Don’t look for affordable housing or economic development in urban areas to be major domestic priorities of either the Bush or Kerry administration, depending on who wins in November.
That’s the conclusion of a two influential Washington, D.C., think tanks that tend to fall on the opposite ends of the political spectrum, the liberal-oriented Brookings Institution and the conservative Heritage Foundation.
Bruce Katz, a vice president and senior fellow at Brookings, is disappointed with what he said were rollbacks in various affordable housing initiatives under President Bush. But he notes that Democratic challenger John Kerry does not seem to be proposing much more than keeping existing programs.
Ron Utt, a Heritage Foundation senior research fellow, said the absence of attention on either housing or urban economic development in many ways reflects both fiscal realities and the failures of sweeping changes tried in the past.
A record deficit means there is little federal money available to make a serious dent on the affordable housing front, while the crises that hit so many inner cities in the 1970s and 1980s has abated somewhat.
“I think this reflects the fact that urban areas are no longer the problems they were back in the 1970s. Crime has fallen substantially and dramatically, and the solutions to city problems tend to be homegrown, rather than waiting” for the federal government to step in, Utt said.
“Most cities have mayors now [who] say, ‘I’m going to turn things around here rather than going to Washington,’ ” Utt said. “Most have taken a hard-nose approach to city finances, and they are much better places to live. The number of cities that continue to be problematic you can probably count on two hands. … Twenty years ago, you couldn’t run for president without having an urban policy.”
That’s not to suggest that Bush and Kerry are ignoring the plight of former mill towns, rundown urban cores and rural communities.
Bush wants to establish so-called Opportunity Zones that would encourage public and private investment, mainly in distressed areas. These zones would receive tax benefits to encourage businesses to locate, invest and hire new workers, and would get priority for federal education, jobs training and housing funding.
“The Bush plan is a combination of Jack Kemp/Ronald Reagan’s old enterprise zones, and Bill Clinton’s empowerment zones. The first plan involved tax breaks, and the Clinton plan involved spending programs. So Bush has come up with something combining the two,” Utt said.
But Utt questioned the value of either option. “If you’re targeting troubled parts of urban areas, bringing jobs to people instead of bringing people to jobs is peculiar. Everybody else in the country gets up in the morning and goes someplace else to work. We don’t work in our neighborhood anymore. In fact, we really don’t want our neighborhoods to be anything but residential,” Utt said.
“Most of these troubled neighborhoods are in thriving metropolitan areas with good job opportunities that are three bus stops away,” he added. “Inducing jobs to move to places where there are few customers and skilled workers doesn’t make sense.”
Bush also has expressed support for a new $200 million American Dream Down Payment Act, which would provide down payment and closing cost assistance for about 40,000 low-income families. Utt has a problem with that, too, noting that in many cases, the down payment programs tend to go not so much to low-income citizens but to middle-income individuals who are unable to save money.
“What we ought to have is a more aggressive savings counseling program, and getting people do to the right thing, even if it’s a special Individual Retirement Account for down payments. Telling people you don’t have to save money and still become a homeowner is not a right signal to send to people.”
The president also expressed support for a new $2.5 billion, five-year program that would provide tax incentives and credits to home builders that increase the supply of affordable housing.
For his part, Sen. Kerry wants to set up a Small Business Opportunity Fund that would target venture capital investments to small businesses and small towns, and supports the 2000 New Markets Venture Capital Program that provides venture financing and technical assistance to low-income communities.
“These are variations of targeted programs that have floated in and out, and I know there is an interest in small towns and rural areas that are declining,” Utt said. “But rural areas have been declining for well over a century. You can’t put opportunity in places where there isn’t any.”
It’s hard to imagine that young college graduates from small towns would be likely to return to them after being exposed to big urban areas and universities that offer more opportunities, Utt said.
Kerry also wants to expand federal assistance to existing programs that help with the construction and availability of low-income housing, such as Section 8 rental subsidies and the Low Income Housing Tax Credit. Waiting lists for Section 8 housing is growing in many cities. Seattle, for instance, has more than 4,000 people on its list.
(Don Hammonds can be reached at firstname.lastname@example.org or 412-263-1538.)