Engineering the City for the Elite
There’s never been a clearer sign that 21st-century New York is nothing but an amusement park for the world’s wealthy and their children. It has ceased to be a real place for the rest of us.1
Zuccotti Park, Financial District, December 6, 2011. On the heels of an unprecedented wave of bank foreclosures that has devastated the nation, Occupy Wall Street (OWS) activists and housing rights advocates across the country launch an International Day of Action. By joining forces with the hundreds of community-based organizations that have burgeoned after the bursting of the subprime mortgage crisis, the Occupy Our Homes chapters of OWS move to direct action by reclaiming vacant foreclosed homes for homeless families, disrupting auctions of bank-owned houses, and blocking eviction procedures from New York City to Minneapolis, from Portland to San Francisco.2 In Harlem, the Occupy Harlem movement stages a rally at 125th Street, condemning the privatization of Harlem’s public housing and the eviction of low-income tenants, and advocating the boycott of predatory lending banks and financial corporations.
Fast forward to 2012, in Chelsea. Light poles near the Highline are patched with flyers saying: “Attention High Line tourists. West Chelsea is not Times Square…. Please consider how you would feel if 3 million people a year from around the world trampled your street, your neighborhood, and your local park.” This innocent flyer sparks a storm of media controversy, with some claiming it is more than the bitter rant of some elitist snob: it expresses perfectly the frustration of New Yorkers with the transformation of their city into a massive tourist trap.3 American art critic Jerry Saltz jumps into the controversy, claiming: “For me, the High Line is the harbinger of a bad pathogen now transforming public space into fussy, extra-busy, over-designed, high-maintenance mannered playgrounds, curated experiences, and crowd-pleasing spectacles.”4
Full speed ahead to 2016, at 335 East 27th Street. New York City’s long-awaited first micro-apartment units are unveiled with great fanfare. More than 60,000 people have applied to live in 14 super-small affordable dwellings with retractable beds that pull down from the wall, which the city presented as a “new model for development of affordable housing.”5 Only 14 of the 55 tiny units in the building, whose sizes range from 265 to 360 square feet, have “affordable” rents ranging from $914 to $1,873 a month, while the market-rate units range between $2,670 and $3,220.6 Since the average price per square foot in the building, called Carmel Place, is over $100 against an average $55 in the rest of the neighborhood, one has to question whether this new breed of luxury micro-units represents a sensible solution to New York City’s affordable housing dilemma.7
Now let me tell you another tale of two New Yorks, circa 2017. There’s a gilded-age city of gleaming glass towers where Wall Street managers, Hollywood celebrities, exiled Russian oligarchs, and Middle East billionaires live their glamorous lives or stash their offshore cash. And then there’s a city where even the professional middle class is one rent hike away from eviction. It’s a city of creatives, freelancers, students, artists, teachers, nurses, clerks and firefighters struggling with exorbitant rents; of storeowners living under the constant threat that their businesses will shut down; and of thousands of families coming in and out of the shelter system.
And these two New Yorks, where the rich devour more and more of the urban space, while ordinary citizens are stuck, are growing further apart.
A brand-new global class of city consumers has been born, and they’re ousting the rest of us—the working classes, the middle classes, and even the upper middle classes—from the city we love. The sheer scale of their consuming power is entirely changing the rules of the urban development game, which today seems focused exclusively on producing a city that is more custom-tailored to their ostentatious consumption demands. In the process, ordinary New Yorkers are pushed further out of this gilded city of unaffordable rents, or left to observe their neighborhoods while they gradually morph into exclusive enclaves for the super-wealthy.
Meanwhile, the power of city producers has never been greater. Those who count in real estate, banking, and finance have managed to ensure that their interests are safeguarded at city hall, in Albany, and in Washington. They have ensured that, regardless of who sits at different levels of government, the fundamental rules of the game (opening up more avenues for profit and being subsidized in the process) will remain untouched. Their ambitious agenda, based on a relentless use of rezoning and branding, is driving an era of unprecedented urban transformations and prompting the physical, social, and symbolic re-engineering of districts and communities across the board, from Flushing to East Brooklyn, from Staten Island to the South Bronx. No corner is off-limits to capital: the whole of the city is up for grabs, and new spectacular tides of creative destruction are on the horizon.
