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Structure versus agency

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Title:
Structure versus agency the causation of urban renewal in downtown Denver and its surrounding neighborhoods
Creator:
Brooks, Zachary M
Publication Date:
Language:
English
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viii, 141 leaves : ; 28 cm

Subjects

Subjects / Keywords:
Urban renewal -- Colorado -- Denver ( lcsh )
Gentrification -- Colorado -- Denver ( lcsh )
Gentrification ( fast )
Urban renewal ( fast )
Colorado -- Denver ( fast )
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bibliography ( marcgt )
theses ( marcgt )
non-fiction ( marcgt )

Notes

Bibliography:
Includes bibliographical references (leaves 136-141).
General Note:
Department of Political Science
Statement of Responsibility:
by Zachary M. Brooks.

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|University of Colorado Denver
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|Auraria Library
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All applicable rights reserved by the source institution and holding location.
Resource Identifier:
62860047 ( OCLC )
ocm62860047
Classification:
LD1193.L64 2005m B76 ( lcc )

Full Text
STRUCTURE VERSUS AGENCY: THE CAUSATION OF URBAN RENEWAL
IN DOWNTOWN DENVER AND ITS SURROUNDING NEIGHBORHOODS
by
Zachary M. Brooks
B.A., University of Colorado at Denver, 2001
A thesis submitted to the
University of Colorado at Denver
in partial fulfillment
of the requirements for the degree of
Master of Arts
Political Science


This thesis for Master of Arts
degree by
Zachary M. Brooks
has been approved
by
Lucy McGuffey
'T-\ Date


Brooks, Zachary M. (Master of Political Science)
Structure versus Agency: The Causation of Urban Renewal in Downtown Denver
and its Surrounding Neighborhoods
Thesis directed by Assistant Professor Anthony Robinson
ABSTRACT
The urban renewal movement of the past decade has taken a sharp turn
towards neoliberal political theory, which dictates that urban redevelopment should
be founded on the supply-side of the economic spectrum. The emphasis is no longer
on a war on poverty centered on the living poor, but instead on the elimination of
poverty through the proliferation of wealth. Throughout the country, urban areas
once deemed blighted are being transformed into affluent neighborhoods for the
cities elites.
While it is unfortunately neglected by academia, Denver is in fact a perfect
case study for urban renewal. Situated in the beautiful Rocky Mountains, Denver has
had the advantage of both structure and agency in its quest for urban redevelopment.
Structural forces on both the supply and consumption sides of market theory give the
city many competitive advantages. These advantages are coupled with an active City
government which has dedicated energy and, very importantly, ample funding for
these advantages to culminate into an urban renewal success story.
However, debate remains as to what extent structure and agency play in this
success, and as to what is the proper role of government in regards to the socially
problematic repercussions of urban renewal, namely the displacement of the inner-
citys indigenous population.
This abstract accurately represents the content of this candidates thesis. I
recommend its publication.
m


DEDICATION
This thesis is dedicated to all of the tenants, past and present, of a certain blue house
in City Park West, for doing their part in keeping property values as low as possible
on a single street of a gentrified neighborhood in an overpriced city.


CONTENTS
Figures..........................................................vii
Tables..........................................................viii
CHAPTER
I. INTRODUCTION....................................................1
Subject.....................................................1
Research....................................................5
II. REVIEW OF THE LITERATURE......................................10
Introduction...............................................10
History....................................................12
Conservative Theories of Urban Redevelopment...............14
Neoliberal Urban-Renewal Theory............................19
Agency and the Limitations of Conservative Theory..........22
The Influence of Societal and Cultural Trends on Urban Renewal.32
Conclusion ................................................39
III. METHODOLOGY .................................................41
IV. URBAN RENEWAL IN DOWNTOWN DENVER..............................46
Introduction...............................................46
Denver as a Case Study: Previous Research................. 47
Census Data................................................50
The Kaplan Study ..........................................62
Conclusion ................................................64
V. THE ROLE OF AGENCY............................................66
Introduction...............................................66
1986 Downtown Area Plan (The Beginnings)...................67
1989 Denver Comprehensive Plan.............................77
Funds Generated through Legal Gambling.....................84
Tax Increment Financing (TIF) .............................87
v


Denver Urban Renewal Authority (DURA) .........................89
News of Denver's Redevelopment.................................98
The Role of the Federal Government (HUD and HOPE VI)..........105
2000 Comprehensive Plan (Denver's Self-Described Success Story) ....107
Conclusion ...................................................109
VI. STRUCTURAL THEORY IN THE LOCAL CONTEXT...........................111
Introduction..................................................Ill
National Economic Trends .....................................112
Supply-Side Reasons for Structural Revitalization.............114
Demand-Side Reasons for Structural Revitalization ............116
Conclusion ...................................................122
VII. CONCLUSION .....................................................124
The Intersection of Structure and Agency......................124
Denver's Future...............................................130
The Limitations of This Thesis................................134
WORKS CITED .........................................................136

VI


FIGURES
Figure
2.1 Traditional Economic Development Incentives.........................25
4.1 Census Tracts and Boundaries Map....................................53
5.1 Downtown Denver Business Improvement District Map...................69
5.2 Transition Areas Map ...............................................73
5.3 DURA Projects Map...................................................97
5.4 East Village and Post Properties Map...............................104
vii


TABLES
Table
4.1 Census Property Data Comparisons..............................54
4.2 Census Rent Comparisons ......................................57
4.3 Census Income Comparisons.....................................58
4.4 Comparison of % Change........................................59
4.5 Average Price of Homes Sold 1986-2003 ........................64
5.1 Examples of the State Historic Fund ..........................85
5.2 Projected Versus Actual DURA Property and Sales Tax Collections.93
6.1 Census Comparison of Counties................................113
viii


CHAPTER I
INTRODUCTION
Subject
The 1990s were an interesting decade for the city of Denver. I remember,
quite vividly, eating at the Breckenridge Brewery immediately following its opening
(and thus preceding the opening of the neighboring Coors field). At the time, being a
13-year-old from the white-bred, Cory-Merrill neighborhood near Washington Park, I
was scared to eat there. The neighborhood did not feel like a neighborhood; it was a
cluster of vacant warehouses. Who would have thought that ten years later, it would
be nearly impossible to drive down that very street, on a Saturday night, because of
the riotous bustling of hordes of customers and game attendees? Who would have
thought that the real-estate values throughout downtown Denver, and its surrounding
neighborhoods, would climb astronomically?
In the early nineties, most Denver residents would have scoffed at theories of
urban renewal. [Architect] Kimble Hobbs recalls when the notion of people living
in downtown Denver was Tike thinking about the Berlin Wall coming down it just
didnt seem possible (qtd. in Leccesse 32). However, it is now abundantly clear that
1


the urban landscape has changed. My thesis will investigate the causes of these
changes. Many assume that the ebb and flow of urban popularity is solely market
driven. Since the 1990s, there has been an increase in neoliberal ideology. The
linchpin of neoliberal ideology is the belief that open, competitive, and unregulated
markets, liberated from all forms of state interference, represent the optimal
mechanism for economic development (Brenner and Theodore 3). Ironically, this
paradigm has not only been espoused by economists, but government agents as well,
resulting in a strategic transition from the classic Keynesian welfare state to
government investment in the supply side of the economic spectrum. In this sense,
existing neoliberalism is not the liberation of the market from state intervention, but a
partnership between governmental and market forces (Brenner and Theodore). This
is the intersection of structure and agency which is the foundation of Denvers
urban renewal.
It is also important to note that the structural reasons for urban redevelopment
- assuming for a moment that agency is inapplicable are divided into two
categories: supply-side and consumption/demand-side. While this distinction will be
discussed in greater detail throughout this thesis, it is important to at least briefly
explain at an early stage. The supply-side is based on capital, and the necessity of a
viable market. Essentially, there must be land and entrepreneurs willing to invest in
the redevelopment of that land. Economists like Michael Porter, who will be
discussed in the literature review, discuss the competitive advantages of the inner
2


city, in terms of market potential. On the other hand, the demand side represents the
consumers. To put it quite simply, people must want to shop and/or live in the inner-
city for urban renewal to occur. While this desire can be instigated with supply-side
tactics advertising, affordability, etc. it is important to realize the extent to which
culture and sociology can affect markets. The postponement of family life, the
disintegration of the patriarchal household, and diminished racial tension can all
cause a demand for urban living. These are all important, structural factors which
will be examined in this work.
Quite independent of such natural market forces, however, there are also
dynamics generated by consciously chosen strategies adopted by city officials who
seek to leverage local regeneration. Evaluating the extent of local agency (political
choices) versus structure (underlying dynamics of market supply and demand) in
shaping the landscape of Denver gentrification is the core of my thesis. There are
many agencies, namely the city and federal government, which directly and
intentionally support urban renewal. However, these agencies operate within a
broader national market and within the boundaries of national culture which can
either foster or impede urban renewal. Essentially, I want to study the intersection of
national market trends (such as supply and demand for inner-city housing) and a pro-
active city government intent on increasing both the supply and demand for affluent
inner-city housing. Although these two sides are often treated as independents in the
literature, they certainly are not mutually exclusive. In fact, they are so entwined, it
3


can often be difficult to separate one from the other, especially due to the
aforementioned shift towards a neoliberal government. It is even arguable that this
distinction may be a false dichotomy since government exists within the broad social
structure, and is thus influenced, and possibly dictated, by market trends.
Although it is logical that various government and private agencies affect, and
shape the direction of, the urban renewal process, it is unlikely that they are solely
responsible for these processes. In fact, the desire for urban-renewal among local
officials has been prevalent since the 1970s, and the local agencies that promote
inner-city regeneration have historically used many of the same tactics as are used
today. City governments have made attempts at urban renewal throughout modem
history, but with limited and mixed success. The post-1960s record of urban decay,
even while local officials worked frantically to stimulate investment, has been
reversed in recent years, not only in the city of Denver, but nationally. My
fundamental question is, "Why now?" Why did the "return to the city" (as it is
commonly referred to) occur in the late 1990s instead of the 1970s, 80s, or even early
90s? My case study for this question is the city of Denver.
Affluence has reemerged in Downtown Denver, not only in the Central
Business District, but also in the surrounding, inner-city neighborhoods. Even with
government support, revitalization easily could have failed. It has in the past, and
few cities have shown the record of urban revitalization that is present in Denver.
Discerning the causation of Denvers urban renewal will allow an intriguing case
4


study of national market conditions that allow for inner-city regeneration, specific
political choices that catalyze that regeneration, and the intersection/interaction
between these two forces.
Research
Since most modem conservatives (including urban Republicans) and moderate
liberals (including Democrats of the Democratic Leadership Council breed) generally
agree that urban renewal is a positive movement, the primary debate exists between
academic leftists and most, if not all, mainstream politicians. Mayor Webb discussed
urban renewal strategies in his 1992 Report to the Citizens of Denver. He states:
Without a successful core housing, retail and service area, Denver
would lose its identity and with it much of its economic energy. I
promised to give Downtown Denver the attention it deserves.
Ninety days after my election, I convened the Downtown Summit,
a two day intensive workshop with City Council menmers,
commercial, residential, and preservation interests. The workshop
succeeded in laying out what became a specific action plan and
schedule for more than 200 steps to reinvigorate the central business
district (3).
It is logical that the Democrats would be in favor of urban renewal. Its foundations
are based in classical, Democratic thought, in the tradition of the New Deal and Great
Society. However, the government agencies that foster urban renewal do so with
much more of an emphasis on business and supply-side economics than the past.
While it is shown that urban renewal increases the property values of the inner city
(see Chapter IV), it is not so certain who benefits. A perfect example of this dilemma
5


is Jennifer Moulton's essay "Ten Steps to a Living Downtown." Though Moulton
was an urban liberal, appointed as planning director by Denvers Democratic
African-American mayor, Wellington Webb, her strategies for rejuvenating the city
could have come straight from the nations chambers of commerce. The abstract of
the essay epitomizes the argument of the Democrats: "Many American cities are
enjoying a downtown housing boom. While a strong economy and market demand
are necessary for a residential downtown to thrive, city governments can facilitate,
rather than impede, the workings of these forces" (5). Many other secondary sources,
as well as primary and government sources, share this opinion. Rodger L. Kemp
states:
The traditional methods of community revitalization included an
assortment of financial and land-based economic incentives, and
several different types of municipal delivery systems to implement
them. Financial incentives included everything from business
assistance programs, to low-cost financing, to tax increment
financing. Land based incentives included an assortment of tools
from enhanced building density bonuses, to allowing mixed land
uses, to revising aging city zoning codes (4).
Another essay in the same book uses Denver as an example. "LoDo, which was
rezoned from industrial to mixed use in 1981, was declared a local historic district in
1988. The Downtown Denver Partnership created a Lower Downtown Business
Support Office that, with financial support from preservation groups and the state of
Colorado, encouraged renovation" (Newberg 4).
The roots of Denvers urban renewal can officially be traced to the
6


establishment of the Denver Urban Authority (DURA), in 1958 (Denver Urban
Renewal Authority, 2005). DURA was active in the 1960s and 70s, using the urban
renewal tactics of the time. These tactics included the razing of several acres of
warehouse space and residential neighborhood, in the heart of the downtown area,
including the land now occupied by the University of Colorado at Denver.
Downtown was transformed into a modem city, with utilitarian, Class A office towers
stretching into the sky. This strategy proved to have its problems, though, as
Downtown Denver became more and more a commuter destination for the increasing
suburban growth.
By 1970, downtown housing had largely disappeared. The exodus of
the population to the suburbs had an inexorable ripple effect:
department stores followed the people, taking many smaller specialty
shops with them to the new suburban shopping malls...
Downtowns were left as centers of employment only Central
Business Districts (CBDs) had little else to offer. And by the 1980s,
even the employers, and of course their workers, were fleeing to the
lower rents and abundant free parking of neatly planned suburban
office parks nearer their homes. Real estate developers and investors
declared downtown dead (Moulton 6).
While the Central Business District remained alive at this time, it was not doing well -
-office vacancy rates in the office towers were high. Faring much worse, however,
were the surrounding areas. DURA had not razed all of the warehouse districts, and
the area northeast of the CBD was comprised of vacant, industrial space and tracks of
rail yards. The surrounding residential neighborhoods, some of the oldest in the city,
were primarily occupied by low-income residents.
7


