Urban Renewal-- Opportunity for Land Piracy?
JANUARY 01, 1963 by JOHN C. SPARKS
Mr. Sparks is a business executive and past president of the Canton, Ohio, Chamber of Commerce. The October 1961 FREEMAN carried his earlier article, "The Urban Renewal Fallacy."
Many inspiring stories of American heroism came out of our war to win freedom from
It is expected that a few men will always be alert to the danger of government oppression and will discern its characteristics no matter how cleverly disguised. Unfortunately, there also will be a few who, while comprehending the issue, will choose to seek improper power in the government or in special positions of influence involving privilege. In between are the majority, many of whom are unaware of any issue or whose other interests seem more important than the preservation of individual liberty or who fear to differ from majority opinion.
Throughout the colonies—north or south, seacoast or inland mountains—men who loved liberty and hated oppression sprang up to fight for their principles. The minutemen of the
Reaction to Oppression
What does this review of the American Revolution have to do with government urban renewal? It simply points out a rather common human reaction to oppression: when freedom is denied, those losing their freedom and those near enough to the victims to feel the pain and to join in outraged indignation, will be the ones most likely to revolt against the tormentors.’ Government interference is more upsetting when encountered in one’s home community than when examined theoretically with regard to a situation in another part of the country or world.
If unlimited government is an un-American concept, then it should be especially provoking when big government power pushes around one’s neighbor or oneself. Excessive taxation should be particularly galling when new spending programs originate in one’s own city. Loose spending should be most painful when experienced at firsthand in all of its wastefulness.
We should expect outcries throughout the land against urban renewal, especially from such community thought leaders as those who so eloquently defended against the recent attempt to socialize the medical profession, or those who fight a continuing battle against the spread of government-owned electric power, or those whose public speeches purport to champion the individual’s right to earn, save, and spend his own income without interference from big government, or those who actively support the right of individual choice against enforced membership in labor organizations.
We should expect angry resistance! But where is it? Why does not urban renewal cause righteous resistance in every city and community in the nation into which its immoral tentacles have spread? Where is the opposition? Where are the advocates of private ownership? Where are the defenders of individual rights? Only an occasional dissenting voice is heard.
This is surprising because it is not difficult to discern that government intervention has a near-perfect record in producing undesirable results—sometimes humorous, sometimes tragic—but always enforcing the unnatural so that the consequences spell reverse progress. When an abundance of a farm product threatens to trigger a price decline, the nature of government intervention inevitably is a price support program, thereby encouraging farmers to produce more of the same. The original problem, abundance, is aggravated by increased abundance. Rent control during and following World War II was a form of government intervention intended to assist more persons to rent property at reasonable prices. Instead, people occupied more space than they needed because it was comparatively cheap, and potential landlords did not make additional space available because it was unprofitable to do so at the rental prices allowed. Again, the result was quite contrary to the intention.
These reverse effects are not freaks; they can be anticipated nearly every time. While a few industrial and business leaders may not fully understand the fallacy of government interference in their economic decisions, most are well enough acquainted with its nature to oppose such government actions vehemently. Must one believe that a businessman, sophisticated enough to understand the nonsense in minimum wage laws and unemployment taxes, is so dull as to fail to comprehend the open invitation to chicanery in the government urban renewal scheme?
A Weak Excuse
Perhaps the mixture of civic dreams and civic pride truly blinds the sometimes champion of freedom to the immorality of the position he supports when he participates directly—or indirectly through his silence—in bringing federal urban renewal money, control, injustice, and oppression to his community. Those who are generous may allow this possible excuse for the illogical and immoral action taken.
No generosity is warranted, however, toward one who recognizes the immoral premise but nevertheless parrots the worn-out cliché, "We’re paying for it, so we might as well get our share." It is as though a man believes himself to be a fighter and flexes his muscles in public as he proclaims loudly how well he will do when he meets the enemy. Finally comes the day and place of the meeting, whereupon he joins the enemy. When government intervention threatens his own community, this vociferous would-be defender of freedom capitulates.
Unfortunately, the people who sincerely want to strengthen their community are drawn almost inevitably to programs that actually undermine and kill the community instead. Redesigns of allegedly fringe business districts are typical. Small merchants, providing unique services or products, are uprooted. Many cannot survive financially during the interim, losing their customers while waiting in limbo. They even may be excluded from the planned new business district because the planner doubts their usefulness in his neat uncluttered scheme. Genuine diversity is thus lost; but business districts require diversity to live. Cities grow only as businesses thrive, not as they expire. Furthermore, in order to raise the local matching funds necessary to comply with the provisions of federal grants, local taxes are increased. This compounds the error, because increased taxation not only fails to attract new business and industry to the community but tends to drive established business away.
