Friday, April 22, 2011

The late Robert Fitch and The Assassination of New York: the loss of manufacturing was not accidental

Robert Fitch, an independent, impecunious left intellectual, freelance academic, and author of the little-known but still influential The Assassination of New York (Verso 1993, paperback, 1996), died March 4 at 72.

That prompted tributes and reflections from Doug Henwood in The Nation and Josh Mason (and others, including Fitch family members) on his blog.

The book still has resonance for today, including the portrayal of a real estate strategy (build!) as a jobs strategy, the role of the City Planning Commission in validating the power structure, the distorting impact of tax incentives on new construction, the reasons why New York is un-democratic, and the difficulty in fighting real estate proposals more complicated than building a highway through a neighborhood.

Here's the blurb for the book, which was published--as was Robert Caro's The Power Broker, by the way--at a time when New York seemed to be down for the count:
In this indictment of those who have wrecked New York, Robert Fitch points to the financial and real-estate elites. Their goals, he argues, have been simple and monolithic: to increase the value of the land they own by extruding low-rent workers and factories, replacing them with high-rent professionals and office buildings. The planning establishment has been able of raise the value of real estate inside the city boundaries over twenty-fold. In doing so, Fitch suggests, it effectively closed New York’s deep-water port, eliminated its freight rail system, shuttered its factories and destroyed its capacity for incubating new business.

Now the real-estate values have collapsed. The city is left with 65,000,000 square feet of office space—enough to last, without any new building, to the middle of the twenty-first century. In pursuit of those who are responsible, Fitch arraigns the great and the bad of the city’s establishment: Roger Starr, architect of “planned shrinkage” (the withdrawal of fire, police and mass transit services from black and Latino neighborhoods); the Ford Foundation, which proposed converting vast tracts of the South Bronx into a vegetable garden; City Hall fixers like John Zucotti, Herb Sturz and James Felt, who cut the deals between government and real estate by working for both sides; and the Rockefeller family, whose involuntary investment in the Rockefeller Center became a gigantic “tar baby,” nearly swallowing up their entire fortune.
It's too bad Fitch wasn't able to do an update, since he got some things wrong, predicting a long oversupply of office space. Even someone sympathetic to his overall thesis, Ron Shiffman, who formerly headed the Pratt Center for Community Development, told me that Fitch misinterpreted some issues, such as Pratt's role in Brooklyn.

In his own words


Here's a 1996 interview with Fitch about Queens West, which, by the way, is finally getting started. Here's a post 9/11 essay, A Mistake in the First Place, by Fitch in Gotham Gazette, which echoes the themes of his book:
Again and again it is said that New York has become the "nerve center of global capitalism." Is this true? If so, how did we get there? Is downtown, and particularly the creation of the World Trade Center, a response in concrete and travertine to the city's increasing dependence on world trade?

The truth is, postwar downtown development has been hugely subsidized by the government, relying chiefly on state power and eminent domain in order to overcome market forces.

....Beside more publicly financed office towers to irrigate parched downtown portfolios, what was the ultimate point? It was clearly expressed by the city's 1969 plan which expressed the higher real estate consciousness: "In the long run, New York does not want to retain the low skill, low wage segment of its industrial mix. The displacement of manufacturing activity in the Central Business District is the complement to the expansion of office construction which results in more intensive land use, higher investment and more jobs than the manufacturing activities they replaced."

1969 marked the city's all-time jobs peak: 3.9 million. Between 1960 and the present, the city would lose nearly three quarters of a million manufacturing jobs. It would never gain enough relatively higher-end jobs to prevent New York City from leading in income inequality, urban poverty and the number of citizens without health insurance.
The tributes

In the Nation, Henwood wrote Remembering Robert Fitch:
On Don’s recommendation, I’d just read Bob’s fantastic essay “Planning New York,” in a now out-of-print anthology on the urban crisis of the 1970s. It was about the 1929 plan for New York City drawn up by the Regional Plan Association. It laid out the outline for an auto-centered metropolitan region, including the highway system that would later be attributed to Robert Moses.

...So many of the things that were attributed to anonymous global forces, like the deindustrialization of the city and its transformation into the prototype of the globally oriented post-industrial metropolis, were consciously guided by bankers, developers, and their hired hands. They used all the instruments of state power—subsidies, zoning laws, eminent domain—to get their way.