This is the historic starting point of my thesis. In 1986, realizing the extent of
the situation, and the dire future implications, the Denver Partnership, Inc. and the
Denver Planning Office jointly drafted a plan, entitled Downtown Area Plan: A Plan
for the Future of Downtown Denver. For the purposes of this thesis, this plan
represents the dawn of the current, urban renewal movement. As will be discussed in
upcoming chapters, this plan set the stage for the redevelopment to come. It focused
on Denvers revitalization strategy, working outward from a strategic center
backbone: the 16th Street Mall, which traverses the center of the CBD from North to
South. Very importantly, it also established the neoliberal paradigm discussed earlier
in this chapter. The Keynesian welfare state was abandoned, and revitalization efforts
were targeted at the supply-side, with the hope that business could instigate
redevelopment.
The city moved forward from this point, drafting another comprehensive plan
in 1989. These plans represent the beginnings of agencys new, neoliberal role in
Denvers urban renewal process. The purpose of this thesis is to study this role in a
structural context. I aim to discover the causation of Denvers urban renewal by
researching what areas were targeted by local government, and what tactics were used
to leverage redevelopment. Coinciding with government investment are a plethora of
structural forces working in favor of redevelopment. As will be shown in upcoming
chapters, lements that were once considered problematic vacant warehouse space,
for example eventually become structural foundations of the revitalization effort.
8


This paper aims to first examine the debate between structure and agency as it exists
in the academic context. This is the purpose of the literature review. Once urban
renewal is understood as a general theory, I will apply it to Denver as a case study.
The period I plan to examine most extensively is between 1990 and 2000. This was
the boom period for Denver, when industrial areas were transformed into
neighborhoods, and existing neighborhoods experienced massive real estate gains. It
is also the period of actualized, neoliberal government strategy. Denver is a
neglected case study, which is unfortunate, given the extent of its revitalization effort.
I hope that this thesis discloses new information concerning a fascinating subject, and
pertinent case study. Urban renewal is an important topic, both locally and
nationally, and it thus warrants examination.
9


CHAPTER n
REVIEW OF THE LITERATURE
Introduction
Before I can discuss the city of Denver as a case study, it is important to
examine the academic debate concerning urban renewal. The cause of urban renewal
is multifaceted. There are many people, including academics, economists, and civic
planners, involved in the discussion. Since they each come from a different angle,
they inevitably have their individual biases. Some emphasize the return of business
dominance, some emphasize the role of strong, pro-active government, and some
emphasize overarching, social trends such as the retum-to-the-city movement. The
purpose of this literature review is to analyze all of these theories in a national
context. Although Denver may be mentioned in these debates, the situation in this
city is not necessarily important at this stage of the discussion.
Before I go on, I must make an important note concerning terminology:
different authors use different terms. "Urban renewal," "urban revitalization," etc.,
and "gentrification" are often used synonymously in regards to explicit meaning. The
difference exists in the moral tone. "Urban renewal" is often used positively, and
"gentrification" is often used negatively. I primarily use "urban renewal," not so
10


much because I am a proponent, but because I find the term to be less politicized.
"Gentrification" is generally used by academics and social activists who are very
critical of its processes and repercussions. Since these voices are prominent in the
literature, the term will inevitably be used throughout this paper.
Urban renewal has been a recurring social phenomenon since the 1960s.
However, it has "undergone a vital transition. If in the early 1960s it made sense to
think of gentrification very much of the quaint and specialized language of residential
rehabilitation that Ruth Glass employed, this is no longer so today" (Smith 39).
What was once a rarity is now ubiquitous. Cities all over the United States have not
only revitalized existing housing stock, but revamped entire neighborhoods. Space in
urban areas is in such high demand that, once the supply of existing loft space is
exhausted, it is not uncommon for developers to construct loft-style condominiums.
Of course, since demand has increased dramatically, so has cost, especially since
supply is geographically limited. For many, this is a dream come true. Property that
was once worth little is now a hot commodity. The boom has not only generated
profit for investors, but increased tax dollars, and improved image, for the cities.
However, questions remain: How exactly did this happen? How did abandoned
tracts of warehouses become trendy nightclubs? How did real-estate values soar in
inner-city neighborhoods? Why now?
There are many people attempting to understand the causation of urban
renewal. Those in favor of it want the process to continue. They want to know why
11


some cities have been more successful than other cities. There is then the hope that
those methods of success can be transplanted to cities in need of revitalization. On
the other hand, those critical of urban renewal need to understand its processes so that
they can work to repel its problematic repercussions, such as the displacement of
urban peoples.
History
Before I can analyze the causation of urban renewal, there is another question
that must first be breeched: Why did affluent people leave the inner-city in the first
place? The answer, as with their return to the city, is multifaceted. It centers on
various social dynamics, technological changes, and economic transitions. The dawn
of suburbanization began after World War II. The result has been referred to as
"white flight," where by those with economic means abandoned their city dwellings
for the increased space, and perceived safety, of the suburbs. The process accelerated
and within years, the economy of the inner-city declined. In 1985, Paul Peterson
wrote: "Two types of urban change have left America's older industrial cities in
severe decline: technological innovations in transportation, communication, and
manufacturing have made their infrastructure and land use patterns obsolete, and
accelerating racial change has made inner cities the primary home for minority
groups, particularly those with low incomes and poor job skills" (viii).
In the 1950s, the emphasis on car travel emerged. This tend was exacerbated
12


by President Eisenhower's construction of the interstates. "What the automobile did
to the suburbs was to bring them within the price range of millions who could not
afford to live in the expensive ones. It made suburban living democratic. It did so by
making possible the development of the large expanses of land lying between the rail
lines radiating from the hub. By bringing this land within the urban pattern, the
automobile both moderated the cost of urban land and allowed urban dwellers to own
more land per capita" (Paul Porter 13).
The physical construction of the suburbs was not the only reason why people
left the cities. First off, the government made it easier by giving VA loans to a
multitude of veterans. These loans made it possible for returning soldiers to purchase
their own homes. Not surprisingly, many of them did so in the easily-affordable
suburbs. A less innocuous reason for suburbanization was the typical racism of the
day. "In addition to the increased housing and transportation options, the end of
segregation in the 1950s and the uncertain political climate of the 1960s expanded
suburban development. This resulted in a fleeing of white residents from the city to
the suburbs, in part provoked by the fear invoked from the real estate industry, whose
unscrupulous blockbusting methods warned of declining property values, and
convinced homeowners to sell their city homes and buy in the suburbs" (Bender 2).
The results proved to be cyclical. As more white residents moved out, more black
residents moved in. "White neighborhoods closest to majority black neighborhoods
emptied of whites more rapidly than neighborhoods far from concentrations of
13


minorities. In a 1976 survey, researcher Reynolds Farley found that only 25 percent
of white respondents would live in a neighborhood that was one-third black" (Grogan
and Proscio 37). "As early as the 1950s, suburban real-estate advertisements were
harping on the themes of race, crime, drugs, congestion, and filth" (Grogan and
Proscio 35). The real-estate industry's heeding became a self-fulfilled prophesy as
property values inevitably devalued. This trend, in turn, led to increased white flight.
However, as will be seen in the remainder of this chapter, the devaluation of
the urban landscape proved to be the perfect breeding ground for urban renewal. Neil
Smith argues that there is an inevitable cycle of investment and disinvestment in the
urban landscape. Disinvestment is necessary in order to prepare the way for
investment and profit-making to follow. Paul Peterson's assertion that technology
made the city's infrastructure and land-use patterns obsolete proved erroneous. The
infrastructure of the city provided the location and the structures in which urban
renewal is now founded. In the following section, I will discuss why conservative
economic theory viewed the vacant, affordable urban landscape as a potential for
profitable redevelopment.
Conservative Theories of Urban Redevelopment
A primary force behind urban renewal is business, and the economic school
behind it. In the introduction, I hypothesized that the cause of urban renewal rests at
the intersection of structure and agency. Economists theorize about developments
14


within both of these realms. They argue that social trends, such as urban renewal, are
dictated by the market. As will be discussed herein, the "rent gap" and other
overarching economic theories, are viewed as structural market conditions catalyzing
economic growth in depressed, urban areas. However, while structural market
conditions exist on the macro scale, economists do not ignore the impact of micro-
managing individual markets. In this way, the economists act as agents or at the
very least influence the governing agency who intentionally support, and guide the
direction of urban renewal. Although they are critical of pro-active government, they
often support government action which conforms to their paradigm. As Paul Porter
remarks: "People who carry the tattered banners of conservative and liberal usually
disagree about the subsidies they want, but both groups have contributed heavily to
the spread of the practice" (193).
A major proponent of economic-based urban renewal is Harvard Business
School professor Michael E. Porter. In 1995, he wrote a famous, oft-critiqued, essay
entitled "The Competitive Advantage of the Inner City." He begins this essay by
criticizing the existing modes used to revitalize cities:
Past efforts have been guided by a social model built around meeting
the needs of individuals.... Programs aimed more directly at
economic development have been fragmented and ineffective. These
piecemeal approaches have usually taken the form of subsidies,
preference programs, or expensive efforts to stimulate economic
activity in tangential fields such as housing, real estate, and
neighborhood development (378).
Porter's solution resides in corporate business and the need to create wealth through
15


market means as opposed to redistributing wealth through state authority. He lists
four main advantages of the inner city as a place where wealth could be created
through market mechanisms: "strategic location, local market demand, integration
with regional clusters, and human resources" (381).
The first of these is obvious. Downtown areas are inherently central and in
most cases built on major thoroughfares. Producers can ship products faster and more
efficiently than suburban competitors. Also, local market demand entails urban
character. "Inner city consumers ... represent a major growth market of the future,
and companies based in the inner city have a unique ability to understand and address
their needs" (385). However, it is important for inner city businesses not to deal
exclusively within their local communities. On the other hand, they should develop
networks and relationships with surrounding companies. This approach is what
Porter refers to as integration with regional clusters. "It also provides tremendous
leverage for development efforts: By focusing on upgrading existing and nascent
clusters, rather than on supporting isolated companies or industries, public and private
investments in training, infrastructure, and technology can benefit multiple companies
simultaneously" (388). His fourth advantage regards misconceptions concerning the
nature of inner-city residents. Porter contends that inner city workers are industrious
and eager to work and have a capacity for entrepreneurship. Considering that
moderate income jobs are scarce in inner-city neighborhoods, there is a multitude of
human resources eager for employment.
16


Porter theorizes that these advantages can coalesce and form an ideal market.
According to supply-side economic theory, the success of one inner-city business
paves the way for others. This progression creates jobs for residents and tax dollars
for the city. Increased employment, and social services paid for with increased
revenue make for less crime and an improved community. Thus the area is more
viable in the eyes of business, and revitalization continues.
While Michael E. Porter focuses on the potential for business in the inner city,
other economists focus on real estate. Much of the literature centers around the "rent
gap," which is the disparity between capitalized ground rent and potential ground
rent. "Ground rent is a claim made by landowners on users of their land....
Capitalized ground rent is the actual quantity of ground rent that is appropriated by
the landowner, given the present land use" (Smith 62). Potential ground rent relates
not only to current rental prices, but to underlying real-estate values as well. "Thus,
assuming for a moment an equation between price and value, sale price=house value
+ capitalized ground rent.... Potential ground rent is the amount that could be
capitalized under the lands "highest and best use' (in planners parlance) or at least
under a higher and better use" (Smith 62). In laymen's terms, the marketable value
of existing property in devalued neighborhoods is lower than the potential value of
the same property if it were to be redeveloped, or upwardly marketed.
Thus, to use Michael Porters terminology, there is a "competitive advantage
of the inner city" in regards to real estate. First, housing stock is prevalent and
17


inexpensive. Second, it is centrally located. Third, in many cities deteriorated
neighborhoods were once affluent, and the houses are indicative of prior wealth.
They are spacious, historical and attractive. "Traditional urban characteristics such as
density, diversity, tum-of the-century architecture and vacant industrial, commercial
and warehouse apace -- negative location factors in the old economy are potentially
positive factors in the new economy because they are attractive to those who bring
with them the potential for economic growth" (Partners for Livable Communities 3).
Prior to revitalization, capitalized ground rent is low. Building maintenance is often
lacking, especially in rental properties because of the "eminently reasonable response
of landlord to a declining market" (Partners for Livable Communities 65). The
potential for inner-city neighborhoods exists for those willing to take real-estate risks.
Houses can be bought at capitalized ground rent, remodeled and sold for potential
ground rent. Once this process gains momentum, housing markets are changed
dramatically. As has been witnessed in Denver and many other cities, the rent gap
can alter the urban dynamic. Housing that was once worth little becomes prime real-
estate. Neighborhoods once dominated by rental properties become-dominated by
single family units. As with Porter's theory, more capital is brought into the
neighborhood. Affluent houses pave the way for businesses that cater to the new
residents. This situation, in turn, increases real-estate value. The neighborhood is
completely transformed.
Another theory of supply-side urban renewal focuses on the interplay between
18


business and real estate. Brian Berry states: "Gentrification has its onset in some of
the housing markets in which the housing industry is producing substantial excess
supply by building far more units than the growth in the number of households
requires" (92). He couples this trend with changes in business dynamics. As blue-
collar jobs decrease in downtown areas, white-collar jobs increase. "It is in this
growing complex of modem service-sector jobs that the professional and white-collar
jobs supporting gentrification have emerged" (94). Similar theories are discussed by
Sharon Zukin in her book Loft Living. Zukin's structural deconstruction of the New
York City loft phenomenon sheds light on mass-market trends. She states that "the
supply of lofts did not create demand for loft living. Instead, demand was a
conjunctural response to other social and cultural changes" (15). These changes were
brought on by the deindustrialization of the inner-city, which created a spatial hole in
the market. This hole was initially filled by artists seeking large space and affordable
rent. However, before long "these 'artists quarters' gained increasing public notice;
the economic and aesthetic virtues of 'loft living' were transformed into bourgeois
chic" (2). As with Berry, the establishment of an urban, professional class profoundly
influences structural trends, and in this scenario, leads to the closing of the rent gap.
Neoliberal Urban-Renewal Theory
At this point, it is necessary to clarify the three major schools of urban-
renewal theories. The last section discussed the classically-conservative, supply-side
19


