which "society as a whole can be held mainly to blame" (Hansen & Greer, 1941, p. 7). This rather general argument, which may have had the wisdom of making the program more acceptable to both the public housers and the growth coalitions, was not appreciated by many liberals, such as the U.S. Housing Authority administrator already quoted. He later retorted:
The high profits obtained from slum properties, the dogged insistence of slum-owners on their right to maintain housing which flagrantly violates human decencies, the high returns derived from this method of operation, and the high capitalized value placed on the properties--these are typical conditions throughout the country. In view of the facts, the thesis that society is to blame for slum conditions and that there is moral justification for using the taxpayer's funds to bail out owners of the slums is hardly tenable. (Straus, 1944, p. 81.)
The growth coalition lobby had different reservations about the program than the public housers did, but they were tempted by it. Involving the federal government in the bail-out was a difficult idea for it to accept ideologically, given its general wariness toward the federal government. It was made even more difficult by the fact that New Dealers had great power within the Democratic Party on these kinds of issues. The real estate interests also strongly opposed the idea that they could not own the land that the city had cleared for them. In addition, they feared the guidelines that might be tied to any federal handouts. In the end, however, they decided they could live with the basic proposal if the lease-only provision was eliminated and the emphasis on housing kept to a minimum.
The Hansen-Greer proposal was included in new legislation introduced into the Senate in 1943, and a slightly different bill was introduced later in the same year by the Urban Land Institute. Hearings on the ideas contained in the two bills were first held in 1944-1945 before the Special Subcommittee on Post-War Economic Policy and Planning.
The stage was now set for a postwar battle that pitted the liberal-labor coalition against the growth coalitions over issues of housing and urban renewal.
After the Second World War, top corporate leaders joined with the biggest land owners and developers in local growth coalitions to form highly visible committees to prepare ambitious plans for the redevelopment of central business districts. They did so in the context of genuine concern that the Great Depression might return now that there was no war spending to stimulate demand. The Central Area Committee of Chicago, Civic Progress in St. Louis, the Allegheny Conference in Pittsburgh, the Civic Conference in Boston, the Greater Philadelphia Movement--these and many more organizations were formed on the same template. The business elites of the city met privately, agreed upon more or less comprehensive plans for the redevelopment of the central city, and presented the plans to the press, the politicians, and the public as their contribution to civic welfare.
However, the task they faced was now even more daunting because of the massive migration of African Americans to the cities to find work in factories and escape the oppressive conditions they faced in the rural South. Arriving with great hopes, they found themselves crowded into low-income housing near downtown areas due to the virulent racism of most whites. Moreover, this migration happened precisely at a time when downtowns made their plans to expand. In addition, downtowns often wanted this close-in land for freeways because they held the vain hope that suburbanites could be induced to shop at the fine department stories and other up-scale places still lingering in the downtown. They also needed a way for their white-collar employees and executives to speed out to the suburbs after work.
In the process of expanding the downtown, the urban growth coalitions also hoped to defend and hold on to existing white urban neighborhoods. This intensified the squeeze of African-Americans into ghettos, and then to the disruption that followed from racism and ghettoization in a context of disappointed expectations and high rates of unemployment. In the end, many growth coalitions were able to save downtown property values, thanks to their new powers of eminent domain, along with the guidelines and justifications provided by urban renewal legislation, and the huge subsidies that allowed them to build skyscrapers, high-rises, stadiums and convention centers. But they were not able to "save" the white neighborhoods, although there were some rear-guard actions by "ethnic" neighborhoods. Urban renewal accelerated suburbanization and left the growth coalitions (and their universities, cultural institutions, and stadiums) surrounded by potentially volatile, low-income, non-white neighborhoods.
In 1945-1946, as the growth coalition polished its plans for urban renewal, the public housers saw a chance to revive their own program. They suddenly offered to support urban renewal if it included public housing for those who were displaced. They spoke in terms of "rehousing" and said that such a policy would avoid many potential problems for the developers (von Hoffman, 2000). They were able to introduce the requirement that residential areas that were cleared of slum housing had to be returned to "predominantly residential uses," with "predominantly" eventually defined as over 50%. This requirement was vehemently opposed by the growth-coalition lobby, but it was unable to have it removed. The public housers also insisted that the bill contain provisions for the construction of public housing, which the growth coalitions continued to oppose. The growth-coalition forces thus worked to block passage of the bill and were successful in doing so until 1949.
