Map 3
(left) : Brooklyn Community District 3.
Map 4 (middle) : Bed-Stuy according to the Bedford-Stuyvesant
Redevelopment Corporation.
Map 5 (right) : Bed-Stuy according to the Department of Housing
Preservation & Development
History
As Douglass North simply put it: “History matters. It matters not just
because we can learn from the past, but because the present and the
future are connected to the past by the continuity of a society’s
institutions.”(6) Bed-Stuy has a relatively short history as a
community, since its Afro-American and Caribbean population really
started coming to the neighborhood in the1920s.(7) The brief historical
description of the neighborhood which follows aims at demonstrating that
institutions and social capital had little opportunity to develop until
the end of the century. Examining another history, the history of
American slavery, would be needed to understand why immigrants from the
South of the US did not have levels of trust and cooperation among their
community comparable those of other immigrant communities, such as the
Caribbean and African communities. But I will limit myself here to the
history of Bed-Stuy.
The Dutch West India Company established Bedford in 1663. It was a rural
community until the Nineteenth Century(8) when Dutch farmers started
selling land to newcomers. Free African-Americans were among the first
to buy land and settle in the area. Weeksville was named after James
Weeks, an African-American entrepreneur who bought land in 1838 and sold
it to other black settlers.
Weeksville and Carsville are two small closely related black settlements
begun in the 1830s and 1840s. They were located less than a mile from
each other on the former farmland in the Southern portion of Bedford, in
an area bounded approximately by present-day Atlantic Avenue, Ralph
Avenue, Eastern Parkway, and Albany Avenue. By the mid century, these
communities were well formed and had begun to establish schools,
churches, and other institutions of community life.(9)
 |
| Map 6 :
Pratt Center for Community & Environmental Development and
Joan Maynard |
These settlements became a refuge for
blacks from New York City during the great Draft Riots in 1863 and kept
expanding thereafter.(10)
In the 1860s and 70s an increasing number of wealthy New Yorkers, mainly
from Dutch and German descent, established residence in Bedford. The
urbanization of the neighborhood followed the street plan ratified in
1839, which extended the grid throughout Brooklyn11. Bedford was an
exclusive and highly demanded suburb. Market pressure led to rapid
urbanization of the area: “the suburban district of freestanding frame
and brick homes was gradually transformed into a more urban neighborhood
of brick and brownstone row houses.”12 Instrumental in popularizing
the neighborhood was the construction of the elevated railway lines
giving fast access to Downtown Brooklyn and Manhattan. The housing
market boomed from 1880 to 1920 as Neo Greek, Romanesque, and Queen Ann
style buildings mushroomed all around Bedford.
In the course of a few years, the demographics of the neighborhood
changed dramatically. “[W]hile the brownstone houses of Bedford were
solidly built and long lasting the community itself was to be temporary,
transformed in a few short years by the ceaseless forces of urban
change.”13 Between the wars, and particularly after the Great
Depression, middle and upper class people moved out of the neighborhood.
Real estate value dropped and working class people moved in. Bedford
became less exclusive and more integrated: “Jews, Italians, West
Indians, Irish and other ethnic groups settled in this aging yet still
comparatively attractive neighborhood.”14 Many property owners had
become too poor to keep their homes. Sold because their owners were no
longer able to afford their property taxes, or voluntarily selling their
property before it devaluated further, the brownstones of Bedford
quickly switched hands. Black in-comers filled up the houses abandoned
by previous immigrants. The devaluation of Bedford corresponded to the
massive migratory flux of black Southerners and West Indians to New York
that began in the 1910s and 20s. “From the poverty and social
constraints of the rural South came thousands of black men and women,
seeking the greater opportunities for economic advancement and personal
freedom supposed to exist in northern cities. Bedford became first
choice destination for black immigrants. The existence of communities in
Weeksville, Carrsville, and Fort Green made it easier for other black
immigrants to settle in the area. The construction of the A train in the
1930s made the commute between Harlem and Bedford much easier. Many
people came from uptown to central Brooklyn, which offered more jobs and
better housing.
Property value was dropping fast. A number of white homeowners reacted
by attempting “to persuade residents not to sell to blacks and
encouraged the use of racially exclusive covenants.”15 However, the
white flight was a self-fulfilling prophecy, and totally destabilized
the real estate market. The real winners were not the black immigrants
who purchased the properties, but real-estate traders:
How do slums begin in the cities? Ask the question to some older or
former Bed-Stuy residents and they will be quick to give you a one-word
answer a³blockbusting. Real estate brokers, speculators, professional
blockbusters, not excluding certain banks and mortgage companies are all
considered to follow this practice and hence to be slum builders. Many
stories are told and retold about such incidents of exploitation as
black family forced to pay $20,000 for a house that the realtor had
purchased for $2,000 or $3,000 just the week before. Additionally it was
hard for a black man (or woman) to get a mortgage, many blacks had to
turn to a middleman, who did his “share” in fleecing poor buyers.
Thus the new black owners found themselves faced with an ironic
situation: they had entered into this financial serfdom in order to
provide a better standard of living for their families and themselves.
Yet in order to maintain the homes that were to help to do this, many
were compelled to cut up the older Bedford-Stuyvesant house they had
purchased into “rabbit warrens” renting out the cubicles for
whatever amount they could bring.16
The “slumification” of the
neighborhood really began in the 1930s after the Great Depression as
bankruptcy and poverty spread all over New York. Blacks were the first
fired and last hired. From then on, the neighborhood was pretty much
left to itself by the public authorities until the 1960s when Senator
Robert F. Kennedy toured the dilapidated streets of New York’s
Bedford-Stuyvesant neighborhood and planted the seeds for what would
become the Bedford-Stuyvesant Restoration Corporation.
Job opportunities at the Navy Yard during the Second World War brought
more black immigrants to what is now known as Bedford-Stuyvesant. The
two neighborhoods, following the same evolution, came to be known as
Bedford-Stuyvesant.
Since the postwar period to our days, racial diversity declined
steadily. The population of Bedford-Stuyvesant went from being 25% black
in 1940 to 50% in 1950, 74% in 196017, 82% in 197018, and to about 85%
since the 1980s. Behind this apparent racial homogeneity lies a variety
of national origins and socio-cultural backgrounds, including, by the
1970s, Puerto Rican, middle class black-Americans, and West Indians.19
The concentration of blacks in Bed-Stuy can be attributed to racial
segregation in housing more than the will of black people to live in
homogeneous community.
Blacks of the 1950s and 1960s were simply unable to buy or rent homes in
large parts of Brooklyn and in many white residential districts
throughout the metropolitan area. Residents and real-estate brokers, in
these areas combined to exclude black families unhampered by the
ineffectively enforced civil rights laws. Bedford-Stuyvesant was one of
the few areas open to blacks.20
In a 1967 survey of the Bed-Stuy community, when asked to choose between
“moving into a block with people of the same race or one with people
of every race”, nearly 4/5 of respondents chose “every race.”21
Despite rampant segregation and institutional racism thus, the black
population was open to live in a multi-ethnic environment. The schools
were not receiving adequate support, city services, and public works
were almost non-existent, and the police were feared rather than
reassuring. Injustice and poverty led a minority of black-American to
endorse a separatist ideology. Political tension reached its climax in
Bed-Stuy during the Civil Rights Movement, in the late 1960s. It
resulted in a one-day riot on July 29, 1967:
[T]here were serious disturbances at the busy intersection of Fulton and
Nostrand Avenue. Over one thousand young blacks (age fifteen to
seventeen years) had broken windows, set buildings aflame, ripped
storefront gates, stolen and looted on Nostrand Avenue between Atlantic
and Fulton. ? fourteen people had been arrested; a full alert had been
put on in Bedford-Stuyvesant. The 20th Tactical Patrol Force had been
sent into Bedford-Stuyvesant because there had been four consecutive
nights of sporadic violence in Spanish Harlem.22
Most rioters were disillusioned second-generation teenagers. In 1967,
the “need for jobs and fuller employment” was cited by 41% of
surveyed residents as a main problem23. Perhaps the high percentage of
recent immigrants in Bed-Stuy prevented the riots from reaching the
scale of the riots in Harlem, Newark, Los Angeles, or Detroit.