economic theory. Most of the proponents of this theory are economists and business
professionals. Since they argue for limited governmental interference, the issue of
government agency is naturally missing from their paradigm. The other "classic"
school of thought is the belief in a welfare state. Terms such as "classically
Democratic" and "Keynesian" are often used to describe this school, where in
government agency focuses on the demand side of the economic spectrum. Poverty is
eradicated by directly aiding the poor. Welfare, unemployment and Social Security
are all tenets of this theory. The foundation is that economists like Michael Porter are
incorrect: disenfranchised areas cannot be rejuvenated through market forces alone;
there is a need for governmental agency.
This discussion leads to the third, and currently most popular, urban renewal
theory: neo-liberalism. Neoliberalism is the culmination of the two, classic schools.
It agrees that market forces alone cannot rejuvenate a dysfunctional urbania.
However, instead of focusing on the demand side, it focuses on the supply side.
"Neoliberalism is a hypermarketized style of governance (i.e. government through
and by the market) that denigrates collective consumption and institutions. It is also
an ideological fetishization of pure, perfect markets as superior allocative
mechanisms for the distribution of public resources" (Weber 520). The ideological
foundation of neoliberalism is that the Keynesian welfare state is insufficient for
urban redevelopment. The welfare state may aid individual people, but it does not
foster massive economic redevelopment. The solution is for the government to
20


support the market directly with financial incentives and even starter capital. As will
be discussed in more detail in subsequent chapters, neoliberalism gives municipalities
more power in the urban-renewal process. "As the federal-grants economy that
fueled urban renewal efforts has been dismantled, entrepreneurial cities have sought
to distance themselves from prior welfare commitments, reclaim obsolete spaces, and
find innovative ways to make costly redevelopment projects 'pay for themselves"'
(Weber 537).
Agency's transition from the demand-side to the supply-side makes the urban
renewal debate increasingly complicated. The market is a primary aspect of social
structure, but if agency directly and intentionally affects the market, it becomes
increasingly difficult to separate the two. Agency is therefore partly responsible for
both positive and negative market changes. Many neoliberals, such as Jennifer
Moulton (who will be discussed in the next section), laud the improved market
conditions brought on by government. On the other hand, opponents of gentrification
argue that these changes negatively affect the urban peoples of redeveloped areas.
Their argument is further legitimized if those changes are not purely structural such
as in Michael Porter's paradigm but are brought on by agency. Ethical debate
aside, neoliberalism is the prominent theory used by both city and federal
governments to draft urban renewal strategies. The next section will discuss this
transition in further detail, illustrating the inequities of the "classic" theories and the
rise of neoliberalism.
21


Agency and the Limitations of
Conservative Theory
While purely economic theories of urban renewal are certainly logical, most
scholars disagree that they are solely responsible for the phenomenon. Even Michael
Porter acknowledges that governmental policies can foster economic growth,
independent of underlying market conditions. However, he argues that such
government interventions are necessary due mostly to the inequities that have resulted
from pre-existing governmental regulation. He claims that programs have been based
on subsidies and mandates rather than on marketplace realities. Government can
assume a more effective role by supporting the private sector in new economic
initiatives. It must shift its focus from direct involvement and intervention to creating
a favorable environment for business (400). In other words, the goal of government
should be the creation of an equal, economic playing field in the liberal tradition of
Adam Smith. "Government entities could also develop a more strategic approach to
develop transportation and communications infrastructures, which would facilitate the
fluid movement of goods, employees, customers, and suppliers within and beyond the
inner city" (Michael Porter 402). However, once the competitive disadvantage of the
inner city is eradicated, there should be little need for pro-active government.
The counter-argument to this claim harkens back to Paul Porter's opinion that
a subsidy is a subsidy. Whether the government spends money to facilitate the supply
side or demand side of the inner city, the fact remains that the government is acting
22


pro-actively. "In his blanket condemnation of government, Porter often misses the
supportive role of the public sector in brokering, financing, and otherwise facilitating
the cluster developments and networking he professes to admire, which lie at the
heart of urban revitalization strategy" (Harrison and Glasmeier 30). Porter's
insistence on business as the primary means of urban revitalization is lambasted
throughout the literature. Harrison and Glasmeir argue that Porter's indictment of
government, as well as other agents, such as community-based organizations (CBOs)
and community development corporations (CDCs), is inaccurate. According to a
survey conducted for the National Congress for Community Economic Development
(NCCED) in 1995, the estimated 2,000 to 2,200 CDCs around the country have
already produced some 400,000 units of affordable housing, developed 23 million
square feet of commercial and industrial space, lent $200 million to minority business
enterprises, and created perhaps 67,000 full-time jobs (32). Harrison and Glasmeir
refer to their essay as "a friendly critique of Michael Porter's approach to urban
revitalization" because, like most urban-renewal advocates, they agree that business is
an important factor. They do not necessarily disagree with his approach; they
disagree about the extent to which business can solitarily revitalize the inner city.
Without government support, it is unlikely that a formidable economic foundation
could exist in the inner city. Agency, in the form of specific governmental policies, is
therefore necessary for urban renewal to occur.
This opinion is echoed throughout the literature. Ironically though, while
23


economists may argue against governmental agency supporting urban renewal, much
of the literature focuses on how governmental policies should, in fact, intervene on
behalf of the supply-side. In fact, this is the key difference between inner-city
strategies of the past and present. The classically Democratic approach focused on
propping up the demand side. The emphasis was on the elimination of poverty; the
focus was on the individual. Today, the focus on the demand side is still present;
social programs still exist. However, the demand- side strategy has been eclipsed by
the neoliberal emphasis on the supply side. Roger Kemp states:
Public officials are beginning to realize that they can plant the seeds of
revitalization, renew their downtowns and neighborhoods, as well as
attract public investment. These new programs are not give-away
programs, or what some conservatives would call corporate welfare
programs. Rather, they represent the efforts of public officials to
invest in their downtown neighborhoods with the goal of revitalizing
them (4).
Kemp's assertion that public assistance is not corporate welfare is dubious.
The purpose of welfare, whether it is aimed at the demand side or at the supply side
(as he is averring), is to do exactly as he says: revitalize through state action. In
theory, welfare is never supposed to be a temporary fix. This exercise in semantics
aside, Kemp epitomizes the neoliberal urban-renewal strategy. He wants government
to support any means that would return affluence to the inner city. In his essay, he
lists the traditional economic-development incentives (5). Since this explanation is a
clear representation of agency's role in supply-side revitalization, I have placed it
appropriately in this thesis (Figure 3.1). As can be seen, these methods discount
24


strict conservatism. There are many things the government must first do before it is
likely that large businesses and affluent citizens will return to the inner city.
Financial
Business Assistance Programs
Business Retendon Programs
Community-Based Assistance
Leveraging Private Investment
Low-Cost Financing
Personal Property Tax Incendves/Rcbates
Pooled-Income Financing
Real Property Tax Incendves/Rcbates
Small Business Development Loans
Tax Increment Financing
Land-Based
Building Density Bonuses
Cleaning Contaminated Sites
Development Standards
Height and Bulk Bonuses
Land Subsidies
Mixed Land Uses
Off-Site Improvements
On-Site Improvements
Parking Improvements
Transfer of Development Rights
Zoning Regulations
Delivery Systems
Community Development Corporadons
Development Disposition Agreements
Economic Development Corporauons
Economic Development Departments
Empowerment Zones
Enterprise Zones
One-Stop Permit Processes
Planning Departments
Redevelopment Project Areas
Figure 2.1: Traditional Economic Development Incentives
25


Some of these are based on the misuse of government. The primary one is
zoning. Michael Porter would certainly argue that outdated or erroneous zoning
regulations are a perfect example of runaway government, since they can certainly
repel development necessary for urban revitalization. Zoning changes are therefore a
relatively easy way for government to instigate urban renewal. For example, areas
zoned as industrial can be rezones to "mixed use," allowing the construction of
residential lofts and entertainment businesses. The basic theme of neoliberalism is
that it takes money to make money. The government must be willing to invest in
urban renewal for it to succeed. Paul S. Grogan and Tony Proscio argue that such
spending is proper. However, they do not just focus on the theory that urban wealth
is cyclical. They remind the reader that "[u]rban taxpayers helped subsidize new
highways, sewer systems, and other public works in the suburbs while their own
deteriorated beneath them. The exact cost of these subsidies is hard to pinpoint, but
one estimate puts the cost of the highways alone in the tens of billions" (36).
Therefore, it should not be controversial that similar subsidies should be granted to
the inner city. Of course, these subsidies do not just apply to public works. In fact,
many are aimed directly at the affluent. Large businesses, upper-income housing
developments and even entertainment attractions (Bender 2) are all subsidized in
order to return capital to the inner city (this fact will be documented extensively in
upcoming chapters). City officials hope that these subsidies can lure affluence back
to the city. Considering the results, in many cities nationwide, this hope is
26


reasonable. Besides purely economic subsidies, there are other techniques that cities
can use to galvanize urban renewal. A major proponent of these was Jennifer
Moulton, one of Americas leading urban planners in the 1990s, and the
quintessential neoliberal. In her essay "10 Steps to a Living Downtown" Moulton
emphasizes some of these techniques (12).
One: Housing must be downtown's political and business priority. She thus
disagrees with Michael Porter's emphasis on business. She claims that downtown
residential neighborhoods must be worthy of investment. The neighborhoods create
the "logical ripple effect." She also iterates that the status of the residential areas
must be articulated to the public. Those who do not live in the inner city should not
be afraid to visit or shop there.
Two: Downtown must be legible. In other words, downtown must have
distinguishable boundaries. This view represents a break from traditional, demand-
side urban renewal. Since it is unlikely for the entire inner city to be revitalized
through wholesale uplift of the urban poor, it is safer to target specific sites.
Warehouse districts can be rezoned to allow for loft-living, cleaned up and/or be
declared historic, and then marketed to new, affluent consumers. Name is important
as well. The name of the neighborhood should be used or in some cases retooled,
such as "LoDo" as a distinguishing characteristic. She even advises inventing a
name, if the redeveloped area lacks one ("Uptown" is a Denver example).
Three: Downtown must be accessible. The physical infrastructure needs to be
27


in good shape. Subsidies should be spent on public works. She even goes so far as to
refer to the city government as "property manager." Intra-downtown accessibility is
also important. The streets should be pedestrian-friendly and aim consumers towards
viable shopping areas.
Four: Downtowns must have new and improved regional amenities. Sports
stadiums, performing-arts complexes, amusement parks, aquariums, etc. bring both
revenue and people to downtown. "Downtowns need people a lot of people in order
to be efficient economic machines and to have lively vital streets" (14). Many of
these people may not otherwise be prone to visit downtown, but regional amenities
bring them by the thousands. The hope is that these people will return for reasons
other than the amenities that brought them the first time. Repeat visits enforce the
improved aesthetic of the area and extinguish preconceived notions of filth and
danger. The government subsidizes these larger enterprises, thus expanding the
market for privately-funded small businesses, such as restaurants and art galleries.
Five: Downtowns must be clean and safe. As was mentioned in the last
paragraph, many suburbanites view downtown as deteriorated and dangerous. This
stereotype must be negated. Obviously, this goal entails added expenditures in public
works and the police force. Moulton also advises that once the city is clean and safe,
the city should promote events which bring suburbanites to the city, surreptitiously
exposing them to its physical improvement.
Six: Downtowns must preserve and reuse old buildings. This policy is a
28


serious departure from traditional thinking. In the 1970s and 80s, entire blocks were
scrapped and replaced with Class A office towers in many downtowns. While this
approach maintains capital in downtown areas, it has unfortunate side-effects.
Expanding Class A office towers are the base of commuter culture. People may work
downtown, but they live and shop in the suburbs. The remaining Class C, oft-vacant
historical buildings distinguish downtown architecturally and thus aesthetically
from the suburbs, and also "have created the skeleton for affordable residential
development in center cities" (Moulton 15). Ironically, historic warehouses, which
were once deemed urban blight, are now potential lofts; Downtown neighborhoods,
which were traditionally industrial, can become residential. This gap creates a local
market for downtown business and improves the image of the entire downtown area.
Seven: Downtown regulations must be streamlined to support residential
growth. As was mentioned previously in this chapter, zoning regulations can deter
urban revitalization. Moulton agrees with Michael Porter that the government must
streamline any past legislation that impedes capital investment. However, Moulton
warns that city government must be careful not to completely disregard zoning
restrictions because the value of residential neighborhoods can actually be decreased
by cumbersome projects or over-building.
Eight: City resources should be devoted to housing. This concept is an intense
departure from conservatism. Moulton asserts that public funding is needed to boost
production of downtown housing. Public funding can be used on anything from
29


facade repairs to the funding of large developments.
Nine: The edge of downtown should be surrounded by viable neighborhoods.
She expresses concern over the "moat" which exists in many downtown cities. This
moat is comprised of vacant warehouse districts, empty parking lots, and blighted
residential neighborhoods. These neighborhoods are problematic since they foster the
negative image of downtown. These neighborhoods are prime candidates for
revitalization due to the rent gap. They are a source of low-cost property that can
increase in value with a revitalized downtown. In other words, it is likely that the
types of subsidies used to bolster downtown revitalization also apply to surrounding
neighborhoods. However, as Moulton explained in her second step, the city should
focus only on viable neighborhoods.
In her last step, Moulton asserts that "Downtown is never done" (19).
Moulton acknowledges that market and social forces (structure) shift. She states this
fact as "inevitable and uncontrollable" (19). Ironically, a major problem can be
excessive demand. Downtown revitalization dramatically increases demand in a
market with inherently limited supply (as opposed to the suburbs that can sprawl
endlessly). This limit can drive property values well above the mean of the
metropolitan area, and thus creates a precarious economic situation, especially when
inevitable market flux occurs. Moulton also briefly mentions the dilemma of
gentrification. She states: "A key characteristic of a healthy downtown is the
presence of a full range of housing opportunities for people of all incomes" (20).
30


