Monday, October 10, 2011

USA Had Slums in 1949 ... Lessons for Africa

A new study by Vanderbilt economist William J. Collins and Ph.D. candidate Katharine L. Shester looks at the long-term economic impact of the ambitious (and highly controversial) Housing Act of 1949, which used federal subsidies and the powers of eminent domain to “revitalize” American cities, i.e., to clear out the slums. By the time the program ended in 1974, 2,100 distinct urban renewal projects had been completed using grants that totaled about $53 billion (in 2009 dollars). In one of the rare papers to collect and analyze data related to the program, Collins and Shester come up with a positive picture of its effects – at least in some ways. The authors are clear that the ugliness involved with pushing people out of low-income housing was the reason the program was shut down, and that their results do not “imply that the dislocation costs for displaced residents and businesses were unimportant.”

A tin shed structure surrounds a locked pit latrine in Kibera, Nairobi’s largest slum. Communal pit latrines are the most common sanitation facility available to the residents of the low income settlement. Often shared by hundreds of people the pay-per-visit system of toilets in Kibera is a lucrative business for structure owners Flickr Photo

Cities that did the most slum-clearing or “urban renewal” had a higher increase in property values, income and population compared to non-participating cities. The results also show that these cities maintained roughly the same demographics, and did not push low-income residents out of cities, but rather redistributed the population.

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