Planners play a particularly important role in creating equitable and just neighborhoods for all community members. Federal programs are integral to achieving this equity.
Partnering with local governments, planners, and residents to build neighborhoods of opportunity, promise and equity should be a fundamental goal of federal policy. This challenge should be met with a combination of proven tools and programs; targeted and coordinated investments and incentives; thoughtful strategies for community development; and strategic support for redevelopment strategies and projects. Additionally, incorporating comprehensive and coordinated planning approaches into federal programs will improve their effectiveness for local communities.
Key community development tools from Community Development Block Grant (CDBG) and Choice Neighborhoods to brownfields assistance and New Markets Tax Credits should be supported while also exploring new approaches to technical assistance and leveraging local initiatives.
Affordable housing plays a key role in creating just communities, particularly in metropolitan areas. Federal policy can be a critical partner for local communities working on innovative solutions. The HOME program has a strong track record of providing critical financing for affordable housing. HUD can continue playing an important role in providing support, research and best practices. Tax policy should extend and permanently reauthorize one of the most proven financing tools for affordable housing: the 4 percent Low Income Housing Tax Credit. Last year, HUD issued a major new fair housing rule with significant implications for local planning. It is vital that HUD work with communities and provide support on the implementation of the new rule.
You can support programs that promote the planning and design of just communities. Interested in helping APA advance these priorities in Washington? Join the Planners Action Network today to gain access to resources to help you become a more effective advocate for planning.
These are some examples of federal programs that help communities create just neighborhoods:
Community Development Block Grant (CDBG)
HUD’s CDBG program arms communities with resources needed to make investments to create equitable and just communities. The program provides nearly 1,200 state and local governments with direct funding to provide decent housing, a suitable living environment, and economic opportunities within their communities.
CDBG is arguably one of the federal government’s most successful domestic programs in supporting not only cash-strapped municipalities but also the many planning, design, construction, and development firms working on infrastructure projects. Communities use CDBG to respond to current and emerging community development needs, including the creation of jobs, development of affordable housing, improvement of existing housing stock, the delivery of vital services, and the development of important infrastructure improvements. It also provides critical gap financing for a number of investments, notably in conjunction with the Low Income Housing Tax Credit. CDBG provides local governments with the building blocks to creating just communities.
CDBG is an economic driver; for every $1.00 of CDBG investment, another $4.07 in private and public dollars is leveraged and between 2005 and 2014, CDBG helped create or retain 353,237 jobs.
Despite its impact and popularity, funding for CDBG has been dwindling. Between FY 2010 and FY 2012, CDBG was cut by 25 percent. Since then, funding has stagnated at just $3 billion, which is a fraction of the original appropriation for the program in 1975 when accounting for inflation. The voices of planners across the country who use CDBG in their communities are critical to the restoration of funding for this key program.
HOME Investment Partnerships
The HOME Investment Partnerships (HOME) Program is a flexible block grant that provides direct annual grants to over 600 state and local participating jurisdictions. The program is used to expand the supply of decent, safe and affordable housing for low- and moderate-income households through public-private partnerships. HOME eligible activities include new construction and rehabilitation of rental and home buyer units, down payment assistance to credit worthy home buyers, and tenant-based rental assistance.
HOME is the nation’s only dedicated funding source for the production of affordable and low-income housing and is a critical component to creating just communities open to citizens of all income levels. Since 1996, the HOME program has successfully produced more than 1.1 million affordable homes, in addition to making homes affordable for hundreds of thousands of families with direct rental assistance.
HOME is also important to the success of other housing programs, such as the Low Income Housing Tax Credit because it often provides critical gap funding needed to make affordable housing projects work.
Though the need for affordable housing is great, funding for HOME has been decimated in recent years; between FY 2010 and FY 2013, HOME funding was slashed by nearly 50 percent. The FY 2016 omnibus spending bill provided only $950 million for the HOME program, a relief to many who feared the program would be cut further or nearly eliminated, but still a fraction of its FY 2010 level of $1.8 billion. Planners’ voices are critical to restoring HOME funding to responsible levels.
Low Income Housing Tax Credit
The Housing Credit provides the private sector with an incentive to invest in affordable rental housing. Since President Reagan signed it into law in 1986, the Housing Credit has financed the construction and preservation of virtually all affordable apartments — more than 2.7 million nationwide, at a rate of nearly 100,000 per year. The development of these homes supports approximately 96,000 jobs across the country annually, while generating $3.5 billion in federal, state and local taxes and $9.1 billion in economic income.
In the 30 years since the creation of LIHTC, more than 2.7 million apartments nationwide have been built or preserved. LIHTC create or supports over 96,000 jobs and generates $3.5 billion in federal, state, and local taxes. LIHTC adds $9.1 billion in economic income.
For years, fixed-rate LIHTCs were authorized on a yearly or multiyearly basis and were subject to the tax extenders process, which is often politicized and passed last-minute, minimizing the impact of LIHTC. The 9 percent credit would frequently be reauthorized with only weeks left in the year, which was the case in 2014, and the 4 percent was not reauthorized at all, making the credits more expensive or impossible to utilize.
Finally, in the FY 2016 omnibus and tax extenders package, the 9 percent LIHTC was permanently authorized. However, the 4 percent rate remains unauthorized, impacting both private affordable housing development and the rehabilitation of public housing through the Rental Assistance Demonstration program. Planners who have utilized the 4 percent credit or would like to are key to convincing Congress that a permanent authorization is necessary.
About the Author
Tess Hembree is the Policy Manager at Advocacy Associates.
Image: Trailnet, the Dutchtown South Community Corporation, and residents paint an intersection mural to promote a better sense of place and slow traffic during a Better Block event within the Dutchtown neighborhood of St. Louis. Photo courtesy Trailnet.