- Both Pete Buttigieg and Beto O’Rourke have backed housing demolition programs in South Bend and El Paso.
- Housing demolition is a controversial issue on the left. Affordable housing advocates see it as a pro-gentrification policy.
- In South Bend, more than 600 homes were destroyed. In El Paso, the oldest barrio in the city was slated for demolition.
Pete Buttigieg presided as mayor of South Bend over a plan that resulted in the demolition of more than 600 homes over a period of about three years. “1000 Homes in 1000 Days” sought to rehabilitate or demolish vacant or abandoned homes in the Northern Indiana town, an initiative that some progressive activists have criticized for encouraging gentrification and reducing affordable housing.
“By day 1,000 the City had taken action on 1,122 properties, nearly 40% of which were repaired,” according to a statement on the South Bend website.
The initiative sparked an enormous backlash from residents, Buzzfeed reported Tuesday night, which propelled Regina Williams-Preston to a city council seat. According to the Buzzfeed report, the demolition program, “ultimately cost her family several investment properties they hoped to repair but couldn’t after Williams-Preston’s husband suffered a serious illness.”
The story of the South Bend demolitions has parallels to the real estate dealings of another Democratic presidential candidate: Beto O’Rourke. In El Paso, where O’Rourke was a city councilman, he supported the bulldozing of the Duranguito, the oldest barrio in the city, to make way for new development. (RELATED: Beto O’Rourke Paid His And His Wife’s Company $110,000 In Campaign Funds)
In O’Rourke’s case, there are some shady transactions, such as his sale of the Imperial Arms apartment complex to a campaign donor in 2017. For Buttigieg, there is no appearance of corruption, just a technocratic philosophy he may have picked up during his time in management consulting, which, for Councilwoman Williams-Preston, caused her to lose thousands of dollars in investment properties that were bulldozed.
For those watching the development of the 2020 Democratic field, these real estate fights are a pretty good way to tell which side of the party’s internal divisions they will come down on. On the one hand are insurgent progressives like New York Rep. Alexandria Ocasio-Cortez, whose opposition to the Amazon New York headquarters was informed in part by concerns about gentrification. On the other hand, there are veteran deal-makers like Nancy Pelosi, whose husband has worked in real estate.
These fights O’Rourke and Buttigieg have taken on are likely interpreted among Democratic Party leadership as an indication that they can be worked with: They understand the need for development and a policy environment that encourages it. For progressives, it shows they aren’t committed to affordable housing, battling gentrification, and other left-wing urbanist priorities. (RELATED: Pete Buttigieg Said ‘All Lives Matter’ In 2015)
Pelosi’s own real estate corruption was exposed when Peter Schweizer published his 2011 book “Throw Them All Out.” The book revealed Pelosi obtained $50 million in earmarks for a light rail project that ran near a building her husband owned. A Washington Post investigation in 2012 found that congressional earmarks often went to projects near property lawmakers owned.
Beto, Buttigieg, and New Jersey Sen. Cory Booker are all trying to occupy the same position in the Democratic primary field, and Booker, who lived in an affordable housing building in Newark, will be in a good position to criticize both of their records as the race unfolds.
In recent years, the traditional lines of housing policy have become somewhat blurred. Democrats have historically been a party that represented the interests of renters and construction unions, whereas Republicans represented homeowners. In California, the current political divides are the opposite: Democrat-controlled cities like San Francisco are famously hostile to new housing construction, while state-level Republicans try to ease zoning and other regulations to pave the way for new development.
While there is a strong case that California, and especially the urban parts of it, need new housing units as soon as possible, most of the rest of the country has the opposite problem. The median home value in the city of Cleveland, according to Zillow, is about $55,000. In Kansas City, it’s $149,300, and that includes wealthier outlying areas in the city; it’s probably lower closer to the center of the city.
A homeowner in Cleveland has very little incentive to put a $25,000 roof on a $55,000 home. As a result, the housing stock tends to deteriorate when home values are so low. If there is a continuum between San Francisco and Cleveland, most of the country is closer to Cleveland.
That’s why housing demolition can be good. Cleveland has had a home demolition program, and so does Detroit. The idea is that by reducing excess supply, you raise the price on existing homes, giving homeowners an incentive to invest in their property and their communities. For heartland cities impacted by deindustrialization and brain drain to the big cities, demolition has to be on the table as a policy option to maintain property values.
Affordable housing advocates claim that demolition takes properties off the table that could be rented by the poor, but the fact is this housing stock is often in very poor condition. In many places they aren’t the sort of shelter a person would want to live in.
The rub, and what upset Councilwoman Williams-Preston, is the terms by which a government decides to demolish a vacant or abandoned home. According to the Buzzfeed story, many of the owners of demolished properties wanted to rehabilitate them, but didn’t have the money to do so. Instead, they found themselves facing heavy fines and penalties from the city government. Code enforcement liens can be used to foreclose on properties, which is what the city did.
Beto O’Rourke’s real estate dealings and support for development in El Paso paint him as an old fashioned pro-development Democrat, one that the party’s leaders should be perfectly comfortable with. Buttigieg, on the other hand, touts his demolition record in his recent book as “a classic example of data-driven management paying off.”
The pair’s brand of expert-driven liberal governance has winners and losers. The winners in this case were homeowners, and the losers were poor residents, hence the progressive outcry. As the 2020 race heats up, expect this tension to get worse, not better.