Redevelopment: The Unknown Government

The Myth Of Economic Development

"Economic Development" is a common cliché among city governments and redevelopment agencies.

It refers to a belief that tax subsidies to selected private businesses can stimulate the local economy. It assumes that the free enterprise system alone is inadequate. It presumes that government planners can allocate resources more efficiently than can the free market.

The legal purpose for redevelopment remains the elimination of blight. All economic development activities must pay lip service toward that goal. Behind this façade, redevelopment has subsidized giant retailers, luxury hotels, golf courses, stadiums and even gambling casinos.

Has redevelopment succeeded in reducing true blight? By what objective standard can this be measured?

Any definition of blight must include depressed local economies and pockets of poverty. If redevelopment is working, then surely poverty is being reduced and the general standard of living improving.

Is there any evidence this is happening? Are residents of cities with redevelopment better off compared to residents of cities without redevelopment?

They aren't.

Are the 359 cities that have created redevelopment agencies any better off than those 102 cities that have not? If redevelopment is eliminating blight, then certainly comparisons between such cities could prove it.

They can't.

If redevelopment was improving local economies, then such a comparison would show greater personal income growth in cities that do have redevelopment relative to those cities that do not.

It doesn't.

Table V is a comparison of combined average income growth among all cities with redevelopment and those without it, between the years 1979-89. As can be seen, there is no correlation between redevelopment activity and personal income growth.

Table VI directly compares five pairs of cities of similar size, region and economic level. Again, there is no correlation between growth rates and redevelopment activity.

Both Tables V and VI demonstrate that cities without redevelopment either match or actually exceed those cities that do, in terms of personal income-growth.

There is no evidence to show that all the billions spent on redevelopment has done anything to improve the lives of people in those cities. There is no evidence that redevelopment is a positive factor in the elimination of blight.

This survey reflects the 313 cities with redevelopment agencies, and the 101 cities without redevelopment agencies, from 1979-89. Cities incorporated after 1979 are not included.

SOURCE: United States Census Bureau, State Controller.

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