Other Reasons Involved
Granted that some are blinded by their civic objectives. Granted that others know better, but rationalize a desire to see their community get its share. Do these two weaknesses effectively eliminate almost all potential leaders of resistance against urban renewal?
Recall that there are men in every community who speak out against a variety of government interferences—against socialized medicine, price and wage controls, government operation in fields pre-empted from private ownership, and other encroachment upon the rights of individuals. Can it be that government interference and oppression, involving funds
lic highways, public schools, and government buildings. In certain cases this right of eminent domain was also extended to private owners classed as public utilities, thus allowing power and gas companies to acquire the necessary rights of way to run their lines. Railroads as public carriers were also granted this power in limited circumstances. Consequently, the right of eminent domain was used sparingly and only under conditions well-known to everyone.
However, in 1954, the Supreme Court changed the law of the land so that the elimination of a slum was interpreted to be a public use, enabling government agencies to seize private property and resell to new private owners if, in the process, a slum is wiped out. Furthermore, the particular piece of property seized need not be "blighted" but may be taken simply because it is part of a total project or program that eliminates a slum. This interpretation enables the professional government planner to remake whole sections of cities; in fact, no property within a city is outside his potential power. If this were not sufficient power, more recent rulings by state courts have extended this interpretation to mean that any property that may become a slum forcibly taken from persons everywhere, are proper and moral and right just in this one area—urban renewal?
Hardly. It does not check with logic. So, let’s see what other reasons might be so compelling and so convincing as to remove practically all influential opposition.
Years ago Lord Acton observed that power corrupts and complete power corrupts completely. If power is present to a great degree in any government situation, then one can depend on it that corruption follows.
"Public Use" Redefined
Laws, once designed to protect the individual against seizure of his property for other than strictly limited public use, now have been diluted to the point where public use is almost anything government planners decide it shall be. Constitutional checks and balances have evaporated, with the courts of the land affording virtually no protection for individuals against domination by predators in the legislative bodies of states and municipalities.
Until 1954, the Constitution of the
However, in 1954, the Supreme Court changed the law of the land so that the elimination of a slum was interpreted to be a public use, enabling government agencies to seize private property and resell to new private owners if, in the process, a slum is wiped out. Furthermore, the particular piece of property seized need not be “blighted” but may be taken simply because it is part of a total project or program that eliminates a slum. This interpretation enables the professional government planner to remake whole section of cities; in fact, no property within a city is outside his potential power, more recent rulings by state courts have extend this interpretation to mean that any property that may come to a slum in the future can now be seized.’ There is little doubt that great power has been conferred upon municipalities to seize property in accordance with their plans to eliminate slums or possible future slums. This is a blank check.
Yes, the power is there, endorsed by the courts of the land, opening the door wide to those who would plunder in the name of planning for the public good. Have local communities accepted the opportunity to use this power?
Eugene Segal, writing in The Cleveland Plain Dealer, December 30, 1961, said, "…. the Board of Control…. is composed of members of [the mayor's] cabinet, including [the] Urban Renewal Director whose opinion can be expected to dominate in matters relating to urban renewal. So it is likely that while the planning commission and its fine arts advisory committee were obliged to go through the motions, it will be [the Urban Renewal Director] who in effect will make the final choice." The news item related to three competitive plans submitted for development of a certain piece of land in downtown
Yes, great amounts of power have been placed in the hands of city politicians and professional planners. And power corrupts. Complete power corrupts completely. Webster says that to corrupt is to change from a state of uprightness to a bad state, or to debase. Corrupt means to change from truth to untruth and from honesty to dishonesty.
Temptations to Dishonesty
What are the temptations to dishonesty by those involved in urban renewal? There is little doubt that the most important is the value of the property to be seized and resold to new owners. Private property anywhere has value and especially in the populous centers. The value of certain private property can skyrocket if one seeking his own benefit has a hand in the compulsory rearrangement of all property in the area. A plan backed by power many cause a rearrangement of land use to that a new owner, favored by planners, gain advantages of location and use formerly developed and held by others. The “availability” of taxpayer funds in the federal treasury with which to accomplish the ill deed is a minor temptation in comparison to the attraction provided by such manipulation and transfer of downtown property values.
