On Brian Lehrer: the Manhattan Institute's Gelinas vs. AY on eminent domain, blight, and affordable housing (and Ratner as a creature of the state)
Actually, he had it backwards--as a caller pointed out. Conservatives have long been opposed to eminent domain, while liberals--leading the narrow 5-4 Supreme Court majority in the controversial 2005 Kelo v. New London eminent domain case--have been much more willing to defer to state power.
The curious thing is that, in New York, where the balance tilts enormously to the state, those who might be politically liberal in general have found themselves opposing particularly egregious cases of eminent domain and thus aligned themselves with those on the right.
"It’s not unusual to see strange bedfellows, if you realize the common ground is distrust of government power," former New York Civil Liberties Union director Norman Siegel, who's challenged the Columbia University expansion, said in December.
On the radio
"Why do you consider Atlantic Yards an example of eminent domain abuse?" Lehrer asked.
"Well, this is a classic example of the government not understanding its limited role, at best, in the private economy," she said. "What should the government be doing in Brooklyn, and what actually would do what Governor Paterson wants to do and bring the unemployment rate down: instead of using government subsidies to take private property from someone with less political power and give it to someone with more political power, what they should be doing... is say, We're going to spend the same amount of money fixing up the subway system so that you knock ten minutes of the commute from the outer reaches of Brooklyn to Manhattan."
"You spend the same amount doing that, the same $700 million in subsidies for the arena alone"--actually, the New York City Independent Budget Office calculated $726 million in savings and tax breaks for the developer, not in city costs--"and you'll create tens of thousands of jobs in the private sector, you'll open hundreds of thousands of affordable housing units, make them closer to Manhattan, improve hundreds of thousands of people's quality of life, instead of picking and choosing a few and basically hoping that people are ignorant enough to be happy being grateful for be crumbs that come out of high-level political dealing."
Radical idea? Not particularly. After all, mainstream urban planner Alexander Garvin, a periodic advisor to New York City and former Deputy Mayor for Economic Development Dan Doctoroff, has said we must spend public money on the public realm, "the quality of life of a great city,” including streets, squares, transportation systems, schools, public buildings, and parks.
Ratner as creature of the state
Lehrer said the liberal view is that powerful players are so strong that government can't resist them. "You see Ratner as more a creature of the state than a creature of the market?" he asked.
"Sure," responded Gelinas, author of After the Fall: Saving Capitalism from Wall Street--and Washington. "This is not Ratner's fault. Ratner is just doing what he does. It's the state's fault for not being able to resist him. It's no different from what's going on in the finnaical industry. The government says, Oh, the big bad banks are taking advantage of us. Well, whose fault is that if you let people take advantage of you? Bruce Ratner could not use the power and the threat of eminent domain [to purchase properties voluntarily] if he did not have the power of the state behind him here."
"If the state were to get out of the way today, Atlantic Yards would look much healthier today. You have un-investment in the area because of uncertainty," she said. "For six years, there's been a cloud of uncertainty hanging over the neighborhood.... why should we continue to fix up these old warehouses when this property is going to be seized?... You build the infrastructure and you keep up public safety, which is what the government is supposed to do, and the private sector will do the rest of that for you."
Lehrer asked if she opposes the entire field of urban planning. Gelinas said good urban planning would be for the mayor to say there'd be a 30-minute commute to Manhattan, as opposed to using eminent domain-"that is income transfer. Property rights is one of the fundamental bases of a healthy economy."
"The MTA gave Ratner and the state much of this property for a song," she added, saying that infrastructure money was being used to help Ratner build luxury housing, with the hope he'll build affordable housing.
Actually, he'll build the latter if the city directs subsidies his way.
The role of blight
"If a city deems an area to be blighted, and sees that the market alone is not providing enough incentives for productive development," asked Lehrer, "isn't it a good use of local development ... to alleviate poverty and lack of decent housing. The supporters of Atlantic Yards say that was the case here. There was the hole in the ground, the scar in the ground, that the market by itself was not coming to fill, and couldn't be filled without using the property around it, so the state had to do something, it was just going to sit there."
Lehrer's summary was a little off. The city didn't deem the AY site to be blighted, that was the role of the state. And, as I've written, the Empire State Development Corporation (ESDC) claimed:
But the city could've done a rezoning to make the land more valuable, and the MTA could've put the railyard out for bid.
While the City, if it desired, could rezone the project site, it has not. Given the attempts over the life of ATURA [Atlantic Terminal Urban Renewal Area] to encourage development, the challenges of developing over the rail yard have resulted in the project site remaining underutilized and blighted, rendering any rezoning of the rail yard parcels unable to affect desired change.
However, the Department of City Planning's Winston Von Engel said in March 2006 that the city hadn't yet taken a look at the railyards: "They belong to the Long Island Rail Road. They use them heavily. They're critical to their operations. You do things in a step-by-step process. We concentrated on the Downtown Brooklyn development plan for Downtown Brooklyn. Forest City Ratner owns property across the way. And they saw the yards, and looked at those. We had not been considering the yards directly."
Gelinas's response to Lehrer
"The city and state should handle the blighted properties they already control," she said, citing the Deutsche Bank building in Manhattan, and public housing elevators. Property, she said, is often blighted because of crime or lack of public transportation.
"At Atlantic Yards, there's no part of it that is blighted, except for the uncovered railyards, and arguably that's not blighted either... people don't seem unhappy living with a view of the railyards, but if the MTA and the city and state want to cover up the railyards, build some limited buildings on top of the property they already own, go ahead, they don't need to take private property to vastly increase this project far beyond what the facts would justify."
It might be tough to assemble land for an arena, given the size of the building, so maybe there's a role for the government in doing that. If so, though, shouldn't the government own or have a piece of the arena, and not give away naming rights?
The affordable housing
Gelinas said people would live at Atlantic Yards for only a couple of years. Actually, the "affordable" apartments would be rent-stabilized, so people with reasonable rent would stay a long while.
Lehrer said that Paterson at the groundbreaking said that government has to make sure Ratner keeps his promises to build the promised affordable housing. "In your understanding, is the affordable housing guaranteed now, with the force of law?" Lehrer asked.
"Oh, no, it's not guaranteed at all," Gelinas responded. "Even covering up the railyards for the MTA is certainly not guaranteed."
While the Development Agreement officially requires the construction of affordable housing, but the developer can claim a subsidy unavailability.
"When you look at the affordable housing component of this, we have hundreds of thousands of privately-owned affordable housing, out in Coney Island, out in the farther reaches of Brooklyn and the Bronx, but we have no reliable, fast transportation to get there," she said. "If the mayor and governor want affordable housing, build the infrastructure and the affordable housing will build itself. For people who say, oh no, the city has to build affordable housing directly. Well, we've been trying that, for a century, and we still don't have enough of it. Why don't we try it my way, just once, and see that it works."
There may be a need for subsidies, or tax breaks, but, again, Gelinas's idea is not that different from Garvin's take, given that the latter has proposed that the government build a light rail system on 21st Street in Queens, which would stimulate development in a substantial amount of vacant or underutilized property, and also new transportation along Third Avenue in the Bronx. He didn't specifically say "affordable housing," but the increase in supply should help.