Photo: Terrence Antonio James/Chicago Tribune

West Erie Street, Chicago

Chicago native Ben Austen (and brother of Jake Austen, who wrote some of my favorite pieces for the Reader when I worked there—he found the earliest known studio recording of the Jackson Five) has a long, fantastic piece in the New York Times Magazine about Chicago's housing crisis and the work of the Chicago Anti-Eviction Campaign.

It's a good piece because it dwells on one of the biggest crises—arguably the biggest—not just in Chicago but in American cities generally: what to do with neighborhoods on the decline. Here's a term you've probably heard before, at least with regards to Detroit and probably to Chicago as well.

And then there’s Emanuel’s plan to close 50 schools, almost all of them in the same black and Latino neighborhoods battered by the foreclosures and a recent spike in homicides. The closures weren’t a matter of downsizing, Emanuel has said in the face of intense protests and criticism, but of trading up academically; he has pledged $155 million for upgrades at the “welcoming schools.” Others were worried more about the long-term consequences of these actions. “It’s a slow death once you take the schools out of these communities,” Brad Hunt, an urban historian and co-author of the recent book “Planning Chicago,” told me. “No one is talking shrinkage, even though that’s what we’re doing. In Chicago, that’s not the image we have of our city.”

"Shrinkage" just means giving up on entire neighborhoods, literally withdrawing some or all city services so that people will also abandon the areas. It's not new to the urban cores of the Rust Belt. When New York City was at its nadir—the Bronx burning to the ground, the city moving towards actual bankruptcy—the former head of the city's housing and urban development administration argued that the city should seize tax-delinquent property, tear it down, offer relocation benefits to anyone left, and then: "The stretches of empty blocks may then be knocked down, services can be stopped, subway stations closed, and the land left fallow until a change in economic and demographic assumptions makes the land useful once again." (Translation: until it becomes useful for industrial land.) Joe Flood, author of the excellent book The Fires, argues that the Bronx burned during the 1970s because of flawed, semi-shrinkage policies instituted by the FDNY.

In that period of American urban history, it was New York, as much as fading rust-belt cities, that was the standard bearer for urban neglect. In the 1982 book After Daley, Northwestern professor Donald Haider, Jane Byrne's first budget director, was able to write that "Chicago is NOT New York or Cleveland. It does not suffer from as advanced a case of deferred maintenance and capital stock deterioration as either of them." One response was to not merely defer the maintenance but to pull it altogether and destroy what was left.

But the city—at one point in possession of eight percent of New York's residential buildings and having lost 800,000 people during the 1970s, equivalent to Chicago's decline from 1950-1990—did the opposite. Under Ed Koch, New York developed 100 programs that spent $5.1 billion to build or renovate over 200,000 units of housing: 125,000 units of occupied housing, 50,000 of vacant housing, and 35,000 of new housing.

The borough that benefitted the most from this was the Bronx: 75,000 new or renovated units. The community district that benefitted the most was Central Harlem (21,000 units, or 40 percent of all units as of 2000; it lost a third of its population during the 1970s), followed by three Bronx communities (10-14,000 units, or 30-40 percent of all units), and then East Harlem (9,000 units, or 20 percent). The Ten Year Plan was specifically targeted to the city's most devastated neighborhoods:

The concentration of Ten-Year Plan housing rehabilitation and new construction is especially evident in figure 4. Over 50 percent of all housing unites built or rehabilitated under the Ten-Year Plan were located in just 10 of the city's 59 community districts, concentrated in the South Bronx, Harlem, and Central Brooklyn.

Data from the 1990 Census of Population and Housing (U.S. Bureau of the Census 1991) illustrate just how distressed the neighborhoods that received city capital were…. Overall, the average income for census tracts in which units are located was $28,726, 38 percent below the citywide average of $46,665….

Similar patterns emerge with respect to poverty rates. Overall, the average census tract poverty rate for all housing built or rehabilitated under the Ten-Year Plan was 34.4 percent, almost twice as high as the citywide average of 18.4 percent.

Chicago's current plan is considerably more modest, though the Cook County land bank will increase efforts. Austen writes (emphasis mine):

Since 2009, the city has funneled $168 million from the federal Neighborhood Stabilization Program into the purchase of 862 vacant foreclosures, fixing up 804 of them, at an average cost of $110,000. It sank $350,000 into the repairs of one home, but even at the asking price of $105,000, no buyers could be found. So far only 91 of the units have sold. Although the real estate market has rebounded elsewhere in Chicago, with construction starts and prices both on the rise, many of the blocks surrounding these renovated homes are still studded with unsellable hulls. Of all the properties the city wanted to purchase under the program, it found it could get title on only about 10 percent of the buildings. To dodge fees, banks often weren’t registering their foreclosures, or they didn’t complete the foreclosure process to avoid the tax burden and responsibility of the unmovable real estate. Thousands of other bad mortgages were bundled in private securitization trusts, frequently with the trusts technically owning the loans and the evicted homeowners owning the property.

New York solved the problem of surrounding blight with a vastly more ambitious program:

The city, for instance, paid careful attention to where they deployed their rehabilitation resources. The planners at HPD recognized that renovating a single building on an otherwise dilapidated block would do little to spur neighborhood change. Thus, they worked to stage city investments so that entire blocks and sections of neighborhoods were rebuilt simultaneously. 

As mentioned, 40 percent of all housing units in Central Harlem were aided by the program. To hasten the process of rehabilitation, Koch recalls, the city went from allowing three years of unpaid taxes before the city took the title, to one.

New York City was buoyed in the mid-1980s by a recovering economy and a growing financial sector, but its massive investment in housing still wasn't an obvious strategy. A decade before, the city was saved from bankruptcy by the federal government and its own pension plans. In the late '80s, the city went through a tuberculosis epidemic. In 1984, Bernie Goetz shot four muggers on a subway train in Manhattan and was celebrated by some as a hero; New York homicide rates increased from 1,392 in 1985 to 2,262 in 1990, before falling to 414 last year. The Ten Year Plan was still a risk for a city that had begun to recover its fiscal stability and that remained a byword for urban collapse.

And it worked. "The Koch housing program contributed significantly to the repopulation of New York," Koch biographer Jonathan Soffer writes, calling it "the greatest success of his twelve-year mayorality. The housing he built did not end homelessness but did help rescue New York."