Free The Streets Were Paved with Gold by Ken Auletta Page A

Corporation Counsel Leo Larkin, and the head of the Central Labor Council, Harry Van Arsdale.
    The following pages attempt to isolate some of the key events and city, state and federal decisions which helped cripple New York. Some of these decisions were bad; some were good, some neither. All had profound consequences. At the risk of overdramatization, they might be called the “original sins.”
Growth of the Suburbs
    Americans were shocked in the mid-1970’s when the Marxist government of Cambodia harshly ordered the resettlement of a nation. Millions were forced out of cities and into the countryside. The intention of the ruling claque, backed by a murderous militia, was to yank Cambodia back into an agrarian, preindustrial society. An entire people was uprooted at gunpoint.
    America experienced a voluntary but no less massive migration, as poor blacks and Hispanics moved north and middle- and upper-income whites fled to the suburbs. The causes of the fiscal crisis cannot be fully comprehended without charting this exodus of wealth and flood of poor people. Admittedly, population shifts were inevitable. They result from “progress”—air conditioning and superhighways and the airplane helped open the South. People’s natural desires for newness and space and property are not easily satisfied in aging, congested cities.
    But a good deal of this population shift was foreordained by city, state and federal policies promoting highways and low-interest government-sponsored home loans. Such policies did not originate with masterbuilder Robert Moses or the federal government, as is commonly assumed. In a fascinating piece of research, Cornell’s Robert Finch unearthed the original 1929 plan of the New York Regional Plan Association. Today, the Association is dedicated to mass transportation and controlled growth; fifty years ago, it was dedicated to and controlled by Manhattan real-estate interests whose aim was to replace the sprawling, low-rise lofts and tenements with high-rise buildings. The Association’s twelve-volume plan urged a “highway system, designed like a sculptor’s armature to serve as infrastructural support for the desired suburbanization and decentralization of the region.…” The plan proposed to shift Manhattan’s economic base from light industry to office towers. It was silent about the subway system and largely ignored the issue of mass transportation. It was this plan that was later followed and supplemented by Robert Moses. Manhattan real-estate values soared, and roads cut wide swatches through neighborhoods.
    There was business logic to the plan. From a profit-making point of view, the crowded lofts and tenements and small factories were inefficient. Greater profits could be generated from high-rise buildings housing many more rent-paying tenants and businesses. The highways made for cheaper truck transportation. In a free economy, it was not surprising to see landlords and developers act in their own interest. Perhaps a socialist system, intent on development, would have made similar decisions—with the buildings even uglier, a tomb to proletarian solidarity rather than an ice-skating rink in Rockefeller Center. But the demands of profits and growth inevitably clashed with neighborhoods and a sense of community.
    Public officials, spurred on by a plethora of developers, construction unions, lawyers, insurance agents and patronage-hungry politicalleaders, plunged ahead. In the 1930’s, the federal government financed private homes by creating the Federal Housing Administration to stimulate the flow of money into home mortgages. This effort was interrupted by World War II, but then on June 22, 1944, President Roosevelt signed into law the GI Bill of Rights. The federal government now offered 4 percent home loans to veterans, with no down payment required. Thus the American dream to own a home led to massive federal assistance to fulfill that dream. Implicitly, government was saying:
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