FacebookTwitterGoogle+RedditEmail

Krugman is Wrong on Gentrification

I usually agree with NY Times columnist Paul Krugman, but he is surprisingly misinformed on the causes and solutions to urban gentrification. A case in point is his November 30 column (“Inequality and the City”) blaming “land use restrictions” for promoting gentrification and identifying the solution as “increasing the housing supply.”

Krugman surely knows that “the 90%” he wants to keep in New York City do not benefit from new housing they cannot afford. These households need below-market housing that is subsidized by government and/or private developers, a solution barely referenced in his column.

Many dispute whether increasing market rate housing ultimately reduces rents for the non-wealthy by increasing supply. But there is a near consensus that new construction must be coupled with stringent tenant protections and more subsidized housing to forestall gentrification.

Land Use Restrictions

Krugman’s blaming of land use restrictions for rising housing costs in urban America is also misplaced.  Restrictions that limit rental housing and keep tenants out of neighborhoods and entire cities are clearly a cause of the nation’s housing crisis, but such policies are not what ails New York City or other major urban areas.

To the contrary, New York City is a case study for how loosening land use restrictions promotes gentrification. That’s because allowing thirty-story condo towers in formerly low-rise neighborhoods like Williamsburg rapidly expedited the gentrification process. This new housing, like most of that built after the Bloomberg Administration’s massive upzoning of as much as 35% of the city, did not serve “the 90%” and instead contributed to the city’s most recent displacement wave.

Land use restrictions are actually among the most critical tools for those seeking to slow or stop gentrification.

In my new book, The Tenderloin: Sex, Crime and Resistance in the Heart of San Francisco, I show how San Francisco’s still primarily low-income Tenderloin neighborhood avoided gentrification despite being surrounded by neighborhoods and a city of dramatically increased wealth. A key factor in this outcome was the enactment of tough land use restrictions that deterred upscale uses.

These restrictions included a 1985 rezoning that brought height limits down from over 40 stories to eight in much of the Tenderloin and thirteen on the borders. The rezoning also banned non-residential uses above the second floor, and barred new tourist hotels.

Since a major component of the Tenderloin’s housing stock is SRO hotels, the Tenderloin also was part of an effort to pass citywide restrictions on their conversion or demolition. These tough land use restrictions imposed on the SRO industry helped stop, rather than facilitate, the neighborhood’s gentrification.

Similarly, San Francisco’s rent control and just cause eviction laws are a leading bulwark against gentrification both in the Tenderloin and in other San Francisco neighborhoods. While state law preempts the city’s ability to restrict rents on vacant apartments, local controls are extremely effective at keeping tenants in large buildings in place.

Krugman famously opposes rent control laws, calling San Francisco’s then much weaker law in 2000 “draconian.” Having long failed to recognize that rent control is essential to stop tenant displacement in potentially gentrifying neighborhoods, Krugman still believes that the housing crisis is caused by land use regulations suppressing supply rather than an unrestricted market leaving housing that “the 90%” cannot afford.

Ignoring State and Federal Funding

Gentrification is most effectively resisted when nonprofit organizations provide housing that is off the speculative i.e. unrestricted market. This is one of the factors that distinguished San Francisco’s Tenderloin, which has roughly a third of its units off the speculative market, from the nearby Mission District, which failed to match the Tenderloin’s aggressive acquisition of nonprofit housing sites.

Creating this nonprofit bulwark against an overheated housing marketplace costs money. Yet Krugman’s analysis of the urban housing crisis ignores that maintaining economic diversity requires significantly more state and federal housing funds.

This omission is even more unfortunate than Krugman’s erroneously blaming land use restrictions for growing urban inequality. Because if there is one feature lacking in today’s seemingly saturated media landscape, it’s a national columnist or reporter promoting affordable housing.

Housing is as far off the national stage as ever before. It’s been ignored in both parties’ presidential debates and even Democratic Governor Jerry Brown in the bluest of states vetoes a major housing funding bill. To have someone with Paul Krugman’s national stature be a voice for increased state and federal housing funding could make a huge difference in returning the housing crisis to the nation’s agenda.

