How the 1 Percent Rules | The Nation


How the 1 Percent Rules

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Anyone walking around New York City, visitor or resident, might think the place had been laid out by the chaotic mind of the market. In fact, the place has been planned over the last century by monied interests, first among them the real estate developers who build and own the results of the plans, in tight alliance with local government.

About the Author

Doug Henwood
Doug Henwood edits the Left Business Observer, does a weekly radio show for KPFA, and is at work on a study of the US...

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If you’re not clued in to those plans, you’d have little idea of the forces behind the transformation of downtown Brooklyn over the last several years. You might be surprised by the recent arrival of an Armani Exchange on the Fulton Mall, a very busy retail strip hitherto known for selling basics to the borough’s working class. Look behind the A|X and you’ll see a rising forest of “luxury” high-rises in a neighborhood hitherto known for low-rise buildings of modest economic aspiration. Anyone wondering how these came to be would probably answer with the all-purpose response for our time: “market forces.”

Yes, markets are forceful, but they often get a lot of assistance from the state and elite nonprofit groups. I’d lived in the city for ten years before I got a good sense of how all this works. That’s when I first read “Planning New York,” an essay by Robert Fitch, part of a collection on the 1970s urban crisis most intensely symbolized by New York’s brush with bankruptcy in 1975. Fitch’s piece is a close reading of the 1929 plan devised by the Regional Plan Association for the city and its surrounding suburbs. While barely known to the general public, the RPA is one of those elite bodies—boards heavy with financiers, developers, lawyers, upscale philanthropists and politicians—that shape the world we live in. They have a reputation for public-spiritedness, which they cultivate. But there’s no question about whose interests they primarily serve.

As Fitch put it, the essence of the 1929 plan was the division of the region into Slab City—the high-rises of Manhattan—and Spread City, the suburbs that surround the city center. This was enabled by the building of a set of highways that made it possible to travel to and from the city, or comfortably around it if you were traveling elsewhere. The guiding idea was to concentrate high-end activities in the city center—finance and other fancy service businesses that could afford high rents—and move the noxious stuff out to Jersey.

The city would be reconfigured in line with this rough hierarchy: (1) financial business, (2) fancy retail, (3) fancy residential, (4) inferior retail, (5) wholesalers and, at the bottom of the list, (6) industry and working-class housing. The ultimate goal was to turn the city into one of the peaks at the commanding heights of global economic activity: finance, senior management and media.

As Fitch would later argue in The Assassination of New York, the deindustrialization of the city—more than 700,000 manufacturing jobs, two-thirds of the total, disappeared between 1950 and 1990, a period when national factory employment rose by more than a third—wasn’t merely the product of “outside forces” like globalization and technological change. It was planned, via the influence of the RPA and other entities like the Real Estate Board of New York on the city planning apparatus. Instead of protecting manufacturing as a valuable resource using zoning and tax breaks, exactly the opposite tack was taken: zoning changes and tax breaks designed to squeeze the little factories out and replace them in accordance with the six-part hierarchy listed above.

The strategy was so successful in Manhattan that by the 1980s, planners started looking across the water for fresh opportunities. Then-Mayor Ed Koch appointed a Commission on the Year 2000—consisting of the usual cast of lawyers, bankers, developers, philanthropists and the like—to plan the transition to a new millennium. The commission published its report, grandly titled New York Ascendant, in 1987, the year of a great stock market crash (though not as great as 1929, the year of the RPA’s plan). Among other things, it envisioned pushing the central business district out from Manhattan and across the East River into Queens (particularly Long Island City) and Brooklyn (particularly downtown). The development in these frontier zones would be more back-office than executive suite, but it would require the displacement of existing industrial properties (Long Island City) and low-end retail. Of course, planners are too discreet to use the word “displacement”; instead, New York Ascendant describes the agenda as one of improving the “ambiance.”

* * *

Motherless Brooklyn?

The redevelopment of Long Island City is still in its early stages, but the transformation of Downtown Brooklyn (DTB) is well under way, so let’s take a closer look at that. The 1987 plan wasn’t the first to target the neighborhood for upscaling. The proximate origin of the idea is probably a 1983 blueprint by, yes, the Regional Plan Association, which, among other things, set the goal of turning DTB into the city’s third central business district (after midtown and lower Manhattan). Though that idea had first surfaced in a 1969 master plan for the city promulgated by the administration of Mayor John Lindsay, it died in the gloom of the 1970s. Revived with the bullish turn of the early 1980s, the RPA’s scheme caught the interest of Mayor Koch, who showered the neighborhood with tax breaks and other inducements for businesses to locate there. Passions for this agenda ebbed during the Giuliani era, which focused on Manhattan, but the RPA followed through with a 1996 plan that encouraged an intensified approach to the area: improving the appearance and social environment of the neighborhood, expanding the cultural district around the Brooklyn Academy of Music, upscaling retail on the Fulton Mall. With the transition from Rudy Giuliani to Michael Bloomberg, official interest in the transformation of DTB revived.

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