City producers and city consumers are transforming the city into a repackaged wonderland of lavish real estate, dotted by pockets of poverty where a new urban underclass lives its daily struggles. New York, like no other city, encapsulates the contradictions and inequalities that surround the process of neoliberal urbanization: it only takes a subway ride from Billionaire’s Row to Spanish Harlem to get a visual reminder of the way the rich and poor live in the city. Even though a trend toward a concentration of wealth among the city’s top earners goes back at least four decades, it has widened precipitously over the last 15 years. By the end of Bloomberg’s tenure, the top 1% of earners in New York City brought in 40% of the city’s total income.8 And things have only worsened under de Blasio’s watch.9 Today, New York has among the highest levels of income inequality in the United States, concurring globally with the likes of Rio de Janeiro and Sao Paulo. And the most unequal of all US counties is unsurprisingly Manhattan.10 Here, the average apartment in 2015 was priced at a whopping $1.95 million.11 In this island of wealth and inequality, median rentals have increased consecutively for years, and today, at above $4,000 a month, they are among the highest on the globe. And things aren’t much better in Brooklyn and Queens, where rents are at around $3,000 a month.12 Prepare to see more of the same happening soon in the South Bronx, where residents in Mott Haven have recently learned that their neighborhood is currently being marketed as “the Piano District” to hip newcomers, courtesy of developers Somerset Partners and Chetrit Group.13
Developers can relax—Mayor Bill de Blasio won’t turn New York City into a communistic realm where no one can build a candy store without including “affordable” apartments…. There are enough fully entitled, publicly approved mega-projects underway to keep the tower cranes busy for four more years—no matter what policies City Hall adopts—and to advance the Bloomberg-era vision far into the future.14
New York’s harsh social inequalities have come a long way, and de Blasio won’t be able to change the rules of a game that was established way before he moved his first steps into the world of politics. They are the result of a political turn that, grown out of the “neoliberal euphoria”15 of the laissez-faire economics of the early 1970s, has morphed into a system of crony capitalism, where an ever larger government is there to give blessings to well-connected special interest groups. It is a system that through corporate welfare, financial deregulation, and the public financing of private losses, has made sure that inequality was built into it, at the federal as much as at the local level.
This system, which certainly hasn’t changed after the 2007/2008 financial crisis (and the ensuing government-sponsored trillion-dollar bank bailout), has traditionally translated into a chronic shrinking of federal spending on housing, services, and infrastructures, at the same time when government was handing out special tax privileges and public funding to big private ventures. In cities, it is a system in which the enormous sway of city producers (the local elite) and city consumers has changed the rules of the game entirely. Those cities that won at the game, like New York or San Francisco, keep attracting top industries and global consumers, and have gradually morphed into citadels where the most outrageous wealth at the top clashes with unimaginable poverty at the bottom. Those that didn’t make it are sinking in a downward spiral of poverty, disinvestment, and population loss: these are cities like Youngstown, Ohio, where almost 40% of residents live below the poverty line, or Flint, Michigan, where even tap water can kill you.
Mayors these days are often celebrated on the global stage as innovative game-changers, and there’s been a growing media emphasis on how they can inspire change and policy shifts to higher levels of government. But a mayor can only do so much to address the demons of poverty and inequality.
De Blasio campaigned on the promise of undoing the Bloomberg legacy. Once in office, his promises of a clean break with past policies were thwarted by the interests of developers and big business, the power of higher levels of government (the governor and the state senate), the total withdrawal of funding for housing by the federal government, and an implicit acceptance of the golden rules of the urban development game. A game that is based on the physical, social, and symbolic re-engineering of low-income communities across the board, to encourage high-end residential and commercial investment and the influx of new, more affluent city consumers.