Imagine a beautiful grassy baseball field, fully equipped, set down in a neighborhood of American boys in the summertime. Would a baseball game ensue? It would All the ingredients are there. So are all the ingredients present in the urban renewal scheme—the temptations to tyranny and corruption. The power is indescribably great. For the squeamish, who would not act immorally when the act is illegal, moral principles have been negated through law. Huge property values stand defenseless against seizure. Federal money and personnel cleverly encourage adoption of their programs. The worn cliché, "get our share," becomes the password of the day, but not really to achieve civic advancement—this is not now the subject of our concern. The cliche is but a thin disguise for the fact that one has discarded his purported principles and has seized a once-in-a-lifetime opportunity to plunder fellow citizens and to gain advantages by pushing around his neighbors, all done quite legally and in the name of civic duty.
These are the ingredients. Will there be a ball game? You can bet your boots!
There are so many communities involved in federal urban renewal programs that it is next to impossible to uncover all of the deals that doubtless are being chalked up. If somehow they could be tallied, the well-known scandals of the past involving power government and immoral opportunists would likely be dwarfed by those "ringing the cash register" today in the urban renewal "club" of privileged members. It is a kind
Temptations to Dishonesty
What are the temptations to dishonesty by those involved in urban renewal? There is little doubt that the most important is the value of the private property to be seized and resold to new owners. Private property anywhere has value and especially in populous centers. The value of certain private property can skyrocket if one seeking his own benefit has a hand in the compulsory rearrangement of all property in that area. A plan backed by power may cause a rearrangement of land use so that a new owner, favored by the planners, gains advantages of location and use formerly developed and held by others. The "availability" of taxpayer funds in the federal treasury with which to accomplish the ill deed is a minor temptation in comparison to the attraction provided by such manipulation and transfer of downtown property values.
Imagine a beautiful grassy baseball field, fully equipped, set down in a neighborhood of American boys in the summertime. Would a baseball game ensue? It would. All the ingredients are there.
So are all the ingredients present in the urban renewal scheme—the temptations to tyranny and corruption. The power is indescribably great. For the squeamish, of local community do-it-yourself bit of tyranny and scandal.
While they may be difficult to uncover, it is not difficult to describe various deals and examples of oppressive acts that can be expected. The purpose of describing these is to alert the reader to take more than one look at the happenings in his own city.
The community newspaper in the past was the recognized crusader against oppressive acts, no matter who committed them—gangs, racketeers, businessmen—any one or more of whom may have illegally combined with immoral government regimes. Concerning the urban renewal fallacy, where is the newspaper crusade? Could silence be golden, literally speaking?
The physical real estate of the newspaper publishing company in your city, quite by coincidence, may be in line for some secondary or even primary benefits as a result of the planner’s rearrangement of the city. A look at the master plan in any municipality will likely reveal some interesting arrangement that takes special cognizance of the leading newspaper’s physical property. A prerequisite to the planner’s success is the support of the newspaper, and its wishes are more than likely to be considered favorably. Furthermore, a newspaper’s largest income is from advertising. Downtown merchants are usually heavy advertisers. Urban renewal programs are often centered around the objective to revive downtown.
Another likely area of legal immorality allowing manipulation will be in the local interpretation of the meaning of a slum or a potential slum. This is not a definite concept, and one can expect the determination of what constitutes a blighted area will be quite flexible, to favor any objective in the minds of the members of the "club" operated by the municipality’s political head and his planner. Or more clearly stated, the chances are good that nonslum property and nonpotential slum property will be condemned and labeled substandard. As a matter of fact, property beginning to rise in value due to changing economic conditions may be a special plum ripe for picking.
For instance, the Erieview project in
Bribing the Opposition
It seems reasonable to expect that substantial owners of large areas of condemned property will strenuously object, at least until included in the deal through some satisfactory compensation. Perhaps these former owners will be allowed to repurchase the leveled land from the city without the formality of an open bid. Or perhaps the plan will be altered to enhance other property of these former owners, such as a new arrangement of property use that will funnel shoppers advantageously to either the existing store or the new store of the former owners.
Look at gerrymandering of an urban renewal district as a clue to manipulation to favor some in positions of influence to the disadvantage of others. Is a piece of property omitted from the area by an unusual deviation of the boundary lines? Or, is a piece of desirable real estate included unnaturally by a deviation in boundaries? In either case the decision may have been reached by surreptitious under-the-table deals, sugar-coated with public-relation pledges avowing the decision to be best for the community.
