Ansfield shows how the insurance industry hastened the Bronx’s decline. As the nationwide uprisings began, insurers pulled out of so-called riot-prone areas. Because uninsurable buildings were hard to sell, property values collapsed. Between 1969 and 1979, the Bronx lost forty per cent of its manufacturing jobs, partly because firms couldn’t secure insurance. Landlords floundered, too. The Times reported on the desperate owner of a tenement in nearby Inwood who offered to transfer its title to his tenants for a dollar; none took the deal. Many underwater landlords gave up. They extracted whatever rent they could as they cut services, stopped paying property taxes, and abandoned their buildings.
To stanch the bleeding, Congress, in 1968, created a form of last-ditch insurance: Fair Access to Insurance Requirements Plans. Private insurers would be obliged to offer policies that couldn’t discriminate by neighborhood. In return, they would be reinsured by the federal government against riots. FAIR Plan policies were neither cheap nor comprehensive, but, when New York started offering them, demand was overwhelming.
That should have sounded alarms. The FAIR Plans inadvertently replaced the too-little-insurance problem with a too-much-insurance one. Once insurers lost the ability to say no, landlords had little incentive to maintain their properties. If property values dropped, they could drive their buildings into the ground and cash out by arson. The more they did so, the further property values plunged, and the more enticing the practice became.
Owners often outsourced the arson to cash-strapped locals. Ansfield gives the example of a fifteen-year-old, Hector Rivera (not his real name), who set forty to fifty fires. “I don’t do it for fun,” Rivera explained to a reporter. “I do it when they hire me.” He made between three and fifteen dollars a fire. Occasionally, landlords did their own dirty work. In 1975, Imre Oberlander was arrested while en route to a building he owned, with firebombs and wearing blackface. (He pleaded guilty to weapons possession and served five years’ probation.)
Oberlander had taken in a hundred and twenty-five thousand dollars from twenty-one fires in just five years. Another property owner, the convicted felon Joe Bald, was caught leading a ring of landlords who had reportedly collected around five million dollars on some two hundred and fifty burned buildings. A recent study by Ingrid Gould Ellen, Daniel Hartley, Jeffrey Lin, and Wei You estimates that in 1978 alone the state of New York had thirteen thousand more fires than it would’ve had without the FAIR Plan. Most other states had FAIR Plans, too, and arsonists torched poor neighborhoods nationwide.