Logue began hatching plans for the Urban Development Corporation to build affordable housing in suburban communities very soon after he became its president. Only months into the job in fall 1968, he delivered a characteristically blunt message to a national audience of housing and redevelopment officials, provocatively targeting by name—for impact—one of the most elite communities in Greater New York. “In the enlightened state of New York,” he promised, “New York City is going to be able to count on the services of the state development corporation in rehousing some of its low-income families in Scarsdale.” In the same speech, Logue left no ambiguity that he meant to provide housing not only for the economically disadvantaged, but for racial minorities as well. “We have
to face directly, in any way we can, the proposition that until the nation decides that low-income black people can have a place to live that they can afford, a place to send their children to school, outside Cleveland, outside Boston, we are just kidding ourselves.”1
Fearing the hardening of racial lines on the parts of whites as well as blacks, who were increasingly attracted to Black Power and community control in place of integration, Logue called for urgent action. “Each year that goes by makes residential integration more difficult,” he warned in 1968.2 Logue took advantage of every opportunity to make this point, particularly with white audiences. For example, he titled his commencement address at Smith College “Fair Sharing—or Why Don’t We Do Something About It,” and asked the overwhelmingly white assembly if they were doing their “fair share” as suburban residents, employers, consumers, and Americans.3 Logue was reprising the message of white responsibility that he had first sent in his 1953 treatise, “Is One Hundred Years Long Enough?” composed in India a decade and a half earlier.
Logue’s effort to have the UDC implement changes he considered necessary for the nation proved more difficult to achieve than he ever expected. Although he had anticipated a tough struggle, Logue had hoped that suburban New Yorkers could be convinced to voluntarily embrace a modest housing proposal that integrated their communities economically and racially. After all, similar agendas were very much in the air. The U.S. Commission on Civil Rights called for an end to exclusionary zoning in 1970, and the Republican secretary of Housing and Urban Development, George Romney, had himself initiated an “Open Communities” program to withhold HUD money from suburbs that refused to accept integrated, subsidized low-income housing, though the initiative was short-lived, as Romney’s boss, President Richard Nixon, soon pushed him out of office.4
Rather than the enthusiasm or even accommodation that Logue had sought, his suburban housing program incited bitter rancor. The UDC had intentionally kept its approach to what it called Fair Share Housing limited in scope, hoping to minimize its impact on any one community. In each of nine Westchester towns, one hundred units of low-income housing were to be built in low-profile structures, allocated according to the usual UDC formula of 70 percent moderate income, 20 percent low income, and 10 percent elderly low income. Priority would be given first to current town residents, then to town and school district staff, and finally to employees of local businesses, with Vietnam veterans favored in all categories. In its prospectus, the UDC promised that each development would be “marketed … with the objective of achieving a minority occupancy of approximately 20 percent,” a goal that the UDC considered conservative.5 With these stipulations, the UDC intended to put to rest any suburban fears of a large invasion of poor blacks from the Bronx and Harlem. Rather, the agency viewed the plan as a modest contribution to its signature goal of creating socially mixed communities.
But what seemed measured to the UDC was hardly received that way in the nine Westchester towns. It soon became clear that the only way that the Fair Share Housing program could proceed would be if the UDC invoked its controversial power to override town zoning and building codes, which had been authorized for use only when public hearings and informal consultation with local officials failed to advance a socially important project.6 Literally from day one, Logue had insisted to Rockefeller that the UDC must have this override authority for just such a case as this one, where “the noble tool of zoning has been perverted to maintaining the character of affluent, lily-white suburbs.”7 To Logue’s mind, exclusionary local zoning laws had proved themselves “among the most powerful forces at work polarizing our society.”8
Before the “Nine Towns” controversy, the UDC had usually worked collaboratively with municipal governments, using its eminent domain authority and zoning and building code overrides sparingly—and sometimes even at local request.9 In its 1972 annual report, for instance, the UDC reported that only in 4 developments out of a total of 101 had the agency gone forward with construction against the stated opposition of an elected legislative body.10 Moreover, the creation of subsidiary boards for the large projects of Roosevelt Island, Harlem, and Rochester had helped involve local communities in UDC decision-making, the agency claimed.11
Very quickly, the confrontation escalated from debating the virtues of building low-income housing in affluent suburbs to the larger political question of whether the UDC had the right to impose its plan on a community that strongly objected, thereby making the UDC and its superpowers the issue. Echoing objections raised at the UDC’s founding, these Westchester towns and their allies argued that a state agency like the UDC had no standing to violate a community’s home rule or right to self-determination. Logue shot back that “a public statewide charter for urban development [could not] condone a policy which promotes, under other banners, an apartheid residential policy.”12 In Logue’s view, the UDC could fulfill its statutory mandate only if it did assert its override power to build low-income multi-family housing in suburban New York, regardless of a community’s local zoning. Robert Litke, a veteran of the neighborhood battles in Boston, explained how important this override power was to the UDC: “To be able to do things that we knew were right without the constraints was just very heady stuff.”13 It would turn out, however, that insisting on the UDC’s rightful powers was one thing. Exercising them and retaining them in the face of grassroots resistance—this time, not from poor white and black urban residents but from rich and powerful white suburbanites—would prove quite another.
When Logue and his UDC colleagues looked around for the best place to put a Fair Share Housing program in Greater New York, they settled on Westchester for a number of reasons. To start with, the rural character of the central and northern part of the county, where the nine towns selected were located, meant vacant land was available, which was not often the case elsewhere in New York’s densely settled suburbs. Moreover, officials in Westchester, particularly County Executive Edwin D. Michaelian, were seeking more economic development to strengthen the county’s financial base. The UDC could offer assistance in constructing needed water and sewage infrastructure, while also contributing more affordable housing to accommodate the labor required for economic growth. Although Westchester’s population had grown markedly in recent years, its housing supply remained inadequate and so expensive that even middle-income employees often found it difficult to live near their jobs.14 And, of course, Westchester was Governor Rockefeller’s home county, where politicians could, they hoped, be counted on for support. Michaelian, for one, was a Rockefeller ally.
Logue consulted with Rockefeller before going public with the plan and happily received his enthusiastic endorsement. “We haven’t bought any land, we’ve just got it under option. If you want to stop it, you can stop it,” Logue recalled saying. To which Rockefeller replied, “Go ahead. What a wonderful idea. It isn’t going to hurt anybody too much.” During that morning briefing the governor even proposed that the Rockefeller family contribute a twenty-acre parcel of land from its Pocantico estate for a Fair Share development. “I left elated,” remembered Logue. But by mid-afternoon, the Rockefeller family’s lawyer called to withdraw the governor’s offer: “Forget it. It’s not Nelson’s property; it’s the whole family’s,” which perhaps should have put Logue on notice of the resistance to come.15 But at least for a while, it seemed that the Westchester initiative held great promise and even the possibility of further expansion in the future.16
By the UDC’s second summer, in 1969, plans were under way. The agency had commissioned the Regional Plan Association to undertake a report on housing needs and opportunities in the New York metropolitan region, which not surprisingly revealed high demand for low-income housing and the availability of land in Westchester. Logue sought out occasions to speak to planners and reformers in Westchester to line up local allies. Although he asserted that he had “no taste for controversy just for the hell of it,” he was adamant that the state could not tolerate what was widely referred to at the time as “snob zoning”—permitting only single-family homes on large lots. Hoping to squelch criticism of too much top-down UDC control, Logue proposed that the Fair Share Housing program be implemented by a UDC subsidiary “to put into the hands of the residents and leaders of Westchester County the powers of the Corporation and the resources of this Corporation.”17
When plans for the Westchester subsidiary stalled, the UDC decided to proceed without it. In January 1972 Logue met with the Westchester Association of Town Supervisors to unveil the Fair Share program of building a hundred units, mostly townhouses and garden apartments on wooded tracts of ten acres or more, in each of nine towns. In June more details were announced, including naming Bedford, Cortlandt, Greenburgh, Harrison, Lewisboro, New Castle, North Castle, Somers, and Yorktown as the selected sites.