This outcome is not practical without government intervention (demand-side
subsidies). There is also the dilemma concerning family. Many of the affluent,
inner-city residents are young and childless. Many of these residents may return to
the suburbs if they choose to start a family. Finally, Moulton warns that history has
shown expedient inner-city abandonment. City government must maintain the value
of downtown if it expects stability.
Jennifer Moulton's essay is important to my research for two reasons. First,
since she was a city planner with a strategy for leveraging urban renewal, she
epitomizes the argument of agency. Her essay is aimed at her fellow civic planners,
government agencies, community development corporations, and even business
industries. It is directed towards the actors in the urban-renewal process.
Furthermore, Moulton bases her essay not on an untested theory, but on a case study.
This approach leads to the second reason it is so important to my research: The case
study is Denver. Moulton was Denvers Director of City Planning and was partially
responsible for the direction it took in its urban-renewal strategy. This essay
summarizes Denver's success story. However, since Moulton worked for the
government, her story is inherently biased by a boosters mentality that might
overstate the role of city planners in creating the Denver miracle. Subsequent
chapters of this thesis will analyze Denver, as a case study, from a more disinterested,
academic perspective.
31


The Influence of Societal and
Cultural Trends on Urban Renewal
The previous section concerned agency's role in urban renewal. Moulton and
her colleagues yearn to understand methods that incite urban renewal. However,
there is no strategy compelling enough to do so without a viable market. There are
many things the government can do to expedite, and control the direction of, the
urban-renewal process, but it is unlikely that it is the sole reason for the phenomenon.
Aside from the government's role in fostering these advantages, these market factors
constitute structural conditions for urban renewal. These are the "inevitable and
uncontrollable" factors that Moulton discusses. The problem is that the structure of
society is infinitely more complex than the human intellect can grasp. The inter-
related facets are limitless. For this reason, it is very difficult to understand, let alone
foresee, the structural reasons for any societal phenomenon. Markets change; bubbles
burst.
In regards to urban renewal, it is often easiest to focus on agency's role. A
study of agency is the study of how urban renewal is orchestrated and intentional.
Its successes and failures are transcribed and analyzed. Also, when it succeeds, the
agencies claim responsibility. Their claims may be true to an extent their
involvement often contributes to success. However, there are other reasons for urban
renewal as well. Broad economic trends are one structural source of urban renewal.
As will be shown herein, underlying societal and cultural changes should also be
32


analyzed. These changes can also be called structural conditions. The ethos of the
American population is certainly different from what it was fifty years ago. The
generation responsible for urban renewal is not the generation responsible for
suburbanization. It is therefore important to discern what these social and cultural
changes are and how they can influence urban politics.
It is very interesting to read outdated urban-renewal literature. A bulk of it
was written in the 1970s and 80s. Much of it is pessimistic. One source claims that it
is a "law of urban dynamics" that "ghettos can only become bigger ghettos" (Grogan
and Proscio 34). However, this outcome is not always the case. In fact, many of the
theories expounded in the 1970s and 80s were utilized by the government at the time
- such as the razing of historic buildings and some remain pertinent today. One
such author is Brian J.L. Berry, who hypothesizes that changes in cultural dynamics
influence urban markets. He initially mentions two fundamental disadvantages of the
suburbs. First, they are distant and getting more so as time passes and sprawl
continues. For this reason, "Convenience to place of employment (usually white
collar or professional) in order to reduce commuting distance is the most quoted
reason for moving into a central-city neighborhood" (92). This convenience is
coupled with the aesthetic of the suburbs. For many, a stark, new home, with an
abundance of space, is ideal. However, there is certainly a market of those who find
this aesthetic mundane. The architecture of the inner city is often more historic,
diverse and generally interesting. For many, less driving and a historical residence
33


influence the decision to live downtown. Closely related are social factors
attitudinal and life-style changes among a portion of an emerging group in demand of
housing. Berry states that "[m]any researchers have hypothesized that young,
professional, childless couples with college educations and two incomes hold an
entirely different set of preferences than was common a generation ago" (Berry 75).
Suburbanization occurred following World War II. Along with the economic
incentives (both market-driven and government-driven), there were cultural reasons
for the phenomenon. Racism and political paranoia were prominent amongst those
emigrating from the inner city. This prejudice was coupled with the "baby boom"
and subsequent, cultural focus on the nuclear family. Therefore, it is not surprising
that cultural changes could instigate a return to the inner city. The family dynamic
has changed. Berry claims that a key difference is the postponement of child bearing.
"The decision to raise children implies a substantial commitment to activities focused
on the home and family. Individuals and couples who have not made this
commitment can be expected to seek both more diversions and more social
relationships outside the home than those who have (83). An inner-city home
provides proximity not only to work, but also to downtown entertainment industries.
White-collar professionals, especially those with two household incomes and no
children, have increased amounts of disposable income. For those who live
downtown, that income is reinvested in gentrified industries.
Although Berry does not explicitly discuss feminism, it is clear that it has had
34


a profound effect on urban renewal. Women are now able to be white-collar
professionals, which was not the case in previous generations. This shift is a factor in
the rising desire for downtown proximity (since both sexes now have to commute)
and the postponement of child bearing. Ann Markusen writes on the subject:
"Gentrification is in large part a result of the breakdown of the patriarchal household.
Households of gay people, singles, and professional couples with central business
district jobs increasingly find central locations attractive" (qtd. in Smith 98).
Changes in racial attitudes also affect urban renewal. Although racism is still
problematic in the United States, it is certain that many white people do not have the
prejudices of their parents. At the very least, white urban residents are willing to live
in mixed-race neighborhoods. In many cases, those residents enjoy the cultural
diversity of the inner city, a preference favored by childlessness. "Childlessness is a
particularly important factor because childless couples are relatively impervious to
the turmoil in big-city school systems association with the desegregation that led to
white flight" (Berry 84).
These changes in cultural attitudes are examples of structural reasons for
urban renewal. However, structural theory is not limited to the social trends of
potential home-buyers. Neil Smith writes extensively on the subject. He articulates
two positions on structural urban renewal: the consumption side and the production
side.
More often, the consumption-side position was adopted by political
35


liberals who broadly celebrated the advent of the postindustrial city
and the rehabilitation of slum neighborhoods while lamenting the
social costs. Insofar as they focused on class it was the middle class,
often a new middle class who were vaunted as the subjects of history.
By contrast, production-side explanations were more usually advanced
by adherents of radical social theory, including marxism, for whom
gentrification was symptomatic of a wider class geography of the city
which was continually replicated and reinvented in various ways,
including the patterns and rhythms of capital investment in housing
(41).
This assertion matches my research. There is an abundance of literature that focuses
on the consumption-side position (using Smith's terminology). Moulton, as well as
the academically oriented social theorists, strategize methods to instigate urban
renewal. Even the economists can be associated with this category. Although they
focus on production-side methods for rehabilitation (such as the rent gap), many of
the advantages of the inner-city (to use Michael Porter's language) are based in
cultural tastes and demand (the consumption side). There is a market that can be
filled in the inner city. Individual corporations fill that market. In typical
consumption-side theories, inner-city rehabilitation must begin micro-economically,
with real demands of consumers for new inner-city housing, before it can transform
into a macro-economic phenomenon.
Although he does not refer to himself as such, Neil Smith is a radical social
theorist. He states:
Not only has gentrification become a widespread experience since the
1960s, but it is also systematically integrated into a wider urban and
global process, and this too differentiates it from earlier, more discrete
experiences of 'spot rehabilitation.'... Gentrification is no longer
36


about a narrow and quixotic oddity in the housing market but has
become the leading residential edge of a much larger endeavor: the
class remake of the central urban landscape (39).
Smith disagrees that gentrification is a micro-economic process that can be instigated
by limited business investment or government support. On the other hand, he also
disagrees that gentrification can be explained simply by consumer demand (57). A
multitude of factors must exist for gentrification to occur. It is a structural
phenomenon that emerges from the market logic of capital accumulation, though it is
also exacerbated by the role of agency as city authorities intervene on behalf of the
gentrifiers.
This opinion harkens back to my statement that urban renewal is difficult to
foresee. Many of the consumption-side, as well as production-side, theories have
existed since the 1970s. More and more, spot rehabilitation has been replaced by full-
fledged urban renewal. Both Smith and Berry focus on the emergence of a new
middle class. As has been discussed, Berry focuses on changing cultural values, such
as childlessness. He dictates three steps towards urban renewal. First, risk-oblivious
investors, such as artists, instigate spot rehabilitation. Second, once knowledge of
neighborhood rehabilitation spreads, risk-taking, white-collar professionals begin
gentrification. This trend galvanizes the process. Agencies, such as realtors, the
government, and the media get involved, and the area is gentrified (Berry 78). The
new middle class is thus responsible for "the class remake of the central urban
landscape." Without it urban renewal would be limited to spot rehabilitation
37


instigated by risk-oblivious investors. Smith brings forth another important point. He
argues that "as gentrification proceeds, it loses its narrow class character, as white-
collar households of much more modest incomes than the ones who gave
gentrification its name become involved" (102). There is an expanding market of
consumers unlike their forbears. The new middle class has different cultural values
and increased disposable income. The emergence of this class has a profound
influence on the urban dynamic. For Berry's second step to occur, there must be risk-
taking, white-collar professionals willing to move to the inner city. This class's
prevalence is a mandatory factor if revitalization is to occur.
The primary inequity of consumption-side theory is that it is too narrow. It
implies that urban renewal can be instigated through exact means. History has shown
that such is not the case. Urban renewal must be built on a social foundation.
Governmental agency and business investment are two extremely important factors.
The problem is that it is too easy for those involved in government and business
leadership roles to claim responsibility for urban renewal. After the fact, they can
easily show how their strategy came to fruition. Moulton's ten steps are a perfect
example of this. However, any urban renewal strategy can easily fail without the
necessary social structure. If there is not a sufficient rent gap or professional class, or
if the cultural dynamic of the inner city is not palatable for potential consumers (such
as intense racial tension), revitalization cannot occur.
38


Conclusion
The purpose of this literature review is to show how urban renewal is
generally debated throughout the literature. The opinions expressed herein dictate not
only theory, but practice. Those involved in the urban renewal-process, whether they
be government, businesses, or home-buyers, are influenced by these authors. This
influence both directly and indirectly shapes the urban-renewal process. Pro-active
government officials, like Jennifer Moulton, take theory into account as they dictate
policy. Conservative economic theory undoubtedly influences business strategy.
Even opponents of urban renewal, like Neil Smith, seek to understand the functioning
of gentrification. Their dissent inevitably shapes its course.
In my introduction, I stated that the purpose of this thesis is to analyze the
intersection of agency and structure. This literature review discusses the fundamental
arguments of each of these schools. To reiterate, agencies can be any organization or
person which actively supports urban renewal. The primary example is government,
especially local government, through urban renewal authorities. However,
government is certainly not the only agency. Community-based organizations,
community-development corporations, and even historical societies can profoundly
influence both the government and local economies. Even businesses can be
associated with agency so long as other agencies actively support them. Supply-side
governmental subsidies do not exist within the Keynesian paradigm, but they are
prevalent today. In fact, in the last decade, the government has switched its
39


revitalization strategy from demand side to supply side with generous pro-growth
subsidies.
Structure is the infinite web of inter-related social factors that influence urban
renewal independently of specific choices taken by specific agents. Therefore, it is
difficult to analyze scientifically. No aspect of structure can be easily localized and
dissected. This is the fundamental problem of social science. However, its prominent
facets must be analyzed as discriminately as possible. These include, foremost,
economic market conditions, as well as social and cultural factors. As has been
discussed, changes in social attitudes can affect social structure, and thus affect the
economic conditions of the urban landscape.
Most authors focus on one facet of the urban-renewal debate. Conservatives
focus on the economy, government planners focus on agency, etc. At the same time,
most of these authors (with the possible exception of the strictest economists)
acknowledge the importance of the other facets. The debate between structure and
agency is not one sided. Different authors disagree about their relative importance,
but it is clear that both profoundly influence the urban-renewal process. The
remainder of this paper will analyze how Denver's underlying economic and social
structure was a perfect breeding ground for urban renewal, and how government and
other agencies fostered this potential and thus changed the city through their specific
interventions.
40


CHAPTER III
METHODOLOGY
The emphasis of the literature review focused on general theory. While
Denver was mentioned, it was not emphasized. A primary purpose of the literature
review was to show that urban renewal is a multifaceted social phenomenon. In order
to comprehend the causation of urban renewal in the city of Denver, one must focus
on both academic literature/scholarly theory and specific ground-level circumstances.
The purpose of the following chapters is to analyze Denver as a case study, with
hopes of getting a more nuanced picture of the intersection between agency and
structure. Since Denver is a seldom-analyzed case study, there is little secondary
research. What does exist will be discussed throughout the remainder of this thesis.
More important, the urban renewal effort of city agencies is very well documented.
As I discussed in the literature review, the social phenomenon of urban renewal is
national. Therefore, it is unlikely that urban renewal successes are ever based solely
on the actions of local agents. On the other hand, the literature demonstrates the
importance of those agencies in determining the relative success of urban renewal at a
local level.
41


Such has certainly been the case in Denver. The strategies used by the city
were focused and intentional. The city recognized the market potential and acted
upon it. While the market has slowed down, there has yet to be major losses in
regards to property values. Real estate remains valuable, lofts are continually
constructed, and -- as should not be forgotten displacement is prevalent. Those
involved in the phenomenon applaud themselves, and in the case of Jennifer Moulton,
write guides for other city planners. In examining the extent of Denver urban
revitalization, and evaluating the reasons behind it, I will draw on several key data
sources.
First, to establish the extent of Denvers urban revitalization, I rely upon
property-value data, taken from the 1990 and 2000 Censuses Denvers boom
period. Two other sources of quantitative data come from the Kaplan Study and from
a real estate industry study, which both use data sets based on the average price of
homes sold by neighborhood. This data set is not used by the Census Bureau, which
gives median property value, as dictated by government sources, such as the
assessors office, as opposed to market examples. It is also categorized by census
tracts that do not always correspond with the neighborhoods analyzed in the Kaplan
Study. Therefore, while the census data does not scientifically correlate with the
Kaplan and Real Estate Industry studies, they can be used in conjuncture to give the
reader a broad sense of Denvers revitalization. Dr. Tony Robinson and Jeffrey J.
Sudmeir have also published a report concerning Trends in Poverty Concentrations
42


in Denver 1970-2000, which gives detailed census figures concerning disappearing
low-income housing. Along with these raw, data sets, The Piton Foundation (a
private, operating foundation dedicated to the betterment of the low-income children
of Denver) and several reports published by the Brookings Institution Center on
Metropolitan Policy, also analyze Denvers census statistics, and act as useful
secondary sources on the subject. The findings drawn from these data sources, and a
limited range of studies of Denvers revitalization processes, will be presented in
Chapter IV.
Chapter V concerns the causal role that agencies primarily city and federal
government have on urban renewal. It uses extensive plans, drafted in 1986,1989,
and 2000, to show what strategies the city adopted in order to initiate and promote
inner-city, especially Downtown, redevelopment. According to the former Director
of the City and County of Denvers Community Planning and Development Agency,
Jennifer Moulton, local public policy can exploit, concentrate and guide economic
and demographic trends that favor a move back into the city (9). It does so by
focusing civic attention and capital on focused areas in need of redevelopment.
Primarily, these areas are centrally-located in either the Central Business District, or
the neighboring historic industrial areas. The city has many tools at its disposal, all of
which will be detailed in Chapter V. Classic governmental tools, such as zoning and
Historic District designation, are used in conjunction with neoliberal methods of
supply-side financing (such as Tax Increment Financing).
43