Immigrants are often too busy trying to make it to engage in political
action.
These events happened shortly after Senator Robert F. Kennedy had toured
Bed-Stuy and initiated the first Community Development Corporation (CDC)
in the country, the Bedford-Stuyvesant Restoration Corporation. Senator
Kennedy convinced eminent personalities of the political and business
world to join the board of the Restoration Corporation, thus insuring
maximum credibility and enabling it to become the first CDC to receive
federal funds.
However, the Restoration Corporation did not succeed in lifting Bed-Stuy
out of poverty. Not all programs succeeded, as the failure of the
following IBM project illustrates. One of the chairmen of IBM, Thomas B.
Watson, was also a board member at the Restoration Corporation. Mr.
Watson was instrumental in opening an assembly plant employing four
hundred people. Unfortunately, the plant failed to show adequate returns
on investment and was finally converted to public housing (after an
unsuccessful attempt to transfer the ownership to the employees). The
“additional cost, above and beyond that which a similar plant
elsewhere would have required, has militated against the likelihood that
other corporations would locate there.”24
It seems that the Restoration Corporation was no exception to the
general failure of CDCs to develop distressed neighborhoods. David Rusk
notes that “in cities across the country, the 34 target areas served
by the most successful CDCs as a group still became poorer, fell farther
behind regional income levels and lost real buying power.”25 The same
observation was also made by Margaret E. Dewar: “Most evaluations
conclude that state and local business financing to stimulate economic
development outside big cities does not achieve the explicit goals ?
Programs aimed at specific distressed geographic areas show almost no
effects on the growth of these areas.”26 In other words, if citywide
programs can have an impact on neighborhoods growth, no evidence proves
that programs limited to specific locations bring results. It is hard,
however, to evaluate the impact of CDCs on depressed neighborhoods
because firstly their programs might have long-term a reach rather than
short-term effects and secondly it is impossible to evaluate how much
worse the neighborhood could be had the CDCs not being present.
However, even if the Restoration Corporation did not save Bed-Stuy, the
money and expertise it channeled to the neighborhood have had a long
lasting effect on the neighborhood. Its renovation and mortgages
programs had a tremendous impact on the longer-term appreciation of the
housing stock and stimulated private re-investment. The Restoration
Corporation could even take a good part of the credit (or the blame?)
for the current boom in real-estate value, since its revitalization of
the neighborhood stimulated private investment.
The Restoration Corporation brought a great deal of linking capital to
the community27: it re-established formal connections with some
mainstream public and private institutions. It was a welcomed
manifestation of good will from the authorities, even though much more
was needed to restore the community’s trust in public institutions.
Years of economic poverty, financial redlining, political segregation,
and legal injustice have definitively done much to “ghettoize” the
community. As World Bank social scientist Michael Woolcock noted,
“hostile or indifferent government have a profoundly different effect
on community life (and development projects), for example, than
government that respect civil liberties, uphold the rule of law and
resist corruption.”28 Henry L. Gates of the African-American Studies
department of Harvard, suggests indeed that much of the “gangster
culture” and “show me the money” attitude that came to epitomize
black ghettos such as Bed-Stuy has deep roots in the political and
institutional history of American society, starting at the White
House.29
On top of existing economic and social problems came the devastating
crack and heroin epidemics, which began during the 1970s and late 1980s.
Drugs were and still are a way out of boredom and bitterness for many
unemployed and disillusioned youth, and also the most direct (sometimes
the only) way to make money. “The quest for manhood is not a simple
thing in any community, but in such areas as Bed-Stuy, in Brooklyn it is
as difficult as an escape from prison.”30 Indeed, many youth of Bed-Stuy
grew up with weakened or non-existent social and familial structures:
As a result action is what happens on the street, and when a youth
graduates from them, he has his diploma into adulthood but he is not
necessarily a man. His entire experience is likely to be circumscribed
by a series of predictable dehumanizing incidents: gang rumbles, quickie
sex in tenement hallways, petty thievery, menial jobs at meager pay, and
a number of abusive confrontations with the law. Indeed, his
relationship with the police is the most predictable of all. It is also
likely to be the most brutal.31
Poor neighborhoods become poverty machines that generate poverty
itself.32 Bed-Stuy seemed to be locked up in a vicious cycle of poverty
until the early 1990s. Redlining by banks made it difficulty to start
new businesses or even to save money. The unavailability of capital in
the neighborhood prevented investment and thus the creation of more
capital. It constituted an absolute constraint on growth. Poverty itself
has an anti-growth effect. Poor are often unable to develop skills for
the market and are less responsive to opportunities.33 Given this
seemingly hopeless situation, many of the most upwardly mobile residents
moved out of the neighborhood as soon as they could, leaving behind more
empty houses, broken windows, poverty, and despair.
Poverty, hopelessness and drugs congregated to create “high rate of
crime and violence that [in turn] generate[d] low levels of trust and
cooperation among residents.”34 However, it seems that as a response
to a hostile environment and in the absence of mainstream institutions
linking Bed-Stuy to the rest of society, solidarity and informal
institutions got stronger. But the social capital needed to support
economic institutions in the neighborhood was definitively lacking. The
legal system was not trusted, and connections to the rest of society
weak. Reliance and cooperation with the immediate entourage was
therefore a matter of survival, to the youth it could mean sticking to
the gang, and to the elderly, reliance on familial and religious circle.
In other words bridging capital was low but bonding capital high35.
 |
 |
| The
numerous religious communities of today’s Bed-Stuy inherited
some beautiful churches from the upper-middle class population
of the early twentieth century. |
Community organizations such as
charities and churches have a very important role in Bed-Stuy. They have
been instrumental in preserving some sense of pride and solidarity in
the community and to a large extent filled up “structural holes”36
left by the lack of formal political and economic institutions. In an
interview I had with Assemblywoman Robinson, who represents the 57th
precinct (which includes Bed-Stuy), she recalls the great benefits
brought by churches to the community. They bound religious communities
together, and many have direct social programs such as food and clothing
distribution, affordable housing development, and financial support for
small business.
Today the ghetto is still in Bed-Stuy, but Bed-Stuy is out of the
ghetto: Nearly a quarter of households have an income over $50,000
(compared to only one eighth in 1990)37. Real-estate value has doubled
or tripled in the last five years. The infant mortality rate decreased
from 21 per thousand in 1990 to 9.1in 199938. Crime rate in the 79th and
81st Precinct covering Bed-Stuy has decreased by 60% and 58%
respectively since 199339. The war on crime launched by the Giuliani
administration since 1993 definitively deserves a large part of the
credit for this dramatic decreases. While reduction of criminal offenses
in the Bed-Stuy area corresponds to the citywide numbers, other
neighborhoods with similar reduction in crime rates did not experience
the same income growth and quality of life improvement. Other macro
factors for the recent development of Bed-Stuy include the American
economic growth of the 1990s. A little share of the wealth created by
Wall Street and Midtown trickled down to Bed-Stuy.
The history of Bed-Stuy is the history of the trial and tribulations of
its people. By an irony of history one of the most beautiful
neighborhoods of New York City became the home of some of those who have
suffered most from segregation and injustice. Residents of Bed-Stuy are
increasingly recognizing the value of their neighborhood, as newcomers
keep flowing in. Today, the neighborhood is developing from the bottom,
with poor immigrants striving to make it and running small businesses,
and from the top with newcomers bringing investment and hope. The next
section will focus on immigrants coming from poor countries. The history
of Solomon and Malik will illustrate the energy and entrepreneurial
spirit of immigrants from the Caribbean and Africa.
Immigration
Poor immigrants kept coming from the Caribbean, but also from the French
Antilles, Latin America, and Africa throughout the twentieth century. At
the same time, second and third generation black Southerners and
Caribbean with higher educational and income levels came (or came back)
during the 1990s, bringing more purchasing power to the neighborhood. I
will first describe the contribution of the Caribbean and African
immigrants to the recent development of the neighborhood, discussing
along the way the costs and benefits of the informal economy for which
these groups are often held responsible. Then I will analyze the impact
of higher-income newcomers, from New York and the rest of the world.
