“Not surprisingly the #1 spot on the list went to the wealthy golf mecca of Pinehurst. Fact is: poor people don't live in Pinehurst and the working class commutes to jobs there. In that way Pinehurst is able to export most of its crime to nearby Carthage, Southern Pines and other Moore County communities just as has always been done there. Greensboro's elites would no doubt love to use the same approach to fighting crime by pricing the working class out of the city just as Pinehurst has managed to do.” - Billy Jones, Another List, Another Failure For Greensboro
At first blush the above paragraph seems like an opinion. However, the above paragraph is in fact based in real phenomena discussed at length by Hernando De Soto in his book The Other Path and William Easterly in his book The Tyranny of Experts. How so? (1) (2)
Central planners, via special interests, through the hijacking of do-gooder’s initial ideas of helping the poor, propose urban renewal plans and greenways. The urban renewal plans destroy low-income housing and low-income serving businesses.
Generally the result is displaced low-income families that must live elsewhere while the urban renewal takes place. Live elsewhere, in that, they must search for other low-income housing that meets their housing budget. These other locales that have acceptable housing prices are generally in more rural areas meaning the added price of a long commute to work, back to their urban based job, by people of very modest means and modest budget. Those that do return to the area are forced to live in a densely populated low-income housing projects with many rules and regulations. Rules and regulations that generally disallow running small cottage-based businesses from one‘s home.
Meanwhile, in the main, the displaced business do not return. The business owners, without revenue during the period the urban renewal takes place, must either relocate their business or seek other employment. With the end result being a densely populated low-income housing project with few if any businesses to serve the population in this newly constructed densely populated housing project.
Greenways serve the same function as urban renewal albeit no housing of any sort is now available for any income strata. The concept of “greenways” is a do-gooder idea that a green strip of land surrounding or adjoining an urban area makes for an aesthetically pleasing, environmental friendly and family recreation area. Greenways are then notionally presented as ways to “attract businesses and people” as the greenway’s aesthetically pleasing, environmental friendly and family recreation area are aspects that supposedly “attract”.
Problem is, the greenway is not constructed through class A real-estate that exhibits high value. Rather the greenway is constructed, much of the time, right through the same low-income housing and low-income serving businesses discussed above. Two avenues, same result.
When examining the result of such intentions as urban renewal and greenways one must examine the seen and the unseen. The seen is busy construction workers plowing under existing structures that once provided low-income housing and businesses serving lower-income people and building anew low-income housing. With greenways dismantlers removing existing low-income housing and replacing it with trees and lawns. The unseen is the families displaced and having to search for low-income housing in other locales. That these same families must now commute to their employment from much greater distances. Further, the social fabric of the low-income neighborhood is destroyed as families that once networked together end up in separate new low-income locales that offer affordable housing. It’s tough to borrow a cup of sugar from your old neighbor who now lives twenty miles away.
De Soto makes a grand point regarding shanty-towns in emerging economies which are akin to low-income housing in developed economies. The shanty-towns emerge as very low-income rural people are attracted to the higher paying urban jobs available. They must have a place to live during the transition and hence the emergence of shanty-towns. These shanty-towns, as De Soto observes, have their own vibrant economies albeit more informal economies (non-regulated, non-taxed). That the vibrant economy of shanty-town then interacts with the established economy of the urban area it adjoins causing the economic pie to grow. That the inhabitants of shanty-town are by no means permanent inhabitants. These low-income wage earners seek to move up the economic ladder and many, many do so and move to other areas with new shanty-town inhabitants replacing them.
The interaction De Soto describes is very much related to the concept of a “whole economy”. That is, all participants, low, middle and high income within an economy interact to create a dynamic and innovative economy. The problem of slack growth can be to one degree or another attributed to economies that wall-off income groups or drive off income groups.
Now comes the insidious. Urban renewal and greenways are generally built via other people (politicos), spending other people’s money (taxpayer funds), on other people (recipient class). The result thereof, for example, is that greenways are argued to be nothing more than an exercise in Director’s Law where the middle class lobby for a convenient park for themselves to have low cost recreational opportunities at the expense of the lower-income driven out. (3)
Regarding urban renewal the insidious many times comes in the form of aesthetics. Political elites and their ilk find lower income housing an “eye sore”, a “blighted area“ or some other derogatory description. Rather than understanding the economic value of shanty-town and the needs of the inhabitants…. the shape, look, smell of shanty-town is not to their liking. Why not designate the “eye sore” for urban renewal and then the aesthetics of the few will be satisfied?
A final item that is worthy of discussion is the rights of the poor and the private property rights of those serving the poor. Should not the poor have the right to live where they choose? Should the poor be driven out merely because they are poor? Should the poor have the opportunity to climb the economic ladder at the most reasonable price? Are those catering to the poor, be it housing or businesses, do they not have a right to supply to the poor what others are unwilling to supply?
(1) The Other Path , Hernando De Soto
(2) The Tyranny of Experts, William Easterly
(3) Director’s Law
Sunday, December 21, 2014
Another List, Another Failure For Greensboro: Part Deux
Labels: Director's Law, greenways, Hernando De Soto, low income housing, private property rights, rights of the poor, urban renewal, William Easterly
BS Economics, cum laude, Private and Public Sectors, 1979, West Virginia University, Morgantown, WV. Undergraduate Minor in General Insurance. Chartered Life Underwriter (CLU), Huebner School of Economics, American College, 1992, Bryn Mawr, PA. Life Underwriter Training Fellow (LUTCF), 1986, National Association of Life Underwriters, Washington D.C.. Currently enrolled and completed one half of Chartered Property and Casualty Underwriter (CPCU) from the American College. 38 years insurance industry experience.