Despite the enormous hope surrounding the new mayor’s policy platform, he has continued an approach to housing development that was used to devastating effect under Bloomberg, with just some trimming around the edges. As a result, in the first four years of his tenure we have seen more of the same: more rezonings serving as a bridgehead for upscale development in working-class neighborhoods, more ultra-luxury glass towers piercing the city skyline, more record sales of multimillion pied-à-terre to foreign investors, and more small businesses, many of them long-lived cultural touchstones, wiped out by massive rent hikes and skyrocketing property values. What de Blasio has strived to do to a larger extent compared to Bloomberg is to harness the forces of the market to extract more benefits for the larger community, such as a slightly increased quota of “affordable” housing units in new developments, although, as we have seen, very few of them will be in the reach of those who need them the most. And de Blasio, who has spent a lot of time raising his national profile as champion of progressive economic policies across the United States, recently had to admit that he expects no interest from higher levels of government in helping cities cope with issues of inequality:16 unsurprisingly, throughout the 2016 presidential race, the issue of housing as a fundamental key to address urban poverty was nowhere to be heard in the talks of political candidates from both sides of the political spectrum.
It must be hard for an administration that vowed to address economic injustice to live up to such big expectations in the world’s capital of inequality, or to invoke preservation in the world’s capital of creative destruction, a city where thousands of buildings are demolished each year, and over 56,000 new building permits were issued in 2015 alone, the highest recorded figure since the 1960s.17
When it comes to urban development and housing, very few New Yorkers have seen much of a radical change since the new mayor was elected into office. What housing activists and local residents have witnessed, instead, was an about-face on many stances that were of the utmost importance to them.
The truth is, the mayor of New York is only the chief executive officer of an urban regime that was in place long before his administration, and that will continue to reign over the city beyond his tenure. CEO-mayors may come and go, but the regime is here to stay. And city producers will do all they can to keep the city building machine alive, regardless of who sits in office.
What we are witnessing, in New York City and other levels of government elsewhere around the world, is an always deeper chasm separating the control rooms of decision making and the people affected by them. And there’s a growing mistrust against the inner workings and the very meaning of representative democracy, in a world where figurehead leaders are elected on a program, only to flip-flop on their electoral promises once in office and once acquainted with the corridors of power. And nothing better explains the deep disconnect between the established norms of representative democracy and the voting public than two major events that shook the world in 2016: the unanticipated UK vote for Brexit and the results of the 2016 US presidential election.
Out of the blue, against all odds, the people have shouted their discontent and their mistrust for the promises and rhetoric of established leaders. In the case of the election of Donald J. Trump, in a paradoxical turn of events, the most well known of city producers in his home city of New York, yet an outcast in Washington, has been chosen by the working classes in the Rust Belt and across rural America as the vanguard against the undue power of elite wealthy cities over the rest of the country, and as an antidote to an establishment that was promising to uphold the trajectory that brought them to their dire straits. Like them or not, these phenomena articulate a clear and sudden rise in popular dissent against elite rule, and they may teach policymakers a crucial lesson: working and middle-class citizens have had enough of established practices of power that have proven time and again their utter distance from the people’s daily needs and desires.
It is said that Einstein defined madness as doing the same thing over and over again and expecting different results. Many are feeling that they have been engaging in this demonstration of madness long enough. The elite city is a policy choice, not some inevitable God-given mandate.18 And even at the local level, there are things that can be done to arrest this mess. When did people tell their government bureaucracies to drain city budgets to subsidize big corporations and banking giants? Or to give out massive tax breaks to developers and buyers of luxury units, when affordable housing is shrinking at a record pace? Since when has producing offshore deposit boxes in the sky for the 1%, while being publicly subsidized for doing so,19 become the new normal? There must be something better than this. As people wake up and challenge the established consensus around city building, there will be a chance for us to see another kind of creative destruction. And hopefully, it will be the creative destruction of established norms, slogans, and political practices that have made this system so disconnected from the needs of the citizens of New York, as well as the citizens of the world.