Tearing down the old to make room for yet another, identical investment.
Tearing down the old to make room for yet another, identical investment. Charles Mudede

Manhattan-based Bloomberg is devoting a year of reporting to the businesses of Capitol Hill's Pike/Pine corridor. The media company picked this location for two reasons. One, the neighborhood experienced during the previous decade the kind of rapid transformation that all major US cities must strive for (gentrification) because it's the only form of urban development that's available or politically viable—investment-driven growth. And, two, because Seattle was the first US city to enter what is proving to be the long coronavirus pandemic, and so is likely to be the first that leaves it.

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Bloomberg:

Nobody knows what cities will look like on the other side of the Covid crisis. Will there be an exodus to the suburbs? Who’s going to ride public transit again? Will independent retailers survive? Will people gather to share a drink, dine out, or dance to their favorite music? For the next year, we’re going to be following businesses along the Pike/Pine corridor in Seattle’s Capitol Hill neighborhood to find out.
The model businesses for this year-long project are small (Porchlight Coffee and Records, Sugar Pill), smallish (Neumos, Chophouse Row), and corporate (Amazon Go and Starbucks Reserve Roastery). The plan is to monitor Capitol Hill's post-pandemic business climate with the view of providing other cities that exit the crisis at a latter time some idea of what's to come.

My feeling, however, is that "One Year, One Neighborhood" will not obtain useful information, and here is why.


Only two of the businesses in Bloomberg's model (Amazon and Starbucks) don't exemplify investment-driven growth. Indeed, this kind of urban development, which is fueled by sharply rising property values, often generates more difficulties than benefits for the owners of small and smallish businesses. (Note: by "smallish" I mean a business that's at or near the bottom of a mid-sized business—a small business is defined in the US has having 10 or more employees.)

To understand why, I need to explain the key dynamic of investment-driven growth, which is described in this parable by the 20th century Polish economist Michal Kalecki:

Let us suppose, as often happens in the United States, that two competing railway lines run between two cities. Traffic on both lines is weak. How should one deal with this situation? Paradoxically, one should build a third railway line, because then the first two lines will transport the materials and labour to build the third line. What should be done when the third railway line is built? Then one should build a fourth and a fifth. This is paradoxical because undoubtedly it would be better to undertake some other investment near the first two railway lines rather than build a third one. But it perfectly illustrates the laws of development of the capitalist economy as a whole.

This parable explains much of the apartment construction boom on Capitol Hill and Seattle in general. The investment in one apartment complex conjured into existence the investment in another apartment complex, and so on and so on.

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If this kind of development grips a city or neighborhood, it doesn't matter if the street-level business activity that proceeds the completion of these seemingly never-ending and almost always identical luxury apartments (i.e. investments) is mild or weak or even nonexistent, as was often the case on the Pike/Pine corridor. The real profits were not found in selling things (Blu Dot), or food/booze (Plum Bistro, Linda's), or presenting live events (Barboza, Century Ballroom), but in property speculation and investments.

Gentrification has been the defining urban model for economic development in the US since the early 1990s, and by the final years of the 2010s "second-wave gentrification" was squeezing the life out of a number of small businesses. Months before the pandemic hit Seattle, restaurants on Capitol Hill and other neighborhoods were closing or on the verge of closing. But this did not stop or slow down the construction of yet another luxury apartment or complex. If the Bloomburg project is to have any value for planners, activists, and progressive entrepreneurs, it must connect the pre-pandemic business climate on Pike/Pine corridor with the one that emerges after the pandemic.

Lastly, what happens to a city if its market-directed investments keep going, despite the death of what the urbanist Jane Jacobs called "sidewalk ballet?" It arrives at the billionaire urbanism of the Hudson Yards (end-wave gentrification). And what happens if investment suddenly dries up or is not revived when the city is reopened? We have not seen that kind of Seattle in a very long time.

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