The response varied somewhat in each chosen community, but the overall pattern was much the same. Once word of the UDC project got out, it provoked citizen outcry, large and volatile public meetings, and vigorous organization by opponents. In town after town, something like a civil war broke out. In favor were civic groups like the League of Women Voters; all the black organizations in the county united under the flag of the Coalition of Black Westchester Residents; some local businesses and unions, including the AFL-CIO; and many clergy, inspired by the unequivocal message of the liberal Episcopal bishop Paul Moore, Jr., to his ministers: “You have my total backing in endeavoring to make decent housing possible in Westchester, even when such an effort brings you into conflict with some powerful members of the community or perhaps even the Church.”18
The opposition was led by newly formed citizens’ groups—United Towns for Home Rule being the most visible—and the elected officials they put under increasing pressure. Raucous public meetings—a thousand people showed up at one forum, and police were necessary to keep order—were reminiscent of Logue’s Charlestown experiences a decade earlier, despite the dramatic social-class differences between the communities. Hostile speakers charged the UDC with ignoring the views of local communities and incompetence in selecting sites for the housing. They argued that an influx of new residents would put an undue burden on the local schools and school budgets and on the tax base more generally, given the UDC’s tax abatement. They claimed that this new housing would change the physical character of their semirural towns and, though rarely said explicitly, their class and racial character as well. Anything that smacked of “urban,” starting with the Urban Development Corporation, was deemed a dangerous threat. By no coincidence, the effort to emphasize the historical heritage of Bedford by creating a historic district—a move long opposed by residents resistant to restrictions on their property rights—now sailed through with the mission to “maintain the character of the historic district” and “regulate construction of new buildings.”19 It was clear that many ardent opponents feared that the UDC’s Fair Share Housing was the opening crack in the zoning wall that would lead to greater development and diversity.20 Observing the defiance as a young reporter for The New York Times, Linda Greenhouse concluded that Logue had “pushed a button they didn’t know they had.”21
Logue acknowledged in the UDC’s annual report in 1972 that “the intensity of the opposition was something to behold … The clamor, the outrage, the anger—and sadly—the hate displayed were disheartening.”22 Logue was personally targeted with death threats. Once, before an evening hearing, he got a call warning that if he showed up he’d be assassinated. He went nonetheless, bringing the UDC staffers Larry Goldman and Richard Kahan along with him, and sat in a front-row seat, crossing his arms and making himself “just as visible as you could possibly be,” recalled Kahan. “It was like, okay, here I am.”23 At one informational meeting called by the UDC, shouts of “Get out, we don’t want you in Bedford” drowned out more reasoned discussion.24 Another meeting had to be adjourned and rescheduled because of excessive “foot stomping and jeering.”25 A suspicious fire destroyed a handsome hundred-year-old barn in Bedford that the UDC had recently purchased to convert into a community center for its proposed housing development nearby.26
The UDC struggled to keep the debate on a more civil level. It responded to opponents’ concerns about tax shortfalls with reminders that the UDC was making substantial payments in lieu of taxes and with calculations of how state allocations would cover much of the cost of additional students. It also promoted a bill in Albany requiring the state to reimburse communities for any financial losses sustained from a UDC development. Seeking compromise, the UDC conveyed a willingness to reduce the number of units, restrict tenant eligibility to town employees, and investigate alternative sites for the proposed housing. Many spots were in fact poorly located—too far from public transportation, on difficult terrain for building, and in open space—on the only land available for the UDC to buy. In truth, the UDC had made mistakes, such as not communicating sufficiently with towns before announcing its program and not seeking enough input on housing locations. Logue’s characteristic drive to fast-track likely rushed the consultation process. But a more politic rolling out of Fair Share Housing would not likely have made a difference. In the heat of battle, the UDC was willing to adjust the plan, but not to back down, arguing that doing so would only obligate more cooperative towns to bear a greater share of the burden. In the hallways of the UDC offices, bitter talk often turned to how racial and class prejudices were really at the root of the resistance.
Many of Logue’s closest confidants urged him to give up the fight. The UDC general counsel Stephen Lefkowitz, who usually wielded great influence with Logue, advised, “There is more than enough to do in the cities.”27 The prominent psychologist Kenneth Clark—a close friend, a UDC board member, and chair of the board’s Integration Committee—argued against expending political and monetary capital on Fair Share. “They don’t want you … Don’t go!” Clark urged. He had built his academic reputation on exposing the limited opportunity in urban ghettos and was no fan of segregated communities. Nonetheless, he thought the UDC should keep its attention focused on the cities where black people already lived in great numbers and often under inadequate conditions. Harlem leaders, eager for the UDC’s resources, not surprisingly sided with Clark.28 The UDC architect Tony Pangaro recalled that despite the chorus admonishing Logue that “it may be morally correct, but teaching people like that a lesson doesn’t really work very well,” Logue was unswayed. “He really, really, really wanted to do it. He thought it was absolutely the right thing.”29
The controversy escalated. Opponents brought numerous legal suits. They lobbied elected leaders, including Rockefeller. Although the governor shared Logue’s enthusiasm for more socially integrated communities; valued the Westchester effort as a way of redirecting the UDC’s resources away from New York City, with its current claim on 55 percent of the UDC’s housing starts; and had expressed his support not only privately to Logue but also publicly, he became more concerned as the summer of 1972 wore on.30 Reactions were only growing more negative, particularly among Republican officeholders up for election in November. It should be noted, however, that two liberal Democrats running for Congress from Westchester districts—Ogden “Brownie” Reid and Richard Ottinger—were no more supportive.31 Typical was the town supervisor who said, “It would be political suicide for me in an election year to support UDC openly.”32 It is not hard to understand why, when anti-UDC supervisors were issuing such nasty statements as “we have some agonizing liberal supervisors in Westchester County who have seen fit to go to bed with the UDC dog and now they’re waking up with fleas.”33 In this maelstrom, Rockefeller decided he had no choice but to act. In August, he declared a moratorium on Fair Share Housing until January 15, 1973, giving the towns time to come up with their own alternative plans.
During the interlude, the nine communities continued to discuss the issue, and by January 1973 six of them had issued “positive responses” acknowledging at least some need for low-income housing. Ever optimistic, Logue took that as a good sign. He said on January 16 that the UDC would welcome more conversations with towns and was willing to negotiate further on housing location and other complaints. But pretty soon it became evident that the whole game had changed and the UDC’s ability to carry out its Fair Share Housing plan was being seriously undercut. Almost since its creation, enemies in the New York state legislature had been trying to clip the UDC’s wings and deprive it of its override powers. But whenever such a bill made it through the legislature, the governor would veto it. “Rockefeller would always beat back the effort to take this override out of the law,” Logue later acknowledged in appreciation. “Which is why I loved him, he stood up for me.”34 In October 1972, some New York state representatives had even tried to push a bill through Congress to deny federal funding to any project lacking local community approval, until the House’s recess put an end to debate.35
Now, in the wake of the tsunami of hostility created by the Nine Towns plan, opposition to the UDC’s override grew overwhelming. In June 1973, Rockefeller saw no alternative but to sign a new bill curtailing the UDC’s power to override local zoning in New York State’s villages and towns, while keeping it in its cities. But he offered Logue a deal as compensation: an additional $3 million appropriation to cover the costs of closing down the project and an increase from $1.5 to $2 billion in bonding authority. Logue didn’t blame Rockefeller. “Rockefeller was the last guy to leave that sinking ship, the last guy. And he saw that I got bailed out.”36
Logue was not happy to have lost the battle against exclusionary zoning in the suburbs. The Boston Globe’s Marty Nolan, now the chief of the paper’s Washington bureau who had watched Logue successfully manage similar uproars in Boston, called it “a stinging defeat.”37 Indeed, once given permission to ignore the UDC, all nine towns retreated from considering subsidized housing. And the removal of the UDC’s override powers had a domino effect in the state. It brought an unhappy resolution, for example, to a long-standing battle on Long Island over building subsidized housing in the unincorporated hamlet of Wyandanch, with its overwhelmingly poor, African American population of fifteen thousand, 68 percent of whom were on public assistance in 1969. The community had begun lobbying the UDC in 1970 to construct urgently needed new housing. By June 1972, designs—by a black architect—were completed for twenty-nine clustered, two-story garden-apartment buildings with 182 units to serve low- and moderate-income tenants. After the state took away the UDC’s override, more than a thousand Wyandanch residents turned out for a rally and signed a petition urging continued support for the UDC housing, only to watch the Babylon Town Board, which had legal jurisdiction over Wyandanch, reject it two months later, on the suspect basis of its “adverse impact” on the community’s high water table. “The blacks all supported it, 150 percent,” Logue fumed, “and the goddamn white bigots killed it.”38
Logue took some solace in the settlement Rockefeller proffered, appreciating the new resources at his disposal. The whole episode, moreover, entered the UDC’s canon of macabre humor when staff members created a satirical book for Logue titled “The Story of ‘The Suburban Destruction Corporation’ (SDC): E. J. Rogue, President, and the Warm and Wonderful World of Westchester.” Large pages featured collages of headlines and illustrations cut out of newspapers and magazines along with text deriding the disaster. One page carried the headline “Dissatisfaction Guaranteed or Your Zoning Back.” Another showed a photo of a large group of men, women, and children in colonial costumes with the caption “Speaking on behalf of the Bedford Historical Society, Mr. Rogue, we have carefully considered your nine towns program, we have considered the alternatives, we have polled our people and it is our collective opinion that you should respectively stick the whole thing up your ass.”39
The Nine Towns controversy raised some of the same questions that had troubled Logue since his earliest days doing urban renewal in New Haven: Who’s in charge, who should have a say, who benefits, and who pays the bill? Once again, Logue found himself contemplating what a democratic process in planning decisions—his much-touted “planning with people”—should really mean. Already skeptical about letting what he considered excessive participatory democracy overshadow professional expertise, his Nine Towns experience only discouraged him further. He wondered anew what form of community consultation might make more possible the kind of social change he judged to be legal and moral.
