#170 Summer 2012 — Election Issue

Housing and Communities Built to Last?

Shaun Donovan is secretary of the U.S. Department of Housing and Urban Development.

Outside of the limelight, the Obama administration has been quietly pursuing ambitious changes to better support healthy neighborhoods and regions. Will these programs be allowed to come to fruition?

© Paul Lachine

rebuilding local capacity

© Paul Lachine

Before President Obama stepped foot in the Oval Office, our country had lost 8 million jobs. Our auto industry was on the verge of collapse. Housing prices had fallen for 30 straight months and foreclosures hit record levels month after month. The Obama administration acted to address each of these challenges — and the results of those interventions are clear. To date, 5.3 million people have gotten the help they needed to keep their homes. The President’s Auto Rescue saved a million jobs up and down the supply chain for hardworking families living in places like Michigan, Ohio, Pennsylvania, and Indiana. Through the Recovery Act, nearly 7 million people were saved from falling into poverty — and more than 1.3 million kept from homelessness, the vast majority of whom were families with children.

To be sure, too many families are struggling today to make ends meet. But these steps to rescue families, communities, and the industries upon which they depend were not only designed to prevent America from falling into a Second Great Depression. They were also crafted to begin repositioning our economy for the 21st century — by identifying new ways the federal government can support local solutions from the ground up.

As Congress considers the proposed Republican budget, the choices we face in the months ahead will in effect determine whether we continue the progress we have made or return to the same economic policies that got us into this crisis in the first place. And nowhere will the implications of these choices be more visible than in the realm of housing policy, urban policy, and the way government partners with communities.

Rebuilding Homes and Neighborhoods

Today, one in five kids lives in poverty. That costs our country at least $500 billion per year — 4 percent of GDP. And the results are even worse for children living in neighborhoods of concentrated poverty, who are surrounded by disinvestment and little hope. We can predict their futures — even their lifespan — by their zip code. (Ed.: see SF Spring 2012, Are Our Neighborhoods Making Us Sick?) The disconnected, one-size-fits-all federal approach of the last half century has too rarely helped. Sometimes it even made it worse, when it rebuilt public housing surrounded by failing schools, rampant crime, or other troubled housing.

You can’t attack poverty one symptom at a time. You have to do the work comprehensively.

The White House Neighborhood Revitalization Initiative (NRI) brings together five agencies to support the work of local leaders from the public and private sectors to attract the private investment needed to transform distressed neighborhoods. At the center of this effort is a tool called Choice Neighborhoods, which builds on the HOPE VI public housing revitalization program. With Choice Neighborhoods, communities are able to use proven mixed-use, mixed-finance tools to transform not just public housing, but all kinds of federally-supported housing in poor neighborhoods.

But a healthy neighborhood depends on more than successful, stable housing. That’s why Choice Neighborhoods requires grant winners to provide neighborhood children with high-quality educational opportunities and allows communities to use a portion of their award for early childhood education and after-school tutoring. The first two years of Choice Neighborhoods grants have leveraged $1.6 billion in additional capital — over 12 times the $130 million federal investment — to create new schools, park spaces, and transit options and put additional cops on the beat.

In Chicago, you can see that approach in action. With its $30 million Choice Neighborhoods grant, Preservation of Affordable Housing, Inc., a nonprofit, is partnering with the City of Chicago to transform the Woodlawn neighborhood into a mixed-income community with critical assets like grocery stores, a youth center, and improved access to public transportation. By partnering with the University of Chicago’s Urban Education Institute and the Woodlawn Children’s Promise Community, POAH and the city are using the grant to build on local efforts to turn around poorly performing schools and create “cradle to career” educational opportunities.

Like the three-phase Neighborhood Stabilization Program, which has responded to the foreclosure crisis by forging cross-sector partnerships between the private sector and nonprofits and foundations to rebuild homes and neighborhoods, reduce vacancies, and create jobs, the ongoing transformation of Woodlawn reminds us that this work must be supported — not driven — by the federal government.

That is the approach we’re taking with our recently launched rental assistance demonstration, which allows public housing authorities and owners of assisted properties to tap private debt and equity resources to help preserve up to 60,000 homes. Further, it offers the families who live there the choice to stay in modernized public housing or to move to a neighborhood that better meets their needs.

With an estimated $26 billion capital needs backlog facing our public housing program — and Worst Case Housing Needs at an all-time high — these efforts represent a new beginning for how the federal government not only preserves and improves affordable housing for future generations but also how it partners with communities and the private sector to make it possible.

Strengthening Regional Economic Competitiveness

Of course, as the economic and housing crisis has shown, for neighborhoods to thrive, they need to be part of competitive cities and regions. The transformation of our neighborhoods and communities doesn’t happen because of a federal grant alone. It happens when stakeholders who may never have worked with each other before start coming together to build consensus about the future of a region. It happens when these partners work to secure and target funding from different sources — and when they bring innovative, evidence-based solutions to complex problems like crime and underachieving schools. Most importantly, it happens when that process is driven by the most important stakeholders of all: the residents and members of the community.

That is one of the reasons HUD has engaged residents not only at the housing and neighborhood level — but also in our work to strengthen the competitiveness of the cities and regions upon which those neighborhoods depend. It was no coincidence that many of the places that faced the brunt of the economic crisis — the communities that had the highest foreclosure rates and faced the deepest job losses — were the least sustainable, with the most limited access to transportation, the most troubled schools, and the fewest jobs.

