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Friday, July 25, 2008

Does HUD Need to Be Razed and Rebuilt?

For the urban and regional economics experts - is this argument correct? Does urban development policy as administered through HUD need major restructuring? If so, can HUD be reformed, or would it be best to, as suggested below, eliminate HUD and start over?:

To Fight Poverty, Tear Down HUD, by Sudhir Venkatesh, Commentary, NY Times: ...It might be best to simply close the [Department of Housing and Urban Development] and create a new cabinet-level commitment to urban development.

In 1965, when HUD was created, its mission was to spur growth in and around cities. The agency provided mortgage assistance to veterans and first-time homeowners, it built housing for the urban poor, and the Federal Housing Administration spurred suburban expansion by recruiting developers and home buyers to a relatively new, untested market.

Since its inception, HUD has had a fairly straightforward recipe: develop good relations with mayors and local real estate leaders, then award grants and underwrite loans that affirm local development priorities. ...

But in the last four decades the urban landscape has changed from discrete, independent cities to vast, interdependent regions where people and goods move freely..., cities have no choice but to collaborate on decisions over land use and economic development. ... And for the first time in our nation’s history, poverty is rising faster in suburbs than in urban cores. In this new era, HUD’s each-city-is-a-separate-whole approach is not only too inflexible and short-sighted, it also hinders effective regional growth.

To see why, consider HUD’s most prominent urban development program: Housing Opportunities for People Everywhere (VI). ...

How could a program aimed at curbing inequality and helping the poor end up creating new pockets of poverty? The answer lies partly in HUD’s myopic focus on gentrifying urban cores. The agency ignored studies showing that former project residents would have difficulty finding rental housing in outlying neighborhoods and did not provide assistance for inner-ring suburbs with high rates of foreclosures. HUD resisted calls to slow down housing demolition and to move the poor to areas of high job growth.

By making no effort to ascertain needs and resources on a regional scale, HUD has ended up eliminating poverty in one place while creating distressed, low-income communities in others. If HUD had developed a broader vision, one that tied together inner city and suburb, it could have created policies to help both areas adjust to the modern urban landscape.

In correcting HUD’s missteps, we must first separate “housing policy” from “urban development.” ...

Then, the development needs of our nation’s regions — wide areas like the Northeast corridor or Southern California — could be considered anew. Block grants could provide incentives for municipal and county governments to collaborate. Regionalism must be embraced, even if it tests local officials who fear losing their traditional sources of government financing. ...

Americans live ... spread out, and economic activity is no longer limited to downtowns. Community-based initiatives — from vocational programs to rezoning efforts to designing effective transportation corridors and recreational space — are sorely needed but will be effective only if they tie into a broader vision that anticipates growth on a large scale.

Even our most persistent problems of inequality will require new strategies. A federal agency devoted to regional planning could help the Health and Human Services Department reconfigure anti-poverty programs to aid suburban communities that have so far gone unnoticed but are desperately in need. It could motivate the Labor Department to develop training programs and support the transportation needs of workers.

We need an agency that can work outside old boundaries and design a regional approach to revitalizing cities and suburbs. Dismantling HUD would be a great place to start.

Update: Richard Florida says "He's absolutely right."
Update: Ryan Avent   says "HUD’s mission should be changed, [but] blowing it up probably isn’t necessary."

    Posted by on Friday, July 25, 2008 at 12:24 AM in Economics, Housing, Policy | Permalink  TrackBack (0)  Comments (18)


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