Logue was not alone in this rumination. Even progressive critics of top-down planning struggled with the conflict between valuing grassroots democratic participation and breaking the seemingly intractable hold of racial segregation. Paul Davidoff, the chief theorist of “advocacy planning” (a movement committed to giving communities, particularly their low-income and minority members, a greater voice), had established the Suburban Action Institute in White Plains, the county seat of Westchester, in 1969. As its executive director, he vigorously battled exclusionary zoning in the courts, his greatest victory in later years being the Mount Laurel decision of the New Jersey Supreme Court requiring all towns to build low- and moderate-income housing. Davidoff applauded the UDC’s efforts in Westchester and followed its struggle closely, convinced that the greater good was being served.40
In contrast, an eighty-four-year-old, increasingly reactionary Robert Moses, who appeared in Northern Westchester in the midst of the crisis to receive a distinguished service award from a conservative arts organization, took the opposite view, ironically—given his own past insistence on top-down control—siding with the people against the big planner. He accused Logue of trying “to force projects into the suburbs … No wonder local people are embittered.” And he urged the residents of Northern Westchester to “go slow,” “acquire more parkland,” and if necessary “consider [yourselves] a separate county.”41 When it came to Fair Share Housing, Davidoff and Moses endorsed the strategy most consistent with their attitudes toward civil rights, not the mode of decision-making that they had promoted throughout their careers.
As the difficult year of 1973 came to a close, Logue fought to contain the damage from the Nine Towns setback. There remained much for the UDC still to tackle. Despite the victory scored by the UDC’s enemies, Logue had no intention of letting Westchester become his Waterloo.
The Fair Share fiasco would probably not have doomed the UDC were it not for its unfortunate convergence with a number of other problems—only some within the UDC’s control. Looking back, it may seem obvious that the Nine Towns defeat marked the beginning of the end for the UDC. But at the start of 1974, no one could know whether this defeat was simply a rough patch in the road or the first steps in a death march. “It may not have ever come to that [end] except for this terrible, perfect storm of horrible events,” lamented the UDC staffer Pangaro.42
The first winds of the gathering storm had actually hit earlier in the year, just as the UDC was readying to renew its discussions with the Westchester towns when Rockefeller’s cooling-off period came to an end on January 15, 1973. A week before, on January 8, the Nixon administration had announced that it was impounding all congressionally appropriated federal funding for housing, regardless of whether projects had already been approved, were under consideration, or had not yet advanced to review. Following his first election in 1968, Nixon had allowed HUD secretary Romney to continue and even expand Johnson-era federal housing programs, biding his time. But now, emboldened by his landslide reelection victory against the Democratic opponent George McGovern two months earlier, Nixon made his move. With little notice, the White House proclaimed a national moratorium on housing subsidies of all kinds for eighteen months, to last until July 1, 1974, when Nixon promised a more cohesive housing and community development program that would replace what he felt was the federal government’s ineffective and excessive involvement in urban renewal and housing provision.43 Although Romney had agreed to stay on as HUD secretary until Nixon’s second inauguration in late January, he had submitted his resignation the day after Nixon’s election, deeply opposed to where Nixon’s policies were headed and angrily feeling undercut. Over the next two months, he railed against the “message to me that all the good we have accomplished is to be undone.” The White House, he complained, was “discriminating against central cities” in a “hard headed, cold hearted indifference to the poor and [with] racial prejudice.”44 With Romney’s departure in January 1973, the UDC lost a friend in a high place.45
Nixon’s moratorium was the opening salvo in his larger agenda to devolve the locus of policymaking from Washington to the states and localities, a major break with the postwar American welfare state that had developed gradually from Roosevelt’s New Deal and Truman’s Fair Deal to Kennedy’s New Frontier and Johnson’s Great Society. At every stage, the federal government had expanded its funding and strengthened its control. Whether Nixon’s reorientation was labeled the “New Federalism,” revenue-sharing, or block grants, his administration’s intent was to give states, and less so more Democratic municipalities, greater discretion in spending and weaker oversight from Washington. This approach aimed to appeal to Nixon’s growing number of southern, suburban, and white working-class voters. The White House also intended for this restructuring to decrease spending on social programs like housing. Now, “power, funds, and responsibility will flow from Washington to the States and to the people,” Nixon promised. “The high-cost, no-result boondoggling by the Federal Government must end.”46
This devolution of authority should not theoretically have penalized a state-level agency like the UDC. But Nixon’s impoundment created a severe, eighteen-month drought in the dispersal of federal subsidies, and then once new policies were in place, urban-oriented agencies like the UDC found themselves beholden to state legislatures dominated by unsympathetic rural and suburban interests. The constituents of suburban legislators, Logue argued, will always demand “that state aid to local government be maintained intact at whatever the human cost to programs which serve primarily the poor, the powerless, and the minorities.”47 Despite Nixon’s assertion that funds would now flow more directly to states and their cities, big-city mayors were quick to recognize a threat, huddling within weeks of the president’s announcement at the New York mayor John Lindsay’s Gracie Mansion to consolidate their opposition.48 Logue at first held out a small hope that there might be some way of using Nixon’s draconian measure to cut back on Washington’s top-down control over local priorities and to increase the dollars going directly to housing subsidy programs. But he concluded, “One thing is entirely certain to us. There is no way to reduce Federal expenditures and still meet America’s housing needs. If anything, additional funds will be required.”49
That was not to be. The replacement legislation, the Housing and Community Development Act of 1974, with its Community Development Block Grant program, amplified the thrust of the State and Local Assistance Act of 1972, which had implemented revenue sharing. Federal spending now was steered away from the nation’s major northern cities toward suburban population centers and the new cities of the Sunbelt.50 In an essay penned in 1976, Logue complained that the “whole new approach of federal assistance … called the ‘block grant’ program” had “purported to minimize red tape” but was raising “serious doubts … about the adequacy of federal funding.” He pessimistically concluded, “There is little reason to believe that troubled central cities will be able to reverse their present period of decline.”51 A new era had indeed arrived. Federal urban renewal—in existence for twenty-five years since the Housing Act of 1949—had enjoyed a decidedly mixed record, but it had kept federal attention on cities and had served as the lodestar for many careers in urban redevelopment, including Logue’s. And now it was effectively ended. Regardless of whether a Republican or a Democrat was president, the federal government would no longer ensure a uniform set of national policies for American cities.
In place of direct federal funding for urban redevelopment and subsidized housing, the new approach would channel money further down the command chain, ranging from states to highly localized community development corporations, and depend more on private-market solutions to help needy households. Some programs still worked well, but they were part of a regime change that sought greater decentralization in programs, less redistribution of financial resources, and more decision-making authority by local politicians than urban experts. There would be little construction of new public-sector housing, reduced attention to racial inequality and poverty through federal programs like Model Cities and Community Action, wider dispersal of spending throughout the nation with less going to major cities, significant fragmentation—at times non-coordination—in urban policy and practice, and a shift in balance from the public to the private sector through rental vouchers and subsidies to developers. If they were aggressively entrepreneurial, the private, nonprofit community development corporations could secure federal funds, though given their limited, often neighborhood-based scale and scope, their efforts rarely cohered sufficiently to add up to a citywide or even broader metropolitan strategy for combating deep-seated urban problems.52
As Logue feared, Nixon’s moratorium proved devastating for the UDC. Predicting that only luxury housing would now be built, Logue warned of a “drastic slowdown and cutback in publicly assisted housing,” with far-reaching ramifications, including “widespread unemployment in the construction industry.”53 Despite the fanfare the UDC had made over its state funding and bond revenue, the agency depended on regular infusions of federal dollars. At least 90 percent of all UDC projects used Section 236 mortgage subsidies to keep rents affordable, even for middle-income families, while also making use of other federal programs like the New Communities Act. In fact, if the New York state legislature had not already revoked the UDC’s override powers, it is very likely that the lack of federal funding would have prevented construction of the controversial Fair Share Housing in suburban Westchester anyway.