The landscape of the city—the propinquity of skyscrapers and slums, of the very rich and the very poor—reflected the kind of hollowed-out society that a FIRE (finance, insurance, real estate)-dominated economy created. Neighborhoods that once housed factories and their workers were either emptied out or gentrified. If you were employed in the FIRE sector, you could do very nicely. If you were employed in one of the elite service industries—advertising, consulting, and the like—that populated those skyscrapers, you could do pretty nicely. Not as nicely as a bond trader or a dealmaker, for sure—but a lot better than the messengers, busboys, and bootblacks that did the scut work for the service aristocracy.
The complication, which is worth a lot more discussion and debate, is that the rising tide for the elite did improve New York's bottom line, its neighborhoods, and, to an extent, its infrastructure, such as the MTA.

But has prosperity been fully shared? No.

Obscurity and the New York milieu


Henwood also offered some sobering observations about Fitch's lack of recognition and reward:
For all his truth-telling, Bob was ostracized not only by the progressive establishment in New York but also by academia, which found him not only too outspoken, but too polymath as well. Universities like well-behaved specialists, not rude questioners. Though his material situation improved somewhat in recent years, he lived most of his life on very little money. His major sources of income were freelance writing fees, small book advances, and the sweatshop wages enjoyed by adjunct faculty (which is what you call a temp worker with a PhD). As [Don] Guttenplan, the former Village Voice editor who introduced me to Bob, wrote just after his death: “[It’s a] scandal that they scrape the barrel to give these so-called genius grants to third-rate conventional fakers when Bob Fitch, a man who did his own thinking and his own research, and who came up with truly original insights about some pretty important topics—urban planning, organized labor, critical journalism—had to live like a luftmensch.”
Mason did note that Fitch was part of that "small group of unaffiliated intellectuals who exist only in New York," relying on left organizations, radical unions, and publications like the (old) Village Voice.

Blaming the powerful

Fitch's essential argument is that the city's de-industrialization--and conversion to FIRE [Finance Insurance Real Estate] and office buildings--did not happen as a result of inexorable societal forces like suburbanization. As he wrote in his book:
Those who took charge of planning the city--who decided where the subways and highways would run; who zoned its neighborhoods; and granted tax abatements and incentives to its real estate--they weren't indifferent as to whether office buildings displaced factories. They owned the land.

How could they be indifferent? There is a nearly 1000 percent spread between the rent received for factory space and the rent landlords get for class A office space. Simply by changing the land use, one's capital could increase in value many times.
So he finds roots in the Regional Plan Association's (RPA) Second Regional Plan, issued in 1968, and financed by the Rockefeller Brothers Fund and Ford Foundation. He also cites the cutting of personal income tax rates, the scrapping of a stock exchange tax, the cut in real estate taxes as having such roots.

Fitch was writing in 1993, a time when New York had a 13.4% unemployment rate, and was "without a private housing market," a situation which certainly changed, albeit not without tax incentives.

Calling for economic diversity, he observed that New York lost manufacturing jobs
before the onset of the global forces responsible for them were brought into play. It lost them in industries like garment and printing that were comparatively immune to decentralizing forces. In fact, they required Manhattan's peculiar industrial ecology to survive.
Until the 1950s, he wrote, New York was not "dangerously dependent on a single highly cyclical product: speculative office buildings (SOBs)."

Diversity and Jane Jacobs

The rich and diverse industrial culture, he suggested, supported significant public services, free tuition at CUNY, and robust parks and libraries. He noted that Jane Jacobs recognized that "the diversity of economic uses of the neighborhood, spread throughout the day, not sheer numbers... that was crucial to downtown's residential development."

Her enemy was David Rockefeller, who once said his family "has long been identified with controversial large projects" and quoted that Robert Moses line about how "you can't make an omelet without breaking eggs."

(Note that the Rockefeller Foundation, independent of the family, actually supported Jacobs's work, and awards the annual Jane Jacobs Medal, though Fitch noted that the foundation opposed John D. Rockefeller III's request for money for Lincoln Center urban renewal, but ultimately conceded.)

