HUD Plan Envisions Inner-City Suburbias

In a bid to help revive inner-city neighborhoods, the Clinton administration is preparing to ask Congress to approve an experimental program to encourage construction of suburban-style subdivisions in the nation’s distressed downtowns.

The initiative would make $200 million in federal funds available nationwide for communities to create middle-class enclaves in abandoned downtown neighborhoods.

Housing and Urban Development Secretary Henry G. Cisneros said Wednesday that he envisions tracts of single-family homes springing up in the shadows of skyscrapers, populated by teachers and firefighters and other middle-income working families who can afford homes priced between $100,000 and $200,000.

“If urban renewal in the 1960s drove middle-class people out of our cities, this will bring them back,” Cisneros told reporters. While some cities, including Detroit, New York and San Antonio, have launched similar downtown housing projects on their own, many others may respond with help from the federal government.

For cities like Los Angeles, which have aggressively promoted home ownership, the proposal could put new money for urban development into neighborhoods scarred by crime, drugs, poverty and vandalism.

“This is a big deal for Los Angeles,” Cisneros said. He said he expected the $200 million would be divided among 10 to 15 cities chosen from those that apply and that Los Angeles “would be an early competitor” for the money.

Los Angeles officials already have approached the federal government about using such money to promote construction or rehabilitation of burned-out or abandoned houses in established neighborhoods--rather than to use the money, as some cities might, for new housing on large tracts of abandoned land.

HUD’s “homeownership zone” proposal is part of a larger administration goal, outlined by Clinton last June, to put 67.5% of adult Americans into homes they own by 2000--up from 65.1% today. That would be a record high in the nation’s modern history.

In a separate initiative, Cisneros said HUD also hopes to relax existing rules governing the use of Section 8 federal housing aid for low-income recipients so that it can be used to help pay mortgages rather than just rent.

The initiatives are expected to be sent to Congress in early February as part of HUD’s 1997 budget submission.