Municipal Ownership

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MUNICIPAL OWNERSHIP refers to city government's control and operation of property, services, and systems. In the late 1800s and early 1900s the term took on special meaning, however, as reformers, eager for better and more affordable services, encouraged the expansion of municipal ownership of key urban systems, including water, electricity, and mass transportation. At the same time, demands for more and better open spaces forced cities to control more land within their boundaries and to provide better recreational outlets for their residents.

Private Enterprise and Municipal Acquiescence

In early American history, cities often owned and operated key economic sites, particularly marketplaces and wharves, and, of course, municipalities have always controlled streets and public squares. Still, in the first half of the 1800s municipalities rarely owned a significant portion of the land within their boundaries. Most cities had modest parks, such as Philadelphia's Rittenhouse and Washington Squares, but they made little effort to provide sufficient open space for ever-growing populations. With the notable exception of Charleston, South Carolina, most cities grew with little attention to municipal control of space. The encouragement of growth being paramount, municipal economic strategies included laying out regular streets, usually in a grid pattern, and allowing the market to determine the best use of urban land. As a result, many booming American cities became densely settled, with industrial, commercial, and residential space mingled in and around busy urban cores. In the 1830s cramped urbanites took to private developments to seek refuge, including expansive, landscaped urban cemeteries (ironically called rural cemeteries), usually created just at the outskirts of the city, and to private parks, most famously New York City's Gramercy Park, developed beginning in 1833.

Beyond the issue of public open space, the failure to provide basic utilities haunted many cities, particularly as suspect water supplies endangered public health and safety, with both epidemic diseases and uncontrollable fires threatening urban residents. The history of the Manhattan Company, organized by Aaron Burr in 1798, best illustrates the problems associated with the reliance on private enterprise for the provision of basic services. Ostensibly created to supply potable water to New York City, then reliant on a polluted pond called the Collect, the Manhattan Company never gave this duty sufficient attention, concentrating instead on creating a successful bank, later known as Chase Manhattan. Meanwhile, the booming New York population remained dependent on its old, suspect source of water, and in 1832 a cholera epidemic killed more than 3,500 New Yorkers, revealing the dire consequences of municipal neglect of the water supply. The following year, a state bill allowed New York to develop a city-owned system using a Westchester County source, and by 1842 an aqueduct brought fresh Croton waters to a thirsty city. By the turn of the century, municipally owned water systems had become the norm rather than the exception around the nation; forty-one of the largest fifty municipalities owned their systems in 1897.

Emphasis on private enterprise in the mid-1800s led to the development of significant inefficiencies, including the duplication of facilities and awkward placement of transportation hubs. It was common practice, for example, for each railroad line to build its own station or terminal. This made for very awkward transfers for passengers coming into town on one line and going out on another. Perhaps more important to city residents, the growth of competing lines often brought excessive interference in streets, as trolley lines and railroad tracks were laid in an effort to attract business. This market approach to transportation did leave many cities with very extensive streetcar systems, and track mileage in American cities far exceeded that of comparatively sized European cities. Seeking greater profits, transportation companies were quick to innovate as well, and American streetcar systems converted to cleaner, faster electricity much more quickly than European systems. Still, as trolleys clogged streets and companies were afforded monopoly rights to certain lines, by the turn of the century reformers came to suspect that the city itself could organize a more efficient system.

The Progressive Era, Monopoly, and Reform

With the rise of big business in the late 1800s came a growing concern over the power of monopolies. As federal trustbusters concerned themselves with huge industrial corporations, municipalities turned their attention to local monopolies, particularly utilities. Political machines found large municipal contracts for services to be valuable in their efforts to build allies and profits through kickbacks. But, increasingly, reformers pointed to service contracts as a source of corruption and as evidence of municipal inefficiency. Municipal ownership of key services became a hallmark of Progressive Era reform in the effort to both rationalize city administration and diminish corruption.

During his administration from 1901 to 1909, reform mayor Tom Johnson launched a multifront battle against Cleveland's political machine, including a broad effort to increase municipal ownership. By the end of his term, Johnson had brought garbage collection, street cleaning, and major utilities under municipal control. In areas where municipal ownership was not complete, Johnson made better contracts with corporations, including those who supplied natural gas and operated streetcars. After 1903, Jersey City's mayor Mark Fagan followed Johnson's example, advocating municipal ownership of utilities and passing strict regulation of other key services, particularly in limiting streetcar fares.