The bill as finally passed had four main provisions, only the last of which was opposed by the growth coalitions:
In an attempt to make the bill more acceptable to the growth coalitions, it contained three important concessions to them, which served as thin entering wedges in this long-term battle. They were introduced as amendments early in 1948 by a moderate Republican, Senator Ralph Flanders of Vermont, an industrialist who was also one of the top leaders in the Committee for Economic Development.
The first concession mandated that federal money be given to the local community in one lump sum, which made it more difficult for federal agencies to monitor the local program in any detail. A second concession stated that a unit of slum housing had to be torn down for each unit of public housing that was built. This would clear land for the developers and keep the housing supply tight.
A third concession allowed city-cleared land to be sold as well as leased to private developers. This concession, which had been part of the original Urban Land Institute proposal, was essential to leaders of the growth coalitions because it made it possible for private entrepreneurs, rather than the city, to realize the gains from long-term increases in land values. Liberals and moderates, fearing fiscal crisis for the cities, wanted to give them a more secure financial basis by letting them share in the profits of ownership. The short-sighted, anti-government place entrepreneurs wanted no part of such a plan. They wanted all the profits, and they wanted city officials to be dependent on them.
The act also included a backdoor acceptance of racially segregated housing by liberal Democrats. When clever--and diabolical--Northern Republicans proposed an amendment to mandate the integration of public housing, with the hope that Southern Democrats would then kill the whole bill, the liberal Democrats sided with the Southern Democrats to defeat the amendment. They reasoned that segregated housing was better than no housing at all. This vote was later used again and again by urban renewal administrators to insist to civil rights advocates that the legislative history of the Housing Act of 1949 gave them no mandate to force housing integration (von Hoffman, 2000).
Even with these major concessions, however, the growth coalitions tried to block the final bill because it still contained the strong emphasis on housing in redevelopment areas and the provision for new public housing. Once the bill was enacted, the growth coalitions attempted to limit its funding through their strong influence with the Appropriations Committee in the House. They also suggested to local leaders that they lobby for passage of state legislation that would allow them to set up local redevelopment agencies that could compete with local housing authorities for federal grants. This plan, created in the mid-1940s by the Urban Land Institute, had been developed in anticipation of a possible defeat at the hands of the liberals and labor at the national level.
The outbreak of the Korean War then contributed to the delay in starting the program, diverting money and attention away from it. In addition, developers were soon very leery that protests might flare up over programs that were going to tear down people's houses with no guarantee of where and when new ones would be completed. The result, as Lowe recounts in her pro-real estate hagiography, is that very few urban renewal programs of any consequences were in process by 1954:
Redevelopment proved doggedly slow in getting started in spite of the apparently attractive opportunity that Title I (of the Housing Act) presented to private enterprise and the cities themselves.... The pertinent fact here is that by 1954, few municipalities had been able to take a redevelopment project beyond its initial planning stage. (Lowe, 1967, p. 34).
The advent of the Eisenhower administration in 1952, along with unexpected victories in the House and Senate, which gave Republicans control of Congress for the first time since the Great Depression, raised the possibility that the real estate interests could change the law to their liking. So, naturally, their opposition to the program began to soften, a fact that is not understood by the pluralists who write about urban renewal (Dahl, 1961; Wolfinger, 1973). The first step in this process was the creation of a presidential commission in 1953 that was dominated by bankers, savings and loan officials, and real estate and development leaders. When their suggestions, in the form of a commission report, were brought to Congress, there was little or no protest from any business groups, although conservative southern congressmen registered their disagreement on some points.
