Here in New York City we have going on a long-running process known as gentrification. This process is associated with general growth in population and in the business community. Here are some demographic data on New York City from Wikipedia. After a period of rapid decline in the 70s (the City lost about 10% of its population during that decade), our population started growing again in the 80s, and by 2000 had surpassed the previous peak. Since then, the population has continued to grow, if slowly -- from 2000 to 2010, we gained 167,000 people, about 2% in ten years, or .2% per year. This is not exactly a population boom. For comparison, during the decade of the 1920s New York's population went from about 5.6 million to over 6.9 million, a gain of over 20% during that one decade, or some ten times faster than the current pace of growth. But anyway, today's newcomers have tended to be of somewhat higher income on average than those previously here. Also, it is famously hard to build new housing in New York, so the newcomers are moving into areas that are relatively fully occupied.
There have been several noticeable consequences of this trend, that in combination are described by the word "gentrification." One is that neighborhoods formerly considered slums have become acceptable places for the upscale to live. In Manhattan, such neighborhoods include Harlem and the Lower East Side. Across the East River, Brooklyn has large numbers of such neighborhoods, many in the parts relatively close to Manhattan such as Williamsburg, Bushwick, Fort Greene, and Gowanus. A second consequence has been much unsubsidized private investment in the building stock to bring it into a better state of repair. A third consequence has been an influx into these areas of retail uses, stores and restaurants, catering to the new, somewhat wealthier residents.
And a fourth consequence is that the market prices of housing, whether to rent or own, have gone up in these areas. Remember that it's hard to build here. Some of the obstacles are inherent in the situation of a dense city, such as the need to buy out previous occupants, but other obstacles are put up by the government, including rules covering things like zoning, landmarks, and the environment. Increased demand with little increase in supply means that prices are going to go up. Increasing property values are a clear positive for the existing owners, as well as for the government whose property tax base increases.
There are plenty of cities out there that would love to have these kinds of problems. Consider, for example, Detroit, where the population has shrunk by well over half from its peak 60 years ago. Large houses there can be bought for $10,000 or $20,000. Vast stretches are vacant, with many abandoned homes and little or no retail at all. For the city government, there's almost no property value left on which to levy a tax. Closer to home, we have multiple cities that, while not so bad off as Detroit, have suffered badly from falling population, low property values and abandoned housing. Within a 100 mile radius we have places like Newark, NJ, Philadelphia, PA, Bridgeport and Hartford, CT, all of which continued to lose population through the 2000 census and have seen only slight recoveries since. All of them have lots of low-value, badly maintained properties that generate little or no property tax revenue.
So you may be surprised to learn that the official position of the New York City groupthink is that gentrification is horrible and that the gentrifiers should feel deep shame and guilt. Thus in New York Magazine of February 2 we have Justin Davidson writing an article titled "Is Gentrification All Bad?" To his credit, Davidson gives at least some of the other side of the argument, but here is his summary of the official position:
In the popular imagination, gentrification and displacement are virtually synonymous, the input and output of a zero-sum game. One professional couple’s $2 million brownstone renovation in Bedford-Stuyvesant equals three families drifting toward Bayonne in search of barely adequate shelter. And so a sense of grievance and shame permeates virtually all discussions of neighborhood change. Even gentrifiers themselves are convinced they are doing something terrible. Young professionals whose moving trucks keep pulling up to curbs in Bushwick and Astoria carry with them trunkfuls of guilt.
Davidson quotes the January 1 inauguration speech of our new super-progressive Public Advocate Letitia James (close ally of Mayor Bill de Blasio):
"We live in a gilded age of inequality where decrepit homeless shelters and housing developments stand in the neglected shadow of gleaming multimillion-dollar condos,” she cried.
It's just more of the mindset that I can't seem to understand. Here is my question: If the city-run homeless shelters and public housing developments are "decrepit" even with the substantial tax revenues provided by the multimillion-dollar condos, how exactly are the shelters and projects going to be better when we stop the gentrification and drive the condos and their owners, and their tax revenue, away?
For a particular Greenwich Village perspective on gentrification, consider the strange case of the William Gottlieb estate. Bill Gottlieb was a true Greenwich Village character who spent his lifetime accumulating dozens of older and generally run-down properties, mostly in my neighborhood of the West Village. He died in 1999, and his heirs spent the next dozen years fighting over control of the properties. Here is a brief summary of Gottlieb's business approach from our local newspaper The Villager in 2010:
William Gottlieb was renowned for amassing more than 100 properties, mostly in the West Village, the Meatpacking District and the Lower East Side, and for not selling, improving or even maintaining them.
Failing to maintain a hundred or so buildings for decades -- can that be a good thing? Actually, Gottlieb was something of a hero around the Village, where any acts of neighborhood improvement are looked upon with fear by the rent-regulated incumbents. In the 15 years since Gottlieb's death, whether by intent or incompetence or failure to come to agreement, Gottlieb's heirs have largely continued the practice of letting his buildings decay. Consider this from the Observer in 2010:
WANDER AIMLESSLY through the genteel corridors of the West Village and take note of the more ramshackle buildings. Chances are they belong to [Gottlieb's heir] Mr. Bender.
But wait! The firm still called William Gottlieb Real Estate, run by his heirs, now actually wants to build something new. They recently revealed plans to erect a 180,000 square foot office building on a property next to the High Line park at 14th Street and Tenth Avenue, former site of a one-story industrial building. Needless to say, the Greenwich Village Society for Historic Preservation (sometimes known as the Greenwich Villagers Against Everything) immediately sprang into action to block a zoning variance needed for construction of the proposed building. You might think that in the West Village and Meatpacking District it's way too late to stop gentrification, but these people will fight to their last breath. This building will easily generate a couple of million dollars of property taxes per year. If anybody was willing to build such a building in Newark or Hartford, the government would kiss that person's feet and probably throw millions of dollars of tax incentives at him. Here we fight to keep these people out, and nobody would ever be so crass as to mention the property taxes to be paid as any relevant part of the discussion.