How Urban Renewal Destroys Neighborhoods

What happens when central planners bulldoze communities and try to build better ones? Trampled property rights, dislocated families, wasted money, and failed development.

One of the unspoken reasons behind Richmond, Virginia's deal with Stone Brewing goes back to the old pottery-shop rule: You break it, you buy it. The city—with a hefty assist from the state—is putting up millions to build a brewery and restaurant for the company in the city's run-down East End. That would only be fitting, since the city did so much to make the East End run-down in the first place—including, quite literally, driving the venerable Fulton neighborhood into the ground.

That neighborhood dates back to the earliest Colonial days, when the Indian chief Powhatan greeted explorers John Smith and Christopher Newport in 1607. The Rocketts family settled there, and Robert Rockett began a ferry service on the James. (Today you can grab a bite at the Boathouse Restaurant at Rocketts Landing.) Gradually Fulton grew into a working-class neighborhood whose residents—largely black—labored in the waterfront industries nearby. "It was a dynamic, intellectual community," the granddaughter of one former Fulton resident recalled some years ago. "Everybody subscribed to the Afro"—an African-American newspaper. "We were voters. We had our own doctors. We had two shoe shops. We had two drugstores. . . . We never thought we were poor until we heard other people talk about it."

Other people did talk about it, though—especially after World War II, when industries moved away and the neighborhood began to slide. Suburban sprawl, encouraged by federal highway policies and funds, hastened the hollowing-out of the city core.

By the 1960s Fulton was being called a slum. A Times-Dispatch article described it in lurid terms: a "sick and shaggy community," "a pocket of misery" made up of "dark and dismal houses." In those houses lived "shadowy figures" leading "drab lives" full of "promiscuous behavior . . . bitterness and despair."

The only decent thing to do with such a community is to euthanize it. Or so Richmond's white leaders argued in the 1970s, when they bought out the property owners and bulldozed everything. The term for that was urban renewal, which was both a misnomer and a national craze. Two federal housing programs shoveled money at localities so they could rejuvenate so-called slums, and a 1954 Supreme Court decision gave them carte blanche to trample the property rights of the underprivileged in order to eliminate blight.

"The concept of the public welfare is broad and inclusive," the High Court held. Localities should have the power to impose values that are "spiritual as well as physical, aesthetic as well as monetary." James Baldwin, the novelist and essayist, had a different term for such values: "Negro removal."

Richmond officials spent $32 million ($133 million in today's dollars) relocating Fulton's families, tearing down hundreds of homes, and starting all over. But as this newspaper reported in 1986, while the tearing-down went swimmingly, the building-up did not. The goal of restoring Fulton remained "Unmet After 20 Years" despite "providing land at virtually giveaway prices for developers." Rebuilding lagged far behind projections and, indeed, is nowhere near completion today.

It was the same story for many urban-renewal projects around the country. And the searing irony is that those slums subject to bulldozing often had been created by previous government policies in the first place. In 1910 Baltimore mayor Barry Mahool signed a racial zoning ordinance into law on the grounds that "blacks should be quarantined in isolated slums" to prevent the spread of disease and social disturbance. The next year, Richmond adopted an ordinance that made it illegal to sell a house on a white block to a black person, or a house on a black block to a white person. Policies like those helped create conditions that a subsequent generation of politicians could then deplore.

If you visit Fulton now you will find suburban-style split-level homes, along with some apartments and large empty fields covered in waist-high weeds. Admiral Gravely Boulevard is half-paved. There are no shoe shops. No drugstores. It's as if a tornado had picked up a suburban tract development from the 1980s and dropped it whole down by the river.

Four years ago, a group of residents met with some folks from the Local Initiatives Support Corp., a community-development nonprofit, to talk about making Fulton a better place to live. As a story about the event put it: "In Fulton, something's lacking. Where are the schools, libraries, grocery stores, coffee shops and restaurants commonly found in other Richmond neighborhoods?" Where? Ask the city leaders who tore them down.

In 1988, Scott Davis, who wrote a book about Fulton, described the contrast he saw between the old-fashioned values that had enabled the residents to thrive in the face of bigotry and those of the urban planners, which were grounded in professionalism and technical expertise. "I knew the urban-renewal people," he told the newspaper, "and they weren't villains. They were good guys."

They were good guys. They were professionals. Experts. And they meant well. Put them in charge of Fulton, and everything would turn out great. Except it didn't: "Millions of dollars had been spent to revitalize the neighborhood," Davis recalled. "Yet it was destroyed."

Fulton is hardly an isolated example. There are many more all across the country. Heck, there are others right here in Richmond. In the 1980s city leaders, with more guidance from planning professionals and experts, launched the Sixth Street Marketplace amid delirious fanfare. "This event," proclaimed City Manager Manuel Deese at the opening ceremony, "will be remembered as a shining achievement for decades to come." Within five years, the downtown mall was struggling to stay afloat. After years on financial life-support from city taxpayers, it was torn down.

For the past couple of years Richmond's current Mayor, Dwight Jones, has been pushing hard for his own big plans, which include the revitalization of the East End, a baseball stadium in Shockoe Bottom, and the transformation of the current stadium site on the Boulevard. Perhaps those projects, should they come to pass, will confound the record with economic success so remarkable it will stun all skeptics into silence.

Or perhaps not. As F.A. Hayek wrote in The Fatal Conceit, "the curious task of economics is to demonstrate to men how little they really know about what they imagine they can design." That's a task for which, despite the lesson of Fulton and so many others, there appears to be no end in sight.