The key change suggested by the presidential commission, which basically served to legitimate the growth coalitions' fondest hopes, was to create an exception to the rule that residential areas had to be restored to predominantly residential usages. The new provision allowed another 10% of urban renewal grant monies for a given project to be used for nonresidential uses, taking the housing percentage down to 40%. The commission also proposed that the program should encompass slum prevention as well as slum clearance. In practical terms, this made it possible for a plan to encompass areas that were not run down--by claiming they would become slums if they were not part of the redevelopment program. In reality, this was a license to create much-needed self-fulfilling prophecies by badmouthing neighborhoods into decline with negative stories about them, not to mention benign neglect by city officials.
The combination of these two provisions freed local growth coalitions to move ahead with their plans. Requests for money burgeoned, and numerous programs got under way. Then the gradual enlargement of the exception rule made the program even more attractive. It was increased to 20% in 1959, to 30% in 1961, and to 35% in 1967. The growth coalitions, functioning as what political scientists call the real estate lobby, had won a complete victory over the liberal-labor coalition even though it took them a long time to do so. As urban sociologist Scott Greer (1965, p. 32) succinctly summarized the legislative struggle between 1937 and the early 1960s, "the slum clearance provisions of the Housing Act of 1937 have been slowly transformed into a large-scale program to redevelop the central city."
In other words, the growth coalitions used the federal urban renewal program to clear downtown land of low-income housing and small buildings so that central business districts and such major institutions as universities, hospitals, museums, theaters, and stadiums could be expanded and enhanced. That is the brutal power trip that university administrators, cultural aficionados, and urban boosters cannot face. They claim that the urban renewal forces had good intentions, but miscalculated. Sometimes they even point to the Housing Act of 1937 as evidence for their argument, as if that act had not been eviscerated by the growth coalitions.
Between 1954 and 1975 urban renewal programs changed the face of many downtown areas and displaced tens of thousands of low-income citizens. The programs led to lawsuits, demonstrations, and sit-ins by angry African-Americans, white liberals, university students, and senior citizens who were attempting to protect their neighborhoods. As the protests mounted, extreme right-wingers like Martin Anderson (1964) conveniently blamed the federal government for a program insisted upon by local growth coalitions, saying it was all the result of what he wrongly called "the federal bulldozer." More housing was torn down than was built. And out of 810,000 public housing units that were mandated by the Housing Act of 1949, only 332,000 were completed by 1961. But since replacement housing was often necessary, some cities put up highrise apartments that soon became overwhelmingly black.
As stated by one expert on the way in which the urban renewal program quite purposefully displaced and ghettoized African-Americans:
The Eisenhower Administration and Housing and Home Finance Administrator Albert Cole offered to supply a modicum of new African-American housing as long as it facilitated the economic development of the central city and did not challenge existing residential patterns. Family public housing increasingly became a minority relocation program locked in the urban core, while government subsidies brought home ownership and suburban mobility within the reach of the white middle class (. (Hirsch, 2000, p. 431.)
This process was even more harsh and blatant in Southern cities, which previously had been less residentially segregated in a context of complete physical control of the African-American population through school segregation, intimidation, and violence. Thirteen Southern states contained almost half of all public housing authorities and one-third of all public housing units. Soon Southern cities were as segregated as Northern ones.
But it was not just urban renewal that cleared land for downtown land interests. The huge federal highway program set up in 1954 (with the justification that highways were needed for national defense in a time of potential nuclear attack by the Soviet Union) spent a large portion of its money creating super highways into large cities for the convenience of shoppers and commuters. Whole neighborhoods were blitzed by this process, and sometimes the highways were sited so that they would provide concrete barriers between low-income white or black neighborhoods and the rest of the city. The combination of the automobile-oil-highway lobby and the growth coalitions remade the urban landscape and greatly intensified the move to the suburbs.
Although every local growth coalition relied on the highway program to create gateways to the suburbs, not all cities used federal dollars to bring about urban renewal. Many large cities in the Southwest, such as Dallas and Houston, were able to accomplish their goals without federal revenues, as were some cities in the West. In the case of St. Louis, its huge Gateway Arch on the city's waterfront was built without urban renewal money, but it did have a special grant from Congress as an addition to the National Park Service. Whatever methods were used to clear the inner cities, the general conclusion is that most large cities ended up looking just about the same (Teaford, 2000).