From the early 20th century


Some major pieces of downtown Manhattan--the World Trade Center, Battery Park City, South Street Seaport--were subsidized by government and overseen by unelected authorities, Fitch noted.

He wrote:
In 1929, no one had head of globalization, containerization or post-industrialization, the explanatory watchwords of present-day analysts. Yet the planners of the twenties pursued concrete objectives such as saving the downtown CBD, and removing manufacturing. These aims are identical to those of present-day elites, who claim that their goals are just conditioned responses to ineluctable modern forces.
He wrote:
Nowhere else has the whole structure of employment shifted from a 2:1 ratio of manufacturing to FIRE to a 1:2 ratio. Nowhere else did land values rise simultaneously with the industrial job loss, from $20 billion to $400 billion.
On Brooklyn

Fitch drilled back to the urban renewal that led to apartment complexes and offices around Downtown Brooklyn:
The implantation of office buildings in Downtown Brooklyn was no more market driven than the planning process which created Battery Park City and TriBeCa. It was also state-led, required massive subsidies, and the use of eminent domain, i.e., force. As [Mayor David] Dinkins' own Public Development Corporation (now the Economic Development Corporation) says, "Downtown Brooklyn stands as a stunning example of how commercial areas throughout the city can be reborn or expanded through planned development." (emphasis added)

...One scholar of the city's urban renewal program estimates that in the ten years after World War II, 250 industrial and commercial structures along with about 8200 jobs were bulldozed in the effort to create the Brooklyn Civic Center.

...The godfathers of the Brooklyn CBD faced two problems: land and capital. The land on which the new CBD was to be located was already occupied by factories, like the American Safety Razor Co., with 1500 workers--presently the site of Metrotech. Working-class residences permeated the area... Eventually, University Towers got developed by Donald Trump's dad, Fred. The Rockefeller-funded United Neighborhood Housing Foundation took a chunk; the Bowery financed and took a piece of the action at Concord Towers; Long Island University's Title I expansion alone knocked out 20 acres of factories. But it took two decades before the path for the SOB is really safe.
Real estate strategy, or jobs strategy?

Fitch observed:
Essentially, over the last three generations, the city has had a real estate strategy--expand the CBD/shrink manufacturing--which it has presented as a jobs strategy.
Think about that--Atlantic Yards was presented as a jobs strategy too, as in the construction of four speculative office buildings, housing 10,000 jobs. Most of that space was traded for housing, and temporary construction jobs.

Fitch delivered a fundamental point in italics:
Urban planning is the coordination of land monopoly.
He offered a jaundiced account of the Urban Development Corporation (UDC), the formal name of the Empire State Development Corporation:
[Nelson Rockefeller] had claimed, just after the assassination of Martin Luther King, that he had created UDC to memorialize the martyred civil rights leader. In fact, one reason for UDC's existence was Nelson's belief that, given an agency with powers of eminent domain and unlimited credit, blacks could be relocated from the city to the suburbs. UDC worked with the family-funded Suburban Action Institute to find suitable locations outside New York City for black residences, but mainly, UDC in the early days operated as a giant piggybank for developers.
There's a pungent footnote:
"The Hudson River Conservancy" is a subsidiary of the Urban Development Corporation--a state agency whose leadership suffers from a malady common among New York elites: the inability to distinguish between real estate development and economic development.
Fighting Jane Jacobs?

He wrote:
It was precisely to counter Jane Jacobs [sic] community organizing in Cobble Hill that Pratt Institute successfully appealed to the Rockefeller Brothers' Fund to finance a pro-urban renewal community movement in Central Brooklyn. Pratt assisted movements against factory expansion on the part of S&S Corrugated Box; for the de-industrializing of [the] Fulton Ferry area; and argued for the elimination of Brooklyn's Piers 1-6 as working piers.
That, Shiffman told me, was a very cramped reading of the record. Yes, Pratt did apply for Rockefeller funding to pursue urban renewal, but, in practice, Pratt aimed for compromise solutions that allowed and encouraged manufacturing without--as some plans proposed--encroaching on long-established residential communities.

And, despite the implications of Fitch's paragraph, the three cases cited in the second sentence involved Pratt responding not to the Rockefellers but to local community requests, according to Shiffman.

