"This lively community began to wind down in the late 1950s and 1960s when, under the guise of "urban renewal," thousands of people and more than 80 businesses (many minority-owned) were displaced. Most of those businesses never reestablished."
William writes:
"There is a mountain of evidence that urban renewal did exactly what is stated above. The result was/is economic deserts. The prior community, before "urban renewal", functioned quite nicely relative to its supplanted community via urban renewal. "Planners" and their ilk decided they had a one-best-way and mowed down blocks of communities in Greensboro and elsewhere as the result would be a wonderful new world of grandeur. The result was to destroy community ties, run off business that never returned, and basically create a decaying community with plenty of unintended negative consequences.
However, an underlying theme was that the prior communities were "eye sores" or otherwise did not enhance the total value of the aggregate community. That is, if the eye sore was removed it would increase surrounding property values and aggregate property values of owners outside the "eye sore". Stated alternatively, the "urban renewal" concept was hijacked by others looking to enhance their property values. Insidious, huh?"
My reply to Bill:
"There was an element of the eye sore mentality involved. One of the businesses that was removed from East Market was Myers Brothers Scrap Metal. Charles Myers, the last remaining Myers brother, told me how their father had established the business. Myers Brothers moved to the old Railroad round-about on Spring Garden street. Greensboro attempted to close them for 40 years there as well but as the property was owned by the railroad Greensboro had no authority.
The East Market Street property became the main Greensboro post office but in 2008, as part of the East Market Street Development Corporation and City of Greensboro's Streetscaping efforts, two perfectly good buildings were torn down. What remains is a red dirt field of many acres-- an eyesore."
Just so you know, Myers Brothers Scrap Metal did close when the railroad sold the old round-about to developers over 40 years later. Last I heard Charles Myers currently runs a scrap metal brokerage in Charlotte. How does Greensboro loose a business belonging to multiple generations of natives of our city? You bulldoze them out.
Mr Heasley continues:
"Urban renewal" when it failed lead to escalated "zoning" and "greenways". How so? The same group that wants their property values increased at the expense of others, others being the poor, found another way to eliminate the eye sore. Really? Yep.
Zoning ordinances are politically sold as ways to stop unwanted mixtures of commercial and residential. Greenways are politically sold as warm and fuzzy eco-buffers that can also act as parks or walking/jogging trails. Unfortunately, zoning and greenways are merely central planning enforced by coercion that concentrates on the curtailment of property rights without compensation, restricts competition and basically leads to pricing the poor out of markets and/or location.
When eminent domain is deployed a property owner is supposedly compensated for the value of their property. But the physical item “land” or “property” is not the economic value. The economic value rests in the options of use of the property. Hence zoning restricts the options regarding the use of the property and hence the economic value. Further, zoning unlike eminent domain does not compensate the owner of the property for the restricted options. Moreover, eminent domain and zoning both affect options and hence should be compensated.
Zoning also restricts competition as it removes some property option for owner X yet leaves that property option for owner Y. X can not compete with Y over property option Q as X has had property option Q curtailed. One can quickly see that zoning through the threat of government force [coercion] would motivate Y to have X’s option curtailed so as to restrict the supply of option Q and hence drive up the value of option Q through restricted competition.
Digressing for a moment regarding zoning, one must consider central planning or its code name “economic planning”. On one hand we have spontaneous and emergent order through the plans of the many and then we have central planning which is the plans of the few. Central planning rests on the premise that a handful of experts can possess all the information, desires, wants and decisions of the many. Not only do these experts posses all the information, desires, wants and decisions of the many they also know, in real time, how the interaction changes. Stated alternatively, the experts are omnipresent regarding time and circumstance. That is to say, central planning is the zenith of charlatanism.
Greenways are also a form of property option restriction leading to a restriction in competition. Greenways are merely zoning with a different name. Yes, greenways come with ecology, environmental concerns and all the do-gooder bells and whistles. However, greenways are not installed for the do-gooders, the do-gooders concern is merely hijacked and used as an excuse to restrict property options as a conduit to restrict competition.