Frustratingly for Logue, his innovations at the UDC aimed at remedying long-standing flaws in federal urban renewal practices only worsened the impact of the Nixon moratorium. Such inventive strategies as fast-tracking projects before all financing was officially in place and bundling together partly finished projects in general-purpose bonds to spread the risk worked only so long as federal dollars kept flowing in. When Nixon shut off the funding faucet, innumerable housing developments were left high and dry at various stages of incompletion. Uncertainty about future subsidies, moreover, made it impossible to project whether rental revenues would cover costs. “Here I am hanging out half naked,” Logue said. “I’ve got these houses under construction, they’ll be bankrupt from the day they open without the subsidy.”54
Once again, Nelson Rockefeller came to the rescue. “As soon as it happened,” Logue recalled, “I called up … the Governor’s office and said, ‘Hey, I’ve got a problem. You have a problem. And I can’t solve it. The Governor’s got to solve it.’”55 Flashing his Republican bona fides, Rockefeller convinced the White House to reinstate funding for UDC projects already in the pipeline. The New Republic later estimated that “as a result of a much vaunted full-speed ahead, mode of operation known as ‘fast-track’ construction, UDC had had 58 projects underway without having gotten formal federal commitments.” In the magazine’s view, the “UDC would have collapsed had Rockefeller not had enough clout to get John Ehrlichman in the White House and persuade him to waive the moratorium on those projects.”56 Although the immediate crisis was averted, severe damage remained. The UDC was forced to implement a spending freeze and a 10 percent staff cutback.
With the UDC’s once-promising future looking bleak, Logue and his team frantically searched for alternative sources of funding.57 Selling more bonds was one option, except that the moratorium shook investor confidence because, Logue lamented, auditors felt obligated to disclose on offering statements that “we were building on land we didn’t own and that our subsidy contracts were not in place.”58 Nonetheless, when several months later Rockefeller offered Logue an extra half a billion dollars of bonding authority after the UDC’s loss of override power, he grabbed it to help soften the blow. But more bonding also meant taking on greater debt and dealing more with bankers and investors, who were growing increasingly skeptical about the UDC’s prospects.59 Logue made no secret of his final judgment about the moratorium. Writing in 1974, he blasted the “federal decree” for forcing the UDC into a “year of consolidation” rather than planned expansion, limiting housing starts to less than 3,500 units instead of the 15,000 expected, a pace one-fourth that of 1972.60 In October 1975, Architectural Record found Logue still storming over what he called “the most outrageous piece of public policy I have ever seen.”61
The UDC’s dependence on Rockefeller in coping with the Nixon moratorium crisis explains why the next squall in the perfect storm proved so damaging. In December 1973, Rockefeller announced that he was stepping down as governor, thirteen months before his term was set to expire, and passing the job on to his long-serving lieutenant governor, Malcolm Wilson. Rockefeller had both generous and selfish motives. Wilson had stood loyally by Rockefeller’s side for fifteen years, forever the best man and never the groom. As Rockefeller prepared to leave the office of governor, he thought that Wilson’s chances of succeeding him would increase with a year as governor under his belt. But Rockefeller was also still chasing his personal dream of becoming president. This would be his last shot. He was now sixty-five years old, and Nixon would not be able to run again in 1976. In search of more national exposure, Rockefeller left office to become chair of the Commission on Critical Choices for Americans, a bipartisan, politically centrist collection of forty-two prominent citizens who committed themselves to studying the national and international problems confronting the United States. Rockefeller handpicked the politicians, academics, and business leaders who served as commission members, including Logue in this elite group; set up shop in his privately owned former governor’s office in midtown Manhattan with former staff he convinced to join him; and provided the initial funding to get the operation off the ground.62 A year later, in December 1974, Rockefeller would move on once again, this time to become Gerald Ford’s vice president when a disgraced Richard Nixon stepped down.
Rockefeller’s resignation was a huge blow to Logue. Not only was his great defender departing Albany, but Lieutenant Governor Wilson had never been a great fan of the UDC. Rather, he was often a conservative voice in Rockefeller’s ear. He had adamantly opposed granting the UDC override powers at its founding (“over my dead body,” he initially said), and Logue was convinced that had Wilson—for many years a state legislator from Westchester—been present when he briefed Rockefeller on the Fair Share Housing program, Wilson would have significantly curbed the governor’s enthusiasm.63 John Stainton, who worked with Logue in Boston and New York, understood how crucial powerful political protectors were to Logue’s success and, by extension, the devastating impact of their retreat. “Lee, Collins, and Rockefeller all were pretty strong people, and he used their strength to accomplish what he wanted.”64
The timing could not have been worse for securing alternative funding. Economic conditions were deteriorating in the United States, New York State, and New York City in ways that directly affected the UDC. At the national level, the United States was undergoing a major reorientation from domestic manufacturing to more globalized production and a postindustrial economy built around finance, insurance, and real estate (FIRE) and other service and corporate employment. Eventually prosperity would come to those cities—like New York—that headquartered this new economy. But many American communities would never make the shift, and even those that did underwent a difficult transition during the 1970s. New York City, for example, lost more than five hundred thousand jobs, many in industry, from 1969 to 1976; by mid-1975, the unemployment rate had reached 12 percent. Other, more immediate problems added to the pain of this restructuring, such as a severe stock market crash during 1973 and 1974; the OPEC oil embargo from October 1973 to March 1974, which sent energy costs through the roof; and destabilizing political crises: Vice President Spiro Agnew’s resignation in fall 1973 following corruption charges and the Watergate scandal culminating in President Nixon’s resignation in August 1974.
Faced with these many pressures, the American economy experienced a period of what became known as “stagflation,” a paralyzing combination of low economic growth, high inflation, and stubborn unemployment that made remedies difficult. As investors’ confidence flagged and interest rates climbed perniciously, cities and states—and entities such as the UDC—struggled to sell the bonds that they needed to survive. New York State and especially New York City neared bankruptcy as public spending continued at levels that rising costs and declining tax revenues could no longer support.65
Not alone in encountering these financial difficulties, the UDC nonetheless suffered greatly. The Section 236 subsidies that it had managed to hold on to had no provision for inflation, depressing their value as expenses rose.66 Interest rates on UDC bonds shot up from an average of 6.5 percent in the summer of 1974 to 9.37 percent in September, increasing the burden of repaying investors, which, in turn, made investors more wary of buying. That soaring interest rate reflected not only the troubled economic times but also the fact that many bankers considered the UDC an especially risky investment. Some of that distrust went back to the UDC’s origins as a public benefit organization expected to self-finance through moral obligation bonds, without the state’s full legal backing. Its general-purpose rather than project-specific bonds, furthermore, made close tracking of revenues and expenditures difficult.67 Rockefeller’s ironclad support for the UDC had gone a long way toward reassuring investors—until 1974, when Rockefeller was no longer governor and money had grown even tighter. Then, all the concerns that had been long smoldering erupted, including complaints about laxness in the UDC’s accounting and Logue’s single-minded determination to keep building regardless of calls for caution. At base, bankers bristled at what they considered Logue’s arrogant refusal to acknowledge that he was running a for-profit operation with investors’ money, behaving instead as if the bond market should bankroll a state social welfare program.
By March 1974, the crisis had taken on new urgency.68 Morgan Guaranty Trust Company, the lead underwriter for the consortium of banks that had promoted UDC bonds enthusiastically for years, refused to sponsor any more sales unless the UDC curtailed future projects and agreed simply to finish what it had started. The withdrawal signaled a damaging lack of confidence in the UDC. Morgan and other banks had long enjoyed robust profits from municipal and state bond sales—as underwriters collecting generous fees and as investors benefiting from high-interest returns and tax exemptions—but they now balked at their exposure from public securities deemed too risky, like the UDC’s.
