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Economic Depressions

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Panic of 1873 > Depression of 1893 > Great Depression (1930s)

Great Depression (1930s)


Economic Collapse
Most historians mark the beginning of the Great Depression by the crash of the New York Stock Exchange in October of 1929, but the effects of the depression were being felt on the Lower East Side even before the crash. increased unemployment, families moving in with one another to save money, or taking in boarders, or moving to cheaper apartments altogether, and increased appeals for aid were a harbinger of hard times to come.

New York City was one of the hardest hit areas of the country during the Great Depression. By March 1930, there were fifty bread lines on the Lower East Side alone, serving 50,000 meals a day to the hungry. By 1932, half of New York's manufacturing plants were closed, one in every three New Yorkers was unemployed, and roughly 1.6 million were on some form of relief. The city was unprepared to deal with this crisis. Abandonment of women and children by husbands and fathers increased 134 % during the first few years of the crisis. Vacancy rates nearly doubled as the number of people with money to pay rent plummeted. Privately funded mutual aid societies, the first defense for most Lower East Siders, collapsed under the stress. The number of mutual aid societies on the Lower East Side dropped from 6,000 in 1920 to 2,000 in 1938, in part because of out migration. In addition, 400 private social services institutions - one-third of such agencies in the city - closed their doors within the first three years of the crisis.

Fiorello La Guardia and New York's New Deal
Fiorello La Guardia was elected mayor of New York in 1933 on a fusion ticket supported by upper-class Republicans and liberals interested in honest and efficient government, "new" immigrants - especially Italians, some elements of organized labor, and the working class in general. He was the first Italian-American, indeed the first descendant of Southern or Eastern European immigrants ever elected mayor of New York City. Once in office, he appointed Jews, Italians, as well as Blacks, to important positions in unprecedented numbers, often displacing the Irish who had previously dominated the city government.

La Guardia's success at reviving New York City from the depression was largely a result of his close relationship with President Roosevelt. Faced with the imminent financial collapse of America's cities, FDR decided to come to their aid with federal funds. This was the first time the national government had funneled money and jobs into cities, but Roosevelt's "New Deal" was a time of many changes.

The Civil Works Administration (CWA) was the first federal assistance program to offer federal grants directly to municipalities. LaGuardia pursued these funds with a passion. By the time he took office, New York City had already captured 20% of the jobs offered by the CWA. Four thousand projects employed 200,000 workers during the three-month-long program. Furthermore, studies found New York City's CWA program to be the most honestly managed and effective in the country.

La Guardia also competed aggressively for PWA (Public Works Administration) and other federal funds. By 1935, New York City was capturing one-seventh of the federal outlay for relief. In addition, it was the only city allowed to administer its own WPA (Works Progress Administration) program, generating another 200,000 jobs.

See also: Public Assistance/New Deal.

Public Housing and Slum Clearance
Soon after taking office, LaGuardia set up the NYCHA (New York City Housing Authority) to deal with the problem of slums and provide public housing. NYCHA immediately began searching for a demonstration project to show Washington that it could produce decent, affordable housing at a reasonable price. The Lower East Side, one of the most notorious slum districts in the world, seemed like the perfect place. Ninety percent of the residential buildings were at least 35 years old, more than 50% lacked central heating and toilets in the apartments, and one in six still had no hot water. After obtaining a piece of land on Third Street between Avenue A and Second Avenue, the city tore down some of the worst structures, renovated others, and built a few new buildings. The development was called First Houses because it was the first government-sponsored low-income housing development in the nation's history.

Rents in First Houses were, on average, a little more than $6 per room per month (or just over $18 for a three room apartment). But this was still too much for the poorest of the poor. Those on relief during the Depression only received about $13 per month for rent. Furthermore, First Houses had an elaborate screening process which shut out those in real trouble. Tenants had to have insurance policies, at least $100 in the bank, and membership in a fraternal society. First Houses was followed by other public housing projects sponsored by both NYCHA and the Federal Government, but they rarely were able to house New York's poorest.