Moses's roots


Fitch detected Robert Moses's deep roots in the RPA's work in the 1920s:
[J]ust about every highway and bridge credited to Robert Moses was conceived and planned by the RPA. Moses simply poured the concrete on the dotted lines indicated in the plan.
And, he didn't blame only Moses for refusing to put mass transit on the Long Island Expressway; he located that resistance in the first generation RPA philosophy, believing mass transit would have congested population on Long Island and spoiled prime residential areas, and said Moses biographer Robert Caro ignored that. Fitch termed Moses "a perfect scapegoat."

He wrote:
The chief obstacle to RPA-style planning is the residual accountability that ties public officials to the public... Thus the passionate preference of the higher real estate interests for unelected commissions, appointive authorities, public development "partnerships." This is also why the RPA had as a principal aim the creation of a city planning commission that obviated legislative accountability.
He hammered home his criticism:
The master plan for New York that was the stated reason for creating the [City Planning] Commission has never materialized. its role is to validate and legalize the plans and initiatives conceived by the city's private real estate interests.
Note that the City Planning Commission today is significantly a Department of Rezoning, while the even less accountable New York City Economic Development Corporation steers planning.

Fitch offered further Moses revisionism:
There was the general feeling in the higher real estate circles (you'd never guess this from his biographers) that Moses was slowing urban renewal down. He took too long to get rid of people. He spent too much time, money and effort on housing low-income groups. And he was insensitive to the greater priority of the Mitchell-Lama (middle-income) housing program.
(Emphasis in original)

NYC undemocratic?

Why might New York be (as legendary community organizer Saul Alinsky argued) the country's most undemocratic city? Fitch catalogued seven reasons:
--an emasculated legislature
--over-centralized executive authority, re-enforced by the 1990 charter that abolished the Board of Estimate
--the difficulty in getting independent candidates on the ballot
--the comprehensive system of economic development authorities, coupled with weak Community Boards
--"The concentration of communications media ownership and the lack of separation between business interests and editorial focus"
--"The vast growth of foundation-dependent community organizations which muffle rather than amplify grass roots energies"
--the role of political contributions.

Most of those still obtain today, though public financing of candidates does give lesser-funded candidates a shot, especially for open seats. Also, I'd suggest, the role of labor and ACORN, via the Working Families Party, has created a new political force.

And community organizations may not be as foundation-dependent today, but they do make deals with developers and/or are dependent on charity from major donors like Mayor Mike Bloomberg.

Missed predictions

Fitch wrote that it would take more than 50 years to absorb the inventory of office space--an estimate that, obviously, didn't prove true, thanks, in part, to the significant conversion of older office space in the Financial District to housing, as well as the city's uneven but significant recovery.

Indeed, Fitch scoffed at the idea that New York would become "the future World Capital," though, in the last decade, it has received an influx of foreign capital.

The book has a good number of small name or copy editing errors--"Olmstead" for "Olmsted"--which makes me wonder whether such sloppiness affects larger arguments.

Deja vu

Fitch pointed to a rush of construction, writing:
Yet on Friday, May 13, 1988, a little more than six months after the [Wall Street] crash, construction began simultaneously on eleven new office buildings and four new hotels... it was the last day to get the 20 percent bonuses given out by city planning's midtown plan. Development wasn't price-led. It was subsidy-led.
The same rush happened a few years ago after changes in the 421-A subsidized housing program, leading to stalled sites, especially in Williamsburg.

Predicting the Atlantic Yards debate?

Fitch sketched the complexity of land-use battles beyond the simplest ones:
When David Rockefeller tried to run the Lower Manhattan Expressway through Washington Square Park, you didn't have to have a degree in planning from MIT to know it was destructive. Jane Jacobs led the charge and miraculously sent the establishmentarians back to their Westchester redoubts. But land-use choices involving housing vs. jobs; the mix of income in a housing project; the question of which jobs are really viable in an urban setting; what's the best location for manufacturing--these issues don't lend themselves to such clear-cut resistance.
Indeed, that hints at the Atlantic Yards controversy. Developer Forest City Ratner, with allies, was able to argue for "jobs" and "housing," and enough people believed it.

The absent Democratic Party

Fitch pointed out in a footnote that none of the county Democratic parties in New York "bothers to write a platform or regularize its membership," remaining reliant on clubhouse organizations.