Then, later in the spring, New York, following the lead of neighboring New Jersey, repealed the 1962 bond covenant Rockefeller had made with the Port Authority of New York and New Jersey and its bondholders to never burden them with supporting deficit-heavy mass transit. That reversal not only threatened the Port Authority’s reserves earned from lucrative airports, tunnels, and bridges, but convinced bankers that they now had irrefutable proof of the worthlessness of New York State’s promises. Doubt deepened that the state would ever live up to its moral obligation to back the bonds of public benefit organizations like the UDC, a debt that was now more than $6 billion for the state’s sixteen public authorities. In Logue’s telling, “Wall Street was outraged” and was determined “to find some way of teaching the state a lesson and testing this moral obligation.” Alarmed by the “avalanche of hostility” from the investment community, Logue thought with trepidation, “I have a feeling which agency is going to be the guinea pig.”69
That summer, Chase Manhattan Bank CEO David Rockefeller, anxious to keep his brother Nelson’s prized UDC viable, rallied fellow bankers to commit to supporting the UDC, at least in the short term. But increasingly, bankers expressed an unwillingness to lend to the UDC and echoed Morgan Guaranty’s demand that Logue complete projects already under way and take on no more. Logue refused, insisting that the UDC’s finances were sound, that every day more UDC revenue-producing projects were being completed, and that the agency was unfairly being made into a whipping boy by bankers out to score a point with the state. Instead, faced with operating expenses of $1 million a day, Logue anxiously cast about for other remedies, such as transferring some incomplete UDC projects to the state’s more solvent Housing Finance Authority (the effort failed), raising the rents on completed developments to generate more revenue (he did so regretfully), and urging the passage of legislation mandating that huge pension funds invest in the state’s obligations to buy some independence from the money markets (it never happened, though months later, New York City would be bailed out by unions doing just that). Logue also pleaded for a bailout from the state legislature, but after the Westchester Nine Towns defeat, his friends in Albany were few.70
Governor Wilson, confronted with a distressing stalemate and bankers’ calls to fire Logue (which he had promised Rockefeller he would never do), finally won a UDC concession not to commit to any new projects without his approval and appointed a six-person task force to make recommendations about the UDC’s future, with the goal of strengthening the financial community’s support for the UDC. Wilson timed the task force report to come out after the November 1974 gubernatorial election, to highlight his vigilance without revealing any negative findings that might damage his candidacy.71 Wilson’s careful scheming hardly mattered. On November 5, Wilson was soundly defeated by the Democrat Hugh Carey, a longtime Brooklyn congressman who carried 58 percent of the vote in this first post-Watergate election.
After the election, Governor Carey became increasingly aware that he had inherited a state in deep financial trouble. At first, he reassured Logue that he backed the UDC. But within weeks he changed his mind, joining those who fingered the UDC as the agency most guilty of irresponsible financial practices and thus most deserving of public punishment. In his inaugural State of the State address on January 9, 1975, Carey set the stage by declaring, “This government and we as a people have been living far beyond our means,” and went on to promise that “the times of plenty, the days of wine and roses, are over.”72 He then proceeded to castigate the UDC for running out of money and barreling toward a catastrophic default on maturing notes and loans in late February, going so far as to call for “an immediate change in the top management of UDC.” Less than a month later, right around Logue’s fifty-fourth birthday, Carey officially requested his resignation. For years Logue had proudly argued against civil service protection for himself or any of his staff, insisting that all should serve at the pleasure of an elected boss. For the first time ever, he and his closest colleagues would personally pay the price for his principles.
Logue felt angry and betrayed at his dismissal, convinced that he and the UDC had been scapegoated for problems that went far beyond their control.73 In a farewell letter to the UDC staff, Logue minced few words about where he placed the blame. After thanking them for their “competence, integrity and dedication,” he shared his judgment “about the real cause of UDC’s crisis.” Not misconduct. Nor fiscal irresponsibility. Rather, Nixon’s mismanagement of the economy, leading to stagflation, compounded the “the reluctance of the major New York banks to make a continuing commitment to social housing … for low and moderate income families in the communities where such families tend to live.”74 With no bailout on offer from the banks or the state legislature, on February 25—another “Black Tuesday” like the stock market crash of 1929—the UDC indeed defaulted on $105 million in short-term notes and two days later on $30 million worth of loans. In what Time magazine called “one of the biggest defaults by a public agency since the 1930s,” the UDC’s credit was destroyed, eighty-five projects remained unfinished, and what was already a dire financial situation in New York now looked even worse, as the UDC’s default signaled more trouble for a nearly insolvent New York City and a financially fragile New York State.75 During the months ahead, the five-hundred-strong UDC staff would steadily shrink—“well-informed heads rolling every which-way,” one dismayed observer lamented—with only those deemed essential for completing projects kept on. Ted Liebman and Robert Litke were among the last of the old guard to leave, charged as they were with finishing the first phase of Roosevelt Island.76
Parsing blame for the UDC debacle preoccupied its staff and supporters for months, if not years. Immediately, the agency’s leaders wrote a spirited defense of the UDC, titled a “Preliminary Memorandum on Behalf of Certain Officers, Former Officers and Directors of the Urban Development Corporation,” which denied any “fiscal irresponsibility and mismanagement.” Instead, it put the blame on external factors such as fallout from the nation’s inflationary financial environment, the city and state debt crisis, the erosion of confidence in moral obligation bonds, and the uncertainties surrounding the gubernatorial election year.77 In some ways, Logue would never get over losing the UDC presidency. The defeat became even tougher to take when Governor Carey put at the UDC’s helm as unpaid chair of the board Logue’s old foe Richard Ravitch, the forty-one-year-old construction executive whom Logue had fired for challenging his vision for Roosevelt Island.78
Over time and in close collaboration with Governor Carey, Ravitch would secure the hundreds of millions of dollars from the state and the banks needed to finish major UDC projects—to be channeled through a new agency, the New York Project Finance Agency—but not without continued difficulty. Ravitch inherited a challenging situation, to say the least, and worked hard to salvage it. At one point that winter, he would in fact echo Logue by complaining with exasperation to state legislators, “The banks of New York have closed their doors to the people of New York.”79 Nonetheless, Logue and his many loyalists would always believe that Ravitch had savored gaining, perhaps even sought out, Carey’s ear in vengeful payback for being dismissed by Logue. His goal, Logue was convinced, was “to embarrass me personally as deeply as possible.”
Ravitch’s version was that Carey reached out to him in January 1975 for help with the UDC’s looming bankruptcy, after being besieged by indignant bankers worried that the UDC was putting the city’s and state’s access to credit at risk.80 Ravitch’s memory of their tangling over Roosevelt Island also differed from Logue’s, but in a way that suggests he might have harbored even deeper anger that motivated him to help Carey. As Ravitch told it, rather than being recruited by Adam Yarmolinsky and fired by Logue, he had been enlisted from the start by Logue, who offered the Ravitch family’s HRH Construction a $3 million contract (equivalent to almost $20 million today) to become “the agent and overseer of Roosevelt Island’s development,” supervising construction of the island’s public infrastructure of roads and utilities and managing the residential projects.
Ravitch at first embraced Logue’s proposition enthusiastically, as it arrived at a particularly difficult time financially for the firm. But once Ravitch dug more deeply into the numbers, he later claimed, he became worried that the UDC’s projections of its operating costs were understated and its revenues overstated to the extent that they “likely would not cover the estimated interest and principal in the bonds financing the project.” That anxiety may very well have propelled Ravitch to recommend prioritizing the building of market-rate over subsidized housing, which had so angered Logue. To protect HRH, Ravitch requested a clause in the contract “stating explicitly that HRH was making no representations about the economic success of the project.” Logue, insulted at Ravitch’s lack of confidence in the UDC, refused and angrily withdrew his offer. According to Ravitch, few at the UDC or HRH knew about Logue’s making and rescinding this proposal.
Logue may have linked Ravitch’s firing instead to his lack of sympathy with the fundamental social goals of the Roosevelt Island project, but the Logue team’s suspicions that Ravitch sought to malign the UDC in fact proved not far off the mark. Ravitch admitted that soon after his dismissal by Logue several years earlier, he had shared with the Chase Manhattan Bank CEO David Rockefeller his dire prediction that the “UDC was headed for financial catastrophe,” because it “would have trouble meeting the debt service obligation of its bonds.”
