AY down the memory hole: In book Unequal Cities and discussion, the "borderline calamity" Community Benefits Agreement gets ignored and mangled
The bottom line, for me, after reading the book and watching the video is that the author's historical analysis seems sound, but his solutions--especially related to Community Benefits Agreements (CBAs) and other topics I've reported on--are based on inadequate research or explanation.
In other words, his focus on criticizing progressives for not embracing the possibilities of growth is not matched by scrutiny of developers and their allies.
The summary, from the Skyscraper Museum:
Cities are central to prosperity: they are hubs of innovation and growth. Yet the economic vitality of wealthy cities is marred by persistent and pervasive inequality. In his new book Unequal Cities, economist Richard McGahey argues that deeply entrenched anti-urban policies and politics limit cities' options to address inequality. Many factors – structural racism, suburban subsidies, regional government fragmentation, the hostility of state legislatures, and federal policy – contribute to an unequal status quo that underfunds cities while preventing them from pursuing fairer outcomes.I don't fault that overall framing from McGahey, an economist and senior fellow at the Schwartz Center for Economic Policy Analysis and the Institute on Race, Power, and Political Economy, both within The New School, and a former city, state, and federal policymaker, as well as a Ford Foundation grantmaker.
Drawing on economic and historical analysis as well as his extensive experience in government and philanthropy, McGahey examines the failures of public policy and conventional economic wisdom that have led to the neglect of American cities. Case studies of New York, Detroit, and Los Angeles trace how attempts to achieve greater equity foundered because of the fiscal and political constraints. Shedding light on the forces that produced today’s dysfunction and disparities, Unequal Cities provides timely policy prescriptions to promote both growth and equity.
But both in the book, and in his conversation at the museum with academic John Mollenkopf, the Industry City rezoning in Brooklyn and the Atlantic Yards CBA were misdescribed or ignored.
From the book: Industry City
McGahey writes:
Elsewhere, progressive stopped another megaproject--Amazon's HQ2, a second headquarters for the retailing giant to be shared with the Washington, DC, region. Although Amazon was invited into New York by [Mayor Bill] de Blasio, [Gov. Andrew] Cuomo and many state and city officials, some progressives rebelled with the bid revealed a cost of $3.4 billion in subsidies. Political agitation led to Amazon's withdrawal, even thought many labor unions and some progressive hoped for a renegotiated deal. But activists focusing on housing and subsidies carried the day, with de Blasio and others withdrawing their support. A similar process played out in 2020 with opponents defeating development of Brooklyn's 35-acre Industry City complex, a project that claimed it would produce up to 20,000 new jobs.
(Emphases added)
Well, putting aside the argument that Amazon simply walked away after playing its cards wrong, is the 20,000 jobs claim accurate? That passage is footnoted to this 9/23/20 New York Times article, Progressives Defeat Brooklyn Project That Promised 20,000 Jobs, which states:
It was slated to be one of the biggest real estate projects in New York City in years, a major expansion of the Industry City complex on the Brooklyn waterfront that could have created as many as 20,000 jobs at a time when local unemployment has soared because of the pandemic.Well that article acknowledged, lower down:
Critics of the project have questioned the 20,000 jobs figure. Mr. Kimball said there were currently 8,000 jobs at the complex, and the rezoning would allow for 7,000 more at the site. Another 8,000 were expected in the surrounding community.Well, even at best that would mean 15,000 new jobs.
As I wrote 9/24/20 in City Limits, Stop Echoing Industry City's Bogus Math on Jobs, the number referred to cumulative jobs, not new ones, and stretched to include purportedly related jobs off-site.
As then Council Member Antonio Reynoso wisely observed, “I think it would be naive for a Council Member to think that a number that’s thrown out… by the applicant, is something that we should trust, solely in itself.”
Too much process?
McGahey, like others weary at statis, writes:
There are calls for process changes that emphasize more community input into development decisions and, at the extreme, giving communities power over any projects in their geographic area. But while increasing community voice central to progressive strategies because it gives people a stake in outcomes and brings in the views of those most directly affected, community veto power goes too far, seeing the city's economy as nothing more than a collection of discrete neighborhoods. It could result in an even more balkanized city economy that is unable to coordinate resources and powers at an adequate scale for equitable growth, as happened with New York City's rejection of the admittedly, flawed Amazon HQ2 and Industry City projects. A more visionary opposition perhaps could've negotiated better deals from those two megaprojects rather than kill them.
Well, he's not wrong that better deals might be negotiated, and that existing members of the community can't speak for future residents.
However, he's missing that one thing an opposition--or, simply, a reasonably skeptical press--can surface, which is accurate information.
