Cities Seek New Formula for Urban Renewal Grants

The Department of Housing and Urban Development's method for dividing money to improve dilapidated neighborhoods has been the same for more than 30 years. Some cities want a system based on human needs, not a tally of old buildings.

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The federal government has spent more than $100 billion in the past three decades to clean up blighted urban neighborhoods. A complicated formula determines how much each city gets. That formula has not changed since 1978, but cities have changed a lot. And some mayors say the old formula is out of date. Changing it, though, means there will be winners and losers, as NPR's Rachel Jones reports.

RACHEL JONES reporting:

Mayor C. Jack Ellis of Macon, Georgia, says cities die from the inside out when they're neglected. His hometown is proof. He remembers what one neighborhood in Macon looked like in the '40s and '50s.

Mayor C. JACK ELLIS (Mayor, Macon, Georgia): There were a lot of old homes. Some homes that probably should not have been built in the first place, some homes were built to be slums. The streets were dirt, and that was the part of town that I grew up in.

JONES: Ellis went on to become Macon's first black mayor in 1999. The city took a hard hit during the Civil Rights era. It lost businesses and white residents in droves. And much of its housing stock was crumbling.

Macon illustrates a big reason why the federal government created Community Development Block Grants - to clear out dilapidated housing and replace it. That's what Macon did, but that landed the city in a frustrating catch-22.

Mr. TODD RICHARDSON (Senior Analyst, U.S. Department of Housing and Urban Development): As time has passed, those cities that had those problems have torn down their old housing, while other, more wealthy communities have repaired their old housing.

JONES: Todd Richardson is a senior analyst for the Department of Housing and Urban Development. He says the current CDBG formula counts how much older housing a city has; those with lots of it get a bigger grant. That worked just fine in the 1970s.

Three decades later, some cities like Macon have done a great job of removing blight, but now they have less older housing, which could shrink their grant. Mayor Ellis thinks that's not fair, and his city's development budget is already strained, thanks, in part, to HUD budget cuts in recent years.

Mayor ELLIS: During this administration, we have seen a tremendous cut - almost 32 percent reduction in the funds that we so desperately need.

JONES: There's another problem. The current formula counts college students as low-income residents, whether they're from the city or not. Macon loses out again, because it has fewer schools than, say, Boston.

So HUD wants to change the formula to put more of a focus on people, instead of buildings. It would count how many poor, female-headed households the city has, and how many poor people live in older houses, versus people who can afford to renovate them. And college students wouldn't be included among the poor. Richardson says that's the fair way to do it.

Mr. RICHARDSON: So New York City is treated in the same manner as Birmingham, Alabama or Springfield, Illinois.

JONES: But that doesn't quite square with some mayors. Consider Dearborn, Michigan, home to Ford Motor Company. It has a higher median income than its troubled neighbor, Detroit, and lots of prosperous businesses and residents. So should some of Dearborn's development money go to Detroit?

Mayor MICHAEL GUIDO (Mayor, Dearborn, Michigan; President, U.S. Conference of Mayors): I don't think we should be penalized by HUD because we've had a program over several years to make sure that neighborhoods stayed strong.

JONES: Michael Guido is Mayor of Dearborn and the new President of the U.S. Conference of Mayors. He says Dearborn needs all of its grant to deal with problems that are just as real as Detroit's. Guido says they've built parks and repaved roads. They've also had to clear out some dilapidated housing.

Mayor GUIDO: There are special issues that need attention, everything from maintaining your property to the proper disposal of rubbish. We've put together a trash and recycling program specific to that neighborhood and have used those dollars to make the quality of life better.

JONES: But Guido says Dearborn's grant would drop by 26 percent if HUD changes the formula. Just like Macon's Mayor Ellis, he says that just wouldn't be fair.

Rachel Jones, NPR News.

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