Aiding the redevelopment effort is funding accrued from legalized gambling
legally mandated for civic use. Along with government and News sources Chapter V
will also rely on secondary sources, many of which were discussed in the literature
review. Two prominent examples are the aforementioned Moulton and Stephan
Weiler who wrote on the relationship between pioneer, entrepreneurial businesses in
redeveloping areas and a proactive city government. Weiler's paper is evidence of the
increasingly neoliberal strategy taken by agents, who focus attention on the supply-
side of the market. A prominent facet of this theory, espoused by Moulton, is that
once markets are sparked (to use Weilers language), they should self-perpetuate
naturally. While local government continues to affect market conditions in Denver
throughout the revitalization process, Chapter V will demonstrate how the market
also shapes the agents tactics, further illustrating the intersection of structure and
agency that is the theme of this thesis.
Chapter VI will then continue to analyze the causal affect of structure on
urban renewal, establishing urban renewal as a national phenomenon. Other cities
have experienced similar changes to Denver's. This national phenomenon can be
witnessed through the census data, as well as through various, secondary sources.
The competitive advantages discussed by Michael Porter in the literature review, as
well as other supply-side factors, such as the rent gap, will be put into a local context.
Also, the secondary sources citing a demographic shift in urban markets towards
immigrants, a young professional class, and aging baby boomer empty nesters,
44


can be placed in a local context using Denvers census data included in Chapter IV.
These theories are founded on technological changes as well as changes in consumer
preference and ethics using language like creative class and an improved quality
of life and are espoused by such entities as the New Urbanism movement.
Once all of the evidence is compared, the intersection of structure and agency
will be conclusive. Denvers urban renewal movement, as well as urban renewal
trends throughout the nation, is a multifaceted process. The goal of this thesis is to
thoroughly analyze the case study, using the statistical data and theoretical sources at
hand, and provide a detailed description of the inter-connected causal forces behind
Denvers urban renewal. The importance of both agency and structure, and the extent
in which they work together, are the keys to understanding this phenomenon. This
paper intends to take these fragmentations and work them into a functional whole.
45


CHAPTER IV
URBAN RENEWAL IN DOWNTOWN DENVER
Introduction
The purpose of this chapter is to document urban renewal in downtown
Denver. Anyone who has lived here for the past ten years has certainly witnessed the
exorbitant increase in property values. The core of downtown, which was once
composed of abandoned warehouses and parking lots, is now teeming with lofts and
affluent businesses. The surrounding neighborhoods have been transformed from
affordable, low-income housing to prime real estate. This chapter will analyze the
numbers. How much did property values increase? Are these increases universal or
limited to specific neighborhoods? It will also analyze the cultural makeup of the
transformed neighborhoods. It is important to know the extent to which race, age,
and economic conditions have changed. In other words, have minorities or persons
with low income been displaced? If so, by whom? This chapter aims to answer these
questions, and in doing so, to discover evidence of Denvers urban renewal.
46


Denver as a Case Study: Previous Research
The purpose of the literature review was to analyze urban renewal theory.
While writing that chapter, I intentionally disregarded the small body of literature that
focused on Denver as a case study. One such case study was a Masters thesis for the
University of Colorado at Denver, entitled Economic, Social and Cultural
Neighborhood Change in Denver's Curtis Park Neighborhood from 1975 to 1996.
This thesis, by Christoph Schuster, is a perfect prelude to my own. In it, Schuster
analyzes the gentrification of Curtis Park from 1975 to 1996. Much of his
quantitative data is taken from the 1970,1980 and 1990 censuses. According to
Schuster, "[pjoverty [had] increased by 8.96% from 1979 to 1989 (census tract 24.01,
1980 and 1990 census) and unemployment in Curtis Park / Five Points remain[ed]
among the highest in the city" (74). His thesis was written at an interesting time.
Curtis Park remained a low-income, inner-city neighborhood. But there was an air of
inevitable change on the horizon. He states: "Thus, with the new economic boom,
the neighborhood is now beginning to experience dramatic changes again" (74). He
was certainly correct.
Before I can examine those changes, there are sections of Schuster's research
worth reiterating. He states: "In the mid 1980s a good renovation, which was then
plentifully available, sold for $45-50 per square foot. By [1996], this price had
doubled to $80-90, while the level of housing prices in Metropolitan Denver [had]
'only' increased by 62% from 1985-1996" (74). He goes on to discuss several
47


examples of individual properties that had dramatically increased in value, while
emphasizing the importance of renovation in the early 1990s. Interestingly, he gives
examples from the mid 1990s of increased sales without renovation. He states:
"Some of the most recent cases indicate that property values have risen as such a rate
that the rent gap might be closing" (96). He then goes on to compare this sharp
increase in property value to the median income of the neighborhood. Although there
was a dramatic percentage increase between 1980 and 1990, the median income of
tract 16 remained dismal at $7,029. Tract 24.01 was better at $11,522. These were
compared to Denver at $25,106 (112). What this data showed was that the property
values in these neighborhoods were increasing, while the financial situation of the
indigenous inhabitants remained constant.
Since a major facet of my thesis is the role of agency, my local research
begins with the governments official Downtown Area Plan of 1986. However, it
took several years for Denver's urban renewal to reach its current heights. The years
following Schuster's research are vital. The property-value increases from 1990 to
2000 are especially significant, as are the changes in Curtis Park and in every other
inner-city neighborhood. In fact, by 2001, Denver's economic boom had ended. In
just two years, from 2000-2002, Denver lost 36% of the jobs gained over the previous
decade. Coinciding with the job loss, the city's unemployment rose sharply, reaching
a high of 7.4% in 2003. And Denver's poverty rate, which had dipped to about 14%
in 2000, rose to more than 16% by 2002 (Piton Foundation 71). One would expect
48


that such economic turmoil would cause a decrease in property values. In point of
fact, property values actually increased. "The average home sales price increased
from $226,000 in 2000 to $255,000 in 2002" (Piton Foundation 71). It is impossible
to know whether the housing market is an economic bubble, poised to burst, or if the
urban renewal process is so socially engrained it is less affected by economic flux.
Besides Schusters thesis, there are other articles that directly address
Denvers urban renewal. One such example is Waterhole to World City: Place Luck
and Public Agendas in Denver. This paper analyzes how Denver arguably achieved
its status as a world class city after years of economic recession. While many of its
arguments would be premature at this stage of my thesis, the paper helps to show
exactly what this chapter aims to prove: Denver experienced massive urban renewal
during the 1990s. According to the authors:
By the mid 1990s, Denver boasted of becoming a genuine world-
class city. The $4.9 billion Denver International Airport was
open; construction of a new rail system was under way; major
public facilities, including a new library and the Colorado Rockies
stadium, were in place; the downtown and LoDo (lower
downtown) areas were reviving; in-migration turned around the
population losses; and the job creation rate was one of the highest in
the country (Clarke and Saiz 173).
All of these projects not only improved Denvers image, but also spurred the increase
in urban living. This observation is reiterated by David Hill, who states that, Twenty
years ago, downtown emptied out after dark, but since then the residential population
has grown by 66 percent, and the area has evolved into a 24 hour community (4).
49


Not surprisingly, the increase in urban living is proportional to an increase in urban
value. The next section of this chapter will analyze the census data in order to
recognize how much property values in Denver have increased, and how the
population demographics have changed.
Census Data
The United States census data is the most comprehensive data set used to
study urban change. The economic period I am most interested in is from 1990 to
2000. This was the decade of growth in Denver. "Denver's population grew by
nearly 19 percent in the 1990s, more than reversing its 5 percent population decline in
the 1980s" (Brookings Institution 1). Because of the census data, it is easy to
analyze this growth, and to compare the city of Denver of 1990 to the city of Denver
in 2000. For the purposes of this thesis, I seek to find how much inner-city
neighborhoods have changed. First, I will examine how the housing stock has
changed. What is the increase in value of the housing stock? How has this affected
occupancy patterns and rent levels? Second, I will examine the inhabitants of the
neighborhood. Have there been class or racial changes?
By strict definition, urban renewal can be shown solely through rising
property values. If there is no longer a rent gap (the property is renting at its highest
and best use), the neighborhood has been revitalized, especially if other factors, such
as crime rates, have also improved. I have broken this study down to specific
50


neighborhoods, several of which are composed of multiple census tracts (Figure 4.1).
The selected residential neighborhoods are as follows: Five Points; Auraria-Lincoln
Park; Civic Center, better known as The Golden Triangle; Cole; Whittier; City Park
West; Capitol Hill; North Capitol Hill; Highlands. These neighborhoods represent
the core of the city of Denver, and also have objective market potential. They are
some of Denvers oldest neighborhoods, and thus have historic architecture. They are
also close to downtown, in terms of both mileage and accessibility. Neighborhoods
that are separated by geography or engineering, such as Globeville and Jefferson Park
(which suffer from the barriers of Freeways and the South Platte river separating
them from downtown Denver) have been excluded, as have neighborhoods with
unusual economic disadvantages, such as Elyria Swansea (bisected by the freeway
and filled with Denvers highest concentration of toxic industries such as a waste
management plant, a hog-slaughtering company and the Purina Pet Food plant).
Although Highlands suffers from similar geography as Globeville, it is connected to
LoDo with two, convenient bridges, and also possesses a surplus of historic homes.
Also, although the Union Station neighborhood better known as Lower Downtown
(LoDo) is very important in the study of urban renewal, and will be discussed
throughout the remainder of this paper, it is excluded from the census analysis due to
its only recent status as a residential community.
Each of the defined central-city neighborhoods had experienced what
economists call a substantial rent gap. According to the Piton Organization, all of
51


these neighborhoods, except for Highlands and Capitol Hill, are poor, defined as
having 25% of residents living in poverty in both 1990 and 2000. Highlands and
Capitol Hill are "at-risk" with over 25% of residents living in poverty in 1990 but
fewer than 25% in 2000 (Brookings Institution 2). The presence of a rent-gap in
1990 laid the conditions for high-yield investment and rising property values by 2000
(Table 4.1). In such a situation, economists would say that the rent gap is being
closed, as investors take advantage of risky, but eventually high-yielding, property-
investment opportunities.
52


Figure 4.1: 2000 Census Tracts and Boundaries Map
53


Table 4.1: Census Property Data Comparisons (adjusted for inflation)
Census Tract 1990 Median Property Value 2000 Median Property Value % Change
Denver $106,176.00 $160,000.00 51%
4.02 $84,672.00 $164,300.00 94%
11.02 $65,721.00 $135,300.00 106%
16 $62,764.80 $184,000.00 193%
18 $71,280.00 $105,700.00 48%
19 $66,662.40 $143,800.00 116%
20 $70,560.00 $319,800.00 353%
23 $82,656.00 $157,600.00 91%
24.02 $79,430.40 $180,600.00 136%
24.03 $69,753.60 $140,100.00 102%
26.01 $109,267.20 $145,300.00 33%
26.02 $97,440.00 $190,400.00 95%
27.01 $152,409.60 $125,400.00 -18%
27.02 $153,081.60 $151,100.00 -1%
27.03 $120,556.80 $114,700.00 -5%
31.01 $97,305.60 $196,200.00 102%
31.02 $110,476.80 $1%,400.00 78%
36 $65,049.60 $104,100.00 60%
Table 4.1 shows that property values have increased dramatically in most of
the downtown census tracts. Capitol Hill (tracts 27.01, 27.02 and 27.03) was the only
neighborhood that lost value, and a single section of North Capitol Hill was the only
downtown tract that increased at a lower percentage than the whole city of Denver.
According to the Piton Foundation, home prices in poor neighborhoods increased
almost twice as much as in non-poor neighborhoods, and the increases in at-risk
54


neighborhoods were much higher than the city too (5).
Interpretation of the data is not as simple as it appears. The near universality
of the increase is evidence of structural change. If urban renewal is based solely on
the actions of agencies, one would theorize that success would be rampant only in
targeted areas, excluding Cole, for example. On the other hand, the percent increase
was extraordinarily high in Curtis Park (tract 16) and the Golden Triangle (tract 20),
both of which have been heavily targeted by the city (as will be seen in the following
chapter). The data lends evidence to my theory that structure and agency are
symbiotic. While agency cannot affect an impenetrable social structure, the success
of the actions of agents can be detected at the margins, for example, by witnessing
some targeted neighborhoods changing faster than others, within a city of generally
rising property values.
It is logical that there should be a positive correlation between property-value
increase and rent increases. Unfortunately, this correlation is socially problematic. If
every resident owned his or her property, gentrification would not be as divisive an
issue. Increased property value would be inherently good. Arguably, a resident may
have difficulties affording the increase in property taxes, but it is doubtful that these
cases would be cause for alarm. Increased rent, on the other hand, is. Renters do not
receive compensation for their investment. Property owners benefit as the rent gap
closes, while renters (approximately 47% of Denvers population) simply pay a
higher rent. This is frustrating for those who have lived in a neighborhood prior to
55


revitalization, and can lead to poverty and displacement. Increased housing prices
also make it exceedingly difficult for first-time buyers. According to the Piton
Organization, Home prices and rents skyrocketed in Denver, far outpacing increases
in wages during the 1990s. Housing prices doubled over the decade, while rents
increased 24%. As a result, by the end of the 1990s, more than one in three Denver
households paid more than 30% of their income on housing. Poor neighborhoods
saw the greatest increases in housing prices and rents, making housing less affordable
for low-income families (Piton Foundation 5). Table 4.2 shows the changes in rent
and Table 4.3 shows the changes in median income from 1990 to 2000. It should
also be remembered that employment opportunities have decreased since 2000, while
housing prices have continued to increase.
These social quandaries aside, it is understandable why urban-renewal
advocates are pleased with the statistical data. Table 4.1 shows a sizeable increase in
property values in all but one of the analyzed neighborhoods, as well as Denver in
general. Table 4.4 shows that while rent has increased, it has done so at a lesser
percentage than property values. Also, while the Piton Organization, is correct that
property values have outpaced wages -- except for the statistical anomaly of Capitol
Hill and a tract of North Capitol Hill -- most of the tracts show a comparable increase.
The two tracts that experienced dramatic disparities in property and wage increase
were Curtis Park and the Golden Triangle. These tracts will be discussed more
intensively in upcoming chapters.
56