The West Indian population started moving into the neighborhood as early
as the 1920s. It seems that they have been among the most successful
segment of the community. As a Caribbean resident stated: “ the Bed-Stuy
West Indian would be among the most ambitious and hard-working people
one would find anywhere. This seems to be true wherever the West Indian
finds himself, and however incongruous his ambitious behavior may be
when contrasted to others in the community.”40 Mr. Senckler,
vice-president of the Restoration Corporation, himself a
second-generation Caribbean born and raised in New York, calls
immigrants the “backbone of the community”. He believes that they
bring a positive energy to the neighborhood. “They are hard working
people, with a strong desire to succeed.” Mr. Senckler also emphasizes
the cultural contribution of immigrants to the community.
 |
| The
picture shows a gas truck owned by a Caribbean driver in Bed-Stuy.
The Drawing represents the Lion of Judah, a biblical symbol of
the Rastafarian religion and culture. The flag with the colors
of Ethiopia reading “positive” is representative of the
attitude of many Caribbean descendent. |
Many businesses in Bed-Stuy are owned
by people of Caribbean descent, typically health food stores, take-away
restaurants and house repair. The Caribbean population is often
perceived as having strong moral values and entrepreneurial skills. Many
Caribbean families choose to invest in their children’s education and
send them to religious or private schools. This has paid off already as
an increasing number of second generation Caribbeans who came from poor
immigrant families, climbed up the social ladder to middle and
upper-middle class professions and incomes. Mr. Senckler himself
exemplifies this pattern of success. As a resident quoted by Mary Monomi
bluntly put it: “It is one thing to say that there are blacks in high
positions in the police and fire departments and in the school system,
and those who own some sort of business. It is quite another thing to
check it out and see that most of those so-called success stories are
about immigrants whose formative years were spent on some small foreign
islands in the Caribbean a³or the children of those immigrants.”41
However this statement is dated (1973) and probably says more about the
pride of the respondent than anything else. The Caribbean and
African-American cultures have merged to a large extent in Bed-Stuy.
Assemblywoman Robinson, who praises immigrants for the cultures and
value they bring, doesn’t like to separate black-American and
Caribbean people: “both share a common history and are the original
people of Bed-Stuy.’
Solomon’s story exemplifies both the entrepreneurial spirit of
Caribbean immigrants and their integration. Bricklayer and brownstone
owner, Solomon came to New York in the 1970s from Trinidad. He first
settled in Queens, in a neighborhood where he could find good schools
for his two children. After working and saving money for years, he
decided to invest in a house. His family and friends thought he had lost
his mind when he bought a brownstone in Bed-Stuy about six years ago in
the mid 1990s, before the market got hot. But Solomon, who built houses
for many years, knows how to recognize quality. Once, after I referred
to the new Trump tower as a “high-class residential building”,
Solomon (otherwise very well behaved) replied impulsively:
“High-class? B? S?! I have been working on these buildings. The walls
are paper-thin. If you throw a kick, you end up in the neighbors’
dinning room! Now look at these walls (pointing to the brick walls of
his brownstone that he had stripped of all wallpaper and painting), this
is quality. They don’t make houses like that no more.” He has a
point: Bed-Stuy brownstones are high-class. Unfortunately, most of them
are in a bad shape. Solomon entirely renovated his brownstone himself,
working every day after work. At one point, he had pierced holes in the
ceilings, the floor, and the walls to fix the water pipes and
electricity and take away the layers of wallpaper, paint, carpet added
throughout the years. Solomon is now renting the two top floors of his
brownstone and talking about retiring to Trinidad.
If Solomon’s dreadlocks hint at his Caribbean origins, no exterior
signs would attest of his son’s ancestry. Dressed in the straight up
hip-hop fashion of Bed-Stuy, he looks like a³and actually is a³ an
American kid. As Greg Donaldson, explained in an interview42: “Most
Caribbean youth adopt the African-American culture as soon as they go to
school and socialize.” Youth might keep their Caribbean roots inside,
but they very quick to adapt to the local American culture. A few years
older, Solomon’s daughter might be closer to her origins in style, but
she also definitively integrated the local culture. Solomon mentioned
that most of her friends are from their former neighborhood, including
her white boyfriend. “If it is love, it cannot be wrong”.
A new wave of immigrants from sub-Saharan Africa has recently joined the
community. The Pratt Area Community Council ancestry figures show a
large increase in African residents from 1990 to 2000. According to one
African vendor I talked to, between one and two thirds of the African
residents in Bed-Stuy are undocumented. One thing is sure: the African
presence is very visible in the streets of Bed-Stuy, particularly along
the Fulton street commercial strip, where many shops and restaurants are
owned or managed by Africans. Bed-Stuy has a high concentration of
African Muslims. A mosque situated right at the corner of Bedford and
Fulton is always busy with street activity. The segment of Fulton
between Bedford and Franklin Avenues has about a dozen halal restaurants
and bakeries, serving some of the best quality food in the neighborhood.
The African Muslim community seems to be well integrated to other
Muslims communities, such as the Indonesians and Pakistanis.
 |
| “Muslim
Street”, on Fulton Avenue between Bedford and Franklin. The
image shows the mosque at the corner next to a clothing shop, a
Halal restaurant and a bakery. |
The African community itself is
divided into sub-communities. Members of each sub-community might have
strong tights with each other, for instance most French speaking
Africans know each other, however they seem relatively weakly connected
to the black-American community. Some long-term residents resent the
apparent lack of involvement in the community of the African Diaspora.
Crystal, a black-American storeowner, notes that African immigrants do
not seem to do much effort to integrate the rest of the community. Many
of them are single men or women with families back in Africa. They are
mainly in New York to make money to send back home. As they do not plan
to stay in the community forever, they have little incentive to get
involved in communal life. Moreover, many have several jobs, or work
every day of the week. If they do not manage to engage in social
activities, they certainly try hard to supply goods and services
demanded by the community. Malik, an African CD vendor on Bedford
Avenue, argues that immigrants like him cannot afford to let
opportunities go by, “we are more willing to take risks and work hard
than others because we have more pressure to make it.” He still has a
family to look after in Africa. With the little cash he makes, he sends
eight children to school in Burkina Faso.
Economics of immigration
Immigration made New York City. Since incoming immigrants are generally
poor, their economic impact on neighborhoods such as Bed-Stuy do not
directly boost income statistics. However, they indirectly contribute to
the economy. In the short term, immigration from poor countries might
appear to limit economic development since it increases the poverty
level and puts pressure on the infrastructure and social services. In
this section, I will first analyze the benefits of immigration, which
include economic dynamism, increased spending, cheap labor, small
business creation, and innovation. Then I will evaluate its cost,
including, loss of jobs for the local population, criminal activity,
infrastructure congestion, social burden, and the informalization of the
economy.
Immigrants, legal and illegal, are increasingly numerous in Bed-Stuy.
Using the definition of the neighborhood boundaries of the Department of
Housing Preservation and Development (narrower than Community District
3), and the census data from 1990 and 2000, the population of the
neighborhood increased by 6%. The foreign-born population increased by
58%, faster than the local population. Foreign-borns are now
representing 18% of the total population in 2000 as compared to 12% in
199043. The data is uncertain, since a good proportion of the
foreign-born population, particularly illegal immigrants, are not
accounted for by official statistics.44
Because they are under extreme pressure to “make it”, immigrants
often seize opportunities and take jobs that locals, even poor, do not
want. This entrepreneurial “do-it-yourself” spirit directly benefits
the local economy in different ways. First it creates a pool of cheap
labor that reduces production costs and increases the productivity of
capital, making local business more competitive.45 For instance, shop
owners can hire staff that will help them serve more than one client at
the time, or allow them to take care of other businesses. Entrepreneurs
employing cheap immigrant labor can reinvest a larger part of their
capital in their business. As development economist Slobodan Djajic puts
it:
availability of cheap clandestine labor represents a significant
advantage for entrepreneurs initiating new businesses and reduces the
risk of embarking on new ventures. To the extent that it promotes
start-ups of small businesses, the availability of illegal aliens in the
economy may be an important factor in stimulating economic growth,
investment, and a competitive business environment. In turn, a healthy
and dynamic small business sector is at the heart of jobs creation for
the native workers in most economies.46
Immigrants are consumers, renters, and taxpayers. As the population
increases, consumption rises, thus local businesses directly benefit
from immigrants. As they create businesses themselves, they invest their
revenues to purchase stock or hire workers. Immigrants also spend money
on residential and commercial rents. Rental of retail space to immigrant
entrepreneurs directly increases the income of local owners. Finally,
they pay taxes, whether they are legal or clandestine. Even businesseses
owned by illegal immigrants generate tax revenue through the automatic
tax withholding system. Although Malik is himself in an irregular
working situation, his business is official registered and taxed.
