Guess Who Saved the South Bronx? Big Government - urban renewal in New York, New York

Washington Monthly, April, 1999 by Robert Worth

Maintain a mix of incomes. The classic mistake of the past had been to create "low-income" or welfare enclaves, which rapidly degenerated into havens of crime. In fact, the city was so eager to house the homeless in the 80s that it repeated this mistake with its Special Initiative Project (SIP), filling entire buildings and even clusters of buildings with homeless people. The CDC community had seen this movie before, and they reacted at once. One night David Bayez, development director for Banana Kelly, persuaded a city councilman to drive up and take a walk with him along Southern Boulevard, where the new homeless, projects were crawling with pushers, fights, and unattended children. Soon afterward, the city began spreading the homeless out into the other buildings it renovated.

The city also tried to encourage home ownership, on the premise that homeowners would have a stake in the neighborhood and provide an anchor against decay, even in harder economic times. So far, it appears to have worked; the homes have sold easily, and their effect on neighborhoods is easy to see. Driving past the bodegas and vacant lots of Brook Avenue in the Melrose neighborhood, you suddenly come upon a solid block of immaculate light blue houses with gates and welcome mats. Keep driving and you'll see them appear again and again, in different shapes and sizes, like flashes of suburbia amidst the older tenements. Most of them were built by the New York City Partnership and are designed for families with an income of about $50,000--"typically, say, a nurse and a corrections worker," says borough president Fernando Ferrer. The most famous of these homeowner developments is Charlotte Gardens, which is invariably featured in TV and newspaper stories about the revival of the South Bronx, and which Clinton chose for his 1997 pit stop. It's true that Charlotte Gardens is a shocking symbol of the change that has come to the South Bronx: Where there was little more than rubble, there are now 89 one story ranch-style houses, with picket fences, satellite dishes, immaculate lawns, and tree-lined streets. Yet for all its symbolic importance, Charlotte Gardens is a poor model, because it lacks the density the Bronx needs to maintain diverse neighborhoods and revive its retail culture.

Use Third Parties. For all the good will and experience of the CDC's, handing them the money and asking them to fix the South Bronx would have been a disaster. Like any local group, they weren't used to dealing with large quantities of money, and their construction experience was often narrow. In most of its renovations the city relied on a nonprofit intermediary such as the Local Initiatives Support Corporation (LISC) or the Enterprise Foundation to help out. In many cases, the city would sell the building for a dollar to the owner, usually a local nonprofit. The city would then contribute some portion of the money necessary for the rehab--depending on the income level of the prospective tenants. The rest would come in part from the owner, and in part through a loan arranged by the intermediary, or even by a bank. Tile city would often eliminate real estate taxes on these buildings for a specified period, so that the owner could charge lower rents for low-income residents.