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A foray by HUD into telling small towns how best to use their land

In April 2009, HUD Secretary Shaun Donovan spoke to the ULI Spring Council Forum in Atlanta; he stated that his administration’s goal was “to put the UD back in HUD,” and explained that HUD’s over-reliance on housing solutions wasn’t helping cities address their complex revitalization needs. Just over two years later, this small new funding program caught my eye on a list of new HUD announcements:

*** HUD HOPE VI – $0.5 million
Application Due: August 22, 2011
Eligible Entities: Local governments

Jess Zimbabwe | @jzimbabwe | October 1, 2011, 11am PDT
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In April 2009, HUD Secretary Shaun Donovan spoke to the ULI Spring Council Forum in Atlanta; he stated that his administration's goal was "to put the UD back in HUD," and explained that HUD's over-reliance on housing solutions wasn't helping cities address their complex revitalization needs. Just over two years later, this small new funding program caught my eye on a list of new HUD announcements:

*** HUD HOPE VI – $0.5 million
Application Due: August 22, 2011
Eligible Entities: Local governments

HUD requests proposals for the HOPE VI Main Street Program. This program provide grants to small communities to assist in the rejuvenation of an historic or traditional central business district or "Main Street" area by replacing unused commercial space in buildings with affordable housing units. HUD encourages activities that actively promote sustainability through enhancing energy efficient measures.

Now, I suppose it would be fair to assume that a community who applies for this program has already studied the parcels and "Main Street" area in question and made a determination that housing would be a long-term better usage of the land than the existing commercial use, but it strikes me as exceeding the bounds of the federal government to make the presumption on behalf of eligible small communities that this land use change should be made. Indeed, the program is only open to communities with 50,000 or fewer residents, which describes communities that don't often have a surfeit of professional planning capacity to study a question like this before chasing federal funds. HUD could have made one of the eligibility criteria that the locality has a comprehensive plan or zoning in place that would support this dramatic land use change. By not doing so, this program seems to encourage the local funding recipient to enact a spot rezoning for the affected properties.

The stated objectives of the program are to: "Redevelop Main Street areas; Preserve historic or traditional architecture or design features in Main Street areas; Enhance economic development efforts in Main Street areas; and Provide affordable housing in Main Street areas." Of these goals, only the fourth (providing affordable housing) is clearly met by every allowable expenditure under the program. Replacing viable downtown commercial space with housing units seems like a questionable move towards "enhancing economic development"  and from the perspective of preserving historic and traditional architecture, rehabilitating older downtown buildings for re-use as housing is generally only preferable if the only alternative is to tear the obsolete structure down.

Especially in the current economic climate, which has created extreme volatility in many communities' retail, restaurant, office, and light manufacturing industries, I can see many communities being interested in the idea of using federal funds to address vacant storefronts through this program, but I'm not sure it's wise for them to do so. Hundreds of small downtowns are struggling now, but removing commercial space, breaking up what little retail continuity exists, and adding first floor residences that are bound to close themselves from the street seem like moves that will facilitate rather than stop the pattern of decline. Why not use this funding to promote developing additional affordable housing units on vacant land or land that is adjacentto existing downtowns? Predicating the funding on a local land use change from commercial to residential incentivizes short-term decision making, and leaves a lot of "UD" still left to do for struggling small downtowns.

I'm curious:

  • Do you know any communities who applied?
  • Can you think of smaller downtowns that would benefit from this program?
  • Do you think it's advisable to make such a dramatic land use shift?
  • Do you have examples of affordable housing in small downtowns that are located in formerly commercial space and contribute to the downtown's economic development?

I'll watch for the results of this funding and report back about the community(ies) that are awarded.

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