Municipalities also increased efforts to provide open space, especially through the provision of parks and the creation of parkways that laced the city. Although this effort dated back to the mid-1800s and had already seen great successes, including New York's Central Park and the design and creation of Chicago's extensive park system, the Progressive Era witnessed greater emphasis on access, particularly for poor residents. Thus, cities created more "pocket" parks and playgrounds in the densest neighborhoods, not just the large landscaped parks that had become so popular with the wealthier classes.

Despite calls for regulation of streetcars, municipal ownership in transportation remained limited. By 1919 Seattle had fully municipalized its trolleys, but most cities fell far short of this goal. The consequences of this failure became evident slowly as streetcar systems gradually went out of business. Some failed due to strict limitations on fares, while many others met with early demise as General Motors and Firestone Tire Company purchased established lines, dismantled them, and replaced them with bus lines. Although the buses did promise some advantages, including flexibility of routes and a less obstructive presence in city streets, in the end the loss of thousands of miles of trolley lines proved devastating to urban transportation systems. In the postwar era, a greater emphasis on automobiles, the ultimate in private transportation, led to persistent, seemingly permanent traffic problems, particularly in the many cities with no municipally controlled transportation infrastructure offering an alternative to auto-clogged streets.

By the end of the Progressive reform decades, municipal ownership of some basic services was widely accepted as both proper and efficient. Municipal governments assumed prominent roles in the provision of fresh water, and in most large cities the government provided garbage collection services, if not through direct ownership then through citywide contracts with private companies. But for other services, particularly utilities, private ownership remained widespread. Although some cities provided their residents with gas and electricity, most urban residents relied on private companies for these services.

City Ownership and Urban Recovery

After World War II, city governments found themselves operating in increasingly dispersed and fragmented metropolises. In a partial attempt to keep the city attractive to middle-class commuters, more and more cities took it upon themselves to build and operate city parking lots and garages. Cities also expanded ownership or involvement in other urban amenities once controlled by private interests, including the development of arts centers, stadiums, and convention centers. Thus, particularly in central business districts, municipalities continued to expand their ownership and control of space and services. In one major exception, however, transportation systems, long since requiring extramunicipal expansion, took on regional approaches and moved beyond municipal control. Many private bus systems experienced financial hardships, particularly in the poor economy of the 1970s, and governmental transit authorities gained in popularity. For rail systems, where capital investments were much steeper, regional transit authorities became nearly requisite; the successes of the Port Authority of New York and New Jersey and of San Francisco's Bay Area Rapid Transit reveal the importance of providing regional transportation solutions.

Even as cities increased ownership to court middle-class residents and visitors, they also increased involvement in the lives of poor residents, particularly through the development of municipally owned and operated housing. Most large cities have faced perpetual shortages of affordable housing, and after World War II municipalities, with the aid of the federal government, increasingly sought to provide housing for low-income residents. Generally operated through housing authorities, these projects have been controversial and many have failed by any measure. Indeed, the simple negative connotation of the word "projects" suggests the failure of municipal involvement in housing. While many politicians have pointed to this obvious disappointment as indicative of a broader failure of interventionist government, the much more popular municipal ownership of urban amenities, such as parks and stadiums, suggests a more complicated rationale for and judgment of municipal ownership.


Judd, Dennis R., and Todd Swanstrom. City Politics: Private Power and Public Policy. New York: HarperCollins College Publishers, 1994.

Melosi, Martin V. The Sanitary City: Urban Infrastructure in America from Colonial Times to the Present. Baltimore: Johns Hopkins University Press, 2000.

Schuyler, David. The New Urban Landscape: The Redefinition of City Form in Nineteenth-Century America. Baltimore: Johns Hopkins University Press, 1986.

Teaford, Jon C. The Unheralded Triumph: City Government in America, 1870–1900. Baltimore: Johns Hopkins University Press, 1984.


See alsoHousing ; Monopoly .