Blighting the way: urban renewal, economic development, and the elusive definition of blight.

• Author: Gordon, Colin

What is "blight"? Over half a century of federal and state urban renewal policy, and a slightly shorter history of local economic development policies, revolve around this question. These policies, ranging from the first stabs at federally-funded urban renewal in the 1940s (1) to the contemporary fascination of local and state governments with tax increment financing ("TIF"), (2) all involve, to some degree, public financing of private economic development or property transactions. (3) In effect, such policies extend the public credit and the public power of eminent domain to private interests--a combination that has often incurred the opposition of both taxpayers and property owners displaced by urban renewal or redevelopment. (4) The legal and political justification for such policies, as a result, leans heavily on an overarching public purpose: the elimination or prevention of blight. (5) But "blight" is rarely defined with any precision in such statutes, and the courts have granted local interests almost carte blanche in their creative search for "blighted" areas eligible for federal funds or local tax breaks. (6) This political and statutory confusion is rooted in a long history of local anxiety surrounding inner city housing, (7) "slum clearance," (8) and the fate of the central business district. (9) A blighted area, as a Philadelphia planner proposed cryptically in 1918, "is a district which is not what it should be," (10) and it is woven through recent history, economic development and urban redevelopment policies. (11) The goals of such policies have always been to eradicate blight; however, as one California state legislator lamented in 1995, "Somewhere along the way ... defining blight became an art form." (12)

A few examples underscore the problem. In affluent Coronado, California, local officials declared the entire town blighted in 1985. (13) The resulting TIF zone diverted property tax revenues from the local schools, making the district eligible for supplemental school funding from the state. (14) The city then used the revenues from the TIF to pay for school improvements. (15) In the St. Louis suburb of Des Peres, local officials declared a thriving shopping mall "blighted" in 1997 because it "was too small and had too few anchor stores," and more specifically, because it didn't have a Nordstrom's. (16) The blight designation paved the way for a $30 million TIF deal that was used to attract the upscale retailer and other new tenants. (17) In Lancaster, California, local developers used a blight designation and the accompanying tax subsidies to develop a new mall in the mid-1980's around "anchor" stores including Costco, Wal-Mart, and 99 Cents. (18) When Costco threatened to relocate in 1998, Lancaster officials relying on the old "blight" designation moved to acquire the 99 Cents property through eminent domain--with the intention of giving it to Costco outright, a tack which the courts, in a rare check on local blighting, condemned as "nothing more than the desire to achieve the naked transfer of property from one private party to another ... to satisfy the private expansion demands of Costco." (19)

Clearly "blight" has lost any substantive meaning as either a description of urban conditions or a target for public policy. Blight is less an objective condition than it is a legal pretext for various forms of commercial tax abatement that, in most settings, divert money from schools and county-funded social services. (20) Redevelopment policies originally intended to address unsafe or insufficient urban housing are now more routinely employed to subsidize the building of suburban shopping malls. (21) And such policies (especially state TIF programs) not only ignore the ongoing urban crisis, but by subsidizing sprawl, routinely contribute to blight in the cities under the pretext of fighting it in the suburbs. (22)

1. FIGHTING BLIGHT: THE LEGAL AND LEGISLATIVE BACKGROUND

   The modern statutory definition of blight is rooted in our first urban crisis, the Progressive-era response to the urbanization and industrialization in the late nineteenth and early twentieth century. (23) Lamentable urban conditions, captured in the investigations of Jacob Riis and others, (24) included the encroachment of commercial or industrial properties on residential neighborhoods, the inadequacy of basic public services, and the threat of moral decay, fire, and disease posed by tenement housing of urban working families. (25) Cities, in the environmental determinism of urban reformers, had become "nurseries of crime, and of the vices and disorderly courses which lead to crime ... perpetrated by individuals who have either lost connection with home life, or never had any, or whose homes had ceased to be sufficiently separate, decent, and desirable to afford what are regarded as ordinary wholesome influences of home and family." (26) Tenements, and substandard urban housing more generally, were considered "standing menaces to the family, to morality, to the public health, and to civic integrity." (27)

