Guess Who Saved the South Bronx? Big Government.

• Author: WORTH, ROBERT
• Position: Urban renewal in New York, New York

The silent partner in "community development"

ON DEC. 10, 1997, PRESIDENT Clinton made a surprise appearance in the South Bronx. After a brief stroll through the once-blighted neighborhood of Charlotte Street, Clinton credited local community development groups with transforming the nation's worst slum into a livable place over the past 15 years. "Look at where the Bronx was when [president] Carter came here in despair," he told the crowd at the Madison Square Boys and Girls Club. "Look at where the Bronx was when President Reagan came here and compared it to London in the Blitz. And look at the Bronx today. If you can do it, everybody can." The story he told was already becoming a familiar one: A group of local people band together to fight off the pimps and pushers and rebuild their neighborhood. "The citizens of the South Bronx set an example that can serve a hundred other slums around the country," Ted Koppel declared in a 1996 Nightline segment.

It's certainly true that the South Bronx has undergone a miraculous transformation. Japanese tourists who come by bus to see "Fort Apache, the Bronx" find themselves staring out at suburban-style homes with glossy lawns and picket fences instead. Most of the charred hulks that made the area seem like a wasteland are gone, and it's hard to walk a few blocks without hearing the buzz and hammer of construction crews. In the 42nd Precinct, which includes the worst areas of the "Fort Apache" days, the number of shootings has dropped by over two-thirds in the past five years, the number of robberies and assaults by over half.

But there's something missing from the usual story about how it happened. Yes, the local Community Development Corporations (CDCs) have made an enormous difference. But they've been around for decades. In fact, they were there when the Bronx was burning in the '70s, and if they had been the only heroes in the story, there might not be anything left in the Bronx to celebrate. The truth is that the South Bronx has come back because the government intervened. Starting in the mid-'80s, New York City started pouring some $500 million a year into affordable housing--more than the next 50 largest U.S. cities combined. Much of that money went into the South Bronx. Equally important, city officials used the money effectively, avoiding the terrible mistakes of old-style top-down "urban renewal" They provided both funding and expertise for the nonprofits and CDCs who have received most of the credit for the boroughs revival. These groups also got help from two federal government programs, the Community Reinvestment Act and the Low-Income Housing Tax Credit, which brought banks and private companies into an area they had previously shunned.

It's understandable that government should get less than its share of the glory. "In a way, that's our role, to work behind the scenes and let local people pick it up from there," says Bronx Borough President Fernando Ferrer. But failing to acknowledge government's role can also be dangerous. It encourages the myth that government's role in cities is still a matter of evil bureaucracies decreeing "slum clearance" and building nightmarish housing projects that exacerbate crime and decay. Above all, it perpetuates the irrational bias against the public sector that persists among today's political elites, and it risks missing the lessons that government has learned in places like the South Bronx--lessons that should be at the heart of any future effort to revive broken communities.

Malign Neglect

If the idea of government saving the South Bronx sounds unlikely, perhaps that's because most people know government helped ruin the borough in the first place. The building of the Cross Bronx Expressway, which Robert Moses oversaw during the 1950s, has become Exhibit A in the failure of large-scale urban planning policies. "The path of the great road lay across 113 streets, avenues, and boulevards; sewer and water and utility mains numbering in the hundreds; one subway and three railroads, five elevated rapid transit lines, and seven other expressways or parkways, some of which were being built by Moses simultaneously," wrote Robert Caro in his 1974 indictment of Moses, The Power Broker. Moses blasted through it all, displacing tens of thousands of middle-class people and creating an instant slum.

Moses wasn't the only villain. In the '50s and '60s, as new waves of poor Puerto Ricans and southern blacks came to New York, the city welfare department "dumped" the poorest of them into the South Bronx by offering landlords above-market rents for taking welfare clients. In retrospect, this policy seems like a recipe for disaster, creating concentrations of extreme poverty that were bound to prove toxic. But it was the easiest route for the city, since there was no longer any local organization to protest. The borough's once-formidable Democratic political machine had fallen apart as the older Jewish, Irish, and Italian immigrants who supported it moved away.

The tenements where these newer immigrants lived, most of which were built before 1915, were rapidly wearing out. But the landlords couldn't afford to renovate them, thanks to another bad policy--rent control. By the 1960s, the inability to raise rents was making it increasingly difficult for landlords to make a profit, much less maintain their aging buildings.

The city also helped to destroy the job market in the South Bronx. There were other reasons for the decline of the boroughs manufacturing base, but the city made things worse by imposing new corporate income taxes on top of federal and state taxes, and boosting permit and inspection fees. In 1959 the area had 2,000 manufacturers...