Approaches to Neighborhood Revitalization
Approaches to Neighborhood Revitalization
In many circumstances, an investment of CDBG or HOME funds can correct a single blighting influence, generate a certain number of affordable housing units, or create infrastructure to serve basic needs of a neighborhood or community. For declining neighborhoods, however, these types of single investments are not usually sufficient to turn the neighborhood around. For instance, a large investment in housing may attract new buyers or tenants initially, but without safe streets, viable schools, or a healthy commercial district nearby to support the residents, the interest in the neighborhood will not be sustained. Declining neighborhoods require comprehensive revitalization strategies that capitalize on the neighborhood’s assets and address its challenges.
Successful neighborhood revitalization initiatives start with a sound redevelopment plan. The planning process is used to bring the neighborhood’s stakeholders together, with the specific purpose of analyzing the market dynamics in the neighborhood, and identifying its assets and challenges. The planning process results in a vision of the neighborhood in the future that is shared by most stakeholders. Once the vision is clear, it can guide all subsequent decisions about redeveloping the neighborhood’s physical infrastructure (housing, commercial buildings, transportation, and other public infrastructure), and its service coordination and delivery. Many neighborhood revitalization activities will be eligible activities under either HOME or CDBG.
Planning Models for Urban Redevelopment
The redevelopment planning process usually results in a document or tool, such as a land use plan, that maps out what types of development (residential, commercial, industrial, open space) are appropriate for the neighborhood, and where that development will occur. In the past decade, new planning models have evolved that can help urban neighborhoods articulate a vision that promotes the best assets of the neighborhood, while controlling or minimizing the negative impacts of growth and development. These planning models define the principles that are incorporated into the design of the neighborhood. These concepts are compatible and share common features, although each emphasizes somewhat different goals.
- New Urbanism. New Urbanism is the most commonly known of the recent urban planning concepts. The concept evolved in the 1990s and draws on the positive features of neotraditional planning movement. New Urbanism emphasizes walkability, diversity, and quality of life. Walkable communities are dense, mixed-use neighborhoods that are interconnected by pedestrian walkways. Ideally, residents would be able to walk to most activities of daily living. The neighborhood would also be supported by a range of transportation options. New Urbanism promotes diverse neighborhoods with a mix of activities, and therefore land uses. At a minimum, this would include retail or commercial and residential uses. Residential housing would be designed and priced to serve a range of households and a mix of incomes. Finally, the design would promote quality of life, including quality architecture and urban design, to promote a sense of place; and design features would encourage neighborly interaction and sociability.
- Smart Growth. While New Urbanism focuses on maximizing the positive aspects of a traditional urban neighborhood, the smart growth movement evolved from the need to control the negative impacts of growth. Smart Growth typically refers to public policies that are implemented in order to use resources wisely and efficiently, and to control the negative aspects of growth in a neighborhood. Smart Growth is highly compatible with New Urbanism. It promotes energy efficiency, economic efficiency, and environmental protections and preservations. These principles result in planning and design features that include walkability in the neighborhood, and access to multiple transportation options; neighborhood schools; community reuse and revitalization; and preservation of farmland and open space.
- Transit-Oriented Development. Transit-Oriented Development also strives to mitigate the impact of sprawl and develop livable communities within urban cores. Public transit is one of the key ways to increase the walkability of a neighborhood. Increasing the investment in public transportation systems can help lower residential transportation costs. Transit-Oriented Development planning models emphasize concentrating development within a half-mile radius of bus and rail stations that have frequent service. This results in high density, mixed-use land uses, designed for pedestrian and bicycle traffic.
The plan typically addresses how the physical redevelopment of the neighborhood will occur. It addresses the redevelopment of one or more of the following components of the built environment: housing, infrastructure (transportation, water and stormwater, and utilities), commercial district, and/or community facilities. In general, CDBG funds can be used to finance a wide range of these revitalization activities. HOME funds can be used only to fund the affordable housing component of a neighborhood revitalization initiative.
Previous sections provide detail on how HOME and CDBG can be used to support a range of affordable housing activities. When revitalizing a neighborhood, grantees and PJs need to determine what type of housing activities will best support revitalization goals.
Many revitalization strategies are based on the premise that an investment of public funds in a large-scale housing development activity will spur private investment. This can be an effective strategy because its visual impact is immediate and substantial. Large homeownership developments, in particular, have the added benefit of creating a pool of stakeholders in the neighborhood who will support continued redevelopment. In developed neighborhoods, however, land assembly can be difficult and costly, particularly if there are a number of households or businesses that must be relocated.
Investing public funds in substantial in-fill activity throughout a neighborhood can be a less-expensive, but equally effective strategy in neighborhoods where large parcels of land are not available for assembly, and where significant building infrastructure is occupied, and/or in sound condition. Undertaking an in-fill strategy does not have the same type of immediate, visual impact of a large-scale new construction project, but it can stabilize a community block-by-block. Combining a vacant structure rehabilitation or reconstruction program with a rehabilitation program for existing homeowners on targeted blocks can be an effective in-fill approach to revitalization. When undertaking an in-fill strategy, or for neighborhoods that have limited problems within the neighborhood, CDBG or HOME can be targeted to specific blocks, or even specific properties whose treatment will have a high impact on the overall appearance of the neighborhood.
Rental housing rehabilitation or development may play a role in revitalizing neighborhoods with certain housing markets. In neighborhoods with a high proportion of homeowner housing, and in neighborhoods with extremely high housing costs, rental housing can offer housing opportunities for households of all incomes. In neighborhoods with a high proportion of affordable rental housing, increasing the supply of this type of housing might not be appropriate.
