Those of us who have been grappling with the impact of vacancy and abandonment in our communities for many years were heartened when in his State of the Union speech President Obama exhorted the nation to “put people back to work rebuilding vacant homes in run-down neighborhoods.” Equally encouraging was his commitment to “partner with 20 of the hardest-hit towns in America to get these communities back on their feet…[and to]… work with local leaders to target resources at public safety, education, and housing.”
These are welcome words. For the past decade — or longer — community leaders across the nation have worked to reverse the tide of vacancy that has arisen not only from the recent collapse of the housing market and mortgage crisis but also from earlier changes in the economy and living patterns that have left communities and whole cities bereft of the resources needed to prosper. While national housing trends may be encouraging, many lower-income urban and inner-ring suburban neighborhoods are showing few signs of recovery. Having long worked toward local solutions without a consistent federal partner, it has been encouraging to hear recent federal recognition of the crises we face.
Yet questions remain — what are the most effective solutions? How can the federal government best partner with local leaders to support innovation and policy reform that can lift up our most distressed communities? The administration has launched several innovative programs that seek to reshape the relationship between the federal government and municipalities, perhaps most notably the interagency Strong Cities Strong Communities (SC2) initiative through which a wide range of federal agencies have partnered more closely with seven pilot communities. The most direct manifestation of this collaboration has been the placement of teams of federal officials within the pilot city administrations to help local leaders identify and put in place innovative and efficient ways to utilize federal resources to strengthen local economies. While this program certainly represents a new and closer relationship between local and federal leaders, it is difficult to imagine how an intensive program of this nature could be brought to scale. And yet, we must find ways in which a more productive collaboration between Washington and our cities becomes the norm in order to ensure that all of the nation’s communities are well-positioned for a strong future. Based on our work with local leaders around the country, we believe the following steps would help to build an effective agenda for renewal — one that removes not only blight, but barriers to reinvestment and reuse. Our communities need:
· Flexible federal funds to support acquisition, clean-up, maintenance, transfer and reuse of vacant and abandoned properties: At present there are two bills in Congress that offer some hope. One is H.R. 656 (the Restore Our Neighborhoods Act) that proposes $2 billion in federal funding for demolition. While demolition is a necessary tool for removal of blighted buildings that endanger communities and are costly to government, we need more flexible funding that can also be used to acquire, clean up and rehab properties and incentivize their reuse. Demolition needs to be a beginning, not an end-point of the process. The other bill is the Brownfields Utilization, Investment, and Local Development (BUILD) Act of 2013 which reauthorizes the U.S. EPA’s Brownfield’s program while making it more flexible.
· Targeted incentives to encourage individuals and companies to invest in hard-hit areas: To make distressed communities more competitive requires that we make them more attractive to home buyers, business owners and other private investors. From the experience of the low income housing tax credit and other targeted programs we know that creating benefits to buyers and investors through tax credits and other incentives not only works but is a good investment. A recent Brookings Institution policy brief by Alan Mallach, also a Senior Fellow with the Center for Community Progress recommended a series of federal initiatives, including a strategic neighborhood investment tax credit with the potential to leverage four- to six times the dollars invested by the federal government. It’s time to develop a tax credit program that would encourage stabilization and reuse and rebuild local markets.
· A wholesale restructuring of ailing home mortgages: Underwater mortgages remain a significant challenge — with property owners continuing to be held responsible for debt that is out of proportion with real property values. Where many banks have failed to adequately restructure these mortgages, local groups have shown real innovation and success in this field — buying mortgage portfolios and whole banks with the sole intent of restructuring loans and keeping owners in their homes. Two such programs are The Resurrection Project in Chicago and the ReStart Home Preservation Project with New Jersey Community Capital. But these efforts, though critical to the health of particular neighborhoods, will not be a match for the national scale of the problem in the absence federal legislation to restructure mortgages more broadly.
· An expansion of the innovative cross-agency approach represented by the Strong Cities, Strong Communities Initiative: While legislative approaches are critical, the executive branch must continue and expand its efforts to work closely with and, perhaps most importantly, learn from local leaders. The National Resource Network component of the SC2 initiative will shortly be launched. It is our hope that this network will not just connect city administrations to one another and to experts and technical assistance providers, but that the network will serve as a conduit for an ongoing exchange between local and federal officials that can help to shape and reshape the federal response on an ongoing basis.
Our experience has taught us that most of our partners at the state and local level are not short on tools and ideas. But they can’t go it alone. The Neighborhood Stabilization Program provided a welcome degree of relief to local governments, but given the scale of the challenges, it was too small an investment over too short a time frame. Our communities need a supportive and, most importantly, predictable federal policy and funding framework that leverages private investment to rebuild local markets over the long term. If we can turn around our most distressed neighborhoods, put vacant properties back on the tax rolls, raise property values throughout these neighborhoods and strengthen our local economies, it will have been well worth the investment.