Whether driven by personal animus or political and financial calculus, Ravitch insisted that Carey convene a Moreland Act Commission to thoroughly investigate—and make recommendations about the future of—the UDC before he would agree to take its reins, to spare him the uncomfortable necessity, he argued, of suing Logue and others for malfeasance.81 New York State’s Moreland Act of 1907 was a product of Progressive Era reform. It authorized the creation of powerful blue-ribbon commissions to review any state agency suspected of wrongdoing and to propose legislative reforms where needed. A month before announcing a Moreland Act Commission for the UDC, for example, Governor Carey had called for another one to inquire into New York State’s notoriously shady nursing home industry, long plagued by allegations of fraud and political corruption. The UDC’s Moreland Act Commission was chaired by the prominent New York attorney Orville H. Schell, Jr., well known to be liberally minded and a recent president of the New York City Bar Association, whose headquarters on West 44th Street hosted the public hearings.82 The commission did its work between February 1975 and March 1976. Armed with a staff of thirty lawyers, accountants, and housing specialists, it interviewed at least a hundred witnesses and examined more than five hundred thousand documents, issuing a lengthy final report on March 31, 1976, titled Restoring Credit and Confidence: A Reform Program for New York State and Its Public Authorities. This report, combined with the UDC staff’s defense of the agency’s record and extensive coverage by a battalion of journalists who recognized the significance of the UDC’s collapse, illuminates what went right and wrong in the short but ambitious career of the New York State Urban Development Corporation.83
The Moreland Act Commission investigation proved an extremely trying time for Logue. He and his loyal assistant Janet Murphy holed up with Logue’s extensive files in the historic Blackwell House on Roosevelt Island to prepare his case. Poignantly, Logue’s pet UDC project was now providing a safe haven from which to mount his defense against an aggressive team of commission lawyers headed by Chief Counsel Sheldon H. Elsen, who had made it clear that he intended the proceedings to last a year and to require testimony from prominent witnesses, including former governors Rockefeller and Wilson and former attorney general John Mitchell, promulgator of the moral obligation bond concept. Logue knew to expect an inquisition of sorts—he was convinced Elsen’s goal was “to put me in jail.” (Whether or not Ravitch meant to go this far, he did acknowledge “spending a lot of time with Shelly Elsen,… educating him.”) It was thus welcome news to get a call from Edward Costikyan, a politically well-connected senior litigating partner in the prominent firm of Paul, Weiss, Rifkind, Wharton & Garrison, offering pro bono legal services. According to Margaret Logue, he was a “big gun,” who was a “sweet guy, but not in court.”84
During its thirteen months of deliberations, the Moreland Act Commission on the UDC regularly made the headlines, with the question of Ed Logue’s personal culpability always front and center. The onetime staffer Pangaro concluded that “because he had made it [the UDC] such a crusade, the attacks were directed at Ed personally, rather than the agency.” Logue’s sister, Ellen, recalled that normally tough Ed was under a strain so great that he secretly threw up every day he testified. The press more often described his public demeanor as alternately “feisty” and “angry,” such as when—in vintage Logue combative style—he charged that “Morgan Guaranty wants the freedom to fatten off America but not share in the solution to its problems.”85
Logue and the UDC’s greatest vulnerability going into the Moreland hearings was whether there had been outright financial fraud or simply poor fiscal management and reporting. In the end, the commission concluded that charges of corruption were groundless. The most that the UDC administration could be faulted for was accounting sloppiness and indulging its ambition to build over its responsibility to its investors.86 For Logue, neither a numbers man nor deeply knowledgeable about the bond business, addressing the great need for housing had justified any number of finance sins, or at least poor practices. These included making commitments that exceeded the UDC’s debt ceiling and then borrowing to meet these obligations at such a slow pace that the interest the UDC had to pay to finance them surpassed that of the mortgages issued.87 When the first UDC treasurer, Robert Moss, originally recommended by Rockefeller, expressed concerns over exceeding the debt ceiling, Logue dismissed them in a memo introduced into evidence at the Moreland hearings: “We are going to build as much as we can. The need is there now. When, having prudently managed our affairs, we have gone as far as we can go, and we can’t borrow any more, that is another day … We will of course be making our best judgments … in other words, that’s my problem.”88 John Stainton recalled Logue’s frequent use of the expression “It’s a fail-smash system,” in place of “fail-safe,” meaning, “I’m going to go for broke and as hard as I can because time is short and you want to accomplish as much as you can.” Even when Frank Kristof, the UDC housing economist who was affectionately nicknamed “Dr. No,” warned Logue about potential problems, Stainton remembered, “Ed found some of it [his advice] useful, but he didn’t necessarily follow it.”89 Eventually as criticism of the UDC’s bookkeeping mounted, Logue fired the treasurer Moss, in whom he had lost all confidence, replacing him with Robert Adelman, who most everyone, including Logue, agreed did a much better job balancing the UDC’s mission with good accounting practices. Years later, the UDC staffer Litke was still defending the trade-off the agency had made: “Had he been more concerned about the financial structure, we would not have built half of what we built. Which is better?… Thirty-three thousand housing units in six years—how can you best that?”90
The Moreland Commission focused much of its attention on the structural problems behind the UDC’s crash and then recommended remedies applicable to many other state authorities also caught between “the social needs of the state and the state’s ability to pay for them,” in Chairman Schell’s words. Most fundamentally, the commission judged the moral obligation bonds, of which the UDC had sold $1.1 billion through early 1975, an imperfect concept that should be abandoned, even as it appreciated that Governor Rockefeller had sought to sidestep the difficult-to-pass referenda required to build affordable housing with regular state bonds. The commission concluded that both sides were too quick to make assumptions: the state that it would never have to back moral obligation bonds, and bankers that they could depend on the state fulfilling its commitment.91 In place of moral obligation bonds, the Moreland report called for a two-thirds vote of the state legislature to set the debt ceiling for all public authorities, a recommendation Logue applauded as a more reasonable approach than a ballot referendum.92
Likewise, the commission acknowledged the benefits of the UDC’s spread-the-risk general-purpose bond strategy for such a broad and diverse project portfolio, but it criticized management’s lack of self-discipline in monitoring these bond packages. This weak internal vigilance was aggravated by lax oversight by the UDC’s board, the commission determined. Career banker George Woods, Rockefeller’s choice for UDC board chair, should have served as more of a watchdog, but as the UDC general counsel Stephen Lefkowitz explained, he was not a “day-to-day guy.”93 The most deserving of blame in the eyes of the commission was the Rockefeller-era state government—the executive, legislature, and controller—for inadequately supervising the UDC’s financial operation: too much partnership, not enough control, particularly from the governor himself. Instead, explained Schell to Governor Carey as he presented the report, “They were like boys playing on a beach, building sand castles with their backs to the tide.”94 The report, therefore, called for an effective public authorities control commission to oversee all such state entities, as other authorities were judged to be insufficiently monitored as well, and to report regularly to the legislature and the public.
