• Angotti, T. (2008) “The Real Estate Capital of the World” from New York for Sale: Community Planning Confronts Global Real Estate, p. 37-79.

Our last reading/discussion was about the burning of the Bronx, which was part of a larger wave of abandonment of low-income neighborhoods of color in NYC during the years following the Civil Rights Movement and surrounding the 1975 fiscal crisis.  Since that time things have clearly changed.  The same neighborhoods that were burned and abandoned in the 1970s are now being targeted for reinvestment, and the communities who have held their ground all these years are being threatened by displacement.  In the chapter we read for today, Tom Angotti explains the nature of these changes through a brief history of urban planning in the context of NYC Real Estate development.  In short, he explains why the real estate industry is so powerful in NYC and how the “growth machine” works.  Overall, the outlook is pretty grim, as many of you noted in your reading responses.  The real estate industry, as a central aspect of our urban and global economy, is characterized by greed (Mohamed), deception (Minhal), institutional racism (Fanny, Brianna, Sam, Erica), and the exploitation of labor (Wilian), for the primary benefit of the wealthy (Edwin) and at the expense of everyone else, not to mention democracy.  Several of you drew connections between this reading and your group projects.  Patrick’s response is particularly illuminating:

Reading this article, I noticed many parallels between the real estate industry and the BQX, the proposed streetcar that is to connect Brooklyn and Queens. First off is the idea that real estate can bring money into neighborhoods. Developers felt that the building of large retail and grocery chains in poorer neighborhoods would provide the residents of said neighborhoods with jobs. These jobs, though, were often low paying and had high turnover rates. One of the advertised benefits of the BQX is that it provides a means for people in underserved neighborhoods to reach jobs that they wouldn’t be able to reach easily otherwise. What is not brought up, though, is that many of the available jobs in these neighborhoods around the proposed BQX route are specialized jobs, mostly in the tech industry. In both cases, money isn’t really being brought in; rather, opportunities are being opened for a select few….Another large parallel is seen when looking at what the Real Estate Board of New York and the BQX hope to bring to the Brooklyn Waterfront. REBNY hopes to rezone industrial sites for manufacturing from the waterfront so that residential and commercial buildings can be developed. The BQX is supposed to provide transportation for many of the residents living in the public housing units along the waterfront while also raising property values along its route. Both can be seen as the beginnings of gentrification along the waterfront, which may only serve to benefit wealthy residents or investors in the area…The final, and what I believe to be the most important parallel, is private funding and intervention in projects that are supposed to benefit the public…To compare this to the BQX, one only has to look at who is currently going to front much of the streetcar’s bill. Private investors who are the driving force behind the organizing and financing of the BQX have other business ventures in neighborhoods along the BQX route that can greatly benefit from a reliable transportation source. To me, this seems like a huge conflict of interest.  

Importantly, Angotti also illustrates how the power and CONTRADICTIONS of the city’s Real Estate market have (paradoxically) created cause and opportunities for community-driven change, as seen in the work of South Bronx Unite, Transportation Alternatives, Minkwon, and ACT UP.  They are organizing and mobilizing around these issues and often develop their strategies by doing historical and situational analyses similar to what Angotti proposes.  Along these lines, Angotti suggests exploring the following questions, which you should keep in mind as you continue planning your projects: 

1. When/how should community organizers and planners oppose vs. ally with FIRE (finance, insurance, real estate) sector?
2. How can contradictions within FIRE become strategic assets?
3. How can we understand the current terrain of struggle as both local (concrete, particular, etc.) and global (abstract, general, huge!)?

Key Terms and Main Ideas from this chapter:

