Thursday, January 14, 2016

The MobilityDilemma and the Clearing House Effect

The Asian American Federation, the group that studied Chinatown businesses I mentioned a couple of posts ago, also studied Asian poverty in New York City. Their policy recommendations point up what you might call the mobility dilemma: efforts to increase upward mobility run the risk of displacing their target populations. Here is one of their policy recommendations:

Economic development efforts in enclave economies that encourage a diversified, vibrant business community rather than a hypercompetitive, low-margin, narrow economy would help stabilize the local economy and raise wages and labor standards. 

By "diversified" they mean non local serving businesses: semiotic, outward-looking commerce -- in a word, tourism. To upscale a local-serving produce stand into a high-end restaurant -- necessarily non-local serving since the locals cannot afford it -- will allow, if successful, higher wages for the waiters (if the manager doesn't steal the tips, a wide-spread practice as I've mentioned). But it also crowds out local-serving commerce and attracts more upscale outward-looking commerce. As prices and profits rise, so do real estate values. Soon the neighborhood is in demand from outside and landlord pressure to harass and evict locals increases. Gentrification displaces the local community.

The dilemma is parallel to the urban amenity dilemma: every material improvement in a low-income neighborhood attracts investment that eventually gentrifies and displaces the low-income community. The two horns of the dilemma both seem unacceptable: remain in poverty or be displaced to poverty elsewhere.

The AAF policy recommendation seems to ignore the historical clearing house dynamic of Chinatown. Immigrants arrive there, work hard for several years, spend frugally, save resolutely, then leave for a prettier neighborhood. Upscaling Chinatown may provide higher wages for a few, but it eliminates it as a first destination for new immigrants.

New immigrants most need work they can assume immediately and housing that is extremely cheap so they can both earn and save. AAF concludes that "Making affordable housing more available is critical to alleviating poverty." But current affordable housing programs are all geared towards permanent housing, too expensive for the needs of new immigrants. Only transient housing meets the demand in an immigrant first destination. Permanence is unnecessary and too expensive.

Chinatown today is divided between two communities, one immigrant and transient, another American-born and permanent. Current affordable housing models would change Chinatown into all permanent, but the mobility it provides for the low-income immigrant is not upward, but outward, so the problem is not solved, in Engels' famous words in The Housing Question, "they are merely shifted elsewhere."
See also in this series:
Semiotic neighborhoods vs the authentic and anti-fragile: prestige and its deceptions and betrayals
Prestige and distortion in Chinatown
Suits and betrayal in Chinatown
Authenticity in the East Village

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