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Urban Renewal, Redlining, and Race

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Urban Renewal, Redlining, and Race

As Baltimore’s experience suggests, taking the eminent-domain bulldozer away from local governments will encourage better development. Spring 2022
Economy, finance, and budgets
Politics and law
The Social Order

Susette Kelo and Sonia Eaddy have much in common. Kelo became famous for fighting in the late 1990s to save her home from the urban-renewal bulldozer. After she renovated a century-old cottage in New London, Connecticut, the city announced that it would use its power of eminent domain to take Kelo’s little pink house and about 90 neighboring properties to make room for a Pfizer research facility and related amenities. Kelo battled all the way to the Supreme Court but lost, the Court ruling that local governments could take private property not only for a public use (such as a highway) but for a public purpose (such as a tax-revenue-enhancing private office park). Adding insult to injury, the city’s grandiose plan was never realized.

Now Eaddy, along with hundreds of other residents of a West Baltimore neighborhood called Poppleton, finds herself in a similar fight. Members of Eaddy’s family have called the area home for three generations; in 1992, she and her husband, Curtis, bought a row home there that dates to 1900. Crime-ridden Baltimore has suffered white and black flight for decades, and the city is using eminent domain to advance 15-year-old redevelopment plans in Poppleton, which is 88 percent black. But the Eaddys are stayers, even rebuilding after a devastating fire in 2012, and Eaddy has become a leader of efforts to preserve the historic community.

Media coverage of the saga has invoked familiar narratives about Baltimore’s history of segregation and redlining, recalling James Baldwin’s long-ago charge that urban renewal translates roughly as Negro removal. “You’re not doing that in Federal Hill,” a mostly white neighborhood, Eaddy pointed out at a summer rally against the program, according to a Baltimore Sun report. But city leaders’ treatment of Eaddy and her neighbors does not suggest intentional racial bias. Predominantly black Baltimore’s political leadership has been staunchly Democratic and determinedly progressive for decades; the city’s last five mayors have been black, as is the CEO of the development firm implementing the Poppleton plan, which itself is heavy on buzzwords and stipulations about equity, inclusion, and affordability. As for Kelo, her unhappy experience began when a Republican governor targeted a largely white neighborhood.

These episodes are more complex—and instructive—than common narratives about race and privilege might suggest. What’s going on in Baltimore is indeed an injustice, but the misguided policies that brought it about cut across racial and ideological lines.

Sixty years ago, when Jane Jacobs published The Death and Life of Great American Cities, she told a story about the overcrowded, seemingly chaotic, and largely poor North End of Boston. After enjoying a walk there, marked by “buoyancy, friendliness and good health,” she called a local planner she knew. “Why in the world are you down in the North End?” he asked. “That’s a slum . . . the worst in the city. It has two hundred and seventy-five dwelling units to the net acre! I hate to admit we have anything like that in Boston, but it’s a fact.” Jacobs nudged him to find more data—all of which, to his surprise, were favorable: low delinquency, affordable rents, positive indicators of public health. The planner even admitted that he’d found it “fun” when he’d actually visited the neighborhood—though he still concluded that “we have to rebuild it eventually.” Jacobs responded, “You should have more slums like this. Don’t tell me there are plans to wipe this out. You ought to be down here learning as much as you can from it.” But, she observed, everything her planner friend had learned “about what is good for people and good for city neighborhoods, everything that made him an expert, told him the North End had to be a bad place.”

Thanks to Jacobs’s devastating critiques, many wrongheaded presumptions about the ills of density and mixed-use buildings have been cast aside. But today’s rebuilding efforts often disappoint (see “They’re Taking Away Your Property for What?,” Autumn 2005) as contemporary planners continue to misdiagnose the areas that require their attention and the remedies they need. Perhaps it’s because those carrying them out rarely ask why a neighborhood is suffering in the first place.

The answer to that question isn’t always race. Both Boston’s North End and Baltimore’s Poppleton were redlined—that is, rated as “hazardous” neighborhoods for investment and colored red on the original maps produced by the federal Home Owners’ Loan Corporation (HOLC) from 1938 to 1940. Today’s commentators often assume that these maps were motivated by, or at least reflected, racial animus; a Brookings Institution report defined redlining as “the practice of outlining areas with sizable Black populations in red ink on maps as a warning to mortgage lenders, effectively isolating Black people in areas that would suffer lower levels of investment than their white counterparts.”

This misreads the history. While the notes attending Poppleton’s rating did mention an “infiltration of Negroes,” the North End was entirely white. Indeed, only 3 percent of Boston’s population at the time was black, but 25 percent of the city was redlined and another 64 percent was rated “also declining” (and colored yellow on the HOLC maps). By contrast, Baltimore’s proportion of black residents, at 19 percent, was six times that of Boston’s—yet its proportions of red (15 percent) and yellow (31 percent) were not nearly as great. Many cities with negligible black populations were heavily redlined. San Francisco, for example, was less than 1 percent black in 1940, but its map was 31 percent red and 32 percent yellow—including Haight-Ashbury, where rents would keep falling until, a generation later, they became affordable to the vanguard of America’s counterculture.

