Consortium seeks new, flexible national urban policy


November 30, 2006|By ERIC SIEGEL

A consortium of large banks and major philanthropic institutions is pushing for a new national urban policy that stresses reliability in federal funding and flexibility in how the money is spent.

In a letter last week to the White House and an accompanying statement, the group, known as Living Cities Inc., backed President Bush's proposal for the creation of a new challenge fund for revitalizing distressed communities as "exactly the right way to go."

But it said the money should not come out of existing U.S. Department of Housing and Urban Development funds, as the administration has suggested, and should be funded at higher than the recommended $200 million.

Living Cities also called for new legislation that would require an urban impact statement describing the effect of new federal programs on cities and a White House conference on cities to be held every five years.

Douglas W. Nelson, head of the Baltimore-based Annie E. Casey Foundation and co-chairman of Living Cities, said in an e-mail yesterday that the group's call for a National Urban Enterprise Act of 2007 was unrelated to the incoming Congress, which for the first time in a dozen years will be under the control of Democrats, generally regarded as more sympathetic than Republicans to urban needs.

"Living Cities began developing a call for an effective national urban policy well before the November elections," Nelson said. "In fact, we have been working on drafts of this statement for several months. Despite the change in congressional leadership, support for America's cities continues to be a bipartisan issue that is in our country's best interests."

Nelson also took issue with the notion that the recent improvement in many American cities -- a point made by Living Cities in its statement -- suggests that current urban policy, or even the lack of it, is working pretty well.

"In many respects, the American city is alive, well and prospering, and we applaud the progress that cities have made across the country," he said. "However, there are real challenges before America's cities. How can we ensure that families can afford to live and work in cities and send their children to successful urban schools? How can we make sure that cities are able to grow sensibly in the years to come with an emphasis on a healthy environment and appropriate infrastructure?"

Besides the Annie E. Casey Foundation, other philanthropic heavyweights involved in Living Cities include the Ford, MacArthur and Rockefeller foundations. Lenders include Bank of America, JP Morgan Chase & Co. and Deutsche Bank.

In its statement, the group pointed out that it is not proposing "radical new strategies." Instead, it said it wanted to initiate a "starting point" for a dialogue about what should be in a comprehensive national urban policy and to foster accountability and innovation.

The group advocates preserving existing programs but giving cities more leeway in how they use them.

It recommends allowing cities to move up to 20 percent of federal grants and tax incentives -- for historic rehabilitation, brownfields and low-income housing -- from one program to the other, depending on their local needs.

Living Cities took pains to point out that is not merely a surrogate for a federal handout.

In its letter, the group says its members "proudly put our money where our mouth is," noting nearly $400 million of investments in urban neighborhoods over the past 15 years that it says has helped leverage $14 billion in investments in nearly two dozen cities, including Baltimore.

Yet the group noted the critical role of federal funds in spurring urban revitalization, and called for a commitment to maintain funding for federal housing and community development programs for the next five years.

"Though federal dollars are often a small fraction of total project costs, they are usually the funds that get projects started," the group said in its statement. "Major economic development projects typically take 10 years. It is very difficult for local decision-makers to make plans over that length of time without confidence in the consistency of federal commitments."

In his e-mail, Nelson came at the same point in a slightly different way.

"We may be reaching a `tipping point' at current levels of federal housing and community development support," he said. ""The current HUD budget of $37 billion has shrunk in real terms by $13 billion over the last 12 years, and we need to be forward-looking with a national urban policy that can more effectively and efficiently offer resources to cities."

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