And so in the earliest months of his administration, President Obama created an unprecedented partnership between HUD, EPA, and DOT to help communities work together to become more competitive as regions by launching a new wave of coordinated housing, zoning, and land use reform. The Partnership for Sustainable Communities recognizes that communities today aren’t just competing against their neighbors — but across the globe. And a big part of what allows places to win that competition and collaborate with other places that share an economic future is how they manage transportation, building, and land use.

At a moment when the fiscal environment has forced us to make very difficult choices about our block grant programs — dollar for dollar, HUD’s biggest job creators — the Partnership uses taxpayer dollars wisely. When businesses invest in a community, they want to see that the city has a plan in place for development and is putting money behind it. They want to see the proper infrastructure coming online. And they want to know that the community and its residents have bought in and contributed to the plan. That’s what HUD’s Sustainable Communities grants make possible.

By helping neighboring communities work together to harmonize their rules and codes, the Partnership helps communities attract businesses to their regions and create jobs, enhancing regional competitiveness. The Partnership also recognizes the critical role community development plays in attracting private investment — and clearing barriers to it.

By bringing stakeholders from all sectors to the table during the planning process, communities have the power to transform themselves. Memphis is planning to revitalize neighborhoods around its expanded airport, or “Aerotropolis,” giving companies like Electrolux and Mitsubishi the confidence they need to generate over 1,500 jobs with over $500 million of investment. Pittsburgh’s plans to revitalize the East Liberty neighborhood gave Google the confidence it needed to open 100,000 square feet of office space in an old Nabisco factory. And on the Pine Ridge Indian Reservation in South Dakota, the Thunder Valley Community Development Corporation and the Oglala Lakota Tribe are using these tools to create the first economic development plan in the region’s history.

Unfortunately, Congress eliminated funding for HUD’s Sustainable Communities grant program this year — even in the face of extraordinary demand. We need to restore that funding for 2013. We also need to align our priorities across agencies by giving those communities that are planning in a sustainable, coordinated way a leg up for the federal investments they need to realize those plans and create jobs.

Rebuilding Local Capacity

No matter how big the federal grant or well-crafted the policy, no city can compete without strong local leadership and institutional capacity. While local capacity is important to every community, it’s absolutely essential for those places that were facing long-term structural challenges long before the recession hit.

That’s why we created the Strong Cities Strong Communities (SC2) pilot. In six geographically and economically diverse cities and regions, SC2 is piloting two capacity-building tools: Community Solutions Teams of highly skilled federal officials who are working on-site full-time to help these cities get the most out of the millions of federal dollars already awarded to them, and a Fellowship Placement Program — funded by Rockefeller and other foundations — that makes sure there is capacity within the local government when the federal teams depart.

SC2 also includes a National Resource Network that can act as a “one-stop shop” for technical assistance for any local government across the nation. For localities with large deficits in their fiscal capacity, it features an Economic Visioning Challenge designed to help them develop and implement a comprehensive, 21st-century, globally competitive economic strategy for their region.

SC2 and the Partnership for Sustainable Communities share something in common: They provide communities with the expertise and partnerships necessary to ensure planning and reinvestment increases competitiveness and expands opportunity for the community as a whole.

The Choices We Face

Ultimately, whether it’s SC2, the Partnership for Sustainable Communities, the Rental Assistance Demonstration, or Choice Neighborhoods, we’ve demonstrated what’s possible when government is in the business of supporting local solutions that create real access to opportunity — to the good schools, safe streets, and decent jobs that every family needs. And for all the achievements I’ve outlined, that may well be our single biggest so far.

Even still, community developers know this is just a beginning — a foothold for the kind of lasting change our communities need and that so many Americans have been fighting for.

To cement this change for the future, we need every dollar across government to be working together toward helping communities realize their own visions for success and economic growth. In so doing, we can create an economy where hard work and responsibility are rewarded — at the same time we make America more competitive for the decades to come.

That’s why the budget debate in Washington isn’t about whether we should create jobs faster or grow the economy.

It’s about how to do that — and what will work.

Do we support communities’ ability to work together to attract jobs — or pit them against one other? Do we invite the local businesses and private sector partners who have a stake in preserving public housing for generations to come to help do so — or shut those partners out? Do we assist cities with tremendous assets but enormous capacity gaps — or let them fend for themselves? Do we expand on the success of the Neighborhood Stabilization Program and create another 200,000 jobs through Project Rebuild — or allow the abandonment in our hardest-hit neighborhoods to spread?

In many ways, the choice before us in the debate between the President’s budget and the Congressional Republican budget is even more basic:

Do we return to the same top-down policies that got us into this economic crisis — or build an economy based on local decision-making and a strong and secure middle class? Do we settle for a country where a shrinking number of people do really well, while more Americans barely get by — or build a nation where everyone gets a fair shot, does their fair share, and plays by the same rules? Do we create an economy built on speculation and phony profits — or on partnership, opportunity, and shared prosperity?

What’s at stake isn’t Democratic or Republican values. It’s American values — values we all stand for — and we need to reclaim them.

By building on the platform we’ve created these past three-and-a-half years — and by continuing to demonstrate how smart government at the federal level can support and unlock innovation at the local level — we can reclaim them. And with the help of community partners across the country, we will.


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