Discrimination in mortgage lending has certainly been a problem, but the contemporary narrative about those famous HOLC maps is distorted. It would be unnecessary for a biased lender to check an address on a map while in the presence of a loan applicant whose class, race, ethnicity, or gender is easily determinable. Doing so would be an imprecise tool of discrimination, anyway, as the redlining maps showed that geographic boundaries could be a poor proxy for membership in a “disfavored” group. A paper in the Journal of Urban History points out that the maps were devised after the agency had expended its resources to stabilize Depression-era mortgage markets, and finds that black borrowers received HOLC assistance roughly in proportion to their ownership rates in most locales. Evidence suggests that racial bias played only a minor role in the construction of the HOLC maps: observed concentration of black, poor white, or immigrant households in redlined zones, notes a National Bureau of Economic Research study, reflected their modest means and thus their tendency to locate in areas that the New Deal technocrats would identify as declining. A paper by University of Pennsylvania urban studies professor Amy E. Hillier offers no evidence that the grades on HOLC’s maps explain differences in lending volumes (though interest rates tended to be higher in areas colored red). The maps told a story, but race was not its antagonist.

“Thanks to Jacobs, many wrongheaded ideas about density and mixed-use buildings have been cast aside.”

If race did not cause much of 1940s-era Boston to be deemed hazardous for investment, what did? What was the real root cause of the North End’s redlining and its status two decades later—at least, in the view of Jacobs’s planner friend—as Boston’s worst slum? Why would New London’s leaders view Kelo’s neighborhood as a candidate for rebuilding in the late 1990s? And why, more recently, has Poppleton become a target?

The cases have differences, but they share a long-term pattern: disinvestment driven by an unfriendly tax environment. In a vacuum, houses depreciate as they age and require regular investment to maintain their value. High property taxes act to depress property values, diminish wealth, and inhibit investment. And the consequences of such disinvestment—physical decay, lower rents, and population shifts as neighborhood amenities decline—first become obvious in older neighborhoods or those that had lower-quality stock to begin with.

As it happened, Boston was a hostile investment environment for much of the twentieth century. James Michael Curley, “the mayor of the poor” for four staggered terms through 1950, was a malign force—pursuing a winning political strategy by taxing the property of his city’s “haves” (well-to-do WASPs) to provide benefits to his political base (Irish immigrants). He quintupled Boston’s property-tax rate, making it the highest of any major city in the United States. As a result, Boston suffered population and capital flight even as other northern cities grew rapidly; its many redlined areas bore the most obvious signs of decline—including the historic North End, with its older stock of physical capital.

Still, physical decay and resulting lower rents will be attractive to some. That’s why the HOLC maps often noted “infiltration” by blacks or immigrants. Redlined neighborhoods drew these populations because they were depreciating physically and, therefore, cheap. But as Jacobs understood from her study of the North End and many other neighborhoods, as Kelo knew as she fought to defend Fort Trumbull, and as Eaddy and her neighbors have long understood about Poppleton, a neighborhood can look as though it needs rebuilding while nonetheless serving its residents reasonably well.

Unfortunately, when government officials, city planners, connected developers, and the construction industry see an area suffering from disinvestment, they often respond by embracing projects that recall the days of urban renewal. They designate the area as a redevelopment zone and request proposals; the wheels of the bureaucratic process begin to turn. Accordingly, investment falls further: few property owners put money into a home or business likely to be in the bulldozers’ path. As decay accelerates and some residents give up, the area becomes, in the words of Baltimore officials discussing Poppleton, “largely vacant and desolate.”

Parcha McFadden, one of Eaddy’s neighbors and allies, remembers that “Poppleton used to be a nice neighborhood” before the plan to renew it began in 2005. This was so, despite an earlier planning catastrophe that wiped out several West Baltimore neighborhoods, including those on Poppleton’s northern border, in order to make way for an interstate—which, like Fort Trumbull, was never completed and thus became infamous as Baltimore’s “highway to nowhere.” Those neighborhoods were once home to thousands of people who had spent years creating congregations, clubs, and associations embodying tremendous accumulated social capital. Much of that has been destroyed, along with those residents’ depreciating and cheap homes.

Eaddy walks past the Sarah Ann Street alley homes in Poppleton. (Kenneth K. Lam/The Baltimore Sun)

What would better treat a disinvestment crisis? The key first step is the creation of a favorable overall investment climate via competitive tax rates and secure property rights. That’s what Boston learned when Massachusetts voters passed Proposition 2½ in 1980, ending decades of damaging tax policy and reversing its long-running flight of capital and population. Baltimore’s ongoing disinvestment crisis is largely due to its leaders’ refusal to pursue tax competitiveness: its property-tax rate is more than twice that available in the surrounding county, and its services are far inferior. Of course, voters might solve this problem themselves, and some political and faith leaders are now encouraging Baltimoreans to do so.

But the problem also flows from the Supreme Court’s Kelo decision. Justice John Paul Stevens called the case “the most unpopular opinion I ever wrote, no doubt about it.” Legal scholar Ilya Somin, among others, has argued that it’s also poorly reasoned. And despite some states’ attempts to limit the “public purposes” for which private property may be taken, Somin concludes that eminent-domain abuse won’t stop entirely until the Court reconsiders and reverses its narrow (5–4) decision in Kelo.

Sonia Eaddy’s case provides an excellent opportunity for that to happen. The starting point for all “rebuilding” plans is always identification of areas suffering from disinvestment. As the originators of the original HOLC maps documented, these areas were usually “depreciating and cheap” and therefore chiefly attractive to lower-income groups—often immigrants and blacks, though certainly not always, as we have seen. These residents’ property rights (and corresponding social capital) would seem worthy of constitutional protection from abuse by powerful officials and developers. The question now is whether taking the eminent-domain bulldozer away from local government might not only keep Sonia Eaddy and many of her neighbors in their homes but also encourage public officials to pursue more benign and effective tools of urban renewal in the future.

Top Photo: Homeowner Sonia Eaddy, who, with her husband, is challenging the condemnation of her home by Baltimore housing officials—and leading an effort to preserve the city’s historic Poppleton neighborhood (Kenneth K. Lam/The Baltimore Sun)

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