Improving Brooklyn?

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The New York Sun

New York City has progressed from the declining industrial Gotham of the age of Beame to the glittering financial capital of the age of Mayor Bloomberg. While previous urban booms were marked by modest housing cost increases and massive construction, this turnaround saw modest construction and massive price increases. In the entire decade of the 1990s, the city permitted only 21,000 units. In 1960 alone the city permitted 13,000 units. The construction slowdown and the resulting high prices reflect increasingly tough regulatory environment championed by anti-growth community groups.

As a student of land use warfare, I feel lucky to be able to watch the epic battle brewing between community groups defending old Brooklyn and Atlantic Yards’ developer Bruce Ratner. Mr. Ratner’s proposal has Moses (Robert that is) like proportions — 6,000 apartments, more than two million square feet of commercial space, and a 19,000 seat arena for the Nets on 22 acres.

The proposal of Frank Gehry’s skyscraper may finally give Brooklyn an iconic tower to rival Manhattan’s art deco marvels.The project is a boon for housing affordability, not because of its so-called affordable units, but because it increases the city’s total housing stock. True affordability doesn’t mean a small number of artificially cheap units, but a large number of units that reduce prices for everyone. Atlantic Yard’s 6,000 units would be a good start.

The enemies of Atlantic Yards have four reasonable complaints.

First, they complain that the process has been undemocratic. Since the days of Jane Jacobs, this has been standard fare for anti-growth groups. These groups would prefer direct democracy and local control rather than delegating decisions to representatives democratically elected to balance competing city-wide interests. I think that the orderly decision-making associated with representative government is more likely to look after interests of the entire city, but I understand the appeal of recreating an Athenian polis on Flatbush Avenue.

The second complaint attacks the use of eminent domain in assembling the site. My Scottish Enlightenment ideals make me sympathetic to any complaint about governmental excess. I too get queasy when the government takes private property. Eminent domain does, however, serve a purpose when it prevents hold-up problems associated with small landowners blocking a large project. Atlantic Yards appears to be a relatively benign use of eminent domain since the private land being contentiously taken is a modest share of the overall site, which is primarily owned by the government and the developer.

The third complaint alleges that the city is giving Forest City Ratner a sweetheart deal. The subsidies to the developer include tax abatements and the right to lease the land under the prospective arena for one dollar. There are also allegations about the government’s guarantee to rent office space, but government rental payments, unless they are grossly inflated, are a fee for services rendered, not a subsidy. I’m not sure that the city got a great deal, but we should probably give them the benefit of the doubt. After all, Mayor Bloomberg is no neophyte at the bargaining table and he is far too rich to be corrupt. Moreover, much of the subsidy goes to the Nets, not the builder. As my allegiance is to the Knicks, I am skeptical of subsidizing their rivals, but subsidizing sports teams is standard fare.

The final complaint is that the scale of the project would completely change the community’s character. There is no debating this one. Just as Manhattan was completely changed when skyscrapers were built during the middle years of the 20th century, big time density would change Brooklyn. Community groups correctly emphasize that some people lose from urban change, and they have every right to ask for some compensation. Still, we shouldn’t destroy New York’s dynamism just because some people prefer the status quo. Local residents own their own property, they don’t have the right to control their entire neighborhood. Thousands of other New Yorkers will be better off from Atlantic Yards construction because new units will make housing more affordable and new office space will reduce the cost of doing business in New York.

Perhaps more money can be squeezed out of Mr. Ratner, especially in exchange for allowing higher densities. Perhaps the city can do more to compensate the current residents. But I can’t see the case for lopping floors off of Mr. Gehry’s skyscraper. Any serious project will impose costs on current residents by radically building up Brooklyn. Restricting heights will just destroy the project’s benefits without significantly reducing those costs.

Mr. Glaeser is the Glimp professor of economics at Harvard, director of the Taubman Center for State and Local Government, and a senior fellow at the Manhattan Institute.

The New York Sun

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