The Neoliberal City: Governance, Ideology, and Development in American Urbanism, Jason Hackworth, 2000

The rise and fall and rise of the postwar American city has been widely documented. New York’s early 1990s revival and ascendance, Chicago’s transformation into a global city, or Pittsburgh’s reinvention as an academic/health care/green technology hub serve as prominent examples of old city new growth. Sunbelt examples like Charlotte, Atlanta, Los Angeles, San Diego, and Phoenix emerged as significant counterpoints to these older Eastern counterparts. While recognizable differences exist between the nation’s more traditional metropolises and their burgeoning Sunbelt siblings, one dominant ideology remains central to all, neoliberalism. With this in mind Jason Hackworth’s The Neoliberal City: Governance, Ideology, and Development in American Urbanism argues that neoliberal ideals and financial innovations have become “naturalized” dictating policy directives, reducing alternatives, and marginalizing remnants of Keynesian economics such as public housing. As Hackworth notes, “The notion that city officials do everything in their power to placate corporate financial interests that threaten to leave or penalize the locality has become so unquestioned that it is considered commons sense by public administrators and the popular press.”(2) Furthermore, argues Hackworth, its “rise and reproduction” serves as the dominant “ideology, mode of city governance, and driver of urban change.” (2) As the latter half of The Neoliberal City explains, the transformation of the urban governments into “a more aggressive vehicle for business and selling the cultural assets of a particular place” result in a view that sees these maneuvers as “the only option for struggling regions.” (170-1)

Neoliberalism’s ideological break with previously dominant Keynesian thought centered around markets. According to Hackworth and others, Keynesian economics failed to view markets as triumphantly as their neoliberal antecedents. For Keynesians, markets “are far from perfectly self regulating; rather they [could] self destruct without targeted intervention by various levels of government.” (7) Several theoretical market failures “justified regulatory and redistributory interventions.” (7) Rejecting egalitarian liberalism most notably in its Keynesian examples, neoliberal thinkers called for a “selective return to the ideas of classical liberalism, most strongly articulated by Hayek”. (9) The influence of this economic rhetoric rippled through various forms of governance such that it became the “proper mode of governance for a variety of geo institutional contexts”. (9) Urban municipalities bent to such influences to the extent neoliberalim became “naturalized”. For city leaders, good government came to mean how well they “function like the corporate community.” (10) This shift toward neoliberal ideals results in fewer public subsidies and regulation. Public services become privatized, business/real estate development interests promoted. Hackworth suggests that this economic development has not emerged as a response to capital flight so much as a “result of an institutionally regulated (and policed) disciplining of localities”. Finance capital operates under a set of “ideological constraints.” (18) If the IMF and World Bank police international institutions, determining which countries and their metropolitan regions receive their financial attentions, in first world cities, bond rating agencies exert the most direct influence, “localities can be summarily redlined from credit if bond rating agencies judge them fiscally or economically separate from the governments they evaluate and thus more immune than, say, the IMF to state based political pressure.” (20) The ever present fear of capital flight, whether it be popular discourse or institutionally, find reinforcement internally and externally to the extent that urban governments fail to function autonomously. Increasingly cities took on non-referendum approved debt through revenue bonds . In recent years, these bonds have outnumbered general obligation bonds, which in contrast require approval of local voters.

As cities have received fewer federal dollars, dependence on municipal lending increased. However, lending in the neoliberal era fails to resemble that of the past. Changing demographics and the ascendency of wealth generation through finance capital, pension funds, money market funds, and insurance firms account for larger segments of the securities industry. Moreover, if commercial banks provided stable and secure lending/investment in previous decades, direct lending illustrates greater volatility. This leaves “remaining investors (households and funds)” more dependent on “professional assessments” (like bond agencies) whereas commercial banks exerted greater independence.