Divulge Plans Piecemeal
Another advantage to manipulators is to divulge the plans piecemeal over a long period of time. This step-by-step revelation weakens those about-to-be-displaced property owners who would enlist the aid of their counterparts in other "planned" areas had the master plan been made public knowledge. Any chance to unite the opposition for defense against push-around tactics becomes slim as a consequence. Such secretive plans may be good tactics for the planner’s motives but morality or good business for the community may be another matter. In
Rigging the Awards
Open invitations to bid to develop pieces of land leveled by urban renewal would seem to protect against favoritism, but not with this power-laden scheme. It is frequently stipulated that bids must include detailed site development suggestions or blueprints for the "betterment of the community." With this intangible measure, one can expect any kind of shenanigan:, Is the leveled land sold to the highest bidder? If it is not, then one may well wonder whether the successful bidder’s blueprint for development was truly superior or, instead, may have been the means to convey a reward for "cooperation" or in payment for "influence."
Sometimes the price is fixed in advance and the "bidding" is then confined to the judgment of which plan is considered best. In one large city, a company sold a piece of property to the urban renewal agency for several million dollars. Later, at a fixed price of 22 per cent of the original price, the same company was the successful "bidder" to buy back the property among nearly twenty firms submitting architectural designs. A neat profit appears to have been made on the deal. Anticipating that the coincidence might be difficult to believe, "the urban renewal agency declared the judges had no knowledge… who had entered the winning design."6
Since increasing emphasis in federal urban renewal is shifting toward renovation of the central core, it might be fruitful to examine decisions regarding the control by local government agencies of the use of land outside the renewal area. Many urban problems are felt to stem from a migration of people and businesses and their activities from the city to the suburbs. It may be expected, therefore, that cities will attempt to use measures that will penalize the "outsiders" by increasing charges for municipal services beyond the corporation limits, refusing to extend water and sewer lines to proposed new suburban shopping centers, and the like. The growing use of a city income tax that taxes nonresidents who only work in the city at the same rate as those who reside in the city is a related phenomenon. Within a city, but outside of downtown, the same kind of land-use restriction may be applied to would-be builders of private projects that may compete with the urban renewal downtown. This is not theory, but fact, as reported in The Cleveland Plain Dealer article of January 19, 1961, by Eugene Segal: "The Federal Housing Administration Office here has stopped the proposed construction of an eight million dollar downtown apartment building [outside Erieview] to discourage competition with dwellings that might be built in the Erieview urban renewal area."
Thus is power wielded; thus is corruption invited. Corruption is an unfailing companion of great arbitrary power. The ingredients are present. The ball game is being played. A new kind of tyranny is in the saddle of municipal government, aided and abetted by
In the Long Run
Justice may reign in the end regardless. The loot seized by land piracy may glitter less once gained, if the observation of Jane Jacobs is pertinent and accurate. In her excellent new book, The Death and Life of Great American Cities (Random House, 1961) she reports urban renewal and city planning to date has brought dull, unexciting, and unprofitable results.
No advocate of freedom can in good conscience advocate legal theft and legal manipulation of the private property of others for his own gain. Justification of immorality may be attempted by alluding to the sheer weight of the numbers joining in the government urban renewal scheme. But moral principle is not changed by numbers favoring its banishment.
Where is today’s counterpart of the 1776 American who would not countenance the practice of tyranny in his community? Regrettably, he is not in his accustomed role. Perhaps he can be found in
Let us hope that free men will not be blind much longer to the immorality of coercive urban planning, and will curb the government power that makes it possible. Freedom needs all its advocates.
1 An eminent political scientist observes that no area in the world today has more appreciation of freedom from oppression than the geographic area adjacent and running parallel to the "iron curtain" boundaries lying next to Russia and her conquered nations,
2 Judge Van Voorhis in his dissenting opinion in Canata v. City of
4 Richard J. Whalen. "Planners, Politicians, and People." Human Events,
5 James L. Wick. Human Events,
6 Human Events,
Earning a Profit
Many businessmen are under the impression that business "has a right to make profits." Nothing could be farther from the truth. The only right which business has in a free enterprise economy is the right to run risks in the hope of earning a profit. As long as this freedom remains unabridged, society is giving business all it can ask.
Not only are profits earned by running risks, but many firms seldom achieve them. Ordinary accounting defines profits as revenues in excess of production and selling costs (with due regard to the wearing out of fixed equipment). In reality, however, profits are less than this: If the businessman could have let someone else use the capital and land (paying rent and interest) and hired out his managerial ability (for wages), these alternative uses of his resources must also be deducted. In other words, true profits consist of the pure return on risk-taking, over and above what could have been earned if someone else took the risk.