One thing is clear as Paterson enters its next phase of “community development” and “revitalization”: Patersonians are not the priority. Like the jaundiced face of the police “reform” we have all become accustomed to over the years, community “development” and revitalization are but deceptive terms used to mask true intentions. For the established players (read politicians with ties to developers and financial groups), it means new opportunities to turn a profit. For the precarious and vulnerable of our city —of which at least one-fourth of Paterson is, if we go by those living beneath the poverty line—it means further marginalization as new investors speculate on the lands beneath them.
To better see through the folly that is “community development” it is important to understand how the political economy of so-called development works. In order to do so we must ask ourselves the following questions: what are the drivers and goals motivating housing development? Who is at the center of this investment and who stands to benefit the most? How is the city government facilitating this process and what is the impact on the most vulnerable? And, what commitments do these investors have to the people already living in the city? If we start here, we can better map the trajectory of development and be better informed on whose priorities matter and how to make sure our communities are not displaced for the sole purpose of profiteering.
For decades now, communities in our state and across the country have been sold the same story: the only way out of underdevelopment is new development. Nice-sounding terms like revitalization and development precedes terms like “up and coming,” terminology that signals new changes in a city. Communities are told that the influx of investment is a good thing and will bring much-needed reprieve from the urban blight that plagues many post-industrial cities. But when we look closely, underdevelopment is not a random phenomenon but a product of specific political economy and its cycles, the natural outgrowth out capitalism.
Paterson today is undergoing what can be considered it’s first phase of gentrification, reinvestment. Most of us have heard the term gentrification but may be unsure as to what it means. According to the policy analyst Sam Stein, reinvestment—the first stage of gentrification—occurs after a long period of disinvestment that depreciates the prices of real estate in a given city. In Paterson, like other industrial cities, this took place in the late 20th century, as capitalism’s pursuit of cheaper labor and other input costs motivated companies to move their jobs elsewhere.
Instead of paying their workers more to keep pace with rising costs of living, companies preferred to close their factories in places like Paterson and relocate them to places where the wage floor was much lower. White flight compounded the impact of lost tax revenue, when the established middle class of Paterson left the city and took with them the vital capital that sustained the city. The ensuing domino effect led to the underfunding of schools and depreciating values. While the residents who were left behind struggled to survive, investors saw an opportunity to buy up large swaths of property to flip and turn a profit. Enter the period of reinvestment.
The process by which people bet that prices will go up in the future is what is called speculation. This process is a key driver for displacement as real estate developers hold onto properties in the hopes that the so-called free market will increase the prices of their properties, allowing them to take out bigger loans and begin the cycle anew. Such has already been in place for years in Paterson, with the 100 Mile Fund having already invested over 60 million dollars in 10 short years. This money is not a grant but an investment, meaning that it needs to turn a profit, and speculation is the way that it is done.
Assisting in this speculation are tax abatements, a reduction or elimination on the taxes paid by developers from anywhere from 5 -30 years. In Paterson, over 400 tax abatements have been granted on millions of dollars’ worth of properties throughout the city. These tax abatements block the much-needed taxes the city desperately needs from coming in. What Paterson is left with then is underfunded schools, roads and libraries. As developers and city official tout new investments, dilapidated schools embody the other reality just meters away.
Revitalization and development are but euphemisms that make up the smoke screens politicians use to win over support for projects that only benefit investors, while distracting from serious corruption.
Understanding the political economy of development can help us see through folly of these projects and be better informed to reject the long-disproven theory of trickle-down economics, the belief that new investments will reach the most economically vulnerable in our community. Outside developers are not interested in serving longtime residents for the simple fact that they do not line their pockets or provide them with tax abatements. It’s time to people ahead of profits when rebuilding our cities.
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