Politics & Policy

One Weird Trick That Can Help Make Your City More Prosperous

I have never understood why West Philadelphia became a slum. There’s certainly nothing wrong with the real estate: Right in the middle of West Philadelphia is an Ivy League university; go eight-tenths of a mile east from the University of Pennsylvania down Walnut Street and you’re in one of the nicest city centers in the Northeast; go four miles northwest down Lancaster Avenue and you’re in Lower Merion, the fifth-highest-income municipality in the country (sandwiched between San Ramon, Calif., and Brookline, Mass.), where you can catch a polo match or a steeplechase race. There is terrific residential architecture, from the Victorian rowhouses on Spruce Street to the stately 19th-century homes spread out on broad lawns as you approach the city limit.

But in between is a lot of blight and some very bad blocks, though less blight and fewer bad blocks than there were 30 years ago.

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The driving force in West Philadelphia has been the University of Pennsylvania and institutions related to it. It’s a familiar story, not dissimilar to what has happened in previously downmarket East Austin thanks to University of Texas students seeking lower rents. Penn students vary greatly in their intellectual achievements (Wharton grads to the right, women’s-studies majors to the exits), but almost all of them can count, and some of them stick around Philadelphia, where they can buy a nice four-bedroom home for half of what they’d pay for a one-bedroom condo in Brooklyn. Get a high enough density of these people and soon enough a fruity coffee shop appears, and before you know it you’re within spitting distance of a Trader Joe’s.

Naturally, everybody hates them for this.

West Philadelphia has experienced a modest urban renaissance — thanks to the “invaders” and in spite of the people who were living there.

Municipal leaders and community activists are forever soliciting “investments” in poor neighborhoods. Politicians, as I have long argued, do not know what the word “investment” means. The point of investment is to increase the value of something — you invest in a new kitchen to improve your house, both for your own enjoyment and to increase its price in case you should decide to sell it. A successful investment is associated with higher market prices. In Philadelphia, this was denounced as “McPenntrification” — a particularly chowder-headed play on “gentrification” — and self-styled community organizers worked mightily and continue to work mightily to prevent investments in poor communities in Philadelphia. U. Penn, which was founded by Benjamin Franklin, but which has been in West Philadelphia only since the 1870s, was denounced as an “invader.”

The transformation of a community from homogeneously poor to mixed-income may be painful — it will increase the cost of living — but all economic change involves tradeoffs. Rising property values are good for homeowners, bad for renters and would-be buyers. But in poor communities afflicted by so-called food deserts — broad urban expanses without grocery stores — and those suffering from a lack of banks and retail services, an influx of relatively well-heeled neighbors can be an excellent thing. This is true of public services as well, of course — perhaps even more true: Democratic theory notwithstanding, city hall does not attune the same set of ears to all citizens’ complaints. That dynamic is almost certainly part of the reason for the relative success of densely populated places such as Manhattan: Nothing magical happens to Fifth Avenue at 96th Street, and if there’s trash piling up in Spanish Harlem, you can smell it on the Upper East Side.

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Being poor is a burden; being poor in a poor community is a danger. Poverty — individual poverty or family poverty — is difficult enough to overcome; overcoming it in an environment in which everybody one encounters is in roughly the same situation (or worse) is much more difficult. One of the best ways to increase generational income mobility for children born in places such as the poor sections of Baltimore is — this will not surprise you — to get the hell out of Baltimore, the sooner the better: The income effects of leaving Baltimore are more pronounced the younger the child is when he leaves.

But exit is not really going to be much of a broad solution for places such as Baltimore and Detroit. The white middle class left long ago; less remarked upon was the dramatic exit of the black middle class from those communities. In poor urban communities, as in the Big White Ghetto of Appalachia, most of those with the resources to leave left long ago. Simply abandoning poor cities is not really much of an answer.