Zoning and greenways many times lead to the placement/displacement of the poor. Zoning increases price and hence drives out the poor. Restricting property options based on zoning via onerous building codes drives up price and hence prices the poor out of particular markets. Greenways remove property options that many times could be used for lower income housing. Many times greenways are constructed from what was once low income housing areas hence coercively displacing the poor."
Sound familiar? The downtown Greensboro Greenway, Steven Tanger Center for the Performing Arts, City Center Park, High Point Road-Lee Street Streetscaping, East Market Street Streetscaping, the gentrification of Glenwood, all these things are efforts to displace Greensboro's poor while increasing amenities for the upper middle class and rich at taxpayers' expense.
And yet while all these efforts have been made to diplace the poor there have been no efforts made to give the poor a place to go or jobs that pay enough so that the poor can afford to live in the communities Greensboro's elites are seeking to create.
Aside from the racist and classist aspects of what I just wrote, that's just bad business. What kind of moron wants to drive away potential customers? Mr Heasley continues:
"Now we arrive at the incumbent and zoning. The incumbent property owners wants zoning restriction to protect their property from low income individuals. By requiring a variety of requirements that drive up price, the incumbent property owner supports zoning that prices future property purchasers in his/her locale to be as affluent as him or her hence driving the low income individual away.
One needs to consider private zoning vs. public zoning. If one voluntarily moves to a private development that has rules and regulations associated with zoning then one voluntarily accepts such property option restriction as a condition. That is, you can voluntarily accept or reject. However, public zoning where property option restrictions are imposed is an involuntary transaction and pure coercion."
Build and live in your gated communities and your downtown penthouse apartments with armed guards at the front door if that's what you want to do but you have no right to tax me so that you can afford your luxuries. Not now, not ever.
Bill closes:
"A final thought: freedom of speech and property rights are given the same weight in the U.S. Constitution. If one attempts to curtail freedom of speech voices ring out to immediately stop such activity. Yet property rights are curtailed at the drop of a hat. Two rights with the same weight yet one can be infringed upon at will. Funny how that works.
Regarding the above, Hernando De Soto, an economist from Peru, wrote a book entitled The Other Path as well as a book entitled The Mystery of Capital. Both books are most insightful. Although he discusses many subjects, he explains that the poor migrate to urban areas and their first stop is "shanty town". Shanty town is a vibrant economy regardless of it "looks". It is an assimilation area for many. They come to shanty town first, but their goal is looking for opportunity beyond shanty town. Hence shanty town is not an "eye sore", rather it is an integral part of an economy.
One last point. Shanty town many times has a subterranean economy aka black market, cash economy, non-taxed economy. That is bad huh? Maybe not so much. How so? Milton Friedman referred to the subterranean economy as "the efficient economy". Chew on that for awhile"
Show me any developer who doesn't depend on the shanty towns and black markets to push his projects over the top and I'll show you a very poor developer.
I encourage you to read the Winter 2009 article from Popular Government Magazine by Jonathan Q Morgan of the UNC School of Government, entitled, Using Economic Development Incentives: For Better or for Worse. I'll be writing from that and adding to my plans as outlined in Part 31: A Different Light and Part 36: Laying The Foundations when I post Part 38.
Why this post, you ask? Why look back 50 years instead of concentrating entirely on the future? Because without knowing our past we cannot know how we came to be where we are and are doomed to repeat the same mistakes over and over again.
Please continue reading Incentives In Greensboro: Part 38: Baby Steps, Giant Steps
About Bill Heasley:
W.E. Heasley, CLU, LUTCF
Chief Economist
Heasley Insurance Services, LLC. Since 1979
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“The curious task of economics is to illustrate to men how little they really know about what they imagine they can design.” - F.A. Hayek