Table 4.2: Census Rent Comparisons (adjusted for inflation)
Census Tract 1990 Med. Rent 2000 Med. Rent % Change
Denver $455.62 $575.00 26%
4.02 $385.73 $491.00 27%
11.02 $345.40 $516,00 49%
16 $266.80 $491.00 84%
18 $542.98 $825.00 52%
19 $162.62 $314.00 93%
20 $264.77 $324.00 22%
23 $329.28 $488.00 48%
24.02 $231.17 $373.00 61%
24.03 $227.13 $382.00 68%
26.01 $311.80 $426.00 37%
26.02 $288.96 $425.00 47%
27.01 $348.10 $482.00 39%
27.02 $499.68 $586.00 17%
27.03 $344.07 $509.00 48%
31.01 $376.32 $411.00 9%
31.02 $287.62 $428.00 49%
36 $341.38 $423.00 24%
57


Table 4.3: Census Income Comparisons (adjusted for inflation)
Census Tract 1990 Med. Income 2000 Med. Income % Change
Denver $33,742.46 $39,500.00 17%
4.02 $19,325.38 $32,065.00 66%
11.02 $18,915.46 $31,672.00 67%
16 $15,485.57 $31,117.00 101%
18 $21,956.93 $31,771.00 45%
19 $8,789.76 $17,257.00 96%
20 $13,315.01 $25,714.00 93%
23 $16,939.78 $31,964.00 89%
24.02 $13,973.28 $28,250.00 103%
24.03 $94,46.98 $17,626.00 87%
26.01 $13,060.99 $18,397.00 41%
26.02 $15,000.38 $26,875.00 79%
27.01 $15,738.24 $25,777.00 64%
27.02 $28,533.12 $34,190.00 20%
27.03 $20,177.47 $27,890.00 38%
31.01 $16,326.91 $31,971.00 96%
31.02 $12,241.15 $21,017.00 72%
36 $21,284.93 $30,114.00 41%
58


Table 4.4: Comparison of % Change
Census Tract Property % Change Rent % Change Income % Change
Denver 51% 26% 17%
4.02 94% 27% 66%
11.02 106% 49% 67%
16 193% 84% 101%
18 48% 52% 45%
19 116% 93% 96%
20 353% 22% 93%
23 91% 48% 89%
24.02 136% 61% 103%
24.03 102% 68% 87%
26.01 33% 37% 41%
26.02 95% 47% 79%
27.01 -18% 39% 64%
27.02 -1% 17% 20%
27.03 -5% 48% 38%
31.01 102% 9% 96%
31.02 78% 49% 72%
36 60% 24% 41%
The increases in property value, rent, and wages lead to another aspect of
urban renewal that must be analyzed. It is certainly logical that extreme changes in
the financial statues of a neighborhood -- in terms of property value, rent, and median
income are indicative of other social changes as well. In other words, it is unlikely
59


that the same residents represent both the 1990 and 2000 figures. According to The
Brookings Institution, there have been changes in Denvers cultural make-up. Most
telling is the increase in the Hispanic population, due predominantly to the influx of
Mexican immigrants. The share of Denver residents who are of Hispanic origin
increased from 23 percent in 1990 to 32 percent in 2000. Driving this trend was a
near-tripling of the foreign-bom population during the decade (Brookings Institution
1). These immigrants, combined with immigrants from other states and cities, are
partly responsible for Denvers population and cultural change. In fact, one-third of
Denvers residents have moved here within the last five years (Piton Foundaton 4).
The census data confirms that many residents are relatively new to their homes. For
the analyzed neighborhoods, the mean year in which the house owner moved into the
unit is 1994. Only tracts 11.02 and 36 had figures in the 1980s with 1988 and 1989
respectively, and the mean years were universally more recent for renters. Also,
Denver experienced a considerable rise in homeownership rate during the 1990s, and
53 percent of its residents own their own homes in 2000. Significantly,
homeownership increased most rapidly for the citys Hispanic households (Brookings
Institution 2). While these residents may have little in common with the
stereotypical gentrifiers young, childless, white, professionals they have
nonetheless contributed to the massive increase in the citys population and the boom
in urban real estate.
Not only has Denvers racial composition been altered, but new residents have
60


transformed Denver into a youthful city. About 47% of Denvers residents were
under 35 years of age in 2004. Fully half of Denvers households were single people
living alone or unrelated people living together. Only 23% of households were
families with children (Piton Foundation 4). It should also be mentioned that the
majority of white households were non-family households (Piton Foundation 30).
According to Jennifer Moulton, the number of households without children is
expected to swell to 72 percent by 2010 (up from 66.4 percent in 1990), and this is
precisely the type of household that is driving the interest in downtown living (12).
Compounding this trend is the return of empty nesters from the suburbs.
Nationally, there are approximately 76 million baby boomers, and most of them no
longer have children at home. Many are seeking to simplify, or enhance, their live-
and-work routine, and some are seeking maintenance-free living close to the health
care facilities often found in center cities (Moulton 12). While, obviously, this
demographic is not contributing to the youthful transformation of the city, it does
contribute to the rise in affluence and thus the citys revitalization. Therefore, age
and family circumstance certainly contributed to the rises in home ownership and
financial diversification that Denver witnessed in the 1990s.
All of the aforementioned changes have also resulted in displacement.
Although it is difficult to prove that residents were forced out of their neighborhoods
due to their escalating property value as gentrification opponents argue it is clear
that the 1990s witnessed social shuffling. Coinciding with a national trend, poor
61


residents of Denver were less concentrated in historically poor neighborhoods (Piton
Foundation 4). Between 1990 and 2000, the number of persons in poverty living in
non-poor neighborhoods (as defined by the Piton Organization) increased by 3,384.
On the other hand, persons of poverty declined by 3,190 in at-risk neighborhoods and
876 in poor neighborhoods (Piton Foundation 54). Although the poverty rate has
decreased in Denver, the number of persons in poverty has remained constant. In the
suburbs, the number of persons living in poverty has increased substantially. This
increase in the number of poor people living in the suburban counties is consistent
with recent studies that show that the number of poor has risen in the suburbs of many
metropolitan areas, even during a decade of economic expansion (Piton Foundation
50).
The Kaplan Study
The majority of data in this chapter is taken from the 1990 and 2000 censuses
-- or secondary sources that use the censuses but there are two other studies worth
analyzing. The first is Marshall Kaplan's study, Housing Conditions and Needs in the
City and County of Denver, which was published prior to Census 2000. It analyzes
the average price of homes sold, by neighborhood, for the years 1986, 1991, and
1998. This study is useful because it differs from the census research. It represents
smaller time frames and also includes data that predates revitalization (and it begins
in the year that the Denver Area Plan was written). Since Kaplan's study represents a
62


different data set from the census, and is divided into neighborhoods as opposed to
census tracts, the two are not scientifically comparable.
The second study is a real-estate study conducted by Rebecca Landwehr
entitled, "How Does Your Neighborhood Rate?" It analyzes average price of homes
sold between 2002 and 2003. Since these two studies examine the same data set, they
are comparable. Kaplan's study represents early and interim years missing from the
census data, while Landwehr's study represents the post-census data. This data lends
statistical evidence to concepts discussed throughout the chapter. As can be seen in
Table 4.5, property values bottomed out at some point between 1986 and 1991 before
their steep ascension through the 1990s. They continue to rise in recent years (except
for City Park West and Whittier, which wane slightly between 2002 and 2003 after
enormous gains from 1998), even though these years represent a general economic
recession for the City. It should also be noted that the Capitol Hill data does not
correspond with the census income data showing a decrease in property values from
1990 to 2000. In Kaplan's and Landwehr's studies, the property values of Capitol Hill
rise in sync with the other neighborhoods. Since Capitol Hill, as well as the Golden
Triangle, are less residential than the other neighborhoods, their value anomalies may
be dictated by the non-res idential character. In any case all these data sources present
similar evidence of widespread revitalization throughout Denver.
63


Table 4.5: Average Price of Homes Sold 1986-2003
Neighbor- hood 1986 Price 1991 Price 1998 Price 2002 Price 2003 Price
Lincoln Park $53,868 $55,883 $95,887 NA NA
Capitol Hill $126,113 $137,085 $311,569 $345,669 $357,012
City Park West $96,212 $62,964 $168,074 $243,583 $238,870
Cole $42,931 $27,320 $86,291 NA NA
Five Points $51,563 $53,877 $127,584 $165,984 $205,577
Highland $60,252 $51,475 $130,390 $212,351 $231,573 NA
N. Capitol Hill $86,723 $41,850 $111,475 NA
Whittier $55,441 $46,056 $106,414 $217,818 $216,863
Conclusion
One could argue that the data discussed in this chapter is indicative of the so-
called back to the city movement. Denvers population turnaround, however,
occurred in the midst of continued decentralization. The Denver suburbs grew nearly
twice as fast as the central city in the 1990s, and half of the regions workers now
commute between homes and jobs in the suburbs (Brookings Institution 1). While
the number of persons living in poverty increased, the percentage actually dropped
due to the rapidly growing number of affluent people. It is undoubtedly true that
there has been an increase in affluence in traditionally poor and at-risk
64


neighborhoods, and that much of that affluence is the result of new residents. It is
also indubitable that many poor residents have relocated to non-poor and suburban
areas. It is likely that increases in rent and property value contribute to this flux.
However, it should be remembered that many job opportunities moved to the suburbs,
where affluence remains predominant.
Perhaps these trends are evidence of the back to the city movement amongst
the affluent. However, it risky to jump to such conclusions. To reiterate, over 25%
of the population of all but two neighborhoods in this study remain in poverty, while
Denver continues to compete with the suburbs for jobs. It is also possible that many
of the young, childless residents will return to the suburbs when they start families.
The continued increase in property value has defied Denvers overall economy, but
there is no guarantee that this trend will continue. While the future will remain
unclear, the goal of this thesis is to clarify the reasons behind Denvers revitalization.
As I stated at the beginning of this chapter, it is not difficult to show that urban
renewal has occurred in Downtown Denver and its surrounding neighborhoods. On
the other hand, the issue of why is much more complicated. This is the
fundamental question of the next, two chapters.
65


CHAPTER V
THE ROLE OF AGENCY
Introduction
The purpose of Chapter IV was to quantitatively show that inner-city Denver
has been economically revitalized. Housing prices have increased dramatically. This
increase is the micro-economic evidence, and the most obvious means of judging
urban renewal. The social evidence is important as well. The census data show that
many residents of the test neighborhoods are relatively new. Therefore, it is likely
that many indigenous residents have been displaced in the process. The purpose of
Chapter V is to analyze the role that agencies especial the city government
played in this revitalization. Essentially, the money has to come from somewhere.
Often, a reasonable proportion comes from the government, as do changes in zoning
laws, increased police protection and a plethora of other means necessary for urban
renewal to occur. According to the Downtown Denver Partnership,
Downtown and the Central Platte Valley witnessed 5.5 billion dollars
of investment with 2.1 billion dollars of public investment since 1990.
Of this investment, 39% was on entertainment venues and attractions,
17% on housing, 15% on transit, 14% on tourism and retail, 13% on
office and 1% on parks and open space (Downtown Denver
66


Partnership).
This investment transformed downtown Denver from a commuter-oriented business
district to a vibrant, albeit expensive, residential community.
1986 Downtown Area Plan ("The Beginning
The 1980s were not a prosperous economic decade for the city of Denver.
The population decreased by 5 percent due to the oil bust (Brookings Institute 1);
from 1980 to 1985 manufacturing decreased 17 percent (City and County of Denver,
1990 6: 22). The economic decrease corresponded with increased decentralization.
Such was the case for downtown Denver, which was no longer the retail center it had
once been. Suburban living increased, along with its associated retail shopping
centers and large-scale malls. While metropolitan Denver was a strong and
expanding retail market, "Denver's share of that market declined steadily a source
of concern to the City, which relies on sales tax for nearly 50% of its General Fund
revenue. Downtown's share also declined with increasing suburban competition for
comparison shopping" (Denver Partnership, Inc. 10).
City officials in Denver realized this dilemma and its implications. There was
reasonable concern that this trend would perpetuate. Because of this concern, the
Denver Partnership, Inc. and the Denver Planning Office jointly drafted a plan,
entitled Downtown Area Plan: A Plan for the Future of Downtown Denver. This was
the first in a series of such plans, which document the strategies the city should use to
67


foster economic development. The 1986 plan states its thesis directly:
Denver should immediately develop an overall strategy to stimulate
new economic growth in the region, with a particular focus on the core
of the city... It should identify the action needed beyond this Plan, to
solidify the economic activity now concentrated in downtown,
including government, communications, the design industry, and
medical services, as well as the finance and service sectors (7).
By 1986, this process had already begun with the construction of the 16th
Street Mall and Tabor Center. As can be seen on Figure 5.1, the 16th Street Mall
represents the backbone of the Central Business District, with the State Capitol and
Union Station acting as anchors. The Tabor Center sits at the border between the
Central Business District, and LoDo. Unfortunately, there was a lack of cohesion on
the 16th Street Mall retailers were separated by space and had various hours of
operation which made for difficult competition with its suburban counterparts. The
plan acknowledged other problems as well. First off, Downtowns potential office
space was hindered by the time it takes to develop land in the core, as well as by
nearby blighted areas that divided downtown from the surrounding neighborhoods.
Second, there were problems in the visitor/entertainment market. According to the
report: Denver lags far behind comparable cities in the number of convention
delegates we attract.... The convention industry is hampered by the size and quality
of our convention facilities, and delays, crowding and inconveniences at Stapleton
International Airport (12). Even the streets, which exaggerated the separation of
Denvers visitor attractions, were a matter of concern.
68