In addition to his public housing efforts, LaGuardia demanded that all landlords bring their housing up to current standards by January 1937. In two years, 10,000 decrepit tenements were boarded up, removing 40,000 rental units from the market. It was in this atmosphere of abandoning tenements, that 97 Orchard was boarded up rather than upgraded by the owner. Some landlords did upgrade their buildings, but then they raised their rents as well, effectively removing another 30,000 units from the low-rent market.

Public housing was supposed to compensate for this loss. New York captured one fourth of the total PWA housing allocation and embarked on numerous projects with its own and federal funds. But despite these efforts, only about 2,000 families on the Lower East Side lived in decent public housing by 1941. Meanwhile, the number of vacant lots had more than tripled in the neighborhood and rents had actually increased since slum clearance had begun. Ultimately, both LaGuardia and Roosevelt were less interested in providing decent housing for the poor, or had less faith in the possibilities of public housing, than in putting people back to work with federal funds.

From their inception, the processes of slum clearance and urban renewal did not proceed at an orderly, even pace, but took place gradually as federal and municipal authorities assembled a series of conjoining sites through eminent domain and condemnation. Once a declining section of the neighborhood was slated for destruction and renewal, already poor housing conditions deteriorated further and faster. Before condemned buildings were demolished, absentee landlords cut back on maintenance in order to maximize rental income from their soon-to-be torn down buildings. Initially, at least, the result was not block-long stretches of boarded-up, vacant buildings, but populated tenements interspersed with already condemned residences. Once the authorities had condemned all of the buildings in a given area and evicted all of the residents, then demolition and construction was supposed to proceed on a predetermined schedule, a process that usually took years, sometimes a decade, to complete. However, because of bureaucratic inefficiency, political recalcitrance, and lack of adequate funding, areas slated for renewal often lay vacant for years before anything was built. As a study of slum clearance in Brownsville, Brooklyn observed, "Block after block has been left vacant, forming a wasteland of gutted carcasses of buildings and rat filled rubble."

In the case of the earliest slum clearance project, the demolition of Mulberry Bend, although the city had gained the power to do so, reformers, government officials, and property owners were engaged in a heated debate over the legitimacy of taking private property for public uses, in this case the creation of a small park. Battles with local property owners over the value of their lots also complicated the process. When the city took possession of the properties of Mulberry Bend in 1894, actual demolition was delayed due to lack of funds. In the interim, the city became a slumlord, collecting thousands of dollars in rent from the inhabitants of these condemned tenements. But even after the buildings were destroyed, the muddy lot remained vacant for another year until considerable pressure from Jacob Riis helped transform the space into a park, which opened in 1897.

During the 1930s, slum clearance and urban renewal programs on the Lower East Side as elsewhere did not seek to destroy and replace the neighborhood's housing stock in its entirety. Indeed, the idea that the government could legitimately confiscate private property and build housing was only just beginning to gain serious currency. Although pioneered in New York City, very few urban renewal projects were actually completed on the Lower East Side in this era. In addition, the first public housing complex in the nation, First Houses, completed in 1936 on the Lower East Side, was comprised of rehabilitated tenements rather than new housing.

The choice of which areas to "renew" seems to have been the result of a complicated calculus that involved, among other things, political and financial equations. Most often, the most seriously deteriorated areas of the neighborhood would be considered first. But what appears to have proven a deciding factor was the ability of the municipal authorities to feasibly assemble a large enough swath of properties for demolition and construction of public housing, taking care not interfere with established traffic arteries. On the Lower East Side, these areas tended to be in the eastern and southern portions of the neighborhood, close to the waterfront.

Then owner of 97 Orchard Street probably kept his building because the city did not want it. 97 Orchard Street likely did not fall within an area of the neighborhood designated for slum clearance either because not enough buildings could be condemned according to existing law or because the buildings proved prohibitively expensive to take by eminent domain.


Thomas Kessner, Fiorello H. La Guardia and the making of modern New York (New York, 1989); Suzanne R. Wasserman, "The Good Old Days of Poverty: The Battle Over the Fate of New York City's Lower East Side during the depression" (Ph.D. diss., New York University, 1990).

See also: Lower East Side; Depression of 1893,, Panic of 1873, Rent, Wages, and the cost of living 1930s; Housing/Public Housing.


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