The Domino Sugar fight

On the Brooklyn waterfront there lies a dilapidated, rusting hulk known at the Domino Sugar refinery. Here's what it looks like today:

Fortunately, however, three years ago developers laid out a $1.3 billion plan to redevelop the site which would involve adding 2,200 housing units, shops, offices and 4 acres of publicly accessible open space. In other words, a waterfront wasteland would be converted into useful space which would both add to the city's housing stock and boost the local economy. Appropriate reactions from local politicians should have included:

• Thank you.
• I love you.
• What can we do to help?

Of course, what actually followed was a protracted battle with elected officials and various interest groups. While the project was finally approved yesterday, the New York Times notes the various obstacles the deal had to overcome:

During last-minute negotiations, the developer agreed to reduce two planned 40-story towers to 36 floors. The lost space from those floors will be added to other buildings on the site. The corporation also agreed that construction, building service and eventual supermarket workers at the New Domino would be paid prevailing wages.

...Christine C. Quinn, the City Council speaker, labored behind the scenes to work out a compromise with the developer and the project’s chief critics, who include Councilman Stephen Levin of Brooklyn and his mentor, Vito J. Lopez, the Brooklyn assemblyman who often plays a pivotal role in city and state housing developments. Mr. Lopez had demanded that the developer reduce both the height of the buildings and the total number of apartments, while increasing the number of subsidized units.

...But Diana Reyna, a Brooklyn councilwoman who worked with the Community Preservation Corporation and is a political adversary of Mr. Lopez, feared that reducing the number of units would undermine the financial health of the project, in a neighborhood where 51 residential buildings under construction are already at a standstill because of the recession. Already, she said, the corporation had promised that 30 percent of the units would be affordable when most other rental housing developers were including only 20 percent.

Well thank goodness for Ms. Reyna, who actually seems to be able to grasp basic economics. But the opposition is insane, with demands for reduced building height (in New York City!), expansion of "affordable housing" (read: wealth transfer from the purchasers of non-affordable units) and even the dictation of what workers at the site must be paid (which is a consensual act between adults).

This is best understood as a means for politicians to secure goodies to please various constituencies (wage demands, subsidized housing) at the expense of the greater good, and a vivid demonstration of how government so frequently imperils progress. Multiply this one project by many thousands and one begins to appreciate the burden of government on the country's economy.