The Moreland Commission insightfully recognized that some of the UDC’s efforts to improve on past flaws in urban renewal had actually worsened its financial situation. Fast-tracking to complete projects more quickly, to control inflation, and to minimize red tape had significantly shortened the building process from seven years down to eighteen months, but it had also left the UDC in a lurch after Nixon’s moratorium and had sometimes led to higher costs due to less-open contract bidding and late modifications.95 Similarly, Logue’s efforts to avoid the often complex and time-consuming coordination among multiple parties by consolidating the responsibilities of developer, lender, borrower, and builder in the UDC often deprived the agency of normal checks, such as lender scrutiny and the help of partners if trouble struck. In other words, by styling itself as a one-stop superagency that did it all, the UDC was stuck holding the bag alone.96
Another well-intended innovation that created problems for the UDC was the prioritizing of good design. Intended to improve on the mediocre architecture of much urban renewal, it often made projects more expensive than the funding available, even if architecture critics like Paul Goldberger of The New York Times praised how “The UDC’s Architecture Has Raised Public Standard,” according to a headline published at the height of the crisis.97 Many UDC opponents, including the more cautious Housing Finance Agency, argued that Logue had gone overboard in hiring ambitious architects and investing in expensive experiments like the low-rise, high-density Marcus Garvey project. Ravitch went so far as to suggest that the UDC might even have survived had it “scaled back” its architectural ambitions and relied less on “fancy schmancy architects.”98
The UDC’s embrace of technological innovation was similarly blamed for budgetary overreach. One frequently cited misjudgment involved the UDC’s eager acceptance of Con Edison’s proposal to install electrical heating with bulk metering on Roosevelt Island. Promoted as a clean, efficient, and comfortable source of heat that could be controlled building-wide, it promised savings in construction costs equivalent to a capital subsidy of between $1,000 and $2,000 a unit. But when the energy crisis of 1973–74 hit, not only did electric bills skyrocket, but bulk metering left the UDC footing the bill.99 Likewise, Logue’s preference for building on open land to avoid the dislocations that had so tarnished urban renewal’s reputation also came in for criticism, as the Moreland Commission urged more attention to the preservation and rehabilitation of existing housing.100
The commission concluded that significant though these vulnerabilities were, the UDC’s downfall could be attributed mostly to one underlying contradiction: between its social mandate to build for low- and moderate-income tenants and its fiscal mandate to do so at no cost to taxpayers. Project budgets simply could not be kept to a level that the UDC could sustain with the financial resources at its disposal or generated through rents, if they were to be kept affordable.101 The UDC’s sister agency in New York, the Housing Finance Agency, and most housing agencies in other states avoided this conundrum by focusing on middle-class housing. The Council of State Housing Agencies, for instance, reported that more than two-thirds of construction carried out by its member agencies provided for middle- and moderate-income families in suburban locations.102 The UDC’s focus on lower-income clients usually living in urban settings led to riskier projects with higher construction and operating costs, whether for enhanced security, as at the Bronx’s Twin Parks, or for amenities that created viable communities in low-resourced areas. Day care and senior centers, schools, community rooms, convenience stores, and other examples of what one New York housing official called “social stuff” were not revenue-producing and thus necessitated subsidies. Responding to criticism of the UDC’s record of favoring these features in its projects, John Burnett, the UDC’s general manager under Logue, said, “Is it risky to take care of daycare and schools and shops—things which enhance the attractiveness and livability of residential projects?… We would have been adding to the margin of risk by not taking care to try to make our projects well-rounded, inviting and, of course, rentable by being worthy of the people we were created to serve.”103
The mismatch between the UDC’s social ambitions and its available funding was intensified by Logue’s strong conviction that the public good outweighed his responsibilities to private investors if and when they challenged his agency’s work. Many observers, including Ravitch, severely criticized Logue’s failure to adequately consider the concerns and cultivate the confidence of his investors. But although Logue had embraced the concept of a public-private partnership at the UDC’s founding, he resisted the notion that private interests seeking a return on investment should have the right to override the UDC’s social mission. “We cannot allow basic public policy of this importance to be made in corporate board rooms and issued to public men by fiat,” he insisted.104 Private investors, he was convinced, were improperly thwarting the foundational social goals underpinning the UDC. “It was too good to last, and that’s why I so cordially dislike bankers … They feel threatened … I was engaged in—bankers said this—social engineering. As if that’s a mortal sin. I was very proud of the fact that Roosevelt Island was a total piece of social engineering.”105
In his own time, Logue expressed an interpretation that some analysts of New York’s broader fiscal crisis of the 1970s have elaborated in the years since. They argue that municipal financiers had a more ambitious agenda than simply bringing New York back from the brink of what was undeniably a looming fiscal catastrophe that threatened to bankrupt the largest American city and wreak damage far beyond its borders. Rather, this analysis goes, they used the leverage of their lending and bonding powers to force New York City and New York State to radically reorient themselves from liberal, social democratic public policies to more neoliberal ones. In demanding an austerity budget that scaled back labor union commitments and social welfare services, including the UDC’s ambitious housing program, banking and business leaders sought to fundamentally restructure the behavior of elected officials and the expectations of the public about what government could and should deliver. As the CEO of the New York Telephone Company bluntly put it, “To balance the budget, to restore the confidence of the financial community whose resources we need in order to survive, to guarantee the survival of New York City there is an urgent need to alter the traditional view of what city government can and should do. What is required is a fundamental rethinking of the level and quality of services the city provides its citizens.”106 While critics like this one on the Right sought to roll back the public sector altogether, critics on the Left often urged a shifting of costs from the local to the federal government, arguing that Washington was more capable of raising revenue and carrying debt. But the call for government retrenchment at any level in the wake of fiscal crisis was patently rejected by Ed Logue.
In identifying a fundamental flaw in the UDC’s conception, the Moreland Commission asked in its final report whether a public responsibility could ever be discharged by an entity that was funded by private investors whose goal was to make a profit. As the UDC collapse and its postmortem unfolded over many months in 1975, other analysts would chime in with similar doubts, most forcefully articulated by the journalist Joseph Fried. Writing in The Nation magazine, Fried claimed that the “fundamental issue raised by the plight of the Urban Development Corporation … goes to the heart of the fact—which this country still does not acknowledge—that only a long-range, public effort will make possible the construction and rehabilitation needed if 10 million or more American families are to live in decent housing and decent neighborhoods.” Condemning the UDC’s funding model, he insisted that the “skittish and volatile” private investment market “can hardly be expected to have the staying power to underwrite a task as difficult” as this one. “Rather,” he asserted, “the job must be done by American society generally, and that means sufficient public funds for subsidized housing and redevelopment programs to begin with, as well as a willingness by government to take the ultimate risk when it does seek to draw private capital into the effort.” Fried concluded somberly that the fall of the UDC is “testimony to how far we have come from those days in the 1960s when the flames of urban riots crackled in squalid slums” and inspired public officials as well as business leaders to tackle the urban crisis. It should serve as a “harsh and vivid reminder that American society is still a long way from meeting a moral obligation of its own.”107
As Fried intimated, a lot of wishful thinking had lain behind the UDC, from Rockefeller’s initial search for an easily fundable way to build subsidized housing, revitalize cities, and create new jobs to bankers’ overconfidence that UDC projects could surely generate sufficient revenues to cover operating expenses and debt service on outstanding bonds. Logue, too, had optimistically signed on, eager to find new sources of housing finance as the federal budget tightened. But none of these expectations proved feasible. It became apparent that it would take years to create a positive cash flow, if one could even be achieved. The UDC itself projected that its operating and debt-service expenses would exceed income until 1981, and had it kept building new projects, that date would have extended further.108 Moreover, the financial picture was not helped by the IRS’s early ruling that the more lucrative commercial and industrial development called for in the original UDC legislation, which might have generated greater income for the agency, must be limited to only 10 percent of the tax-free bonds.
But should anyone have ever expected the UDC to be self-supporting? John Zuccotti, at various points in his career a New York City public official and a real estate developer but long a UDC champion, argued that any assumption of a natural alignment between the goals of private bankers—whose job it was to make money for depositors and stockholders—and affordable housing production was misguided from the start. The UDC, and the nation, needed some other way to create housing.109 The UDC chronicler Eleanor Brilliant identified other contradictions. The so-called private market for UDC bonds in fact depended on government, whether it was stated explicitly or not. Tax-exempt bonds were subsidized by the federal government, and the State of New York made the bonds marketable through offering its protection. She also identified a contradiction within the UDC itself, contending that “it was not possible for the UDC to enjoy the benefits of being both a public and a private authority at the same time.” If it were intended “to do public good, it would have to move in the direction of a recognized public nature,” including “assuming continual public funding … along with accountability of its staff.”110 Even Frank Smeal of Morgan Guaranty Trust Company, spokesperson for the disapproving banking consortium, concurred about this incompatibility when asked if banks should have demonstrated more concern for the UDC’s mission. He declared in no uncertain terms that “social goals are funded one way in this country and economic goals another way.” Smeal further acknowledged that “building where others failed to tread,… we now know requires a much firmer state commitment, which can only be given by the people.”111
Even as recognition of the need for public subsidy for low-income housing grew, the ideal level of government to provide it remained a matter of contention. Brilliant was convinced not only that localities were ill equipped financially but also that “clearly, local level decisions are not necessarily the best since they tend to affirm the status quo at the expense of those outside who want to come in.” As the Nine Towns failure showed, “it was not possible to develop a metropolitan view of urban problems at the local level.”112 Nor, despite Rockefeller’s best efforts to the contrary, had state-level funding of the UDC proved adequate to provide housing at a cost that low- and moderate-income residents could afford. In truth, federal assistance had always been necessary for the UDC to succeed. Subsidies from Washington were crucial to making the math work, which is why more than 90 percent of UDC projects were federally supported until jeopardized by Nixon’s moratorium. In fact, as one analyst put it, the UDC’s creators had made a losing gamble in 1968 when they mistook the setting sun for the dawn.113
In assessing the UDC for the Ford Foundation, Louis Loewenstein aimed for balance. The UDC suffered an unlucky convergence of many unfortunate events, he acknowledged. And it had made some serious misjudgments, such as expanding in a contracting money market and not distinguishing well enough between abstract housing “need” and real “demand,” if that included the ability of low-income tenants to pay. Nonetheless, it could claim significant achievements. It brought an estimated $2.7 billion in federal subsidies in write-downs and payments through Section 236 contracts to New York State, which amounted to well over half the national federal Section 236 awards. It furnished housing for some one hundred thousand people in fifty cities and towns and developed three New Towns. All told, the UDC was responsible for about a quarter of all government-aided housing constructed in New York State from 1969 to 1975, including 40 percent of what was built in upstate New York and New York City’s suburbs and 15 percent of New York City’s units.114 It had created many new jobs—through its own construction projects as well as by building new industrial and commercial facilities in the state.
