Freddie Gray

Baltimore's Long History of Failed Development and Urban Renewal

Police abuse might have lit the fuse, but decades of awful top-down planning helped create the explosion.

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The riots still raging in Baltimore after protests against the police-custody death of Freddie Gray aren't happening in a vacuum. The violence and destruction are in no way justified but they can be partly explained by decades of failed governmental attempts to rejuvenate Charm City's fortunes. Predictably, these efforts fail, even as they squander public resources and taxpayer dollars on useless projects that benefit well-connected politicians and business interests.

via CBS 13

Like many older American cities, Baltimore's population peaked at about 950,000 in 1950 and since then has settled into a long and virtually uninterrupted decline, even as the surrounding areas gained in people and opportunities. Currently about 622,000 people call Baltimore home and there's every reason to expect more people to move out as a result of recent events.

While Baltimore's police department has a long and sordid history of abuse—and the details surrounding Freedie Gray's death in custody only embellish that history further—the city's misfortunes can't simply be laid at the feet of law enforcement. The simple fact is that Baltimore's city government has made mistake after mistake for decades when it comes to pursuing the Holy Grail of "urban renewal" and redevelopment. In this, as in its history of population decline and tensions with police, Baltimore is less the exception than the rule.

Indeed, even the city's vaunted "Inner Harbor" complex, widely regarded as jump-starting similar projects in cities across America, failed to stem the tide of people leaving the city. If anything, it actually showcases how elites go wrong when trying to make their cities livable. Built on massive subsidies, giveaways, and eminent-domain abuse, such projects routinely divert funds, resources, and energy from the core operations of local governments: providing basic infrastructure, good schools, safe streets, and room for local businesses to start and grow.

In late 2013, Baltimore's leaders pushed hard to start another mega-project that could only happen with massive subsidies, tax breaks, and other giveaways that strongly suggest the project isn't actually supported by real market forces. That project was the subject of a Reason TV documentary that adds meaningful context to eruption of violence and destruction now throttling Baltimore. From the original writeup of Todd Krainin's "Harbor Point and Baltimore's Taxpayer-Funded Edifice Complex":

For 20 years, Harbor Point, a 27-acre site of an abandoned chromium factory, has been a dream in the eyes of developers. It's the last big unbuilt site on the city's waterfront and arguably the most sought-after real estate in all of Maryland.

Yes, developers have lusted after the site, but they just didn't want to have pay the full cost of, well, developing it.

In a city as desperate for growth as Baltimore, they don't have to. Baltimore's political class has committed  $400 million in public subsidies to a controversial plan that supporters claim will generate 6,000 jobs and build a complex of skyscrapers, residences, and public parks that will forever transform the character of the city.

City officials believe the $1.8 billion-dollar project will spark an economic turnaround. Mayor Stephanie Rawlings-Blake considers Harbor Point a "once-in-a-generation opportunity" to reverse the half-century-long exodus of residents and businesses that have hollowed out Baltimore. Rawlings-Blake and developer Michael Beatty have campaigned relentlessly for the plan, offering promises of urban renewal and jobs in a city with 10.3 percent unemployment.

Yet Baltimore's citizens aren't convinced.

The public hearings and frequent street demonstrations outside City Hall have revealed a tale of two cities: sweetheart deals for the well-connected along the waterfront and decades of neglect for the majority of its blue collar residents. The subsidies are a major sticking point, as is the use of an Enterprise Zone for the benefit of wealthy residents. Tax increment financing, known as TIF, will exempt the developer from taxation for a decade. To many residents, Harbor Point is just the latest example of socializing risk and privatizing gain.

Why are the public coffers wide open to wealthy developers? That's the way business has always been done, in Baltimore and elsewhere. Just upriver from Harbor Point, the city's famed Inner Harboris the result of similar top-down, heavily subsidized development. Decades ago, city politicians spent billions to sweep away Baltimore's crumbling industrial-age infrastructure, replacing it with office towers, popular chain restaurants, museums, and an aquarium, all of which attracts millions of tourists, year after year.

More than just creating a pleasure for daytrippers, the development of the Inner Harbor set a precedent for the nation, as other cities rushed to make their own versions of the scene. In Baltimore, developers lobby politicians for special deals. If they don't get what they want, they give themselves a tax cut by moving their business to the surrounding county, where property taxes are much lower than in Baltimore proper. It's a dynamic that's left large sections of the city abandoned, with only a few tax-exempt institutions such as Johns Hopkins University and the Catholic Church continuing to thrive.

Even the widely praised Inner Harbor has failed to stanch the flow of 300,000 residents who've left Baltimore since 1960. Instead of revitalizing the city's fortunes, the rise of the waterfront has paralleled the decline of basic city functions. Violent crime remains high, public schools underperform, and the cityscape is blighted by the presence of tens of thousands of vacant buildings.

Ironically, the Harbor Point project has overcorme every political obstacle in its way only to be put on hold pending an environmental review of hexavalent chromium in the soil. Despite that delay, developers and their friends in City Hall remain confident that the project will soon be moving forward and that it will both revive Baltimore's fortunes and the reputation of planners who push corporate welfare. It will likely take a decade before the project is up and running and the rest of us learn whether Harbor Point is just another tax-aided mega-project that fails to provide the economic stimulus its backers promise.

Original release date was January 8, 2014. For full text and more links, go here now.