The background
That passage was footnoted to an 11/24/20 post by/about McGahey, The Political Economy of Cities, that previewed his book, which noted trends in which cities are ringed by suburbs that benefit from
urban growth without fully bearing the costs:
- Economic structure, industry, and job restructuring
- A long-standing anti-urban bias in federal policy
- States and suburbs are often anti-city, and states control what cities can do
- Structural racial and ethnic divisions
His framing:
In all, an examination of these four factors reveal a long-term legacy of the 1970s fiscal crisis: 1) structurally, the economy remains dependent on corporate offices and finance, 2) federal policy has been hostile to immigrants and state or city spending, 3) austerity policies rule and the state controls the city, and 4) a mix of race/ethnicity politics has led to fragmented workers without a common interest as workers.
 |
| From October 2020 presentation by Richard McGahey |
So that means that suburban commuters have benefited from the jobs. Regarding New York City, he writes:
Mayor [Mike] Bloomberg’s administration responded to poverty on the “supply side,” by increasing and bettering income supplements, education and training, and taking mayoral control of the school board. But his administration did not focus on unionization or community benefit agreements, despite rising inequality. While the administration supported a state minimum wage increase, it opposed city living wage policies. Overall, there was very little citywide progressive economic advocacy.Rather, he points out, progressives "focused on criminal justice, housing costs, and rent regulation, but not on the economy."
On CBAs
But that last passage got CBAs wrong, and so did an additional critique of progressives:
One example of this progressive weakness was the lack of a systemic community benefit agreement (CBA) policy, a tool used in Los Angeles and other cities tying enforceable benefits to development subsidies or rezoning. Bloomberg opposed linking equity or labor market policies to New York's booming real estate market via CBAs. The occasional isolated CBA either failed to obtain significant benefits or became mired in divisions among community groups. Unlike Los Angeles and other cities, progressives did not generate consistent, citywide pressure for stronger CBAs or monitoring impacts in return for city subsidies and development actions. In 2010, a New York City Bar Association committee urged 'the City to clearly and firmly reject any consideration of CBAs in the land use approval process' while expressing concerns of a potential corruption and conflicts of interest for all CBAs, a conclusion embraced by Bloomberg.
That last passage links to this paper (also at bottom) by Vicki Been and others.
While the book describes how Los Angeles did achieve more widely accepted CBAs, it ignores the fact the New York's first CBA, involving Atlantic Yards, was supported by Bloomberg (who signed it as a witness) as a tool to boost the project's profile. That developer-driven CBA, now seen as a failure, poisoned the well in New York City.
So the book ignores that the first CBA it failed to obtain significant benefits because 1) the Atlantic Yards developer that signed it was untrustworthy, for example unwilling to hire the promised Independent Compliance Monitor and 2) the only entities that could enforce it were the signatories, most of which were astroturf and financially dependent on the developer.
Those are significant contrast with Los Angeles, where CBAs were monitored by government entities and the signatories represented a far broader "community." The Atlantic Yards CBA was criticized sharply in that City Bar paper, but McGahey doesn't go there..
The discussion: CBAs
Let's go to the videotape, which involves a discussion between the author and Mollenkopf, a Distinguished Professor at CUNY Graduate Center, where he teaches Political Science and Sociology, directs its Center for Urban Research, and chairs the public policy subfield in political science.
Early on, McGahey cites "a political movement in Los Angeles that still had a lot of strength on using this community benefits agreements. New York has been opposed to community benefits agreements. Mayor Bloomberg hated them, and even Mayor de Blasio who was an advocate for fighting inequality was not a strong advocate for them, either. I am."
Well, as long as he overlooks the failures in New York.
Later, as described in the exchange below, McGahey explains how Los Angeles came to have a broader, more effective coaltion: with the loss of industrial jobs and the civic fracture after the police beating of Rodney King, a political movement brought together not just communities of color but also labor unions and environmentalists to seek elect public officials who pursued inclusive growth.
"They're the ones that pioneered these Community Benefit Agreements, so that's a tool that I think cities should be using more," he said. "I wish that New York progressives were more focused on these economic aspects of policy."
About Atlantic Yards
McGahey, however, nodded along. "Fair point, but that's one and we can find lots of bad ones in New York," including Yankee Stadium and the Kingsbridge Armory. (He said "Knightsbridge.")
"So I'll give you Atlantic Yards," he said, "but I'll put Amazon and Industry City back on it, that there hasn't been a consistent movement to do it" in the way Los Angeles has.
McGahey's not wrong that New York could learn from Los Angeles. But neither he nor Mollenkopf should credit Atlantic Yards with anything other than having poisoned the well for future CBAs.