Property Inspections and Code Enforcement
In addition to the development of additional units, grantees and PJs may want to address the condition of existing housing units in the target neighborhood.
CDBG can be used to administer a code enforcement program that involves inspecting properties in the target area for compliance with applicable codes and property standards. Under CDBG, code enforcement is a separate eligible activity, and code enforcement costs are not subject to the CDBG program’s 20 percent cap on planning and administrative expenses.
Eligible code enforcement costs under the CDBG Program (24 CFR 570.202(c)) include:
- Salaries and other expenses related to code enforcement activity; and
- Costs of legal proceedings related to code enforcement activity.
General code enforcement activities are not eligible under the HOME Program, although property inspections of HOME-assisted units are eligible costs. Every unit that is assisted with HOME funds must be inspected to ensure that it meets applicable codes and property standards upon completion. Property inspections can be charged either as an eligible planning and administrative cost (and subject to the PJ’s 10 percent cap on administrative expenses) or as a project soft cost.
Once a code violation in a unit is identified, HOME funds can be used to bring the unit up to code. CDBG funds cannot be used under code enforcement to correct property code violations (24 CFR 570.202(c)). Note, correcting violations may be eligible under CDBG as rehabilitation. Used together, CDBG and HOME can help fund community efforts to uncover and rectify residential property code violations and restore dilapidated housing as standard, affordable housing.
Infrastructure Development and Improvement
Adequate infrastructure (i.e., public improvements) is crucial to the successful revitalization of blighted and impoverished neighborhoods. Although infrastructure needs are sometimes taken for granted, they lay the foundation for the community’s growth and improvement. Redevelopment planning should include an assessment of whether or not infrastructure systems require upgrades. Basic infrastructure components include:
- Transportation system, including streets, highways, and bridges; parking; and sidewalks, to ensure that people and goods are able to get in and around the neighborhood with ease. The transportation system is critical to the neighborhood’s local economy;
- Water, wastewater, and stormwater systems to ensure that the neighborhood has a sufficient supply of clean water, as well as a system for the treatment of wastewater, and stormwater sewers to prevent flooding;
- Electric and other utilities;
- Streetlights to make the neighborhood attractive and safer; and
- Accessibility improvements required under the Americans with Disabilities Act.
Since its creation in 1974, CDBG has been used extensively to address infrastructure development needs in communities throughout the country. CDBG funds can be used by grantees and nonprofits for the acquisition, construction, reconstruction, installation, or repair of public infrastructure. The maintenance of public infrastructure is not an eligible expense.
In general, HOME funds cannot be used to finance the development or maintenance of public infrastructure. However, it is an eligible HOME expense when it is needed to support HOME-assisted housing and the improvements to the project site are in keeping with improvements of surrounding, standard projects. Eligible infrastructure investments might include: connecting housing that is assisted with HOME funds to existing infrastructure (24 CFR 92.206(a)(3)); making utility connections from the property line to the adjacent street, including off-site connections; developing on-site roads, sewer, and water lines necessary to the development of the project; providing essential infrastructure improvements to on-site infrastructure. The project site is the property, owned by the project owner, upon which the project is located.
A vital urban neighborhood typically includes a healthy residential living environment, and a healthy commercial district. Neighborhoods rely on the commercial district to provide needed goods and services to support residents. CDBG grantees can undertake a range of activities to support neighborhood economic development.
CDBG can be used to provide assistance to create economic opportunities that primarily benefit low- and
moderate-income residents. Grantees have a great deal of flexibility in how to use program funds to meet this goal. Economic development activities that are eligible under CDBG (24 CFR 570.203 and 570.201(o)) include:
- Acquiring, constructing, reconstructing, rehabilitating, or installing commercial or industrial buildings, structures, and other real property equipment and improvements, including railroad spurs and similar extensions;
- Providing economic development services in connection with eligible economic development activities;
- Providing financial and/or technical assistance, advice, and business services to owners of microenterprises and persons developing microenterprises; and
- Training and technical assistance, or other support services to increase the capacity of recipients or subrecipients to carry out microenterprise activities.
Community Facilities and Public Services
Community facilities (i.e., public facilities) add to the quality of life for a community's residents. Integrating quality services to meet the needs of residents and businesses can generate opportunities for neighborhood residents to develop ties to other people in the community. These social benefits are often the basis of a “sense of community” that makes a neighborhood an attractive place to live. Community facilities that may be eligible for assistance under the CDBG program include senior and youth centers, child care facilities, parks and recreational facilities, community centers, fire stations, libraries, and health care facilities.
Revitalizing neighborhoods must be supported by a comprehensive strategy to deliver quality public services, and a sustainable quality of life. Community facilities often house important services to community members, which include the following CDBG-eligible public services:
- Employment and job training services;
- Crime prevention and community safety programs;
- Child care;
- Substance abuse treatment and counseling;
- Fair housing counseling;
- Energy conservation;
- Welfare services (other than direct income subsidy payments);
- Recreational services;
- Meals on wheels and other programs to promote nutrition; and
- Assisting private, for-profit businesses;
- Assisted living services.
In order to be eligible for CDBG funding, a public service must either be a new service or a quantifiable increase in the level of an existing service that has been provided with funds from the unit of general local government or the state. CDBG cannot be used to replace existing local or State funding for a public service. Grantees are capped on how much they can spend on public services (see Section 1). Given the importance of public services to community viability, grantees should evaluate public service activities to see if a particular service might qualify under a different CDBG eligible activity category.
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