1. (NYC’s) Growth Machine: a block of economic and institutional interests that favor new construction and public works, led by the Real Estate Board of New York (REBNY) and the NYC Partnership, a group of corporate executives mostly from the financial sector founded by David Rockefeller.  According to Angotti it works like this:“Real Estate drives the growth machine [with the Real Estate Board of New York (REBNY) at the wheel], government oils and repairs it, the building trades make the parts, and global and local capital deliver the fuel. The machine works to create growth and sustain growth (i.e. through rising property values and keeping taxes low)…Growth is always presumed to be good, even in a Manhattan that is already densely packed with buildings and has little breathing room” (p. 39).  The whole thing depends on rising property values and the myth that growth is always good because it brings money to neighborhoods and always possible.  When in fact, it often extracts more than it invests (i.e. low paying/short-term jobs, lost jobs, gentrification, etc.) and space is quite limited.  This gives rise to.. Contradiction #1: Constant growth undermines quality of life which then suppresses growth.
2. The 3 Rules of Real Estate: Dislocation, Dislocation, Dislocation: Location is important for land values but also implies dislocation of those who can’t afford the rising costs, aka gentrification: a product of the normal operation of the real estate market as it pushes out poor people and people of color and brings in people who can pay higher rents.  According to Angotti, “The more New York’s economy follows the dictates of real estate, the more it experiences the agonies of dislocation.  With the landing of the first Europeans in America, a perpetual cycle of displacement, settlement, and displacement began. This is a country of chronically displaced people- indigenous Indians, English pilgrims, African slaves, European immigrants, and now immigrants from every country in the world” (p. 43).
3. Flexible Accumulation: nimble, adaptive, expansive process of capital accumulation that overcomes local constraints and regulations by taking advantage of mobile capital and labor (i.e. African slaves, northern investments in the south, etc.)  As such, another paradox emerged in re. to de-industrialization, globalization, etc.: NYC became “more like tornado than a mushroom, a whirlwind of explosive activity” (p. 41).  Yet at the same time, this chaos relies on central, concrete places, which reinforces the importance of cities like NYC (Contradiction #2), which suggest the 3 rules of Real Estate (see above) are likely to stay in effect. 
4. Chasing Disasters (as a strategy for capital accumulation)- namely, the Great Depression, Post WWII federal urban renewal program, and vast neighborhood abandonment of the 60s and 70s (also post 9/11 redevelopment and securitization)
5. Landscape of Inequality- NYC is one of the most segregated and unequal places in the world, thanks to Real Estate which divides the city in many ways: by concentrating wealth in elite enclaves (i.e Upper East Side); by perpetuating the myths that high end development will trickle down and create homes for lower income people, that the market’s invisible hand (supply and demand) will sort it out, and that rent regulations zoning restrictions etc. restrict the development of much needed housing; and through Institutional Racism in the form of:
   • Racial Steering: when real estate agents “turn people of color away from white neighborhoods, and white home seekers steer themselves away from historically integrated and black neighborhoods.”
   • Blockbusting: when “Realtors exploit racial stereotypes and spread the word that people of color are moving in, which will lead property values to go down. White homeowners sell at below-market rates and realtors turn around and sell to people of color at above-market rates.”
   • And as Jose pointed out: “Segregation and discrimination in housing are also consequences that have taken a strong foothold.”
6. The Post-Industrial City: global trends of de-industrialization and flexible production accelerated during the decades post WWII and local real estate helped move manufacturing out (p. 50)- i.e. by pushing for the rezoning of industrial areas to residential/commercial, which would be more profitable to the real estate industry
7. Globalizing Cultures and the Branding of New York:  “As capital’s system of industrial production becomes increasingly globalized, NYC, always a major center of culture and consumption, is now producing culture for export.  All services, art, music, culture, and ideas-indeed, everything both tangible and ethereal- are commodified and transformed into investment capital that can be traded in financial markets” (p. 51)
8. REITS: Global Finance Unites with Local Real Estate: “REITs represent the global takeover of local real estate by publicly traded investment firms- a globally oriented finance capital” (p. 52).
9. Low-Income Housing for Profit: “One of the more perverse contradictions in today’s real estate market is the use of public subsidies for low-income housing to back real estate speculation” (p. 53).  In short, profits from low-income housing provide a steady stream of cash for mega developers like Related (p. 54).
10. The Diverse Ways of Globalized Real Estate: Companies like Related have figured out how to navigate NYC’s global/local dynamics better than Wal-Mart- the result is more or less the same (displacement).
11. NY Real Estate’s Global Roots: i.e. Peter Stuyvesant, first political leader of the city, was director of the Dutch West India Co.
12. The Global/New York Empire: “publicly financed fixed infrastructure helped to mobilize capital and in the long run was a boon to the most mobile of capital” (p. 61).
13. Land Use Planning and Zoning for Real Estate Development: It started early!  With the 1811 Grid and 1916 Zoning Resolution. Later came the 1961 Zoning Resolution and the 1969 Master Plan, and led to Zoning Instead of Planning, what the “neoliberal” city does today.
14. Urban Reforms Against the Working Class (and people of color) in “Central Cities”: Early 20th century- Post WWII, Robert Moses, “urban renewal,” etc. vs. the mass investment in suburban sprawl for (white) middle and upper classes.
15. Corporate Vision of the Region: The Regional Plan Association: founded in 1920 and produced 3 plans for the metro region: 1929, 1968, 1996, which for the most part supported the status quo.
16. The Permanent Fiscal Crisis and Deregulation: mass disinvestment/national conservative shift, “planned shrinkage” that started in 1975 and led to Capital and Communities on the Move/the Abandonment of Neighborhoods (in the 1970s), but has never really stopped.

As it happens, many of these themes appeared in a NY Times article the same day as our discussion: De Blasio’s New York Feels Effects of Recovery to Relief of Business Leaders (March 7, 2016).