On the chance that the disruptive urban renewal and highway programs contemplated in 1955 might not be accepted by everyone, corporate and growth-coalition leaders prepared a massive public relations campaign. As one part of its report to President Eisenhower, the Commission on Urban Renewal and Housing suggested that implementation of the urban renewal program should be aided by "the formation outside of government of a broadly representative national organization to help promote and lead this dynamic program for renewal of the towns and cities in America" (President's Advisory Commission, December, 1953, p. 2). This new group was formed in November, 1954, as ACTION, the American Council to Improve Our Neighborhoods. It included bankers, corporate executives, and real estate developers as well as urban planners and housing experts from major cities across the country. Its ambitious program included a research division that would amass all available information on how to carry out a good program, a national advertising campaign that would "arouse individual action against the threat of home and neighborhood decay," and a technical assistance program that would provide trained personnel to both citizens and governmental groups."
A mere four days after the founding of ACTION, the Advertising Council, another propaganda arm of the corporate community, announced a new national campaign to be called "Action on Slums." The aim of the campaign was to "stimulate the rehabilitation or rebuilding of depressed areas." At the same time, various real estate and homebuilding associations were conducting their own campaigns under such slogans as "Build America Better," "New Face for America," and "Better America, Inc."
As one small aspect of the ACTION program, in an attempt to give people the feeling that something was happening and that they should become involved, the organization hired writer Jeanne Lowe in 1957 to be its public information officer. This work took her to various cities. It was not long before she visited New Haven, the scene of the early urban renewal program studied by pluralist Robert A. Dahl and made famous in Who Governs? (1961). After being shown around the city with breathless enthusiasm by Mayor Richard E. Lee and his aides, Lowe wrote an article for the October 1957 Harper's Magazine entitled "Lee of New Haven and His Political Jackpot."
As might be expected, it was an enthusiastic endorsement of what was happening in New Haven, proof that there was no political danger in creating an urban renewal program. The article had been vetted and edited by Lee's staff, which is not exactly an example of independent journalism. Harper's was pimping a puff piece for ACTION. There was great emphasis on Mayor Richard C. Lee's leadership qualities. It began:
Richard C. Lee of New Haven is the first city Mayor in the country to make urban renewal the cornerstone of his political career. Today, as a result, this twice-defeated candidate for a once semi-ceremonial job in a second-rate city is apparently assured of re-election next month for his third term.... Mayor Lee has struck political paydirt in an unpromising issue. (Lowe, 1957, p.36.)
Five paragraphs later, Lowe noted that "what redevelopment needed was an example like New Haven's, which other cities have watched with envy and which Housing Administrator Cole has called 'spectacular, imaginative, exciting, comprehensive--a model for urban renewal in the cities of America.'" ACTION adopted the city as its ideal example of an urban renewal program.
As the creation of ACTION and the hype about New Haven show, the legislative successes and image-building efforts of local growth coalitions had a great deal of outside help from members of the corporate community. Leaders from the largest corporations in the United States gave their considerable support through the opinion-forming process. If their interest in the minor city of New Haven as a model seems to be something of a mystery, the answer is that it is the home of Yale University, the revered alma mater of key people within ACTION, including its chairman. (Yale is also the reason why New Haven received so much urban renewal money, but that is a separate story.)
As might be expected from the way in which the legislative battles of 1937, 1949, and 1954 unfolded, several different studies of urban renewal programs in specific cities reveal the predominant role of local business interests. For example, social scientists Timothy K. Barnekov and Daniel Rich (1977), using questionnaires and interviews in 33 cities, found that downtown associations, chambers of commerce, and small committees of top business leaders were highly active in the urban renewal programs in most of these cities. They concluded that "these data suggest that it is inaccurate to conclude that businessmen have been hostile or indifferent to urban renewal, or that they lack the sustained organization to promote redevelopment" (Barnekov and Rich, 1977, p. 434). In other words, they are contradicting the received wisdom of the pluralists, in fair measure based on what Dahl (1961) claimed about New Haven.