Like other historians and urbanists, Hackworth identifies the 1970s as the key decade in which financial shifts wrought widespread urban change. The welfare state found itself challenged by anti-statist politics despite following the “four decades of targeted military and social program expenditures” that led to national growth. The drive to “hollow” out the nation-state as a means to reduce the influence of Keynesianism forces municipalities to reduce or eliminate state based welfare provisions. What results is a mix of greater local responsibility in terms of governance and services, but within a regulatory model that allows fewer options. If global institutions have assumed new powers, their reach extends to local municipal governments in a phenomena Hackworth describes as “glocalizatoin”, which simultaneously shifts regulatory power downward “local institutions” and upward “global institutions”. Using the example of public housing, Hackworth notes that though public housing agencies (PHA) now operated as “central regulators” this regulatory power remains “incredibly qualified and constrained” . (44) The adoption of HOPE VI legislation in the early 1990s and the Quality Housing and Work Responsibility Act in the latter years of the same decade, pushed private investment and management of public housing. Moreover, the discourse assigned to HOPE VI and to a lesser extent QHWRA established a narrative that such innovations were unavoidable but yet “progressive” since they since the state suggested the legislation acted to empower residents. The widescale displacement that unfolded in many of the HOPE VI projects were disguised by this narrative discourse, a discourse that found proponents in the media, among housing officials, planners, and even “housing scholars.” (183) Like earlier reformers, tropes of “failed architecture” pervaded the rhetoric around these developments. For example, public housing “stigmatizes residents”, makes preventing crime a near impossibility, while services such as child care remain severely limited if possible at all. As Hackworth later notes, “the notion that public housing problems are reducible to a series of design mistakes is now popular among many housing planners, PHA officials and increasingly tenants. It is used not only to justify the current state intervention in public housing but also to frame such intervention as progressive, self correcting response to one of the most “serious” problems of public housing.” (184) [ Gwendolyn Wrights 1981 work Building the Dream traces this discourse throughout the 20th century, noting similar processes at work in the 1920s, 50s, and 60s … all while federal planners purposely scrimped on the architecture in the belief it would encourage people to stay for shorter periods while also questioning the validity of those residing in such architecture] Ironically, the New Urbanism pursued by a generation of architects repeatedly privileges design over tenant access, which has come to be defining criticism of HOPE VI housing. As one student in a affordable planning class I once attended remarked, “pitched roofs on public housing isn’t for residents, its for the rest of us to feel good about.”

Similarly, the Low Income Housing Tax Credit enabled investors to create revenue streams through the syndication of tax credits from the construction of mixed unit public housing. Like other critics of neoliberalism, perhaps most notably David Harvey, Hackworth is careful to point out that its effects are uneven. Different localities experience them differently; “local economic geography” does not provide the explanation, but rather, “Deeply ingrained geoinstitutional differences that manifest themselves through housing authorities are far more to blame for eh differences in quantity and quality of public housing after HOPE VI” (52) Using examples from Chicago, Seattle, and New York, Hackworth locates distinct responses: 1) Chicago chose to eliminate much of its public housing stock all together, Seattle attempted to employ HOPE VI funding to establish “relatively low in come diverse environments,” while New York retained as much as its current stock would allow. According to Hackworth, this has left PHA with a “troubling choice between pursuing, on the one hand, a model that might ultimately undermine the public stock even more through gentrification or, on the other, fighting to retain an already problematic and compromised housing system. By contrast, local real estate developers have been given another set of opportunities, as regulations and other factors, discouraging their presence are no longer as acute as they once were.” (60)

The prevalence of public-private partnerships imposed a dominant role on municipal governments, one in which city governance must facilitate the market rather than solve effects of market defects or failures. Problematically, academic research on such governments tends to be “highly localist” in its orientation, meaning it fails to identify how these “local regimes are connected to broader policy shifts” while also ignoring the power public-private partnerships exert. Thus, regime theory studies as thet are known, view state and local funding as separate and “autonomous entities that just happen to be coalescing around a particular set of development concerns”. (61) The failure of regime theory revolves around its inability to “understand regimes as capitalist agents within this dialectic.” As the federal state has been restructured since the 1990s, materialist interpretations of urban governance have increased in importance. The role of exclusion plays a key role here. If previous iterations enabled the federal government to expand through exclusion, then after 1995 when many of these powers devolved, regimes could, as Hackworth notes, “manipulate more directly the expansion-exclusion dialectic in and around the central business district.” (75)

The increasing dependence on real estate investment has accelerated the unevenness of neoliberal development. The new neoliberal city seems “characterized” by an interesting amalgamation of investments, combing inner city and exurban private monies, disinvestment in inner ring areas, less stringent land use mechanisms, and reduce levels of public investment not likely to deliver profit margins to municipalities. In terms of the built environment the result has been an increase in “gentrified neighborhoods and downtown commercial mega projects” which have come to serve as the symbols of the new metropolis. (78) All this stands in stark contrast to the more “managerialist Keynesian” model which had come to be iconically represented by public housing and that of middle class suburban homeowners. In this way, while suburbanization continues, the inner core receives new economic and political attention while inner ring suburbs receive less. Rather than an atomized, individualized process, the “neoliberal spatial fix” occurs broadly, and simultaneously, even if mediated by local factors. Unfortunately, 1970s academics and policymakers failed to connect processes of real estate development and gentrification. However, as heavy industry and manufacturing waned, other economic drivers emerged to replace them. Real estate , “service sector employment”, and tourism filled the void. Perhaps more importantly were the changes in capital that accompanied these alterations, “Capital had “switched” into finance, insurance, and real estate, and the urban fabric was morphing to accommodate these changes,” writes Hackworth. In addition, though surburban growth continues it seems to be connected to “broader social polarization” as inner ring suburbs decline while sites of active growth often serve the upper classes need for second homes and recreational fun. In this model, gentrification serves as the wedge for neoliberal forces to erase or reduce the physical built environment manifestations of Keynesian economic policy, notably public housing . For Hackworth, gentrification is not “politically neutral” but rather a conscious expression of neoliberal forces. As Marcuse and Kempen have pointed out, the inner city proved a key sight for such interventions as manifestations of Keynesian planning could be replaced enthusiastically with mixed income units or business friendly empowerment zones. Predictably, if gentrification previously featured individuals with a real stake in local communities (Hackworth calls them “risk taking owner occupiers” who hoped to rehabilitate brownstones for their own use as well), today these processes unfold under the supervision of “globally linked corporate brokerage firms” . (122) Consolidation of real estate firms, trusts, mortgage brokers and similar actors resulted in a narrower industry. In the past, owner occupiers began the process of gentrificaion on a small scale individual basis, today corporate leadership has replaced these individuals. As Hackworth argues, this has meant “firms are increasingly the first to invest and redevelop property for more affluent users.” (128) Local resistance evaporated as unions shrunk, activism grew more fragmented, and federal redistribution withered away. National urban policy further encouraged these developments as did the belief in municipal entreprenueralism. Organizations that observers might expect to serve local activists like CDC’s find themselves in the odd position of both representing neighborhood concerns while remaining dependent on state based aid and approval. More militant forms of activism found themselves forced out by rising prices or co-opted in some way.

