Tossed into the dustbin of history more than a generation ago, the concept of urban renewal, long derided as “Negro removal,” is getting a second look.
The program began in 1950 and was scrapped in 1974, by then thoroughly discredited as unfair and unworkable. In the national war on blight, the poor were disproportionately targeted for eviction from dilapidated downtowns to make way for parks, office buildings, sports arenas, and high-rise apartments. But a new study for the National Bureau of Economic Research finds that urban renewal, or slum clearance, had some lasting positive effects on economic growth.
William J. Collins, an economist and historian at Vanderbilt University, and Katharine L. Shester, an economist at Washington and Lee University, looked at family incomes, property values and population growth in about 460 American cities for 1950 and 1980. The cities they chose encompassed the vast majority of urban renewal projects. Overall, the economists found, the longer cities participated in the program and the more federal funding they received, the bigger and better off they became, with no net loss of black residents.
“The results suggest a far less dismal legacy for the U.S. urban renewal program than is commonly portrayed,” they wrote.
“We were really surprised,” Collins said. “Everything I’d heard about the program was really negative. On the other hand, these were pretty big investments made in central cities, many of them funded by the federal government. It shouldn’t be too surprising that they had a positive influence.”
Urban renewal was no panacea. It did not stop the exodus to the suburbs amid the waves of riots and racial strife of the 1960s and ’70s. But things would have been worse without large-scale investment in cities, Collins said. He offered the example of Baltimore, whose population declined between 1950 and 1980. And yet the data showed that Baltimore would have had a 5 percent lower median property value, a 2 percent lower median family income, and a 6 percent smaller population in 1980 had it not been allowed to participate in urban renewal from the start and had it not received 35 percent more funding than the average city.
After World War II, urban poverty was a top priority on the U.S. domestic agenda, and slum clearance was promoted as a way to halt the contagion of blight. Congress authorized major funding for cities to buy land through eminent domain, effectively forcing owners to sell downtown properties for public use. By the time the program ended, 2,100 projects across the country — including Lincoln Center in New York City, Government Center in Boston, and Charles Center in Baltimore — had received the equivalent of $53 billion in 2009 dollars.
As of June 1996, according to Collins and Shester, the approved projects had either cleared or intended to clear 90 square miles of land and 400,000 housing units, forcing the relocation of more than 300,000 families, half of whom were people of color.
A recent study by Michael Carriere, a historian at the Milwaukee School of Engineering, recalls some of the turmoil that ensued. In early 1968, Carriere recounts, protesters sat in front of the bulldozers when Columbia University began clearing Morningside Park to build a gymnasium with separate entrances for college students and Harlem residents. The gym project became a powerful symbol in the student uprising against the Vietnam War at Columbia that spring, as activists linked the university’s expansion plans at home to its support for the military invasion abroad. The gym was never built.
Looking through records at the National Archives, Collins discovered his own university’s expansion plans had encountered opposition from Nashville residents in 1967.
“Much of the property from which home owners would be displaced would go to a privately owned tax-free Institution, Vanderbilt University, for projected use in an expanded program that lies far into the future,” one resident wrote to the U.S. Department of Housing and Urban Development.
Collins and Shester’s study is one of only a few that examine the economics of urban renewal. More often, the program has been analyzed from a sociological or historical point of view, with a focus on how it affected specific communities.
Based on data from the U.S. Census and the federal Urban Renewal Directory, the pair discovered that an extra $100 per capita in grant funding for urban renewal saw a 2.6 percent increase in a city’s median family income, a 7.7 percent increase in median property value and a 9 percent increase in population by 1980. The average per-capita funding under the program was $122.
The economists found it mattered whether a state dragged its feet or quickly passed legislation enabling local agencies to carry out urban renewal projects. The data showed that five extra years of eligibility led to a 4 percent increase in a city’s median property value and 1 percent increase in median family income.
Collins and Shester acknowledge that the program placed a heavy burden on the poor, but they conclude that it had sizable economic impacts at the city level. At a time when the federal government is much less involved in funding large-scale urban projects, Collins said, “it is remarkable to look back to an era when slums were a national policy priority.”
“I don’t think we’ll ever do urban renewal as it was done in the ’50s and ’60s,” he said. “The politics of it are not feasible anymore. But the data support the basic idea that the federal government can provide funds to cities, and cities can use those funds to facilitate private development and economic growth. It seems like that mechanism worked.”