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The problem of poor individuals and poor families is different from the problem of poor communities. Writing in Slate, Professor Louis Hyman argued that those Baltimoreans who torched the CVS because they were enraged by police misconduct were perfectly rational to do so, because they feel exploited by the ghetto economy. They may in fact feel that way, but we are not obliged to respect those feelings if they are not based in reality. Contra Professor Hyman’s account, those living in the Mondawmin section of Baltimore have not been abandoned to the check-cashing shops and other ghetto financiers; there are ordinary commercial banks in the area, and while their services are not free, neither are those of the check-cashing houses. In many cases, conventional banks’ checking services are free or effectively free — one of the banks in the area waives charges for those with any sort of regular direct deposit of $250 or more, including government benefits. (The majority of small businesses nowadays, and practically all large businesses, use direct deposit for their payroll.) For those without direct deposits, the expense of a checking account runs from $0/month for students 23 years of age and younger to $8/month at one of the major banks in the area to $12/month at another.

Professor Hyman, who learned all about poverty at prep school (McDonogh, $26,000 a year) and Harvard, is of course correct that $8 can mean a great deal to a very poor person. But the CVS-torchers in Baltimore are nonetheless wrong to resent the commercial establishments that serve them, and Professor Hyman is wrong to endorse their stupidity. A poor black man from Baltimore, or a poor white man from eastern Kentucky, would have to jump through a great many hoops before he would be granted a job interview with Professor Hyman’s former colleagues at McKinsey or his current colleagues at Cornell. But a man with $10 in his hand is the same as any other man with $10 in his hand, regardless of race, background, or accent, when he is standing at the register at Walmart or Target. And unlike entities supported by government “investments” — like Atlanta’s schools or Baltimore’s police — Walmart reliably keeps its end of the bargain: You pay Walmart $20 for a pair of shoes, you get the shoes.

RELATED: Riot-Plagued Baltimore Is a Catastrophe Entirely of the Democratic Party’s Own Making

#related#There are many variables in the success and failure of cities, but one stands out. It isn’t race — Philadelphia is a minority-majority city, as is New York. And it isn’t affluence, either: Rank U.S. metros by income and Los Angeles barely cracks the top 50. But each of those cities has enjoyed a measure of success in recent decades by improving the material conditions in poor neighborhoods through the sort of commercial development bitterly denounced as gentrification. The streets of West Philadelphia are not nearly so mean as they used to be. New York City’s transformation in the Giuliani years was dramatic not only for the well-off precincts of Manhattan but in the rest of the city, too, with development even in places such as the South Bronx, once written off as a total urban loss. Los Angeles, which experienced a much worse version of the Freddie Gray riots in 1992, is a different city today. Economic policy is of course a piece of that, though not so big a piece as the economic-policy wonks like to think — does anybody remember what Rudy Giuliani’s tax plan was?

These cities are now safe — that’s the difference. New York City may be backsliding under its new Sandinista regime, but there’s still not much of the old menace there. Downtown Los Angeles feels like Arlington with better weather, and it has a lower rate of violent crime than Portland, Ore. Philadelphia still has a high rate of violent crime compared with similar-sized cities such as Houston and Phoenix, but it is dramatically lower than the rates in the urban basket cases. Philadelphia’s murder rate, though still very high, is barely 60 percent of Baltimore’s. Baltimore’s violent-crime rate is twice New York City’s and three times Los Angeles’s.

There are two straightforward ways to improve the material conditions of people in the poor parts of Baltimore: Move them out or move capital in.

There are two straightforward ways to improve the material conditions of people living in the poor parts of Baltimore: Move them out or move capital in. There is a little something to be said for moving people out of dysfunctional communities; I have in the past argued for a kind of reverse incarceration for young men convicted of serious crimes in gang cases — i.e., that during probation or parole they could live anywhere in the country they liked, so long as it was more than 200 miles from their home town. But that’s a narrow question. The real issue is moving people, businesses, and resources into poor neighborhoods — which is not going to happen when the locals are assaulting people, burning down businesses, and destroying resources. Lawlessness and violence convert assets into liabilities — all those boarded-up houses that once were homes are attractive nuisances on a massive scale. Somebody, somewhere, wants to sell things in those abandoned Baltimore storefronts, but no one can, because it is not safe.

And that’s the horrible irony here. If Baltimore wants to get its economic act together, it has to get something else right first: policing.

So far, neither the police department nor the people of Baltimore have shown any particular capacity for keeping the peace.


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