Immigrants are good at filling up gaps in demand. As Malik puts it,
“we see opportunities natives don’t see, and we are willing to do
the job.” The hat or incense stalls on Fulton or Nostrand Avenues
characteristically fill up little spaces unusable by the bigger shops.
Moreover, immigrant vendors, using their community networks, are often
good at satisfying specific demands, such as finding the CD of a
particular musician or the hat of a particular baseball team.
The entrepreneurial and “self-help” spirit of immigrants stimulates
experimentation and innovation. For instance, a general utility store on
Nostrand Avenue just moved its facade inward in order to put an outdoor
stall selling inexpensive winter goods. This allowed the store to take
full advantage of the pedestrian traffic. Consumers do not have to step
in; they can just purchase a pair of gloves on their way to the subway.
Interestingly this innovation was inspired by street vendors who rely on
“opportunity” rather than “destination” shopping. Another
example of creative innovation is the delicious “bean pie” invented
by a Muslim baker on Fulton. Unique in taste, it can be found only in
Bed-Stuy (at least that is what the baker says!).
In Bed-Stuy, as elsewhere, immigrants are “vital to progress in
carrying ideas from place to place.”47 Some examples are: specialty
shops selling authentic African fabric and crafts, Caribbean bookstores
and health stores, Halal restaurants, and Southern Soul food
restaurants. They all bring new cultures and lifestyles to the
neighborhood and stimulate the local economy.
If immigration brings a positive spirit to the neighborhood and
stimulates local economic activity, it also has its costs. Firstly,
Assemblywoman Robinson observes that African and Indian communities
would rather trade among each other. She argues that the money does not
circulate, going straight from the hands of residents to the pockets of
foreign merchants. It is probable that many business transactions are
made within the community. The immigrants’ own communities are
obviously a first choice business network with higher levels of
cooperation and trust. Many recent immigrants do not even speak English.
When he first arrived to New York four years ago, Malik did not even
know how to order food. Four years later he is fluent and trades
everyday with locals. The pirate CDs he sells are produced locally by
indigenous residents. However, he spends little of his money in local
shops and business. This is because he hardly ever spends any money for
non-essential goods and services. Most of the money he earns is sent
abroad to his family. It is probably generally true that immigrant
workers send a good share of their revenues abroad. This is good for
Africa and South America, but on the first sight seems to channel money
away from Bed-Stuy.
[M]any trade economists argue that humanity as a whole benefits
enormously from migration. Alan Winters of Britain’s Sussex
University, in a study for the Commonwealth Secretariat, has tried to
quantify these gains. He concludes that, if the rich countries raised
the number of foreign workers that they allowed in temporarily by the
equivalent of 3% of their existing workforce, world welfare would
improve by more than $150 billion a year. That is bigger, he points out,
than the gains from any imaginable liberalization of trade in goods.48
Therefore, in a global, long-term perspective, the money sent abroad
also contributes to local wealth. A richer world is good for the US
because it expands the market for its export goods. Moreover, better
distribution of wealth in the world reduces the need of residents of
poor countries to immigrate. Although the connection is quite direct, it
seems far remote from the everyday economic life of Bed-Stuy. Also, if
immigrant merchants send abroad a portion of their revenue they still
spend a good share of it locally in business investment and living
expenses.
Another commonly perceived cost of immigration is that it takes jobs
away from the locals. As immigrants are willing to work more and for
less, it is believed that they “take jobs held by [or destined to]
natives and thereby increase native unemployment.”49 Most economists
reject this argument for being too simplistic: “Immigrants not only
take jobs but they also make jobs, in two ways: First, their spending
increases the demand for labor, leading to new hires. And second, they
frequently open small businesses that are a main source of jobs.”50
Moreover, the assumption that illegal immigrants are more likely to
indulge in criminal activity than natives seems to be false. Illegal
residency produces a paradoxical effect. As it increases precariousness
and subjects immigrants to the arbitrariness of institutions, the
police, or employers, it forces them to lead a honest life.51
Mr. Senckler of the Bed-Stuy Restoration Corporation points out that
newcomers represent a supplementary cost for the community in the
following areas: education, sanitation, housing, and transportation.
“The standard presumption is that additional people a³children or
immigrants- have a negative effect upon the incomes of the rest of the
people. The usual reasoning is diminishing fixed stocks of agricultural
and industrial and social capital, together with the dependency burden
of additional children and the consequent need for additional
demographic investment.”52 The main burden associated to the
demographic increase caused by immigration is on the school system:
Immigrant children and their use of educational services have been at
the center of the public debate on the public-sector impact of illegal
immigrants. According to Weintraub and Caderas (1984), 85 to 93 percent
of the cost of the public services used by illegal immigrants goes for
education.53
However, it appears that the contribution made by immigrants to the
public coffers is higher on average than their cost. A “magisterial
study in 1997 of the economic impacts of immigration, by America’s
National Research Council, found that first-generation immigrants
imposed an average net fiscal cost of $3,000 at present discounted
value; but the second generation yielded a $80,000 fiscal gain.”54
Nevertheless, if immigrants directly benefit the government through
increased tax revenue, they might represent a burden to the community as
they create an additional pressure on existing infrastructure,
especially if they do not spend their earnings in the neighborhood.
Therefore, to truly benefit from immigration, Bed-Stuy should have
enough public subsidies to expand its infrastructure in line with its
demographic increase.
Another cost of illegal immigration is the one paid by the illegal
immigrants themselves. Informal workers have the hardest working
conditions and lowest wages. Malik works from 9 AM to 9 PM, seven days a
week, and has not had a break in four years. Living close to subsistence
level, he cannot afford to take holidays. Moreover, the very precarious
condition of his status and activity, and his total reliance on it,
makes him very vulnerable to exploitation from potential lenders, his
landlord, and even clients. He lives under the permanent threat of
losing everything. He has no health insurance, social security, or
pension, and cannot go in and out of the country. The precariousness of
his situation prevents him from investing much. The risk of losing
everything usually outweighs potential future gains. Therefore
precariousness itself prevents development.
 |
| The last
two commerce open at 7 PM on Nostrand Avenue, between Fulton and
Macon, are the hat shops owned by Africa immigrants. |
Finally, immigrants, particularly
undeclared ones, are often blamed for sustaining a secondary, informal
economy. Assemblywoman Robinson estimates that the portion of the local
economy which is “unregulated by the institutions of society”, to
use Castells and Portes’ definition, is “rather important” in Bed-Stuy.
“Immigrant communities are a key location for informal activities
meeting both internal and external demand for goods and services.”55
However no systematic relationship between immigration and the informal
economy can be made. Many illegal immigrants in Bed-Stuy and New York
City run declared, tax-generating businesses. The informal economy is
not, as I will try to demonstrate, a direct consequence of immigration.
