A few blocks from Havana's famed Malecon, another new joint venture waterfront hotel is on its way to completion. Across the street from the construction site a small wooden building draws in a trickle of Cubans searching for the latest available construction materials posted on a list on the front door. Despite the images and cliches of Havana as a city whose beauty is matched only by how rapidly it seems to be disappearing before your eyes, the city shows signs of being poised to take advantage of the Cuban government's new laws governing private property.
Even with the uncertainty over the impact and details of how Cuba's new property laws will be implemented, some residents of Havana appear to be convinced that the new reforms are worth investing in. But scarcity of resources— material and financial—as well as competing priorities seem likely to temper the enthusiasm of Cubans towards the reforms.
“I'm a child of the revolution, I believe in it and it has done many good things,” responded a resident of Old Havana when asked about how the new law that reforms how Cubans can buy and sell homes would impact his life. “But the problem is the way people in different neighborhoods live.” Tourism and related economic development may provide new employment opportunities but in areas like Old Havana they have not relieved crowded conditions or housing shortages, nor have they addressed differences between housing stock in Old Havana and areas like the suburb of Miramar in the west of Havana.
The numbers are alarming. In recent years, the federal government has cut 400,000 vouchers from Section 8—the program that provides housing subsidies for low income people—even as 300,000 units of public housing have been turned into for-profit developments, rendering them unavailable to low-income people. Meanwhile, 2.5 million foreclosures have worsened the housing crisis for the poor.
These big numbers are more than real estate figures; they are real people—families with children, people in ill health, the elderly. But rather than trying to help them, cities are issuing “sit/lie bans” and “public commons for everyone” laws, which make it illegal to “loiter” in a public space. Criminalizing these simple acts and making them subject to police harassment and arrest is an egregious violation of the civil liberties supposedly guaranteed by our democracy. Yet it happens to homeless people all the time.
In a survey of 716 homeless people in 13 different communities, the Western Regional Advocacy Project (WRAP) found that 78 percent reported being harassed, cited or arrested for sleeping; 75 percent for sitting or lying on the sidewalk; and 76 percent for loitering or hanging out. Only 25 percent said they knew of a safe place to sleep at night.
Oakland is far removed from Anaheim in look, feel and form. But as corporate real estate firms stake a claim to the maintenance and administration of public space in Downtown Oakland, the area is being reshaped in accordance with the model for a controlled and commodified space exemplified by the post-war suburban shopping mall and theme park par excellence: Disneyland.
While redevelopment agencies typically control the building phase of large-scale downtown projects, in the built environment, the “curb to property line” streetscape is often controlled by the Business Improvement District (BID), a lesser known but strategically relevant urban entity.
In early 2008, a small group of managers working for the largest real estate corporations in downtown Oakland partnered with New City America, Inc. (a San Diego-based consultancy that has established over 61 BIDs in the U.S.), to create the Downtown Oakland Association (DOA) and Lake Merritt Uptown District Association (LMUDA).
Affordable housing advocates across California are scrambling for alternative sources of funding following the closure of the state’s redevelopment agencies in February 2012.
A state law upheld by the California Supreme Court mandated the dismantling, which aims to redirect billions in property tax earnings held by the redevelopment agencies (RDAs) back to local governments to help close a huge gap in the state’s general fund.
The demise of California’s 425 RDAs “comes at a very bad time,” says Rachel Iskow, executive director of the Sacramento Yolo Mutual Housing Association.
Money coming from the federal housing program has been substantially reduced. The $2.9 billion generated by the state’s Proposition 1C bonds—enacted by California voters in 2006 for various types of housing—are almost gone, and a sluggish development market has reduced money for local low-cost housing trust funds to a trickle.
“The end of redevelopment agencies significantly shrinks the total supply of financing for affordable housing,” Iskow explains. She adds that her private nonprofit has built more than 900 homes in the Sacramento-Yolo area. It serves an ethnically diverse community of mostly “workers earning an average of $20,000 a year for a family of four people.”
The closure of California’s 452 Redevelopment Agencies (RDAs) could rock land-use planning and policy as dramatically as 1978’s Proposition 13. For six decades, redevelopment gave California cities one of their most powerful—and controversial—tools for spurring real estate investment. Now they stand to lose $1.6 billion per year in local RDA property tax levies and will need to change their approach to housing, land-use planning and development financing. The millions of Californians who rely on affordable housing and the groups that build and support it will feel even stronger aftershocks from the fall of redevelopment.
The abrupt shutdown of the RDAs left plans for hundreds of affordable housing units in limbo and billions of dollars worth of debt from RDA-issued bonds unpaid. The state law dissolving the RDAs (AB X1 26), set up complicated mechanisms for winding down their business, paying their debts and maintaining their housing assets. Advocates face the challenge of untangling the processes and monitoring the disposition of RDA assets while quickly formulating (and organizing around) legislative and policy solutions.