In the heat of the UDC crisis, a New York Times op-ed headline reminded readers “It Built Where Nobody Else Would” and urged that the question now should not be “‘What is wrong with the U.D.C,’ but rather, ‘if not the U.D.C. what?’”115 In a way, even Logue’s archenemy Ravitch agreed. Ravitch did not so much reject the UDC’s lofty goals as argue that in taking them all on, the agency was trying to accomplish the impossible—subsidized housing, racial integration, great architecture, open space, first-rate education, community involvement—and pay for it by combining inadequate state and private-sector funding with a federal requirement to keep rents affordable. The difference was that Ravitch, a man of business, did not assume that the state or federal governments must step up or that bankers must take more responsibility. Ravitch was a pragmatist who felt that the UDC had no choice but to live within its means, as limited or unfair as they might be, and adjust its ends accordingly. In contrast, Logue—hard-nosed as he often seemed—was actually the idealist, driven by what he felt could and should be.116
Logue’s bold UDC undertaking to revitalize cities in a new way ultimately went bust. But he could take some solace in what he had managed to build and how colleagues in the urban policy and architecture fields would long applaud the UDC’s valiant efforts. Reviewing the UDC debacle in fall 1975 while the Moreland investigation was under way, Architectural Record concluded, “In all events, the Urban Development Corporation set fresh solutions and strategies in motion, establishing a benchmark by which other efforts, across the country, will be measured for a long time.”117 Even the Moreland Commission concluded that the “UDC was led and staffed by creative and highly motivated persons who conceived and built many projects of which the citizens of the State can be proud.”118 And indeed, for decades after 1975, the UDC would remain a touchstone for advocates of building affordable housing and breaking through the suburban zoning barrier, inspiring any number of conferences, exhibitions, and idealistic new efforts to provide all Americans with a decent home.119
The infamous default and subsequent demise of Logue’s UDC, after having been the largest developer of subsidized housing in the country, created shock waves nationwide. Directly affected were the dozens of states that, inspired by the UDC, were funding housing with moral obligation bonds or similar instruments now coming in for closer scrutiny.120 Logue’s projects were eventually finished under Ravitch, who remained the UDC’s chair until 1977. Ironically, given that New York taxpayers’ lack of support for subsidized housing had inspired the creation of the UDC, they ended up footing the bill, as private investors were repaid in full to preserve the state’s credit.121 Logue’s UDC would survive in name only, barred from building any more housing and reconstituted as a more conventional economic development agency for New York State—“a cautiously run real-estate enterprise rather than a daring sprearhead for social betterment,” in the journalist Fried’s brutal assessment—until it even lost the name in 1995 and was relabeled the Empire State Development Corporation.122
Ed Logue had his own rocky recovery from the loss of the UDC. Some critics were quick to blame him, taking a cue from Carey and Ravitch. Others were more appreciative. The analyst Brilliant, for example, concluded that “Logue had made enemies for some of the best of reasons. He wanted to develop New Towns for integrated economic and social goals, and he wanted to build housing in the suburbs and in the most troubled inner-city areas. He developed major minority employment programs; and he had upgraded the architectural style of publicly assisted housing, if not always the livability of individual units.” She acknowledged, “It might be argued that Logue was too ambitious or too tempestuous in his style,” but she insisted that even if Logue “had been the most superlative politician and the most charming of entrepreneurs, it seems doubtful that UDC could have conquered the forces against it.”123 Logue agreed and felt unfairly scapegoated. “I would never want to say that we didn’t make any mistakes,” he freely admitted, “but the blame that I acquired was somewhat disproportionate, I think.”124 The chorus of criticism and the sullying of his reputation were particularly stinging for a public servant who, his staff all agreed, prided himself on being “an ethical guy … and a very careful guy,” in the words of the UDC staff assistant Larry Goldman. He was someone, said his longtime friend Penn Kimball, who deeply valued “his reputation for being on the side of right and justice,… a powerful man of principles.”125
Professionally, Logue tried to keep his hand in the urban field that had been his life’s work, piecing opportunities together with the help of loyal friends and colleagues. At first he set himself up in Rockefeller’s Critical Choices Commission, until he was invited to share offices with his friends Kenneth and Mamie Clark at 60 East 86th Street, where he opened a consulting firm, the Logue Development Company. A typical project enlisted George Raymond and Robert Litke in an assessment for HUD of why some New Towns had failed and what could be done about it.126 Sympathetic and still-admiring associates also offered him part-time teaching opportunities—at Yale and NYU law schools, Princeton’s School of Architecture, and the University of Pennsylvania’s City and Regional Planning Program.127
Personally it was a dark period. The journalist Fried reported that initially “Logue was bitter and depressed at the way he was expelled from the top ranks of his profession.” Once the lion king presiding over “Logue’s Lush Lair” and driven around in a chauffeured car, he was now operating out of a modest ground-floor office in a small building surrounded by mementos of better days—awards, citations, aerial photographs, redevelopment maps, and a 3-D model of Roosevelt Island. From his desk he looked out at the tiny backyards of houses on 85th Street rather than sprawling majestic vistas of New York all the way to the Catskills.128 Drinking that previously had greased the wheels of male sociability and aided unwinding at the end of hard-driving workdays now threatened to become more than that, a fear that his brother Frank had voiced a few years back in an intimate letter. “I don’t know what demon makes you treat yourself so badly,” Frank had written. “I’m sure it’s not negative self-image. You like yourself. You do indeed do important public work and do it surprisingly well. But you won’t do it long at the rate at which you are drinking.”129 Longtime associates like Litke and Stainton who stayed in touch with Logue after the UDC debacle worried that his drinking was worsening.130 With Margaret Logue working at Saint Ann’s School, the Logues moved to Brooklyn Heights, leaving behind their posh East End Avenue address for what Ed described to Ted Liebman as “a smaller, less expensive place,… not as grand as what we had” but, Ed added, “we like it.”131 For the first time in their marriage, Margaret’s job, not Ed’s, dictated where they would live.
Through it all, however, Ed kept in mind the negative example of Fred Rodell, his Yale Law School mentor who had let the university’s retaliation against his unpopular political stances make him, in Logue’s words, “a hater,” someone “who blighted his own life terribly,… inflicting more damage on himself” than anyone had inflicted on him. Reflecting back on those years, Margaret felt confident that despite the injustice Ed felt, he in fact succeeded in not becoming bitter like Rodell.132 Nonetheless, in a revealing interview that Logue gave in October 1976 to Jean Joyce, a former colleague from the Indian embassy days who was documenting the career of their common mentor Chester Bowles, Logue interpreted Bowles’s defeat for the Connecticut Democratic Senate nomination in 1958 in terms that reflected his own fears. “In ’58 he was at the end of the road of personal, political power … I’ve had to go through a lot of this myself, in the last couple of months. This happens, and what does it mean? And even your best friends don’t always tell you … As far as being a major dominant force, with not only a power base but a place in which to use it—that’s when he lost it.”133
What was next for Ed Logue? At the time of his resignation from the UDC, he was still a relatively young man, in his mid-fifties, with twenty years of intense city-building experience under his belt. But if the future was unknown, one thing was certain: if Logue ever got another chance to do significant work in his chosen field of urban redevelopment, it would be under very different conditions, and not only because of the black mark he bore as a result of the UDC’s downfall. Clearly, the end had come to the era of large-scale government programs of which Logue had been a master. While it lasted, the UDC—although far from perfect—had given Logue rare opportunities to experiment with making subsidized housing more plentiful, affordable, and livable; better designed and technologically advanced; further integrated by race, income, age, and physical disability; and built by a more racially integrated workforce. If Logue were to continue to grapple with the still-pressing problems of urban America, particularly the dire need for decent housing, he would have to find some other way.