Figure 5.1: Downtown Denver Business Improvement District Map
The plan offered many solutions to these problems. The general theme of
these solutions was that the city needed to build on its assts. In terms of the office
market, the plan dictated three means of doing so:
maintaining superior access to Downtown by auto and mass transit, as
69


the hub of the region; building on the density and compactness of
downtown, a particular challenge when the supply of developable land
exceeds short term growth expectations; and enhancing downtowns
distinctive atmosphere; its street life, retail, entertainment, and historic
roots (9).
As for retail, the plan recommended that there should be additional retail anchor
stores, particularly at the southeast end of the district, as well as greater consistency
between the stores (business hours, promotions, etc.) and improved parking (11). To
improve the visitor/entertainment market, the plan stated that Denver required
improved marketing, and very importantly, a new convention center and airport (12).
The plan then discussed the importance of the Downtown aesthetic. Denvers climate
and mountain scenery are economically advantageous. Downtown needed to act on
this reputation and emphasize spaciousness in its streets, parks, and waterways.
The primary focus of the 1986 plan was on the core of Downtown Denver.
After this analysis, it turned to housing and neighborhood redevelopment. While
capital existed in the Central Business District, the potential housing areas were
desolate, and would thus entail greater effort to rejuvenate. The plan states:
Downtown housing development is the most obstinate hurdle to creating the rich
mix of uses that reinforce each other in an active Downtown. But for many reasons
Downtown housing may represent the threshold for achieving the full realization of
our vision (28). This vision included the creation of neighborhoods as well as the
revitalization of neighborhoods. The plan recommended that the city:
Develop housing targeted to the broad middle-income segment of the
70


market to achieve critical mass, [and to] Assure new housing
development by committing public investment to the task of
neighborhood building. A development mechanism and ongoing
revenue stream should be targeted to assure housing development
according to the district programs (28).
Although there was much less emphasis on downtowns existing, residential
neighborhoods, the plan reminded that the development of housing in the Downtown
area should not be considered to be in lieu of residential improvements in the existing
neighborhoods in Denver. "Downtowns future is vitally linked to the health of the
citys neighborhoods, many of which offer opportunities for infill housing
development as well (28).
There are two areas which, the plan asserted, required the creation of
neighborhoods: the Downtown Core and Transition Areas. The primary section of
the Downtown Core is Lower Downtown (LoDo). According to the plan:
Lower Downtown has the potential to be a distinctive mixed-use
historic district, with a character that creates a special market draw for
development and leasing ... Of all the districts in the core, Lower
Downtowm is the most logical for a downtown residential
neighborhood by virtue of its historic character, existing housing base,
and proximity to the action of Downtown while being removed from
the most intense commercial development (47).
The plan recommended a new economic generator for the neighborhood and
accentuated its historic nature, which was a change in urban-renewal policy. In the
1970s, areas deemed blighted were often razed and rebuilt with streamlined
architecture. By contrast, the vintage architecture and loft potential of Lower
Downtown are seen as positive attributes in the 1986 Plan.
71


Besides Lower Downtown, the plan listed three major Transition Areas
(Figure 5.2). These areas were problematic because of a lack of distinctive
character, services, and amenities (28). The first was the Golden Triangle, which
lacks a unique identity and role, as well as a physical and psychological connection
to the rest of Denver (63). The plan recommended mixed land use zoning and new
internal amenities, such as improved use of Cherry Creek and new auto and
pedestrian bridges. The second area was the Central Platte Valley. This area
presented many difficulties due to its industrial, railroad nature. The plan dictated
that: The character of the valley should be urban, but not duplicate the Downtown
core.... Due to the magnitude of the infrastructure needs in the Valley, its design
will have a major impact on Downtown and Lower Downtown. The transportation
system serving the Valley should emphasize a pedestrian environment, and contain
adequate capacity and flexibility for the future (65).
The third area was the Arapahoe Triangle, which incorporates the area from
20th to 23rd Street, and the rail yards to Welton. This represents the section of Five
Points closest to Downtown, and unlike LoDo, is proximate to existing, residential
housing stock. According to the plan, this area is hindered by industrial zoning, and a
proliferation of shelters and service centers, local bars, and pawn shops (referred to as
"incompatible land uses"). On the other hand, it contains numerous art and design
studios, and has the potential to become a special arts district. Portions of the area
could also become strong Denver neighborhoods (68). Also, the section between the
72


rail yards and Larimer Street was one of the citys most intact historic districts. The
plan recommended that the city rezone to mixed land use and discourage further
concentration of incompatible land uses.

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Figure 5.2: Transition Areas Map
73


Many of Downtowns advantages and inequities were discussed, in a general
sense, in Chapter IIs analysis of Jennifer Moulton. At the time of her essay 10
Steps to a Living Downtown, Moulton was the Director of the City and County of
Denvers Community Planning and Development Agency, which helped plan and
enact Denvers renewal strategy. Therefore, it should not be surprising that much of
her essay is founded in the successes and failures of Denver as a case study. The
theme of her essay is the influence that orchestrated government can have on the
redevelopment process, assuming that government works with market forces
following the neoliberal paradigm. Unlike many academics, who place a case study
in the context of a general theory, Moulton does the reverse, and bases a theory or
at least a set of steps on a successful case study. This reversal implies that other
governments can follow Denvers strategy and obtain similar results, a scientifically
suspect implication that shows the extent to which local agents affect or at least are
perceived to affect the success of urban renewal. It is also further evidence of the
extent of city planning and follow-through, in regards to Denver. The 1986 plan
represents a cohesive strategy for the redevelopment of the Central Business district,
and its surrounding, industrial areas. While a fundamental of neoliberalism is to
allow the market to self perpetuate naturally, governmental efforts towards the
rejuvenation of potential markets were focused and intentional, highlighting exact
locations and attempting to initiate and foster change.
74


It is a wonderful experience for a researcher to read such a plan after its
implementation. One can not help but notice successes and failures. In the
Downtown Area Plan, there are failures. Most obvious is the southern section of the
Arapahoe Triangle. The bars remain, as do the shelters. More important for this
thesis is the general neglect shown towards the surrounding neighborhoods. While
parts of the Arapahoe Triangle remain underdeveloped, the neighborhood directly
west flourished. Of course, it is logical that the city would start centrally and move
outward. In fact, the plan talks about picking a point of attackthe 16th street
spinearound which to build, and identifies anchor projects along 16th street on
which to focus first. So in this sense, the plan itself noted that things would (and
must) start from a central point. The city's primary focus was the Central Business
District, which was tethered to Lower Downtown revitalization along the 16th street
spine, followed by the Transition Areas, with only minimal mention of the
surrounding neighborhoods. As will be seen, this neglect is no longer present in
upcoming plans.
While there are many ideas which never came to pass, it is remarkable how
many did. As far as basic strategy is concerned the Central Business District was
improved, Lower Downtown was established as a residential neighborhood, and the
Transition areas are now predominantly out of transition. As was seen in the last
chapter, the property-value increase in the Golden Triangle has been astronomical.
Although it took several years, there has been massive redevelopment along the
75


Central Platte Valley. Desolate stretches of rail yards and gutted buildings are now
green acres and affluent loft complexes, partly due to the citys willingness to rezone
the downtown area from industrial to mixed land use, a credit for which Mayor Webb
in his 1991 list of accomplishments (Webb 1) although the legal designation
towards mixed use began in 1981 (Newberg 4). Another important step for
Downtowns redevelopment occurred prior to rezoning, in May of 1988, when the
City granted protective Historic District designation to LoDo (Weiler 174). To
distinguish LoDo as a special district, the citys government undertook a streetscape
improvement program for street lighting, benches, manholes, parking lot edges, and
signage. These details, along with specific physical edges, helped to delineate the
boundaries and character of LoDo (Moulton 13). In terms of particularities, there are
almost too many to mention: Denver now has a new convention center and airport;
the Golden Triangle is home to such amenities as the art museum and library, as well
as hip restaurants and upscale apartment towers; Coors field represents the ideal
economic generator for Lower Downtown. Many of Denvers projects from the
Convention Center to individual loft complexes have been partially funded by the
city government. This funding is a major facet of Denver governments over-arching,
neoliberal urban-renewal strategy, fist articulated in the 1986 plan, which represented
the beginnings of the Citys successful urban renewal.
The 1986 plan was central, focusing on the Central Business District and the
adjacent, industrial areas. Moulton refers to the legibility of Downtown, which is
76


an important concept, recognized by the 1986 plan. Instead of focusing on city-wide
urban renewal, the city initially focused on defined areas, all within a potentially
legible area. This was especially the case for LoDo, which sits adjacent to the Central
Business District, unseparated by any natural or man-made impediments. The 16th
Street Mall was the backbone, with LoDo, the Central Platte Valley and the Golden
Triangle representing easy (Moulton 13). targets for redevelopment, due to a
surplus of either vacant warehouses or virgin land, and a lack of indigenous
occupants. The success of these identified, legible areas, early in Denvers
redevelopment, is evidence of the importance of agency. While market factors
(which will be discussed more extensively in the next chapter) existed, and needed to
exist for redevelopment to occur, the City initiated the process with improvements in
amenities, and fostered the process with investment capital for pioneer businesses.
1989 Denver Comprehensive Plan
The 1986 plan was primarily an economic document. It lacked a human
element. Neighborhood analysis was neglected, as were the social characteristics of
the city. People were viewed not so much as neighbors with social needs, but as
potential investors in the redevelopment of Denver. The problems presented were of a
strictly economic nature (untapped markets, disinvestment, etc.). The 1989 Denver
Comprehensive Plan differed from its predecessor in this regard. It not only
acknowledged many of the same economic problems as the 1986 plan, but also
77


examined the social issues associated with those problems. It stated:
Across the nation, core cities are faced with a decreasing population
that is increasingly poor, elderly, single, minority and female what
has been called a new 'urban underclass.' About half of the
metropolitan area poor live in the city of Denver, even though Denver
represents only 28 percent of the Metro Area's population (City and
County of Denver, 1990 2: 13).
The 1989 plan cited declining household size (the population shift toward the young,
the old, and the single), increases in single-parent and female-headed households,
higher labor force participation, and a more racially diverse population as challenges
facing the redevelopment of the city (2: 13).
The 1989 plan also reiterated many of the issues from the 1986 plan, primarily
the need to update the zoning code and the emergence of a historical preservation
movement, stating: "Denver's Zoning Code was adopted in 1956 and has been
amended over 800 times since. The Zoning Code contains no recognition of urban
design. Many of the Code's regulations work against a good design and encourage
speculation. The Code and its districts bear little relation to today's markets or
development practices" (2: 17). Improper zoning also negatively affects historical
preservation. "Denver's historical and architecturally important areas are located in
its most intensely zoned areas. The use of downzoning as a preservation tool has
succeeded in a few neighborhoods, such as Curtis Park, City Park South, West
University, and Capitol Hill" (5: 44). The Plan logically recommended continued
efforts to change the outdated Zoning Code for the benefit of redevelopment. Many
78


areas, notably LoDo and the Central Platte Valley, were zoned industrial. In order for
residential construction to ensue, they had to be rezoned for mixed use.
The report went on to discuss the problems regarding neighborhoods. Like
the 1986 plan, it discussed Downtowns surplus of developable land. It also advised
that new housing stock correspond with the cultural shift in household size (which
will later be seen with the proliferation of Downtown lofts). However, it did not stop
with new development. The plan recognized problems with existing housing stock:
In many older neighborhoods physical rehabilitation and
improvements are needed. Concentrations of low-income housing and
group homes are destabilizing some neighborhoods. Despite having
desirable amenities such as established character, landscaping and
park, central location and easy access to services and jobs some of
Denvers neighborhoods suffer from a negative image and
deteriorating conditions; continued efforts are essential to address
issues such as crime and safety, traffic, incompatible uses, lack of
neighborhood shopping, litter, and the condition of housing,
especially rental units (6:4).
This quote encapsulates the plans opinion of Denvers deteriorated inner-city
housing stock and leads the way to its strategically chosen urban-renewal strategies.
The tactics described in the plan represented an array of both social and
economic mechanisms. There was an interesting amalgamation of neo-liberalism and
classically Democratic thinking. For example, the plan accentuated the importance of
cultural history (such as the rich African-American history in the Five Points
neighborhood), yet considered the influx of minority residents problematic. In terms
of neo-liberalism, the plan continually reiterated the zoning dilemma as well as the
79


problems associated with rental housing, such as poor building management and
maintenance (6:15). Also, the Plan recommended that public funding be aimed at
leveraging private investment. It was concerned that the lack of tax rebates and other
tangible and direct monetary support of private renovation of designated properties
discourages preservation efforts since tax rebates have been shown to be one of the
most effective incentives for preservation and re-investment in older areas of the city
(5: 46).
As was discussed in the literature review, this philosophy represents a change
in urban-renewal strategy. Preservation includes not only public structures and
improved city amenities, but also private, residential structures, especially single-
family homes. The plan mandated that housing in "opportunity neighborhoods" as
it referred to the neighborhoods in and around downtown is marketable to a
sizeable, well-defined audience (6: 15). Another objective discussed in the plan is the
creation of a dynamic downtown, "one that is unique, exciting and an attractive
tourist destination and a cultural and entertainment center" (6: 16). This concept
necessitated an increase in the number of residents in the core. As was discussed in
the 1986 plan, improved retail outlets, and more important, increased housing
development, is needed for the revitalization of Downtown. The plan describes its
vision:
The greatest possible variety of units should be available in order to
reach the broadest number of potential Downtown and core area
residents. This will include rentals and for-sale units; from lower,
80


moderate and middle income units through luxury units; the existing
distinctive single-family homes plus urban townhouses, three story
walk-ups, midrise and high-rise buildings. A variety of housing types
can also be made available through preservation and selective
redevelopment of the existing mixed density residential neighborhoods
adjacent to Downtown. Existing single family enclaves will be
preserved as will the mix of densities and ages of other housing and
the older structures which add character (6: 16).
These existing neighborhoods can be improved with assistance strategies. Here,
targeted public sector investment in the maintenance and renewal of housing stock,
public services, essential recreation sendees or selective infrastructure, and targeted
inspection and code enforcement can bring needed improvements and encourage
private revitalization efforts by neighborhood residents, organizations and investors
(6:17).
The 1986 and 1989 plans recognized the impact that structural factors,
especially consumption-side factors, have on the potentiality of a market, particularly
the increase in declining household size. The 1986 plan found this demographic shift
to be problematic. Ironically, the opposite is true: a major consumption-side facet of
the downtown housing market is comprised of those without children. The 1989 plan
acknowledged this market, and recommended that new housing stock correspond
with this cultural shift. As time goes by, these demographic changes will come to
epitomize the consumption side of Downtowns residents (as will be discussed more
thoroughly in upcoming chapters). Once again, the intersection of structure and
agency is clear. Instead of attempting to create the demand-side of the market, local
81


agencies cater to it, fostering the market potential.
The plan also acknowledged how pre-existing aspects of urbanity could
negatively affect potential consumers. Moulton states: the physical environment [of
downtown] must be of a character and quality that people will want to live there.
Downtown must be perceived as a comfortable, safe place (10). Before successful
redevelopment, the image of much of downtown was quite the opposite. For
example, there were (and still are) homeless shelters in the Arapahoe Triangle, and
crime rates were inevitably high in depressed areas. In order for successful
redevelopment to occur, the City realized that these issues must be addressed, and
that it was the responsibility of agency to increase demand. Moulton states:
Public policy cannot by itself create demand for housing anywhere,
especially downtown. However, in conjunction with private business
initiatives, local government can help accelerate potential into action
by educating, providing incentives and removing regulatory obstacles
(9) (and along with them, incompatible land uses).
The city took the initiative to eradicate Downtowns inequities. Zoning Codes
have been changed, code enforcement has increased while crime has been
dramatically reduced from its height in 1993 (Piton Foundation 75). Most
importantly, the city found means of financing urban renewal. As will be discussed
in the next two sections, tax increment financing (TIF) and revenues collected from
the state lottery and gambling in Black Hawk and Central City support the
revitalization effort. The prominence of the Denver Urban Renewal Authority, along
with its primary supporters, including Mayors Wellington Webb and, now, John
82


