Kelo and Urban Renewal

Consider the fate of New Haven, Connecticut, the most willing victim of the urban-renewal era. Mayor Richard Lee, a Democrat who took office in 1953, had pledged to create “a slumless city, the first in the nation.” During his 16-year tenure, as Yale University’s “Model City” history project relates, Lee procured more urban-renewal funds per capita than any other American mayor—more than $1 billion in today’s dollars, and nearly four times as much as runner-up Newark. In 1958, the Saturday Evening Post hailed Lee for embarking upon “saving a dead city.”

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But bulldozers and central planning didn’t save New Haven. Between 1950 and 1980, the city’s population declined by 30 percent—and poverty increased. “In 1970, as urban renewal ended, the census ranked New Haven as the 38th-poorest city in America,” local journalist Paul Bass and Yale prof Douglas Rae wrote in a New York Times op-ed in July. “Ten years later, it was ranked seventh, with 23.2 percent of its population living below the poverty line. Today, more than a quarter of its families live in subsidized housing.” Rae thinks that without urban renewal, New Haven’s poverty rate would be lower today: “They destroyed a lot of economic and social vitality,” he told me. Even Mayor Lee saw that top-down planning had failed; by the end of his final term, he observed: “If New Haven is a model city, God help America’s cities.” Unfortunately, cities all over the country had replicated New Haven’s experience.

The taxpayers sure won’t get much in return. They will pour about $200 million in public subsidies into the stadium portion of Ratner’s project up front. In return, the city and state could receive an annual net surplus from that part of the project of about $7.8 million over 30 years... But if New York simply deposited that $200 million in a savings account and left Prospect Heights alone, it could receive about $8 million a year in interest—and at no risk, as it could withdraw the $200 million at any time.