The City of Oakland, California, is sometimes compared to a good model car that, for strange reasons, never seems to be able to give uninterrupted service or get up to full speed on the highway. Strategically located and blessed with an interesting, industrious, creative, and diverse population, a wonderful climate, spectacular views, and the perfect blend of city, marsh and woodland hills, Oakland ought to be one of America’s jewels. It is not. Instead, it is often described as a city of missed opportunities and wasted resources. Nothing exemplifies that description more than Oakland’s treatment of the structure originally known as its Civic Auditorium (renamed the Kaiser Convention Center in 1984).
After years of bungled management, Oakland closed the 98-year-old cultural treasure in 2005—at the same time it was pouring redevelopment money into rehabilitating and reopening another entertainment venue, the Fox Oakland Theater in the rapidly gentrifying Uptown District. Then the city dithered for years over what to do with the Civic Auditotium before entering into a purchase-leaseback agreement with the Redevelopment Agency (RDA) in 2011, just in time for the statewide dissolution of the RDAs. In January 2012, the Auditorium became the target of the Occupy Oakland movement which staged a failed attempt to occupy the building and convert it into a social services center.
The foreclosure crisis has disproportionately impacted communities of color because people of color were sold adjustable rate mortgages at a higher rate than whites, even where income levels and financial risk were on par. The upshot of this predatory lending practice has been a massive dislocation of workers and families (most of whom considered their homes their only economic asset) side by side with an unprecedented transfer of wealth to financial institutions and the private sphere.
Advocates abroad call this type of activity by a name more familiar to the third world—a land grab. Multinational corporations have acquired 15 to 20 million hectares of land in wholesale purchases in the global south to establish large-scale industrial farms for food and biofuels.
Closer to home, in the Detroit area, speculator John Hantz is trying to purchase 200 acres to create a large corporate farm. Indeed, land grabs have been afoot for some time within postindustrial landscapes from where capital has fled in search of cheaper labor. What makes the current land grabs especially troubling is the opportunistic use of the tsunami of foreclosures by banks to seize properties. Their willful enablers in this transfer of assets have been the states and their housing policies, ostensibly created to reduce the number of vacant bank-owned properties by converting them into rental units.
Foreclosures: Excellent Investment for Some
A handful of fast-growing real estate management corporations are now stepping into the foreclosure crisis. Backed by billions of dollars in private equity, property management companies are viewing the crisis as a rare opportunity to amass tens of thousands of single-family homes and convert them into rentals—i.e. long-term high-yield investments. Beyond the stresses on families in neighborhoods experiencing the land grab, this nascent industry—promoted by federal policies—will in all likelihood facilitate the transfer of tens of billions in wealth from distressed homeowners—largely Black and Latino—to a few wealthy private equity firms.
The new Eastern Span of the Oakland to San Francisco Bay Bridge, with its signature single tower and 7 billion dollar plus price tag, is rising out of the bay waters, strengthening the connection between two of the region’s core cities. But even as the Bay Area adds another legacy architectural landmark to its skyline, questions about who benefits from this and other massive public investments remind us of the challenges we face in ensuring everyone’s right to enjoy the great resources and beauty that the Bay Area has to offer.
The annual Gross Regional Product (GRP) for the Bay Area is approximately $487 billion, the third largest in the country after Los Angeles and New York. Much of that economic activity is shaped and channeled by public policy decisions by government agencies at the local, state and federal levels. For example, in addition to construction of the Bay Bridge and the new San Francisco Transbay Transit Terminal, the Metropolitan Transportation Commission (MTC) and Association of Bay Area Governments (ABAG) are currently in the process of deciding where and how $277 billion in public money will be spent over the next 28 years. These expenditures will shape everything from the frequency of bus service to the extent of suburban highway expansion.
The nation’s economic model is broken and the problem is not just the recent downturn, as pressing and important as that may seem. Over several decades now, economic growth has slowed, racial and income inequality has spiked, and the middle class has withered. The United States needs a new strategy to bring about robust growth that is widely shared by all who live here.
The nation is undergoing a major demographic transformation, in which racial and ethnic groups excluded in the past are becoming a larger portion of the population. The new growth model must embrace these new demographics and make the necessary investment for the next generation to reach its full potential.
By 2042, a majority of the population will be people of color, which is the reason for the growing racial gap between America’s oldest and youngest—whites make up 80 percent of seniors but only 54 percent of those under 18. Too many elders and decision-makers do not see themselves reflected in the next generation and they are not investing in the same educational systems and community infrastructures that enabled their own success. The racial generation gap not only puts youth of color at risk, it threatens the wellbeing of all children and the nation as a whole.