   The political response to such conditions ranged widely, and included urban beautification campaigns, (28) the "model tenement" movement, (29) "managerial" reform of urban governance, (30) early efforts at urban planning and zoning, (31) and prohibition. (32) But, despite the progress of home rule in many states, municipal powers to regulate or rehabilitate urban blight were quite limited. (33) In part, this reflected political and fiscal constraints. (34) Reformers increasingly understood "blight" as a condition of entire blocks or neighborhoods, (35) but cities lacked the capacity to do much more than fine the occasional landlord or raze the occasional building. (36) And in part, this reflected legal constraints on the local regulation of private property. (37) Indeed, the only substantial legal footing for urban reform was the "police power" to safeguard the general welfare. (38) For this reason, local efforts to address urban conditions leaned heavily on the threats to health or safety or moral order that animated local police powers. (39) While efforts to eradicate blighted conditions were limited to land zoning and the authority of health departments and fire marshals, early definitions of "blight" did begin to crop up in local health and safety codes. (40)

   Political attention returned to urban conditions during the Great Depression, accompanied by the efforts of local, state, and federal officials to refine the definition of urban blight. (41) Not surprisingly, such definitions drew largely on Progressive-era police powers. (42) At a 1930 Housing Conference, the Hoover Administration defined "a slum" as "a residential area where the houses and conditions of life are of such a squalid and wretched character and which hence has become a social liability to the community." (43) In 1937, the National Association of Housing Officials defined a slum, in language echoed in the second National Housing Act later that year, (44) as "an area in which predominate dwellings that either because of dilapidation, obsolescence, overcrowding, poor arrangement or design, lack of ventilation, light or sanitary facilities, or a combination of these factors, are detrimental to the safety, health, morals, and comfort of the inhabitants thereof." (45) Blight was defined more broadly, because most viewed it not as synonymous with "slum," but as a set of conditions often analogized as a disease or a cancer, which resulted in slums. (46) At the 1930 Hoover Conference, blight was singled out as an "economic liability" whose demands upon the public purse outstripped its tax revenues. (47) "Structures become shabby and obsolete," as one observer wrote in 1938, "[t]he entire district takes on a down-at-the-heel appearance. The exodus of the more prosperous groups is accelerated. Rents fall. Poorer classes move in. The poverty of the tenants contributes further to the general air of shabbiness. The realty owner becomes less and less inclined or able to make repairs." (48)

   Such efforts to define blight reflected not only the renewed urban crisis of the 1930s, but also the conviction, especially in the later New Deal, that urban conditions deserved federal and state political attention. (49) New York in 1926 and New Jersey in 1929, led the way with laws granting eminent domain to private developers in exchange for rent controls and other regulatory conditions, but could not overcome the pervasive obstacles to redevelopment: private interests had no incentive to facilitate public policy, and public interests had no money to acquire or assemble private property. (50) The National Housing Act of 1937 established a system of loans and grants-in-aid to local public housing authorities. (51) As a compromise between real estate interests and housing advocates, the 1937 law made federal funds available for the construction of low-income housing, but also required the clearance of an equal number of "blighted" properties. (52) Refined in 1941, the National Housing Act pressed state governments to pass enabling legislation--usually taking the form of sweeping urban redevelopment laws--under which municipalities could apply for federal funds. (53) New York in 1941 was the first to follow the federal lead, (54) and others followed as depression conditions were displaced by an equally troubling war-era housing shortage. (55) By 1947, about half of the states had passed urban redevelopment laws that created quasi-public redevelopment corporations and endowed them with the power of eminent domain to clear and prepare "blighted areas" for redevelopment by private interests. (56)

   These redevelopment corporations were largely inactive until 1949, when a new Federal Housing Act made federal funds available for the redevelopment of large areas rather than merely the removal of discrete slum conditions. (57) Under the new law, local redevelopment...