Does anyone think that the CBA succeeded in its stated goal to “maximize the benefits of the Project to residents of Brooklyn, as well as minority and women construction, professional and operational workers and business owners and thereby to encourage systemic changes in the traditional ways of doing business on large urban development projects”?
Development cycles
In the discussion, Mollenkopf recalled having worked for the NYC Department of City Planning during a time when rezoning the west side of Times Square was under consideration.
"One of the wise old heads in City Planning," recalled Mollenkopf, "said that there was always a 30-year arc of development in New York City and there would be two or three plans along the way, and the fact that the first or second or even third plan got shot down was not going to deter a plan from developing successfully over time, and then in fact what ultimately happened would probably be better because there had been conflict over these earlier plans."
His conclusion: that Times Square and nearby Bryant Park have worked out.
So in New York, he said, there are lots of players--"hungry mouths that want to be fed around every deal"--and it takes time to resolve things.
"And so just because Amazon didn't get what it wanted," he said, "and the developers at Industry City didn't get what they wanted doesn't mean that something very like what they were shooting for won't ultimately happen."
Mollenkopf noted that "the fact that as much affordable housing is built built around developments in New York City" was the product of a long political struggle, given that the Bloomberg administration was quite opposed requiring such affordability, and now "there's a fairly substantial side benefit of affordable housing development around new development."
That's not wrong, but it doesn't assess whether the city asks too little and misses how Bloomberg and Deputy Mayor Dan Doctoroff were urged, for example, to require affordability in the rezoning of Downtown Brooklyn.
A political process
McGahey said they both agreed that development is a political process, while mainstream economics tends to deny it, and simply relies on the market.
Mollenkopf noted that economics is about about efficiency and politics is about distribution, and both are needed--and that those who just want "distributional equity" might be left with no growth, while those focused on economics ignore distribution.
McGahey noted that some in economics have shown that efforts to include equity actually lead to faster and better growth, that it's not "always a trade-off as the standard economic model would have you say."
More from the book
I did find the book illuminating. The author points out that, unlike in England or France, cities in the United States were constrained by the federal and state governments, and the latter especially have limited autonomous action, like annexation.
That would've precluded the significant city/suburb divide that grew in the second half of the 20th century, in which suburbs limit integration, hoard their own taxes, and resist public transit.
Single-family suburbs relied on public investments in highways, as well as deductible property taxes and mortgage interest. While economies were regional, tax and social welfare policies were not. New tools like home mortgages and credit cards fostered suburbia, and exclusionary zoning kept the poor (and non-white) away.
Federal public housing policy was linked to "slum clearance," not available land outside the city. While the Great Society did invest in cities, McGahey writes, it "didn't change home mortgage subsidies and racially-exclusionary housing policies, tax-favored treatment for single-family homeowners, or highway and suburban road building. Nor did it support much direct job creation."
"Metropolitan problems--crime pollution, and substandard housing and education--were concentrated in core cities," he writes.
Los Angeles agreed on a new sales tax for public transit. "Supported in part by philantrhopic funding, interest in CBAs grew rapidly among progressive urban groups," he writes.
Meanwhile, most federal aid goes to states, not cities, and states like New York, New Jersey, Connecticut and Masachusetts pay far more toward federal spending than they get back.
One conclusion: "Regional fragmentation allows suburbs to separate themselves from urban problems while benefiting from metropolitan concentration and innovation." One possible solution: city-states that focus on the "real economy of cities and metropolitan areas."
And in New York
New York's mid-1970s fiscal crisis, he writes, derived from not more the oft-cited lack of budgetary disclipline but by national recessions and the lost of the city's employment base, notably manufacturing. Corporations were lured to the suburbs, often with subsidies.
Notably, the author points out how little mayoral races have addressed economics. For example, Rudy Giuliani ran on crime, policing, and race. The data-driven Bloomberg focused on the creative class and big projects, and was willing to subsidize major financial firms and new stadiums.
The book points to a "sweeping progressive agenda" articulated in a 2013 report, TOWARD A 21ST CENTURY CITY FOR ALL: Progressive Policies for New York City in 2013 and Beyond (with multiple contributors, but organized by Mollenkopf and the Center for Urban Research and then Council Member Brad Lander), but notes that the report acknowledged that competing interest groups were not expected to agree--and they didn't.
(More on that report, and others, in another article.)
de Blasio did run on a "tale of two cities" and implemented universal pre-K (and kept regulated rent increases low). But his economic develoment strategy lacked a consistent theme, McGahey writes, while none surfaced in the 2021 election. Eric Adams was elected significantly on issues of public safety and his biography.
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