Case studies of urban renewal programs in such major cities as Pittsburgh, Philadelphia, Chicago, San Francisco, and Atlanta also shed light on how growth coalitions dominated local programs even though there were wide differences in how this was accomplished. In Pittsburgh, one of the first cities to undertake urban renewal, it was one family, the Mellons, that spearheaded the program through a coalition known as the Allegheny Conference. Founded in 1943, the Allegheny Conference developed a close working relationship with local government and the Democratic Party that was considered the basis for its success. Because of the great wealth and influence of the Mellons, urban renewal was possible in Pittsburgh even without federal money. Although few cities could emulate Pittsburgh in this regard, the Allegheny Conference nevertheless became the model for Philadelphia, Baltimore, Syracuse, St. Louis, and other cities in the formation of "public-private partnerships."
Philadelphia became a case worthy of study because it created a strong urban renewal program despite the absence of a super-wealthy family. It therefore had to develop a deeper and more broad-based leadership coalition that spent most of the 1940s drawing up plans and changing the structure of local government. One of the key steps in this process was the formation in 1948 of an organization called the Greater Philadelphia Movement. It was composed primarily of downtown business leaders, but there were minority group representatives and a labor official among its 35 members who were considered essential symbolic representatives. Not least among its efforts was support for the election of a reform Democratic mayor who was more responsive to the program than his conservative Republican predecessor had been. The Philadelphia model was one that other cities, including Dahl's New Haven, tried to emulate in their own efforts.
A detailed study of Chicago's first urban renewal project is of interest because it showed the central role that can be played by a major university--in this case, the University of Chicago. A university can be especially potent, this case suggests, when it has direct ties to both the downtown business community and the Democratic political machine. In Chicago, the university provided aid to various planning and citizens' groups in the formative years between 1949 and 1953 and became even more open in its participation after that time. Utilizing its trustees' connections to city government, it lobbied vigorously for the first city project to be located in the area surrounding the university (Rossi & Dentler, 1961).
In 1959, trustees and administrators from the University of Chicago convinced the Eisenhower Administration to amend the urban renewal legislation so that new university construction could be counted as part of the city's one-third contribution to the project costs. This was one of those little add-ons that turned out to be a bonanza for both universities with expansionary plans and city officials who needed more "local" credits for their overall urban renewal programs. City officials were able to piggyback their programs into university deals by gerrymandering renewal areas.
Urban renewal in San Francisco also showed strong downtown business involvement, but there was a different relationship with government. The process began with a group of business leaders who started meeting regularly in 1945 to plan the revitalization of the city and then formalized themselves as the Bay Area Council and the San Francisco Program for Urban Renewal in 1948. The idea was to remake San Francisco as the "Manhattan" of the West, a financial and communication hub that reached out to China and Japan. By the early 1980s, the downtown business sector had been transformed (Hartman, 1984; Mollenkopf, 1983).
With some delays due to neighborhood protests, the plans for the downtown in San Francisco were carried out almost to the letter by a strong redevelopment administrator who was often at odds with the board of supervisors and received minimal support from the mayor's office. Instead of a coalition between downtown business and the mayor, as in many cities, there was a coalition between business and the Redevelopment Agency (Hartman, 1974; Wirt, 1974). This and other examples like it are important because they show, contrary to Dahl (1961) and later pluralists, that a strong mayor was not essential to the success of an urban renewal program.
One of the best and most detailed case studies of an urban renewal program concerns the Southern city of Atlanta between 1950 and 1970. Written by political scientist Clarence Stone (1976), it is of special interest because it was designed with the controversy in the community power structure literature between sociologist Floyd Hunter and political scientist Robert Dahl clearly in mind. It completely vindicates all of Hunter's claims.
More generally, landed elites dominated urban renewal in virtually every city that was studied. But what about New Haven? After all, according to Dahl (1961), business leaders were relatively powerless in New Haven on all issues, including urban renewal. He claimed the program there was almost entirely due to Mayor Richard E. Lee and his highly competent aides. Not even Yale University, which was in need of land for expansion plans developed as early as 1948, showed any real interest in urban renewal. But is this a correct analysis? My later research, based on newly opened archives and new interviews, along with transcripts of Dahl's key interviews, shows that his analysis is mostly wrong.