As Saskia Sassen puts its:
Immigrants, in so far as they tend to form communities, may be in a
favorable position to seize the opportunities represented by
informalization. But the opportunities are not necessarily created by
immigrants. They may well be structured outcome of current trends in the
advanced industrialized economies.56
Informal Economy
Indeed, a current trend in advanced industrial economies is the
dismantling of the welfare state. Since 1990, the number of people
qualifying for Public Assistance in Community District 3 has declined
from 45,483 to 23,029.57 It would thus appear, at first sight, that
poverty decreased in Bed-Stuy. According to the Brooklyn Chamber of
Commerce report58, the percentage of households earning less than
$10,000 annually went from 35% in 1990 to 24% in 200059. Converting to
2000 dollars, we can restate this statistic above this way: In 1990
18,986 households earned less than $13,175 (in 2000 dollars) and in
2000, 12,729 households earned less than $10,000. It would seem
therefore that poverty in absolute numbers has not significantly
decreased. What has decreased, however, is the number of people
qualifying for welfare benefits. Indeed, from 54% in 1997, the rejection
rate for welfare in New York City rose to 75% in 1998.60
As social safety nets disappear, those who cannot, or do not want to
join the pool of minimum-wage workers feed the informal sector:
In their quest for survival, [agents] have connected with a more
flexible, ad hoc form of economic activity that, while reviving old
methods of primitive exploitation, also provides more room for personal
interaction. The small-scale and face-to-face features of these
activities make living through the crisis a more manageable experience
than waiting in line for relief from impersonal bureaucracies.61
 |
The informal street vendors, who were
all over Fulton Avenue until 2001, are the best example of the vitality
and negative externalities of the informal economy in Bed-Stuy. The
anarchic street market has now been “cleaned up” by the authorities.
Now, a couple of street vendors occasionally sell sweaters or CDs, but
it is nothing like it used to be. The street vendors who had “been a
permanent fixture on Fulton Street for decades, have been relocated from
the sidewalks near the intersection of Nostrand Avenue and Fulton Street
to a central location known as the Bed-Stuy Coop Market, on the corner
of Albany and Fulton Streets.”62 Some liked the informal market and
others hated it, but no one was indifferent.
I asked Jahdan, a local musician who has know the area for as long as he
can remember, how the neighborhood had changed in the recent years:
“Before, it was open to merchants, but they chased them out of Fulton.
Now they need an authorization. Street vendors are outlawed. Fulton
market sold products for the community. It was a strong economic,
social, and cultural space.” Delie, another young resident, makes the
same analysis: “Stopping the market was negative for the community
because it prevented people to make money legally.” He remembers
merchants selling clothes, watches, house utilities, everything
inexpensive. The market was bringing black people of different origins
together, interacting freely and openly. It was a lively cultural and
social scene.
Crystal and Charles, homeowners, disagree. They argue that street
vendors were often selling illegal products, and evading taxes. Charles
says that they were downgrading the street and preventing upper scale
businesses from coming to Bed-Stuy. It congested the street and made it
hard for people and cars to circulate. Crystal didn’t like its aspect.
It was messy and gave a bad image of the neighborhood. Its existence was
a disincentive to rent unoccupied storefronts. Finally, they argue,
street vendors constituted a disloyal competition against established
regular businesses.
Fulton First is an initiative of the Brooklyn Chamber of Commerce,
financed by the Fleet Bank, the Giuliani Administration, and the New
York City Department of Business Services, aiming at revitalizing Fulton
Avenue. This nearly $4 million plan will redesign the look and feel of
the Avenue “adding lighting fixtures, street furniture, structural
design elements, and traffic flow through the commercial corridor.”63
 |
| About
half of the tents provided by the Fulton First Initiative to
street merchants remain empty during the week. |
The first visible action of Fulton
First was the evacuation of street merchants by the police. A new place
was given to street vendors at the corner of Albany and Nostrand. I have
been there a few times during the week and it is pretty quiet, to say
the least. There were about 15 vendors and about half of the stands were
closed. I bought a dubplate mix-CD, a poster and three pairs of socks
for less than fifteen dollars. The market is organized and orderly but
the dynamism seems to be gone. Jahdan believes it was better for the
community when the merchants were not taxed and controlled. “Let the
people do it. People organize the market better than the City.”
Classical economics since Adam Smith agrees:
Smith believed that individual welfare rather than national power was
the correct goal; he thus advocated that trade should be free of
government restrictions. When individuals were free to pursue
self-interest, the “invisible hand” of rivalry or competition would
become more effective than the state as a regulator of economic life.64
The informal market of Bed-Stuy was a perfect example of what happens
when economic agents trade without regulations: creative chaos. Creative
because the free interaction of a multiplicity of vendors and buyers
created a self-sustaining economy out of nothing. Chaos because in an
uncontrolled market, no one is individually responsible for the mess
collectively generated. Street congestion is an example of negative
externality produced by unregulated street markets.
The informal economy is the purest expression of the free market. It
exists spontaneously wherever the formal regulated economy is not:
[i]t is only because there is a formal economy (i.e., an institutional
framework of economic activity) that we can speak of an “informal”
one. In an ideal market economy, with no regulation of any kind, the
distinction between formal and informal would lose meaning since all
activities would be performed in the manner now called informal. At the
opposite pole, the more a society institutionalizes its economic
activities following relatively defined power relationship and the more
individual actors try to escape this institutionalized logic, the
sharper the divide between the two sectors.65
The informal sector emerged in Bed-Stuy as a result of the breakdown of
mainstream economic and social institutions and poverty. In the same way
churches and other non-profit organizations filled up structural holes
in the social fabric, informal businesses emerged opportunistically (one
could even say organically) to fill the economic void. The informal
sector is thus firstly a response to the lack of a formal sector. If
there were a Blockbuster in Bed-Stuy, there would probably be fewer
video vendors in the streets. The informal sector is a product of
low-income consumers’ demand and low-income suppliers who cannot find
adequate sources of income in the formal sector.
On the supply side, the struggle for survival pushes “street
entrepreneurs” to reproduce and sell any kind of goods and services
they can sell. Informal street vendors would certainly prefer to have a
steady income, job security, a pension, and health insurance rather than
living in precariousness. However, the absence of economic opportunities
in the formal sector draws many to the informal sector. Sometimes, as
the quote above stated, regulations can keep people from setting up
legal businesses. For instance, some foreigners might not be able to go
through the procedures required to set up a legal business. Illegal
immigrants might equally be barred from regulating their business for
fear of being expelled. As Steve Mariotti, founder of the National
Foundation for Teaching Entrepreneurship, states:
The minority entrepreneur usually ends up being his own lawyer and
accountant ? The paperwork, cost, and confusion ? drive would-be
entrepreneurs away from certainty and down a slippery slope. They
develop contempt for the government, because they no longer see it as
their ally. That drives people into the underground economy, where there
are no contracts ? Once an entrepreneur moves into the balkanized a³and
chaotica³ underground economy, growing the business is not a viable
option. 66
On the demand side, the need for cheap goods and services feeds the
informal sector. Should a Blockbuster open in Bed-Stuy, it would need to
compete with street vendors selling pirated movies for five dollars.
Since the purchasing power of the local population is lower than in the
rest of the city, market forces naturally drive down the price of goods
and services closer to their marginal cost of production, and closer to
the subsistence level of the producer and distributor. Informal
entrepreneurs are good at fulfilling local demand at competitive prices.
The redundancy of many street businesses, such as CD and hat vendors
insures a quasi-perfect competitive market, which keeps the price near
the margin. Also, the highly open, unstable, and opportunistic informal
small-business environment of Bed-Stuy prevents the formation of price
cartels, and therefore prevents artificial price inflation. The informal
sector is thus closer to the textbook model of perfect competition than
the formal sector because in the formal sector, laws and regulations
artificially maintain the price of goods and services well above the
marginal cost of production.
Such a local economic base may well represent a mechanism for maximizing
the returns on whatever resources are available in the communities
involved. In this regard, they may contribute to stabilize low-income
areas by providing jobs, entrepreneurship opportunities and enough
diversity to maximize the recirculation of money spent on wages, goods
or services inside the community where the jobs are located and the
goods and services produced.67
Low-income consumers are not the only ones benefiting from the lower
prices of the informal economy. The middle-class itself benefits and
promotes the informal sector. Saskia Sassen notes that gentrifying
neighborhoods tend to have high levels of informal economic activity. A
source of informal activity is the rapid increase in the volume of
renovations, alterations, and small scale new construction associated
with the transformation of many areas of the city from low-income, often
dilapidated neighborhoods into higher income commercial and residential
areas ? The volume of work, its small scale, its labor intensity and
high skill content, and the short-term nature of each project all were
conducive to a heavy incidence of informal work.68
Craftsmanship is definitely highly demanded in Bed-Stuy, fueled by the
mix of a deteriorated housing stock and booming real-estate market.
