Commentary: Signs of Hope for America’s Cities
November 3, 2004 | Commentary | Housing, Community & Economic Development

Originally published in the Washington Post on November 3, 2004, MacArthur President Jonathan Fanton talks about publicy policy's role in helping drive an urban renaissance in the United States.

Presidential campaigns have a way of focusing on what is wrong and who is to blame. Now would be a good time to give some thought to an area where, in fact, considerable progress is being made: America's cities.

For decades, talk about cities has been dominated by the perception of urban decay and by skepticism about urban policy. But the current reality paints a far more interesting -- and hopeful -- picture of metropolitan opportunity. In the past decade, the population of the nation's 50 largest cities has grown by nearly 10 percent. This was accompanied by a rise in city incomes that was almost double the national average and by an increase in housing units, homeownership and mortgage lending. In the same period, concentrated poverty declined 24 percent and urban crime also decreased.

Cities are crucial to the U.S. economy. In 2002 metro economies were responsible for 85.6 percent of gross domestic product, almost $9.1 trillion in goods and services. If we look closely at inner cities, usually dismissed as lacking economic vitality, we understand that they, too, possess significant assets. Inner cities are home to 21 million people with purchasing power estimated at $331 billion. The business community is beginning to realize the potential of these communities, and investment has returned to many urban markets, bringing goods, services and job opportunities. What accounts for this progress? How can it be sustained, even accelerated, as we seek healthy cities worthy of the richest country on Earth?

Several national trends -- such as immigration, population growth and the shift to a services-based economy -- are contributing to the urban renaissance. But another important factor is smart public policy. Over the past 20 years, bipartisan etlort has put in place a number of federal programs that are working to stimulate private investment and energize people to take charge of their own destiny. They include the Home Investment Partnership Program, the Community Development Block Grant program, the new-markets tax credit and the earned-income tax credit. Their combined effect has been to help lift millions above the poverty line and into at fordable homes.

But two of the most important, one called HOPE VI and another known as Section 8 housing choice vouchers, were put in danger by reforms proposed in this year's budget. These are programs that have given cities important ways to transform aging public housing ghettos into dynamic mixed-income communities.

HOPE VI, which was proposed for termination by the administration but appears headed for at least partial funding by Congress, provides funds for building improvements, as well as support services such as child care and job training. Since 1992 it has awarded almost $5 billion to 146 public housing authorities in 36 states and the District of Columbia. The program has been remarkably successful in leveraging additional investments: Every federal dollar spent is matched by more than three from the private sector. HOPE VI is transforming areas such as Wheeler Creek in Washington and Cabrini Green in Chicago by bringing new resources to the community.

Housing choice vouchers, which assist 2 million families every year, are a crucial component in the large-¬scale rejuvenation of these neighborhoods. HOPE VI attracts the capital for investment, but only rental subsidies such as Section 8 can make housing in improving areas affordable for low-income families. According to the Congressional Budget Office, maintaining the vouchers at an adequate level would require $14.9 billion dollars in 2005. But the administration's proposed budget would have cut $1.6 billion from the program, with even deeper cuts forecast in the future. Pending legislation in the Senate would forestall this reduction, but nothing is yet certain.

These programs are not widely known outside the world of urban housing specialists; to comprehend them fully requires a patient understanding of technical detail. So they are vulnerable in an era of federal budget cutting. But they have encouraged a wave of urban renewal across the country over the past decade.

The momentum for urban improvement is real but fragile, dependent on both public and private financing. Now is the time to stay the course with what we know works. Access to stable, aFfordable housing is still of critical concern: 14 million families -- one of every seven -- pay too much for housing or live in substandard conditions. Inequality is increasing. Notwithstanding the gains of the past decade, the rate of urban poverty in 2002 was almost twice that of suburbs, at 16.7 percent.

Cities merit an important place in our national discussion. With continued effort they can be an essential source of inspiration for the decency and dynamism that will strengthen our country.

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