Local growth coalitions, backed by the major corporations in their respective cities, dominated most American cities with relative ease from the 1920s well into the 1960s. Then they were severely challenged due to a combination of factors (Mollenkopf, 1983). Pluralist political scientists and hopeful political activists predicted the beginning of the end for the growth coalitions. There was soon talk of "hyper-pluralism," "street-fighting pluralism," the "ungovernable city," and even "the wild city."
What were the factors that led to this potential unraveling for the growth coalitions?
Several of these factors are an inherent part of growth-coalition theory, which predicts that neighborhoods will organize and fight to protect their use values whenever they can. The theory even allows for the fact that growth coalitions can lose, although that is not the usual expected outcome.
In response to these diverse challenges, three kinds of urban political administrations developed--liberal, progressive, and conservative (Dreier et al., 2004).
Boston, a combination of a university and high-tech city, had both urban liberal (1968-1983) and urban progressive (1984-1993) administrations after the upheavals of the early 1960s. Urban liberal Kevin White won the support of rent control advocates in 1968 with the slogan, "When landlords raise rents, Kevin White raises hell" (Dreier et al., 2004, p. 177). However, once he was elected mayor he dropped the issue in the face of strong growth-coalition opposition. In the 1970s he used government development grants, supposedly intended to help low-income neighborhoods, to support a downtown mall that included up-scale housing (Dreier et al., 2004, p. 138).
During the building boom in Boston in the 1980s, when nearly $1 billion per year was being invested downtown, the progressive mayor Ray Flynn used linkage programs tied to specific projects to finance the Boston Housing Partnership, which supported the Community Development Corporations that built the housing (Dreier et al., 2004, pp. 205-206). The Flynn Administration was able to obtain $50 million from developers for affordable housing and job training (Dreier, 1993; Molotch, 1998, p. 66). Measured against the past, the liberal and progressive mayors of Boston were impressive, but they did not do anything that stymied the local growth coalition.
Progressive regimes most often developed in university towns, where neighborhood-activist/
However, progressive regimes also developed in some primarily residential cities as well. The classic example here is Santa Monica, California, where activists rode to electoral power on an initiative for rent control in the face of rapid rent increases by the large apartment building owners who provided a very large percentage of the rental housing. The activists then used their governmental authority to extract concessions from developers in exchange for permission to build--which in good part meant social services and a walking mall, which turned out to be a bonanza for both the growth coalition and the city treasury (Gilderbloom & Capek, 1992; Shearer, 1982).
San Francisco was the biggest city to face a major challenge from a progressive coalition (Mollenkopf, 1983). The devolution of power to neighborhoods there was extensive enough that one political scientist who analyzed these changes, Richard DeLeon, called his book Left Coast City (1992). Up-scale neighborhoods stopped a multi-lane federal highway through the city in the mid-1950s, and by the 1970s most neighborhoods were reasonably well protected from noxious growth through strict zoning laws. Then a slow-growth initiative was passed by the citizens in 1986, the strongest such measure anywhere in the country up until that time.
DeLeon thought that San Francisco had become a "wild city" in the sense that no one group was strong enough to carry out its plans. He called the coalition of progressive forces--traditional liberals, neighborhood populists, left-wing activists, and environmentalists--an "anti-regime" because they could stop the growth coalition, but could not as yet pass their own agenda. He thought that these progressive forces were on the verge of becoming a true regime. The distribution of power in San Francisco deserves separate treatment in the light of events since 1992.
In Los Angeles, a long-running urban liberal regime, led by a black mayor, was replaced in 1993 by a Republican corporate lawyer who worked to slash city services. This change did not make a great deal of difference from the point of view of the growth coalition, however, because both regimes focused on downtown development (Dreier et al., 2004, p. 189). In Cleveland, though, the replacement of the progressive mayor in the late 1970s did make a big difference, dashing the hopes for major challenges to a tightly knit downtown elite (Swanstrom, 1985).