According to the Department of Housing’s statistics, only 49% of
residential buildings are in good or excellent condition. This is the
second lowest score in Brooklyn after Bushwick. 37% of residential
buildings are judged to be in fair condition, and 13.5% in poor
condition, the second highest percentage after Brownsville Ocean Hill.69
There is plenty of maintenance work to do and, according to Charles,
brownstone owner; skilled labor is lacking or expensive. Informal
contractors are found from word of mouth, and are usually freelance and
self-employed. Revenues from house repair typically go undeclared.
Other sectors with high concentration of informal activity include
“the Gypsy cabs [which are] serving areas not served by the regular
cabs, informal neighborhood child-care centers, low-cost furniture
manufacturing shops, and a whole range of other activities providing
personal services and goods.”70
The informal sector is therefore not a problem in itself, but rather the
market solution to poverty and exclusion. The lower purchasing power of
many Bed-Stuy residents stimulated the growth of a market of
substitution. Informality reduces the cost of production and
distribution through tax evasion and proximity to the consumer. The
structural breakdown of economic and social institutions such as the
welfare state has also contributed to the expansion of the informal
sector.
Libertarian economists believe that the unregulated market is the best
way to maximize economic efficiency. The economy, they argue, is like an
ecosystem. Exterior intervention can only harm the perfect
self-organization of the free market. The problem is that, as Adam Smith
noted when he developed his invisible hand theory, the free market has
negative externalities such as labor exploitation and environmental
degradation. Moreover, the unregulated market can sometimes get stuck at
sub-optimal levels. Intervention is needed to help the market grow in
the desired direction. As Paul Krugman ironically puts it:
The economy is an ecosystem, like a tropical rainforest! And what could
be worse than trying to control a tropical rainforest from the top down?
You wouldn’t try to control an ecosystem, wiping out species you
didn’t like and promoting ones you did, would you? Well, actually, you
probably would. I think it’s called “agriculture.”71
This comment helps us to look at the informal economy of Bed-Stuy from
another angle. It should neither be curbed nor be seen as a ready-made
solution requiring no intervention. Its positive outcomes and negative
externalities need to be recognized and dealt with. Its most positive
aspect is that it generates income for many residents and provides goods
and services that would not otherwise be available or affordable to the
community. Informal workers and entrepreneurs should be assisted in
their effort to formalize their businesses. Negative externalities need
to be reduced as much as possible without taking away the positive
outcomes. For instance, the displacement of street vendors to the Albany
square destroyed the previous dynamism of the market. I will suggest
possible ways to preserve the benefits of the informal economy while
reducing its negative aspects in the last section of this paper.
 |
| A
renovated brownstone in Bed-Stuy, right next to a board-up
property. The sign reads: “Please keep your block clean, Filth
is lack of pride”. |
To conclude this section on
immigration and informal economy, I would say that, while illegal
immigrants are sometimes drawn to the informal sector by lack of choice,
the informal economy itself did not develop as a “consequence of the
large influx of Third World immigrants and their propensities to
replicate survival strategies typical of home countries.”72 But rather
as a result of the high poverty level existing in Bed-Stuy prior to
their arrival. Far from being a nuisance to the neighborhood,
immigrants, legal and illegal, are a source of growth and change.
Adequate policies are needed to maximize the positive input of
immigrants to the community. The striving small business environment and
the availability of cheap goods and services contribute to the
incremental development of the neighborhood. How many brownstones would
have been privately renovated if the only available craftspeople were
working at Manhattan wages? The self-help attitude of many poor
immigrants and natives has allowed the emergence of a solid economic
base in the neighborhood. The consolidation of this economic base has,
in turn, a stabilizing effect on the social environment, strengthening
social institutions and indirectly setting the context for in-migration
of higher income people.
Newcomers
In the next section, I will consider the factors that turned Bed-Stuy
into an attractive residential location, then portray some
representative newcomers. I already described how the incremental
economic development of the neighborhood, significant reduction of crime
and citywide economic growth improved Bed-Stuy’s physical and economic
condition. These factors, combined with a very tight citywide housing
market during the late 1990s, led an increasing number of people to
chose Bed-Stuy. The work of the Restoration Corporation as well as other
agencies, including the Department of Housing, also has to be accounted
for. The growing black middle-class willing to invest in a home has also
been instrumental in regenerating Bed-Stuy. All these factors contribute
to attract more newcomers. The atmosphere of the neighborhood is
changing. In the words of a local reporter:
On every block, around every corner, there’s a demolition or
renovation project going on; a dumpster filled with the innards of some
long abandoned, burnt out or recently purchased dwelling. (How many
scaffolds did you walk under today?) Those little quality of life
issues, like the refurbishing of those glass and crack vial gardens into
viable playgrounds, are finally being addressed.73
The Restoration Corporation has largely contributed to the appreciation
of the housing stock through its renovation and mortgages programs. In a
little more than thirty years of activity, “it has renovated 4,200
homes covering 150 blocks and provided more than $250 million in home
mortgages and rehabilitation loans to neighborhood homeowners.”74 In
2000 there were 48,661 housing units in total according to the
Department of Housing Preservation and Development. The Department of
Housing has also contributed to stabilize the neighborhood’s
low-income households by building new affordable housing units, many of
which are located on Gates Avenue. All together, the Department of
Housing has rehabilitated or built more than 8000 housing units since
1986. Still there is room for much more work. According to a 1999 New
York survey of the Department of Housing. Almost 38% of the housing
units are on the same street as buildings with broken or boarded-up
windows, the highest percentage in Brooklyn75. There is still much room
for revitalization and price rise. As most interviewees noted, the
architecture of the neighborhood is its main asset.
 |
| The Slave
1 Theater has been closed to the public for some time. It only
reopens occasionally for weddings and other private events. Next
to it is a fully equipped musical lounge that also opens
sporadically. |
Another asset of the neighborhood,
which might increasingly become an attraction to newcomers, is the
culture of its people. Bed-Stuy might lack economic capital, but
certainly not cultural capital. The many cultures and lifestyles of Bed-Stuy
are, as most interviewees noted, assets to the community. They connect
the neighborhood to the rest of the world and bring in new ideas.
Together with Fort Green, Bed-Stuy is a stronghold of the Black American
culture of New York. From history to consciousness, the African-American
culture developed a critical edge that is often lacking in the rest of
society. Through struggle and survival, inner-investigation and
self-affirmation, reaction and creation, grew a strong sense of
identity. This culture is transnational by nature. Thanks to its
dynamism and fertility it has grown branches throughout the world.
Artists and musicians from the US and the rest of the world are
increasingly looking at Bed-Stuy as a good location to live. Diego’s
story illustrates the crossing realities of the neighborhood’s past
and future.
Originally from Europe, Diego studied jazz at Berklee College in Boston.
After one year in New York he formed a band with players from Boston,
Manhattan, and Brooklyn. The two lead singers, Jahdan and Delie, are
from Bed-Stuy. In need of space for his studio and his family, Diego
decided to move to Bed-Stuy. For the price of a three-bedroom apartment
in Fort Green he was able to rent a duplex in a fully renovated
brownstone with garden on Green Avenue, right by the G train. It took a
few months for Diego and his wife to get used to the neighborhood. The
bohemian utopia has quickly given way to the reality of the ghetto. The
summer they moved in, three people were shot in their block. One of
them, a neighbor known by everyone on the block, was killed by seven
bullets shot by the police because he was supposedly waving a toy gun at
them. A version denied by some witnesses but validated by local
tabloids, which called the victim homeless although he lived with a
woman in a brownstone on the block.76 Despite this, and other incidents,
Diego and his family have integrated the neighborhood well. They know
most of their neighbors and feel at home.
 |
| Noble
Society. From left to right: Diego, Jahdan, special guest Afu-Ra,
Rory Jackson, Delie. |
Moving to Bed-Stuy was strategic for
Diego: not only is he getting more space to rehearse and record with his
band, but he is also getting closer to one of his main sources of
inspiration. Many famous black musicians and producers come from Bed-Stuy,
such as Notorious B.I.G. and Spike Lee. Music brought Diego to Bed-Stuy.
