On May 9, 1959, Aurora Vargas was forcibly carried out of her home by police officers. There was no clear justification for this; Vargas had broken no laws, and her family’s home was not under foreclosure. This clear violation of property rights is common in countries ruled by totalitarian dictatorships, but this scene occurred in Los Angeles, California.
Aurora Vargas and her family were evicted from their home by LA County Sheriffs to clear the way for what would become Dodger Stadium. Although the Vargas family was given $17,500 as compensation, few would dare to say that this displacement was just. The infamous image of Vargas’ eviction is only a glimpse into the disaster of urban renewal, the decades-long nationwide campaign of destruction and displacement during mid-twentieth century America.
American urban centers exhibit steep levels of inequality. Wealthy businesspeople walk the same streets that unhoused individuals live on, while luxury high-rise apartments tower over dilapidated public housing projects. Populists often blame the market, but this inequality is primarily the result of historical and contemporary government overreach, such as urban renewal.
Urban renewal was the policymakers’ effort to slow white flight and reverse metropolitan decline, as urban populations were slowing or even decreasing throughout the mid-1900s. Subsidized mortgages empowered more people to move out to the suburbs, further shifting property values and causing white families — with their capital — to abandon increasingly racially diverse urban centers. Urban renewal efforts were, at least on paper, intended to reverse this hollowing out. As in many cases of state intervention, the cure was worse than the disease.
Urban renewal began with Title I of the 1949 Housing Act, which authorized local governments to raze neighborhoods which were labeled as slums or showed visible signs of blight. By 1962, the federal government had allocated over $3 billion to local municipalities to exercise eminent domain to clear land, and construct projects such as schools, hospitals, highways, and public housing. In the process, countless neighborhoods were bulldozed, and over 300,000 families were displaced. Despite being barely a fifth of the population in most cities, African-American or Puerto Rican families were two-thirds of those displaced.
Although urban renewal was initially pushed as a policy to help impoverished people through upgrading the low-income housing stock, the misplaced good intentions of community activists were quickly overrun by self-interested local politicians and metropolitan land developers. The subsequent Housing Acts in 1954, 1959, and 1961 shifted urban renewal policy towards funding private commercial endeavors while upscaling displacement and inadequately replacing demolished homes. The Housing Act of 1949 promised 810,000 new housing units by 1955, a target missed by over two decades. The public housing units that were eventually built only served to concentrate poverty and contribute to racial segregation. Between 1950 and 1970, majority black and impoverished neighborhoods in Chicago were 23 times as likely to be saddled with public housing projects. These developments became pockets of crime, single-parenthood, and inadequate schooling, creating long-term roadblocks to mobility for displaced people.
The tax dollars of impoverished residents subsidized their own displacement. Urban renewal destroyed the same housing stock it was enacted to improve, spread the blight it intended to eliminate, and further concentrated poverty in metropolitan areas. In the process, it earned the moniker, “a war on the poor.”
Policymakers did not learn their lesson despite the general consensus surrounding urban renewal’s failure. The HOPE VI program during the 1990s revived the public housing vision of urban renewal, and currently $5 billion is spent annually on eminent domain compensation nationwide, still without properly considering the effects of displacement.
Metropolitan areas still show the scars of the federal bulldozer through widening wealth inequality and visible racial segregation. Forcible displacement inflicted economic trauma that was not easily undone, leading to a poverty trap compounded by the segregation between public housing communities and the rest of central cities. As a consequence, impoverished areas have borne the brunt of business closures and declining educational opportunity resulting from economic shocks. This combined with the substantial increase in the cost of substandard replacement units deepened the harm of displacement.
Central planning urban development through eminent domain projects, although supposedly utilized for the “common good,” is neither decided democratically nor provides equal results. Urban renewal predominantly benefited local politicians seeking to win votes and increase tax revenue, along with central city business moguls who acquired hefty government contracts. Urban renewal is a cautionary tale for utopian advocates for the impoverished. Improvements in living conditions for economically disadvantaged people will not come through sweeping government action.
Abuses of state power have severe ramifications regardless of whether they come from federal or local governments. Municipal politicians face the same knowledge problems in “correctly” allocating resources, making any intervention predestined to fail. Urban renewal was not a failure of execution — it was a failure of principle. When local governments trample property rights to manufacture progress, they setback the very communities they aim to serve.