Today, a search for the Kings County Democratic Party comes up empty, though an insurgent group, New Kings Democrats, offers a platform with such seemingly common-sense planks as this:
Holding regular meetings – the County Committee currently only meets once every two years.
What to do?

Fitch closed the book with an astonishing chapter of analysis and prescriptions. Once, New York City had flexible production, economic diversity, ecologically compatible manufacturing, many exports, and housing production aimed at a variety of residents.

It came not without problems, such as discrimination, inequality, low wages, job insecurity, no economic democracy, and fiscal instability.

It also came with what Fitch called "urban mercantilism," in which New York and New Jersey compete to poach jobs and taxes from each others. (Hm--sounds like the argument for "netting the Nets.")

His solutions:
--reverse the tax code, which taxes manufacturing and exempts land speculators, and add a stock exchange tax (still a live idea, I'd add)
--municipalize city land, and then lease it, following the lead of (anti-communist) Hong Kong and Singapore.
--control the city's elite non-profits, requiring the organizations to pay some sort of taxes, as well as wage taxes on executives who earn more than the mayor
--create a city bank for jobs and community development
--make it as difficult to re-zone manufacturing land as to de-map parkland
--roll back subsidies for luxury development
--abolish the public development authorities, and privatize the World Trade Center (this was 1993)
--build a new port
--tax the FIRE sector to build housing
--commercial rent control
--reform the construction trades to ensure roles for minorities

His conclusion:
New York needs to re-industrialize to regain its capacity to respond to these aspirations. The challenge of New York is to play out for the twenty-first century--as it did in the nineteeth and the twentieth--the full meaning of diversity. That is not nostalgia; it's destiny.
In his call to preserve and bolster manufacturing, Fitch was hardly alone. Consider that in 1999 the Manufacturing Land Use and Zoning Initiative was launched by the Municipal Art Society in partnership with Pratt Institute for Community and Environmental Development.

A 2001 report, Making it in New York, offered recommendations on how to retain and revitalize the city’s manufacturing base, citing where and when it is appropriate to do so. Even as rezonings continue to swap manufacturing for residential land, the issue remains alive.

More from the book

Fitch described Battery Park City as "socialism for the rich," drawing in one year $126.3 million in tax abatements and delivering just $37 million in revenue for affordable housing.

The loss of 30,000 jobs in clearing land for the World Trade Center was nearly 1% of all jobs in the city, Fitch noted. And where did the New York Times put that news? Page 23.

Fitch termed the period from 1949 (the beginning of federal Title 1 funding) through the mid-1960s (Mayor John Lindsay's last term) "real estate stalinism." New York City, with 4% of the nation's population, represented 32% of all urban renewal construction.

4 comments:

  1. The information on Robert Fitch was excellent. I would add to Mr. Alinsky's seven points, an "intellectual retiree" population that takes no interest in city affairs, and a group of young city dwellers in their twenties and thirties who are transplants and just don't feel city politics are vital to their lives.

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  2. I'd agree with Bob; as a city dweller in my 30s (in the 1990s), I certainly voted, but didn't pay that much attention to local politics. And I paid zero attention to state politics.

    Then Atlantic Yards pushed me into thinking about a whole lot of things.

    In 2009, I asked a couple of 20something colleagues who they planned to vote for in the local elections. They had no interest in voting, they told me.

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  3. As you know, Norman, I am concerned about the distortion of the city's politics, economy, and way of life that Fitch described, not just here but in Paris. And I love Fitch's book.

    But what should the structure of the government be so as to give citizens a voice? ULURP offers hearings and community board involvement, but community boards are appointed rather than elected, and they are manipulable, and ULURP is in any event not democratic. Nor, as Mayor Bloomberg demonstrated in removing Atlantic Yards from ULURP and handing it to the ESDC, is ULURP even compulsory.

    So what should the process be?

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  4. Fitch was smart and his urban analysis was deep, unparalled, and courageous.

    His list of proscriptions (e.g. the stock transfer tax) is a classic for all times.

    Here is a link to a typical Fitch subject, addressed by no one else.

    http://www.fiveborough.org/5boroughreport/fitch_legacy.html

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