He knows that if he makes it in Bed-Stuy, he makes it in Brooklyn; and
if makes it in Brooklyn, he makes it in New York; and if he makes it in
New York? The waves generated by the black culture of Brooklyn have
crossed the oceans to Europe and Asia, and back.
Having grown up in the neighborhood, Jahdan, lead singer in Diego’s
band, doesn’t see Bed-Stuy as any different than any other
neighborhood in Brooklyn. His experience of Bed-Stuy has not changed
much in the past years. With his wife and son, he is part of the 49% of
households earning less than $25,000 a year.77 Recently, Jahdan found a
job as a janitor at a school in Queens. Starting work at 6:30 AM, he
wakes up at 4:30 AM every day and earns minimum wage. His wife is
unemployed, as one tenth of the population of the Community District 3.
The Bed-Stuy of today makes it possible for Diego and Jahdan to meet and
create music together. The fusion of the rich local culture and the
motivation of newcomers is explosive. The cultural energy of the
neighborhood lies today in the mix of inspired local and international
artists, creativity, survival, space, informality, instability, change,
potentiality, and openness.
Asked if the neighborhood could be described as “international,” all
interviewees responded affirmatively except Crystal who said that
international was not the first word that would come to her mind to
describe the neighborhood. She sees the neighborhood as rather
homogeneous since the great majority of residents are black. She agreed
however, that the homogeneity of the neighborhood was more “facial”
that cultural, since the black community is very diverse. Jahdan also
observes that African descendents, dispersed around the world, come
together in Bed-Stuy forming an international cultural melting-pot.
According to Delie, Bed-Stuy, with its mix of Afro cultures, is a
breeding ground for contemporary black identity. He says that the street
market of Fulton was a scene where the international black culture of
Bed-Stuy could progress and develop.
None of the interviewees believed that other ethnicities coming in the
neighborhood were a threat to the identity of Bed-Stuy. Delie notes that
five years ago, when he moved in the neighborhood, there were no white
people on his Macon block. Now they are maybe six or seven. Crystal also
observes that there are more white people than in recent memories, but
she believes that the neighborhood will remain predominantly black. The
vast majority of homeowners and buyers are black. Jahdan welcomes the
arrival of other colors. “It had to happen. The interaction of
different people is good for communication and the economy. More white
people moving in means cultural exchange and big money movement.”
Jasper is a twenty-six years-old white American who moved into the
neighborhood about a year ago with three other friends from Switzerland
and Panama. Jasper feels “as comfortable in the neighborhood as a
white guy living in a black neighborhood can feel.” When he first
moved in, he was expecting some reactions from the people. But nobody
ever gave him a negative look. People were neutral. It might be due to
the fact that he is “pretty low-key.” “Some yuppie might be
treated differently. It is probably a matter of attitude.” He notes
that the fact that he has been involved in black-American culture for
many years and traveling to different countries certainly helped him to
feel at ease in Bed-Stuy. Jasper runs a music business specializing in
hip-hop, funk, and reggae records and DJ equipment. He says that if he
had only been listening to mainstream white rock his whole life, it
would be different.
CÄline, one of Jasper’s Swiss roommates concurs, “I guess that when
you are real, people feel it.” Because she works in a Non-Governmental
Organization in the United Nation building, she has to be formally
dressed every morning. At first, she was worried about the perception of
other residents. She didn’t want to be seen as a rich white girl
taking advantage of the community. Asked if she considered herself to be
middle-class, she said, “it depends. In terms of income, I am probably
lower class! In terms of education probably middle-class, and in terms
of privileges probably upper-class because I have an excellent insurance
and I can travel.” At first people were wondering what she was doing
in the neighborhood. But any hostility would disappear as soon as they
would hear her French accent. Now she feels she has been completely
accepted. She knows all the shopkeepers, has conversation with everyone
on the block, and guys at the corner call her “Mamy.”
Jasper believes that there is definitively a plateau for white people in
Bed-Stuy. Each time he sees white people he “checks them out,”
curious about what they are doing here. Other white people in the
neighborhood interestingly “threaten your specialty in some ways.”
But after giving it much thought, he came to the conclusion that
“diversity is a good thing; whether it is blacks moving into white
neighborhoods or whites moving into black neighborhood.” However he
doesn’t want to see in Bed-Stuy what happened to many other
neighborhoods of New York. “It is a good thing that there is no more
heroin in the East Village, but it is boring now! White wash completely
took over the neighborhood.” ”It is important to have a good mix.”
“Good things can happen because there are more different types of
people.” So what would the right mix be? “Somewhere between here and
Fort Green would be nice.” “The social atmosphere of Fort Green is
nice, but you get a croissant and coffee and it is five dollars or
something! ? They are trying too hard to be like Manhattan, or some kind
of bohemian expensive place.”
Eric is another new resident representative of the ongoing change in
Bed-Stuy. By lack of a better term, Eric could fall into what Richard
Florida calls “the creative class.”78 Eric recently moved with his
boyfriend into a three-story brownstone on Hancock Street. Their
building is occupied by a black writer on the third floor, a white
teacher from Chicago on the second floor, and them, two trendy black
gays on the ground floor. Eric was attracted by the physical character,
space, low rent and excellent transportation that the neighborhood
offers. The A train, five minutes away from his apartment brings him to
his Manhattan office in less than twenty minutes. Because of the
shortage of affordable housing and his lifestyle he had to think
strategically about his living location. Although at first he was much
less enthusiastic about living in Bed-Stuy than his boyfriend, he now
sees the potential of the neighborhood and likes it. Eric believes that,
in five years time, Bed-Stuy will be a new Clinton Hill. That is, a
trendy place to live. It seems that he was always at the right place at
the right time: Chelsea in the early 1990s, Fort Green and Clinton Hill,
in the mid-1990s, and now Bed-Stuy. Recalling when he and his artist
friends moved to Clinton Hill in the mid-1990s, he describes how no
social space existed for them there; they had to make it happen
themselves. Some of his friends opened cafes and shops in Clinton Hill,
which contributed to the transformation of the neighborhood. He would
like to see the same evolution in Bed-Stuy and hopes that new businesses
will open soon, particularly more quality food stores, bars, and
restaurants, offering the goods and services that he needs and replacing
some of the numerous 99 cents stores. He welcomes the arrival of
“educated blacks and brave white people.”
Eric likes the anonymity of cities, but quickly found out that he would
not be a stranger to the people living in his block. Now he begins to
appreciate the strong sense of community of the neighborhood. People
were welcoming, and he did not feel that being a gay couple was more
problematic in Bed-Stuy than anywhere else. He never had problems with
the crackheads at his corner either. Living in Brooklyn he learned to be
“street smart.”
Eric does not see displacement as a big issue in Bed-Stuy now, since
many people own their houses. Anyway, there is nothing he can do about
it, “owners decide the fate of the neighborhood.” “The new
replaces the old, that’s life.” There is still a lot of empty space
that can still be bought out by newcomers.
He doesn’t necessarily see the cultures of newcomers and these of the
locals blending together anytime soon. He says that the people who grew
up in Bed-Stuy are much more complaisant. He doesn’t quite understand
why the people on his block like hanging out on their stoop and doing
barbecue on the street side of their house so much, but he doesn’t
believe that living side by side will be a problem. New shops and stores
will not necessarily be aimed at the present population, he believes,
but integration is not indispensable. “There is enough room for
everybody.”
But is there? In the next section I will analyze the current trends in
housing and describe the kind of pressure exercised by the influx of
middle-class buyers and renters on the long-time residents of the
neighborhood.
