TOPICS > Economy

Community Redevelopment Reforms Spark Funding Concerns

April 7, 2005 at 12:00 AM EDT


ELIZABETH BRACKETT: The neighborhood just west of downtown Chicago has seen a remarkable resurgence: New homes, new parks and playgrounds, a new public library, and its first drugstore in 30 years.

Chicago’s mayor credits the federal government’s Community Development Block Grants, CDBG, for much of the transformation.

RICHARD DALEY, mayor of Chicago: They have been the foundation of rebuilding communities whether it’s schools, not-for-profit, faith-based organizations, they’ve all participated — retail business, I mean, there’s a variety of things that you look at to rebuild communities.

And to me that is then the cornerstone of CDBG money — rebuilding the souls of America.

ELIZABETH BRACKETT: Chicago has received $3.1 billion in CDBG funds since the program began in the early 1970s.

That was shortly after the west side and urban communities throughout America went up in flames following the assassination of Dr. Martin Luther King.

ELIZABETH BRACKETT: CDBG was meant to restore the neighborhoods, according to Andrew Mooney, whose Local Initiative Support Corporation has invested over $100 million in the city.

ANDREW MOONEY: These neighborhoods were disinvested. People, insurance companies, banks and others literally left the neighborhoods and pulled money out of the neighborhoods.

The whole point of Community Development Block Grant and funds that we use and others bring into the neighborhoods is again to bring these market forces back into the neighborhood.

ELIZABETH BRACKETT: Community Development Corporations were set up to administer the CDBG funds.

As new homes finally replaced long-vacant lots, the near west side CDC used the symbol of the Phoenix rising from the ashes on the homes it developed.

CDC officer Wilma Ward says the funds have worked just as they were intended.

WILMA WARD, CDC officer: They have worked. They work because we’ve seen them work in this community. You can go down blocks and you will see homes that are over 100 years old, but they’re still here and there’s families that live in them and homeowners that still live there.

ELIZABETH BRACKETT: Like 85-year-old Margaret Glenn who says she couldn’t have stayed in her 100-year-old home without help for needed repairs from a CDBG-funded program.

MARGARET GLENN: I got new windows, tuck pointing on each side, on each side.


MARGARET GLENN: Roof. Roof and everything. See –the other houses don’t look much different than mine.

ELIZABETH BRACKETT: And Zaccheus Miller says he and his mother would never have been able to buy their first home without a starter loan funded in part by CDBG funds.

ELIZABETH BRACKETT: How much difference has it made to you and your mother to have a house?

ZACCHEUS MILLER: A significant difference. It gave us a sense of pride. You know, when we go out in the yard, do the gardening, the lawn work, when you drive down the house… down the block and you see your house and you know that’s yours, it gives you a sense of pride, make you want to keep it up as well as keep up the community.

ELIZABETH BRACKETT: But the Bush administration says there are more neighborhoods where CDBG funds have not made a difference than neighborhoods where they have.

They point to areas like Columbia Heights in Washington, D.C., where 49 town homes remained empty three years after the local CDC received $3 million in federal funds to redevelop them. This was in the midst of a hot real estate market where private developers were rapidly transforming the neighborhood, except for the CDC-owned properties.

The Washington Post reported that after a $100 million investment of CDBG funds over the last decade, Washington’s neighborhoods had little to show for it — a story that was repeated in many neighborhoods across the country says Commerce Undersecretary David Sampson.

DAVID SAMPSON, Undersecretary of Commerce: The reality is, after more than a 30-year track record and hundreds of billions of dollars that have been pumped into these communities — while there are individual cases — you can identify where a particular initiative has been successful — from a systemic point of view, when you look at the program as a whole, the analysis simply shows that these programs have not produced measurable results.

ELIZABETH BRACKETT: So the Bush administration is proposing a new program: Strengthening America’s Communities Initiative.

Under that program, 18 programs, including CDBG, would be combined into one program in the Department of Commerce.

Funding would drop from $5.31 billion to $3.71 billion, a 30 percent cut. The administration says the cuts are misleading, since if one looks at the whole universe of economic and community development programs the budget only drops from $16.2 billion to $15.5 billion, a 4 percent cut.

DAVID SAMPSON: What we’re doing is proposing the elimination of 18 different points of entry into the federal government and replacing that when a single point of entry, so that communities can go to one place to access the whole suite of community and economic development block grant funding.

And it greatly simplifies the administration of these programs from a local community’s perspective.

ELIZABETH BRACKETT: Mayor Daley doesn’t see it that way. He says the department of Housing and Urban Development, or HUD, where CDBG is located, has always been the way mayors accessed the federal government.

RICHARD DALEY: When you cut the funding by 40 percent, then you say we’re going to put it over into the Commerce Department, they could have put it into Agriculture. I mean why commerce? Commerce has no relationship with cities at all. I mean, I’ve been to the U.S. Conference of Mayors — they have no contact with us, you know, they don’t have any expertise. They have no feeling about cities at all.

And I mean, they’re good people, but they’re commerce. They deal with the business community, they deal with international treaties.

ELIZABETH BRACKETT: Many here in Chicago worry that the gains made in the cities neighborhoods will be lost if any cuts are made in CDBG funds.

ANDREW MOONEY: Whether it’s 4 percent or 40 percent, any pull back at this moment is the wrong thing to do. It is exactly the right moment to move in the other direction, which is to have very strong investment in these cities in a variety of ways, CDBG being one of them.

ELIZABETH BRACKETT: Some are also concerned how the new proposals could impact the relationship between CDBG funds and private investment.

It was private investment — the Chicago Bulls and Blackhawks’ new stadium, the United Center — that started the revitalization of the west side. The team owners built 32 quarter-million dollar homes for residents whose homes had been torn down to build the new stadium. CDBG funds were then used to renovate and build more houses and support early child care and job training programs.

After building the replacement homes, the United Center continued to stay involved in the neighborhood, much to the surprise of many. They invested another $2.6 million for the construction of new homes and the start up of new businesses.

United Center Vice President Howard Pizer:

HOWARD PIZER: Look, we are a capitalist society and we all know that. And ultimately economic development doesn’t really occur without private sector stepping up and putting in the bulk of what it takes to get the job done. And yet government can do some things to stimulate that and I think it’s probably exemplified by this community.

ELIZABETH BRACKETT: But Sampson is optimistic that the new consolidated program will benefit the neighborhoods and businesses even more.

DAVID SAMPSON: It’s disciplined, it’s reasonable, and we think we can actually produce greater results as a result of the consolidation and the targeting and the better focus.

ELIZABETH BRACKETT: But those on the near west side of Chicago aren’t sure.

They know what they have done, they know what still needs to be done, and they worry about the dramatic changes being proposed in programs they say have worked well for the last 30 years.