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.

Weekend Edition
May 25, 2018
Friday - Sunday
Melvin Goodman
A Major Win for Trump’s War Cabinet
Andrew Levine
Could Anything Cause the GOP to Dump Trump?
Pete Tucker
Is the Washington Post Soft on Amazon?
Conn Hallinan
Iran: Sanctions & War
Jeffrey St. Clair
Out of Space: John McCain, Telescopes and the Desecration of Mount Graham
John Laforge
Senate Puts CIA Back on Torture Track
David Rosen
Santa Fe High School Shooting: an Incel Killing?
Gary Leupp
Pompeo’s Iran Speech and the 21 Demands
Jonathan Power
Bang, Bang to Trump
Robert Fisk
You Can’t Commit Genocide Without the Help of Local People
Brian Cloughley
Washington’s Provocations in the South China Sea
Louis Proyect
Requiem for a Mountain Lion
Robert Fantina
The U.S. and Israel: a Match Made in Hell
Kevin Martin
The Libya Model: It’s Not Always All About Trump
Susie Day
Trump, the NYPD and the People We Call “Animals”
Pepe Escobar
How Iran Will Respond to Trump
Sarah Anderson
When CEO’s Earn 5,000 Times as Much as a Company’s Workers
Ralph Nader
Audit the Outlaw Military Budget Draining America’s Necessities
Chris Wright
The Significance of Karl Marx
David Schultz
Indict or Not: the Choice Mueller May Have to Make and Which is Worse for Trump
George Payne
The NFL Moves to Silence Voices of Dissent
Razan Azzarkani
America’s Treatment of Palestinians Has Grown Horrendously Cruel
Katalina Khoury
The Need to Evaluate the Human Constructs Enabling Palestinian Genocide
George Ochenski
Tillerson, the Truth and Ryan Zinke’s Interior Department
Jill Richardson
Our Immigration Debate Needs a Lot More Humanity
Martha Rosenberg
Once Again a Slaughterhouse Raid Turns Up Abuses
Judith Deutsch
Pension Systems and the Deadly Hand of the Market
Shamus Cooke
Oregon’s Poor People’s Campaign and DSA Partner Against State Democrats
Thomas Barker
Only a Mass Struggle From Below Can End the Bloodshed in Palestine
Binoy Kampmark
Australia’s China Syndrome
Missy Comley Beattie
Say “I Love You”
Ron Jacobs
A Photographic Revenge
Saurav Sarkar
War and Moral Injury
Clark T. Scott
The Shell Game and “The Bank Dick”
Seth Sandronsky
The State of Worker Safety in America
Thomas Knapp
Making Gridlock Great Again
Manuel E. Yepe
The US Will Have to Ask for Forgiveness
Laura Finley
Stop Blaming Women and Girls for Men’s Violence Against Them
Rob Okun
Raising Boys to Love and Care, Not to Kill
Christopher Brauchli
What Conflicts of Interest?
Winslow Myers
Real Security
George Wuerthner
Happy Talk About Weeds
Abel Cohen
Give the People What They Want: Shame
David Yearsley
King Arthur in Berlin
Douglas Valentine
Memorial Day
FacebookTwitterGoogle+RedditEmail