Displacement
 |
| Speculation
in Bed-Stuy today is reminiscent of the 1920s when brookers made
fortunes turning out properties from white owners to black
owners. In contrast however most home buyers still are
middle-class black people. |
According to Gabriel, of the Pratt
Area Community Council (PACC), displacement is an issue in Bed-Stuy. His
job is to help residents keep their homes. There is not much he can do
for renters, but there are also plenty of brownstone owners threatened
by predatory lenders. Long-time brownstone owners are under severe
pressure to sell because they are often poor but sit on equities that
have hugely appreciated in the past ten years. Bed-Stuy has the highest
number of foreclosures in Brooklyn. Predatory lenders get foreclosure
lists and target owners, offering loans, which they know the creditor
will not be able to reimburse. Erica McHale, homeowner counselor at PACC
and currently dealing with about forty cases, exposes a typical
scenario: A cash poor widow owns a brownstone that her husband bought
thirty years ago for $20,000. She doesn’t have enough liquidity to
renovate the deteriorated roof of her brownstone. A lender knocks at her
door and offers to help. Not only can he provide the funds to renovate
the house, but he can also find people to do the job. He will give her a
$100,000 credit for complete renovation at 12% interest rate (in some
cases it was as much as 19%), and the works can start as soon as next
week. Unaware that her credit history would allow her to get a much
cheaper deal with a conventional lender, and that the loan she
contracted is unaffordable, she trusts the lender, and signs with her
house as a collateral. Very soon, unable to repay her debt, she goes
over foreclosure. The lender gets the house and resells it between
$200,000 and $400,000 (“those in exceptional condition [were] recently
selling for almost $600,000. At of the date of the report, real estate
listings for Bedford-Stuyvesant brownstones were as high as
$750,000”)79, making between 100% and 400% profit.
Subprime loans, that is, loans made by
non-conventional lenders are a good indicator of predatory lending. A
study by the Neighborhood Economic Development Advocacy Project (NEDAP)
has shown that the neighborhoods which were historically redlined by
bank (i.e.: non-white ones) are also the one with the highest
concentration of subprime loans:
There is a strong correlation between
concentrations of refinancing loans made by subprime lenders and
neighborhood racial composition. Likewise, there is a clear relationship
between the predominance of subprime loans and high concentration of
foreclosure action filed, by neighborhood.80
Subprime lenders made 30% of home purchase loans in Bed-Stuy in the year
1998, compared to only 9% in New York State. In 2000, Bed-Stuy also had
the highest share of refinancing loans made by subprime lenders in the
city, 65%81. Gabriel points out that the few non-profit organizations
counseling homeowners are overpowered by the dozens of speculators
operating in the neighborhood. Predatory lenders go door to door,
establish personal relationships with homeowners, and obtain deals with
people who could get cheaper loans elsewhere. Not all subprime loans are
predatory, however. They have in the past allowed people living in
redlined neighborhoods to borrow. Today they also serve people with bad
credit history for instance.
Another real-estate scam affecting first-time homebuyers
(disproportionately in communities of color) is preoccupying the PACC:
First time homebuyers are sold dilapidated houses with a home mortgage
loan designed to fail.
Most New York City property flipping
scams involve the same basic elements: real estate companies buy
distressed properties on the cheap and perform cosmetic or no repairs.
These “one-stop shops” then offer a package of services to borrowers
who believe their interests are protected because the loans are insured
by federal FHA insurance a³but instead, appraisals are inflated to
provide huge profits to sellers, loan applications are doctored, home
inspections are faked, and attorneys purportedly retained to protect
borrowers watch while they sign their rights away. In one New York City
case, a real estate flipper purchased a devastated property for $20,000
and sold it 14 months later to an unwitting Jamaican immigrant
grandmother and first-time homebuyer for just under $200,000.82
 |
As during the 1930s, the current gap
between newcomers and current owners put pressure on Bed-Stuy’s
real-estate market. People have been buying and moving in massively in
the area in the last ten years, driving up the price. A report prepared
for the Brooklyn Chamber of Commerce explains the rising real-estate
market of the past ten years as follows:
Factors driving this trend include pricing for brownstones in other
neighborhoods throughout New York City (including Clinton Hill, Fort
Greene, Park Slope, etc.), general residential real estate and economic
trends throughout the metropolitan New York City area, activity in the
stock market, and favorable interest rates.
Buyers consider brownstones within the Bedford-Stuyvesant area due to
the high quality of the brownstone residences, superior building widths
(sometimes 30 to 40 feet, compared with more narrow buildings in other
parts of the City), excellent subway access to Manhattan, the character
of the neighborhood and its brownstone blocks, and significant recent
decreases in crime.83
 |
| Sign on
Bedford and Green Avecnues: It could not be clearer. Your
brownstone is wanted. |
According to the census the number of
owner occupied buildings has increased by 633% from 1289 in 1990, to
8165 in 2000. Meanwhile, the number of renter-occupied units increased
from 32467 to 34567. In addition, new housing units have been built
during that period, notably by the Department of Housing. The total
number of housing units went up from 44643 to 48830.84 The demand
largely outstrips the supply, which inflates prices. PACC staff observed
a change in the people attending the first time homebuyers’ workshops
they organize. “Since last summer a lot more Manhattan people come to
the workshops. Backgrounds are very diverse, from working class to PhDs,
blacks, white, Asians.” The brownstones and excellent access to public
transportation attract them. It is a mixed blessing: business do better,
more upscale businesses and restaurants start opening, which lifts up
the neighborhood, but it is not necessarily a good thing for low income
residents, particularly renters, who might get priced out. Assemblywoman
Robinson, however, estimates that, while displacement is one of the big
issues the neighborhood faces right now, rents need to go up a bit.
According to the Department of Housing the median contract rent and
median gross rent are the lowest in Brooklyn at $495 and $515
respectively. She is quick to add control mechanisms such as rent
control, moratorium on conversions, and public housing are needed a³especially
for senior residents. She also points out that many housing units are
rent controlled in Bed-Stuy. The Department of Housing survey confirms:
37.5% of renter occupied units is unregulated, 25% is public, 21,4% is
stabilized, 13.1% is under some other kind of regulations, and
rent-controlled units are “too few to report.” It appears thus that
a little more than a third of the housing units are unregulated, and
almost two third are under some sort of regulation since public housing
are rent controlled by definition and stabilization is a form of
rent-control.
The demand for rental apartments
within the Bedford-Stuyvesant area has momentarily decreased since the
fourth quarter of 2001, but that most probably reflects a citywide 9-11
effect rather than a change in trend. As the neighborhood keeps
attracting new people, uncontrolled rent will go up and many current
residents will be displaced, in the words of resident Baye McNeil:
With gentrification, many people will be dislocated, priced out, razed
by this economic bulldozer. Eventually, and that right soon, the
underclass, the impoverished, which means many of our everyday people,
will simply have to vacate the Stuy (Can’t picture it? Remember
Alphabet City? Take a look at the Lower East Side now).85
Gentrification is a politically loaded word. Originally describing the
immigration of middle class into working class neighborhood, the term
took a racial connotation. As Baye McNeil puts it “in Bed-Stuy, as is
the case in Fort Green, Harlem, and inner cities all over the country,
in fact, it’s also a race issue because in America the vast majority
of the middle class is still white.” So who is gentrifying Bed-Stuy
and who is being displaced?
I asked Assemblywoman Robinson if she would believe me if I said that
income doubled in the neighborhood in the past five years. She responded
affirmatively without hesitation. In fact, I learned later, the income
did not exactly double in five years, but it still significantly
increased. The average household income went up from $23,819 in 1989 to
$36,983 in 1999, and the median income went up from $17,202 to $25644.
During the same period, the real purchasing power for households
increase by $1,473, which is more than twice as much than Brooklyn as a
whole ($629 increase). “ It should be noted that average household
incomes are higher than the median incomes ? during 1989 and 2001. This
generally occurs when the average is distorted by a few households that
have relatively high incomes.” Indeed, what doubled is the percentage
of households earning over $50,000 a year; it went from 12.3% in 1990 to
28.3% in 2000. And the number of households earning over $100,000 went
from 947 to 3,293 (a 350% increase). Theref