Krugman ended his November 30 column by saying he would revisit the issue. Let’s hope he does soon, and next time gets the ingredients necessary to keep longterm urban residents in their neighborhoods right.

More articles by:

Randy Shaw is Editor of Beyond Chron and Director of San Francisco’s Tenderloin Housing Clinic.

February 19, 2019
Richard Falk – Daniel Falcone
Troublesome Possibilities: The Left and Tulsi Gabbard
Patrick Cockburn
She Didn’t Start the Fire: Why Attack the ISIS Bride?
Evaggelos Vallianatos
Literature and Theater During War: Why Euripides Still Matters
Maximilian Werner
The Night of Terror: Wyoming Game and Fish’s Latest Attempt to Close the Book on the Mark Uptain Tragedy
Conn Hallinan
Erdogan is Destined for Another Rebuke in Turkey
Nyla Ali Khan
Politics of Jammu and Kashmir: The Only Viable Way is Forward
Mark Ashwill
On the Outside Looking In: an American in Vietnam
Joyce Nelson
Sir Richard Branson’s Venezuelan-Border PR Stunt
Ron Jacobs
Day of Remembrance and the Music of Anthony Brown        
Cesar Chelala
Women’s Critical Role in Saving the Environment
February 18, 2019
Paul Street
31 Actual National Emergencies
Robert Fisk
What Happened to the Remains of Khashoggi’s Predecessor?
David Mattson
When Grizzly Bears Go Bad: Constructions of Victimhood and Blame
Julian Vigo
USMCA’s Outsourcing of Free Speech to Big Tech
George Wuerthner
How the BLM Serves the West’s Welfare Ranchers
Christopher Fons
The Crimes of Elliot Abrams
Thomas Knapp
The First Rule of AIPAC Is: You Do Not Talk about AIPAC
Mitchel Cohen
A Tale of Two Citations: Rachel Carson’s “Silent Spring” and Michael Harrington’s “The Other America”
Jake Johnston
Haiti and the Collapse of a Political and Economic System
Dave Lindorff
It’s Not Just Trump and the Republicans
Laura Flanders
An End to Amazon’s Two-Bit Romance. No Low-Rent Rendezvous.
Patrick Walker
Venezuelan Coup Democrats Vomit on Green New Deal
Natalie Dowzicky
The Millennial Generation Will Tear Down Trump’s Wall
Nick Licata
Of Stress and Inequality
Joseph G. Ramsey
Waking Up on President’s Day During the Reign of Donald Trump
Elliot Sperber
Greater Than Food
Weekend Edition
February 15, 2019
Friday - Sunday
Matthew Hoh
Time for Peace in Afghanistan and an End to the Lies
Chris Floyd
Pence and the Benjamins: An Eternity of Anti-Semitism
Rob Urie
The Green New Deal, Capitalism and the State
Jim Kavanagh
The Siege of Venezuela and the Travails of Empire
Paul Street
Someone Needs to Teach These As$#oles a Lesson
Andrew Levine
World Historical Donald: Unwitting and Unwilling Author of The Green New Deal
Jeffrey St. Clair
Roaming Charges: Third Rail-Roaded
Eric Draitser
Impacts of Exploding US Oil Production on Climate and Foreign Policy
Ron Jacobs
Maduro, Guaidó and American Exceptionalism
John Laforge
Nuclear Power Can’t Survive, Much Less Slow Climate Disruption
Joyce Nelson
Venezuela & The Mighty Wurlitzer
Jonathan Cook
In Hebron, Israel Removes the Last Restraint on Its Settlers’ Reign of Terror
Ramzy Baroud
Enough Western Meddling and Interventions: Let the Venezuelan People Decide
Robert Fantina
Congress, Israel and the Politics of “Righteous Indignation”
Dave Lindorff
Using Students, Teachers, Journalists and other Professionals as Spies Puts Everyone in Jeopardy
Kathy Kelly
What it Really Takes to Secure Peace in Afghanistan
Brian Cloughley
In Libya, “We Came, We Saw, He Died.” Now, Maduro?
Nicky Reid
The Councils Before Maduro!
Gary Leupp
“It’s All About the Benjamins, Baby”
FacebookTwitterGoogle+RedditEmail