Where Urban Renewal Fails
MEYER, EUGENE L.
National Reports WHERE URBAN RENEWAL FAILS BY EUGENE L. MEYER Washington Although urban renewal has become something of a sacred cow on Capitol Hill, many congressmen are beginning to suspect...
...Romney that the Congress was the initial culprit," stormed Gross...
...As hud Secretary George Romney admitted in testimony before the House panel: "We are keeping land values up in these central city areas at a time when, if we permitted the land to find its natural value on the market-price basis, ultimately [it could] be purchased at a much lower price...
...It is hard to find any planning logic in locating large family units next to 14th Street N.W., a busy thoroughfare...
...a longtime defender of renewal programs, replied, "I'm not so sure that if we spent millions in that area, for example, in helping people to rehabilitate their existing homes, that we wouldn't be better off...
...In theory, this was also supposed to promote sensible neighborhood planning...
...But he has had almost four years now to curb the incredible blunders that have plagued the urban renewal program, and I have seen few signs that he has done anything about it...
...The minute the government comes in, bingo, the costs go to the absolute limits...
...I think there are people who are identifying areas of blight and going out and picking up the property at low Eugene L. Meyer is urban affairs reporter for the Washington Post...
...When the Representatives expressed shock that renewal sites were costing the taxpayers so much, Romney told the panel that it was time for Congress to take a fresh look at the entire program...
...Now that liberals as well as conservatives are coming to realize that the present urban renewal program is not working, they might do well to consider how urban development is administered outside the U.S...
...The day the hud appropriations bill was passed, Representative H. R. Gross (R.-Iowa), a fiscal conservative, railed against renewal profiteering from the House floor...
...a few blocks away, outside the urban renewal area, a nonprofit developer has built nine family units at a land cost of only $2,000 each...
...That is what happened with the Washington town house project...
...prices and holding it until they sell it for urban renewal at high prices...
...The problem with the system is that, increasingly, speculators have been buying inner-city land for a song and reaping enormous profits by reselling it to the government for "fair market value," when in fact there is no "market" to speak of except the government...
...I agree with Mr...
...It is in the speculator's interest to demolish any existing buildings, use the land as a parking lot and then construct a luxury high-rise, if there is a demand, or await the windfall of urban renewal...
...NDP provides for year-to-year funding and planning of smaller another major artery a few blocks away, contending that a commercial high rise was more appropriate...
...George gets depressed sometimes," confided a former hud official to a reporter after the hearing...
...The project provided congressmen with a timely study of how renewal works in cities throughout the country...
...But it has resulted in little planning or action, and continuing displacement problems...
...In many Western European countries, the price of the land is frozen when an area is slated for renewal, thereby curbing speculators and cutting the cost to the public...
...The urban renewal program was given condemnation powers for assembling adjacent parcels to facilitate the economical selling of sites...
...Called the "write-down," this is the price the public must pay to lure developers back from the lucrative suburbs and into the urban quagmire...
...In fact, traditional area wide planning moved so slowly and ultimately displaced so many families— mostly poor and black—that since 1968 it has largely been supplanted by the Neighborhood Development Program...
...If a developer builds on a site he owns, its assessment and "action areas," its objective being to speed renewal and displace fewer people...
...Some $1.5 million, over half the cost of the 54-unit project, had gone into purchasing the land at "fair market value...
...This system recognizes the reality that when the government steps into an area, there is no such thing as a "fair market value...
...The overall land cost for the town houses was $28,000 each...
...We have to look at the building of communities...
...National Reports WHERE URBAN RENEWAL FAILS BY EUGENE L. MEYER Washington Although urban renewal has become something of a sacred cow on Capitol Hill, many congressmen are beginning to suspect that the program to save the nation's cities is actually contributing to their decay...
...In the Washington case, a company bought one of the four properties involved for $398,000 in 1963 and resold the vacant tract to the District of Columbia's Redevelopment Land Agency six years later for $755,000...
...The price was calculated by two government-approved appraisers on the basis of what the property should have sold for under its present commercial and light industry zoning, rather than its future residential use...
...Urban renewal has failed so miserably, he said, that he is seriously considering barring it from sections of 20 major cities...
...Land speculation is encouraged by the property tax system, which penalizes improvements and rewards their absence...
...Thus money that could be going into more housing, schools, playgrounds, day care centers, and health facilities is winding up in the speculators' pockets...
...indeed, local citizen planners had fought a similar project along taxes rise...
...By coincidence, on the eve of the subcommittee's hud hearings Washington newspapers reported that a group of modest town houses being built for low-income families in the capital's inner city would cost taxpayers more than $53,000 each, or $76,000 including debt service...
...Three days later, Floyd Hyde, assistant secretary for community development, tried to soften the secretary's remarks: "That cost is an investment to preserve a greater area," he said...
...The former owners of the property made more than a 200 per cent profit on the deal, and the "writedown" in this instance is to be over 200 per cent...
...He cited another case where Washington's renewal agency had paid $8 million for a downtown commercial block it would resell to residential developers for a maximum of $2.5 million...
...The land was then bought by the city's renewal agency and resold to a public housing developer for a token $56,700— in effect, almost a 100 per cent subsidy...
...The property owner then has two choices: He can either build in accordance with renewal plans, or sell to the government at the frozen price...
...In the District of Columbia, the "action areas" selected have usually been those plots of land that were scarred by the riots (instant urban renewal), and most neighborhood "planning" has been determined by the availability of the sites for development...
...Representative Robert N. Giaimo (D.-Conn...
...Before the House approved the Department of Housing and Urban Development's $3.7 billion budget for fiscal 1973 last month, its Appropriations Subcommittee subjected hud's $1 billion allotment for urban renewal to the closest scrutiny it has received since the program began in 1949...
Vol. 55 • June 1972 • No. 13