In Detroit, the long-time progressive regime of leftist Coleman Young (1973-1992), which constantly criticized business, had little or no success despite many years of effort. The city declined while businesses moved to the suburbs and prospered. Young was replaced in 1993 by a black corporate lawyer, Dennis Archer, who openly courted business and urged it to move back to the city from the booming suburbs, which were now becoming an expensive place to do business. He was replaced in 2001 by another black lawyer, Kwame Kilpatrick, who continued the process of winning back business:
Computerware, a software company, spent $400 million to move its headquarters and 4,000 workers from a Detroit suburb, buying its five-acre site from the city for $1. In recent years, Detroit has seen nearly $4 billion in investments downtown and midtown including two stadiums, corporate construction, hotels, and housing. (Dreier et al., 2004, p. 200.)
As these examples show, growth coalitions continued to be the dominant political force in most large cities in the late 30 years of the 20th century, or recently returned to that role through conservative regimes. However, they are often more fragmented and compromised than their predecessors. Most of them have resigned themselves to the fact that linkages, affordable housing projects, environmentally sensitive designs, and other concessions are a cost of doing business. On the other hand, the progressive forces have not been able to make as much headway as they had expected to for a variety of reasons, including the decline in federal monies since Nixon's second term as president began in 1972:
A good many urban analyses, along with the present study [of housing on the lower east side of New York City], also suggest that U.S. policies and politics are partly to blame for the limits experienced by cities. For several decades, scholars and planners have labored to develop notions of the "progressive city," and to puts these notions in practice in a number of cities. Yet the harsh reality remains that in the intervening years it has been difficult to sustain departures from elite-oriented strategies of urban growth, and this brute fact underscores the limits of a progressive localism. (Sites, 2003, p. 142.)
Within the current urban context, where "market forces" and "elite-oriented strategies of urban growth" shape the city, the growth coalitions and their opponents engage in a new set of battles. First, most growth coalitions now focus on increased hotel and motel space for tourists who come to partake of events that occur in the growth coalitions' new stadiums and convention centers. They also push for up-scale housing for adults without children, who will frequent the city's cultural centers and eat in its five-star restaurants. While these goals may seem reasonable, even these narrow and focused development struggles once again involve rousting low-income people out of their homes because the land under them now can be put to "higher and better uses." There is still no inclination on the part of the growth coalitions and city officials to deal with the twin evils of poverty and racism. Nor is there any willingness to pay people adequate compensation for their losses and provide them with enough money for decent re-housing.
Still, even though large-scale liberal and progressives successes were relatively few, or short-lived, with the exception of a few cities, they are important because they show what is possible by rejecting noxious projects and insisting on linkages in exchange for the right to create new developments. As Molotch (1998, p. 67) argues:
It is a mistake to minimize the significance of these linkages on the grounds that these are privileged places with special bargaining resources. The bargains they strike set the outer limit of standards. The higher those standards and the more projects they turn down, the stronger the negotiating position of places lower in the hierarchy.
Growth-coalition theory, which grew out of Molotch's (1976; 1979; 1998; 1999) critical reading of the urban sociology and the community power structure literatures, provides a new perspective on local power that is compatible with what power structure researchers found for the national level. It preserves the pluralists' emphasis on markets, which is an essential starting point in a capitalist society, but it shows how markets are sociologically constructed and explains how land markets differ in important ways from commodity markets. It explains the very real conflicts between landowners and neighborhoods that are ignored by pluralists, and it takes the federalist nature of American government seriously.
The theory resurrects Marx's distinction between capitalists and landlords that has been ignored by latter-day Marxists. It also uses the Marxist distinction between exchange value and use value to understand the conflict between growth coalitions and neighborhoods. At the same time it stresses that these conflicts are analytically distinct from struggles between capitalists and workers, noting further that labor unions often join the developers as part of the pro-growth coalition. Thus it is a new theory because it is a creative synthesis of the best available ideas from earlier schools of thought. And it is a good theory because it encompasses existing empirical findings.
However, it would be wrong to imply that this theory has carried the day. Pluralism, Marxism, and regime theory are still the favorites for the many social scientists who theorize about any aspect of urban and suburban settings. I think they are very mistaken for reasons provided in a separate detailed critique of these rival urban theories.
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