Hickenlooper, was profoundly influential in the urban renewal process. These plans
dictated the strategies for the city to follow, and the city responded with zeal and
tenacity.
The simple purpose of the plan was to instigate urban growth. Logan and
Molotch write:
For those who count, the city is a growth machine, one that can
increase aggregate rents and tap related wealth for those in the right
position to benefit. The desire for growth creates consensus among a
wide range of elite groups, no matter how split they might be on other
issues (51).
While Logan and Molotch refer to private interests, in the neoliberal paradigm, this
theory is also applicable to government, and is even logical outside the realm of
neoliberalism, as government is an entity that benefits from increases in aggregate
rents and property values. Growth was particularly important to the city in 1989,
when downtown was believed to be dead by real estate developers and investors
(Moulton 6). It was thus in the governments best interests to promote growth in the
downtown area. This is the pivotal theme of the downtown plans: Growth must
occur for the survival of downtown. The methods detailed in the Plans are merely the
strategies formulated to ensure that growth occurs.
83


Funds Generated through Legal Gambling
Property taxes have always been used to improve the city. However, they did
not generate enough funds to finance the scope of urban renewal planned by the city
government, in the late 1980s. In order to accomplish its goals, the city found
creative methods to afford redevelopment. The most important is tax increment
financing, which will be discussed in depth in the next section. However, there are
two other sources of funding which come from an unlikely source: gambling. In
1993 correlating with Denver's urban-renewal explosion the State Historical
Fund was created by a constitutional amendment, legalizing limited gambling in the
towns of Cripple Creek, Central City and Black Hawk. According to the Office of
Archaeology and Historical Preservation (OAHP): "The State Historic Fund receives
22.4% of the tax revenues generated by limited stakes gambling (Limited Gaming
Fund).... Since 1993 over 2,400 projects received more than $120 million dollars to
support preservation in Colorado." Although this fund is spent throughout the state,
by its 1993 induction, the city of Denver had realized the importance of historic
preservation, and has since been a benefactor. To date, there have been 490 grants to
Denver County projects, worth a combined $44,343,624. While these grants
represent the entire city, Table 5.1 illustrates examples of pertinent, Downtown
projects. Both public, such as the Denver Urban Renewal Authority, and private
institutions receive money from the State Historic Fund (it should be reiterated that
84


this table gives only a small selection of pertinent examples of a massive source of
funding, affecting the entire city and state).
Table 5.1: Examples of the State Historic Fund
Applicant Name Property Project Title Grant Amount
DURA Denver Dry Goods Bid. Exterior Rehabilitation $60,000
Capital Hill Senior Resources Emerson School Exterior Restoration $50,440
Dept, of Parks & Recreation 20th Street Gym Cornice Reconstruction $25,000
Dept, of Parks & Recreation City Park Pavilion Exterior Reconstruction $75,000
Auraria Higher Education Ctr. St. Cajetan's Church Doors & Stained Glass Restoration $40,000
LoDo District, Inc. Various Historic Signage & Walking Tour $36,500
Downtown Denver Partnership Daniels & Fisher Tower Conservation & Restoration Project $46,188
Zion Baptist Church Zion Baptist Church Exterior Restoration $100,000
Historic Denver, Inc. Denver Union Station Building Restoration $100,000
DURA Flour Mill Lofts Storefront & Entrance Restoration $100,000
DURA W.A. Hover Drug Company Building Exterior Restoration $100,000
DURA Tramway Tower Exterior Restoration $150,000
Auraria Higher Education Ctr. 9th Street Historic Park Interior & Exterior Restoration $194,046
Along with historic preservation, the 1989 plan accentuated the importance of
urban parks. Not only are clean, safe parks an enjoyable amenity for the city's
85


residents, but they enforce the positive, outdoor stereotype of Colorado. A major
source of state funding for parks comes from the Colorado Lottery. These revenues
are dispersed to three recipients: Great Outdoors Colorado (GOCO), receiving 50%;
The Conservation Trust Fund (CTF), receiving 40%; and Colorado State Parks
(which will not be discussed herein), receiving 10%. Funding from the CTF can be
used for the "acquisition, development and maintenance of new conservation sites or
for capital improvements or maintenance for recreational purposes only on any public
site" (Colorado Department of Local Affairs).
More importantly at least regarding urban renewal is the GOCO Trust
Fund. According to GOCO's website:
In 1992, Coloradans took a major step towards preserving their state's
outdoor heritage by voting to create the Great Outdoors Colorado
(GOCO) Trust Fund, which now forms Article XXVII of the Colorado
Constitution____Since it began awarding grants in 1994, GOCO has
awarded almost $489 million for 2,100 projects throughout the state.
As with the Historical Fund, a minority of these projects have been in Denver, and
even fewer in downtown, but there are three projects worth mentioning, both because
they are in downtown and because they were sponsored by the City and County of
Denver. The first project enabled the creation of Commons Park (in the rapidly
redeveloping Central Platte Valley area), with $350,500 in GOCO funding (1994).
The other two projects concern the revitalization of the South Platte River. The first
project, entitled Imperative 2000: A Vision of the South Platte River, received
$50,000 in GOCO funding in 1995. The next year's follow-up project, the South
86


Platte River Corridor Legacy Program, received $7,775,000 in GOCO funding.
All three of these projects are perfectly in sync with the city's efforts to
revitalize the Downtown area. It is not surprising that the Central Platte Valley was
the primary target. The 1986 plan recognized this area as both a potential market, and
an intensive project. Improvements to the land and river corridor were needed for
financial success, and GOCO represents the perfect means of achieving this success.
It is funded by money voluntarily spent by the population. For this reason, parks can
be revitalized with less taxation. The same applies to the Historical Trust Fund. The
modem concept of urban renewal requires the reuse of historic structures.
Unfortunately, the renovation of old buildings and houses can be costly. The Historic
Trust Fund can be used to partially fund this renovation, and thus transform the area.
Also, while these sources of funding can vary based on the popularity of gambling,
they are not dependent on City or State budgets, making them politically popular.
Tax Increment Financing (TIF)
The most important method of financing urban renewal is tax increment
financing (TIF), which is used ubiquitously on Denver's projects. "Since the first TIF
law passed in California in 1952, tax increment financing (TIF) has spread throughout
the nation to become a useful, effective tool for local governments to finance capital
projects in support of economic development" (National Association of Realtors 1:
1). It was originally intended as a redevelopment tactic for blighted areas. However,
87


as time progressed, TIF became less specific and has since been a method used to
finance all types of urban redevelopment, from blighted areas to commercial and
industrial projects and even housing. The Denver Urban Renewal Authority (DURA)
gives a brief synopsis of how TIF works:
When a redevelopment project is being planned, DURA analyzes how
much additional property and/or sales tax should be generated once it
is completed. That tax increment then can be used by DURA either
to finance the issuance bonds or to reimburse developers for a portion
of their project financing ("Financing Urban Renewal").
TIF is used on properties that require public investment in order to be successful, and
represents the gap between available private financing and the actual financing that is
needed to make a project work. According to DURA, the investment must also meet
a public objective. However, it should be noted that the 1986 and 1989 plans dictate
that any and all revitalization benefit the city as a whole, thus TIF is often used to
finance all manner of private enterprises, including the Adams Mark Hotel expansion,
Denver Pavilions, several LoDo loft projects, and retail malls.
TIF is a popular financing tool because it is based on the dedication of future
property taxes and thus does not have to raise current property tax raies. Essentially,
the city government borrows money, with the use of bonds, which are then paid back
with future tax receipts once the project is successful. TIF is considered a 'self
financing' way to pay for economic development projects. Development projects are
financed with tax revenues generated by the new development. Government officials
do not have to impose a new tax, but rather reallocate new revenues from
88


development to pay for development cost (National Association of Realtors 1: 3).
TIF is an ideal means of financing redevelopment in a strong economy because of its
high success rate, and its inherently perpetual nature. So long as financed projects
create property and/or sales tax at their prospected level, investment can progress to
other sites. TIF is a primary example of neoliberalism because it finances the supply
side, with a realistic hope of tangible reimbursement. Without it, it would be
impossible for the city to heavily finance urban renewal projects. Although private
investment represents a large portion of revitalization, it is highly doubtful that it
could have achieved the level of redevelopment seen today without the aid of the city
government and TIF bonds.
Denver Urban Renewal Authority (DURA)
The government entity in control of the vast majority of TIF is the Denver
Urban Renewal Authority (DURA). There is one major exception: the convention
center hotel, which is its own institution and will involve 500 million in public
dollars. DURA's role in Denver's urban renewal can not be overstated. DURA has
ties to a great number of major redevelopment projects, many of which would not
occur without its support. The purpose of the last section was to describe the
functioning of TIF; this section will discuss the multitude of projects that DURA has
helped finance since the dawn of the urban renewal movement, set forth by the 1986
plan. DURA describes its success on its website:
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In 1992, DURA entered an era of unprecedented activity that has
included the investment of $273.5 million in public funds in 25
redevelopment projects, leveraging more than $1 billion in private
capital investment. As a result of those projects, 1,565 residential
units were created and 11 historic structures were saved. Four
vacant department stores were renovated and are now providing
jobs and tax revenue, and three neighborhood shopping centers
were redeveloped. During the same period, 2,890 single-family
homes were rehabilitated.
The report illustrates the importance of TIF in this redevelopment, stating that most
urban-renewal funding in the 1970s and 1980s came from the federal government.
With budget cuts in the 1980s, city governments were forced to find alternative
means of funding. TIF became a popular method in 1992, which correlates with the
statistical increase in Denvers urban property values. TIF remains a popular method
not only because of its success in redevelopment, but also because of successful
financial returns.
While TIF is used ubiquitously, there is a blatant problem with this system:
the project could fail. If this is the case, TIF is not reimbursed and the city loses
money. The advantage of TIF is that in times of economic prosperity, it is the ideal,
economic tactic to foster urban renewal money is invested; money is returned; the
area is revitalized. On the other hand, in times of economic recession, TIF is a
dangerous gamble money is invested, but not returned. This is a burden to the
taxpayer and a roadblock for future urban renewal.
The most egregious, local example of a failed redevelopment project is
Denver's aquarium, Ocean Journey. In its redevelopment effort of the Central Platte
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Valley, the city funded Ocean Journey with both TIF, and revenue bonds, which the
non-profit aquarium was to pay back to the city. Unfortunately, the aquarium was not
as successful as had been hoped, and filed for bankruptcy in 2002. The Denver Post
reports: Colorado's Ocean Journey will shut its doors April 2, ending a short-lived
dream of becoming a major cultural institution in Denver.... Ocean Journey is $62.3
million in debt and lost $6.8 million in 2001" (Aguilar and Brovsky 1A). According
to a subsequent article, these losses were then covered by the city of Denver, costing
tax-payers $700,000 yearly, including $350,000 from the general fund (Brovsky 1C).
However, the saga does not end here. In 2003, Landry's Restaurant, Inc. bought the
aquarium, which cost nearly $100 million to build, for $13.6 million. Within a year,
Landrys was in disaccord with the Denver Assessor's Office concerning the worth of
the aquarium, assessed at nearly $30 million. Landry's could not afford the property
tax at the respective level and threatened to bulldoze the fledgling aquarium (Dwyer
1C). Today, the aquarium remains open, with Landry's as owner, but the city has not
received the foreseen returns on its investment.
This problem has arisen at other locations as well. Three prominent
downtown redevelopment projects are producing less than half the sales tax revenues
that the Denver Urban Renewal Authority initially forecast. The drop-off is due to a
rough three years for the Colorado economy, which hit downtown businesses
particularly hard. If it continues, DURA could have difficulty funding future projects
(Vuong 1C). According to a report by Tony Robinson, several prominent DURA
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projects performed at an average of 79 percent of projected levels between 1998 and
2002 (Table 5.2) (Robinson 6). These examples are indicative of the inherent
problem with TIF. As the economy recesses, it becomes more difficult to recoup
loans. This problem perpetuates until the city can no longer afford to issue bonds,
fearing huge losses to the general fund, which affects other programs. Supply-side
financing is optimistic it expects tangible returns; loans are given on the basis that
they can be repaid. Since the economy is inherently unstable, any loan agency
whether it be a bank or DURA must exercise caution. However, this market
uncertainty has yet to reduce the city's willingness to use TIF.
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