Like other urbanists, Hackworth notes the visible post WWII shift among American cities. Midwestern and Eastern metropolises bled away their manufacturing and industrial bases, as local competition with suburbs and burgeoning Sunbelt municipalities greatly reduced the financial and political pull of traditional cities. By the 1970s, entrepreneurial development as exemplified by “tax abatements, land giveaways, and lax or nonexistent zoning” came to dominate local urban policies. With the 1973 crisis and the general pull of deindustrialization, downtrodden downtown areas became attractive investments, especially with increased deregulation. Mega projects in the guise of “festival marketplaces” or “office complexes” came to dominate. With reduced federal expenditures, property development became the domain of national and global enterprises [example- Lincoln realty]. Hackworth explains this shift in relation to the previous Keynesian model, “if suburban house builders like the Levitts were iconic facilitators of the Keynesian spatial fix, large commercial developers like rouse are the iconic facilitators of the neoliberal spatial fix. The commercial mega projects that they build have utterly transformed the physical landscape of cities while also serving as symbols of a new form of urban governance.” (153) The commercial redevelopment of central business districts has emerged as the most prominent form of post 1970s urban economic development. While some positives may arise out of such workings, Hackworth points to three fundamental problems. First, success can not be guaranteed and even when it is, it depends on how one defines it. Take Boston’s “Big Dig” which was completed years late, with massive overspending and even the loss of life. While many argue it has improved parts of Boston for the better, how does one measure the overall cost/success ratio? Second, the amount of public space following commercial redevelopment often finds itself diminished, “though many commercial redevelopments are publicly funded or supported, most are regulated and policed by the private sector.” (170) Finally, the type of jobs that come with such development often prove less beneficial for workers than previous manufacturing, industrial , or small business employment.

Employing tactics to correct the failures of neoliberal urban policies proves difficult especially as Hackworth points out that neoliberalism exists as both a “unified meta-concept and a locally contingent, actually existing set of policies that contradict one another. The ideas underlying neoliberalism are relatively unified and reproduced by a specific set of institutions (IMF, bond rating agencies, Washington Consensus, etc) but at the same time the geography of neoliberal implementation is much more complicated.” (187). Still, The Neoliberal City points to several existing “threads of resistance” that hold out hope for reform, among them are: the anti-globalization movement, movements toward economic justice such as living wages, battles to maintain current Keynesian urban institutions like hospitals, public universities and public housing, anti-gentrification battles (though Hackworth carefully notes that b/c gentrification effects groups/individuals in different ways coming up with a unifed alliance on this issue often proves difficult) and collective ownership of “various aspects of life that have been affected by neoliberalism”. Here Hackworth refers to communities opening their own banks, production of their own goods through the purchase of a workplace previously run by a global business, and the use of housing cooperatives and land banking “practices”. Unfortunately, these threads remain just that. If one trend that Hackwork, Roger Sanjek, Gregory Stevens, and others have described is the fragmentation and marginalization of opposition. Another problem arises when one must distinguish between real neoliberalism and rhetoric that resembles neoliberalism but really functions as simple exclusion, “Simply put, how does on critique neoliberalism when its proponents are merely using ideas of neoliberalism as political cover for some other usually antisocial motivation or policy?” (199) More than anything, Hackworth argues, neoliberalism must be denaturalized or shown to be a policy process that has been implemented rather than naturally reached. Referencing Marcuse and Kempen’s TINA syndrome (“There is no alternative” choice) poliymakers, the public, and broader discourse must move away from such reductionist conclusions.

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