HUD to Fund Tract Housing in Abandoned Inner-City Areas

The Clinton administration, in a new bid to restore “families, neighborhood and life” to the nation’s inner cities, announced an ambitious plan Thursday to encourage the creation of suburban-style tract housing in blighted urban zones.

Challenging cities to design “homeownership zones” on abandoned center-city land, Housing and Urban Development Secretary Henry G. Cisneros said that $100 million in federal funds will be dispersed as grants and loans among as many as a dozen cities that apply for the money.

HUD officials said that they expect Los Angeles to ask for funds, even though the city has few of the large tracts of deserted inner-city land that characterize most decaying urban areas around the country. There is “definitely an application of this in Los Angeles,” said Andrew Cuomo, assistant secretary and the official who will oversee the competition this summer among cities applying for the money.

Cisneros said that his agency’s initiative should fund projects of 200 to 300 homes in six to 12 cities, generating new housing for at least 1,200 families. Construction should begin by this fall, he said.

Officials said that they believe thousands of additional homes could be built through public-private partnerships.

However, Rep. Rick A. Lazio (R-N.Y.), the Republican chairman of the House panel that oversees the Housing and Urban Development budget, called the initiative “Christmas in July for a few handpicked communities.” Lazio charged that the Clinton administration has resorted to “a pork-barrel program” to “cover up its failure to make housing more affordable for all Americans.”

Almost a dozen U.S. cities, including Detroit, San Antonio, New York and Baltimore, already have used federal funds to help forge partnerships among homeowners, banks and local government that have resulted in center-city tracts of suburban-style housing.

But Cisneros’ announcement marked the first time that his department has created a special fund for such projects. Cuomo said that the undertaking is a companion to the administration’s “empowerment zones,” which established a pool of federal money to help cities attract businesses into their depressed inner areas.

But whereas that effort focused on economic redevelopment, the new homeownership zones would strive to return neighborhoods and people to blighted downtowns by bringing in “sidewalks, porches, yards, attractive buildings,” Cuomo said.

Cisneros called the initiative a turning point in urban-renewal policy, predicting that specialists in future years will look back on it as “one of the building blocks of the new American city.” He said that the concept of luring middle-class families back to the inner city by creating neighborhoods and homes that they could own “has the potential to catch fire” in metropolises across the nation.

Cisneros and Cuomo emphasized that projects must try to create large blocks of new housing, rather than small, scattered efforts. Federal and city officials conceded, however, that the objective will be more difficult for Los Angeles--which has fewer large tracts of cleared land--than for many Eastern and Midwestern cities, where huge parcels have been abandoned.

Ann Sewill, acting general manager of the Los Angeles Housing Department, said that the city definitely will make a proposal because “there are a lot of different places that this could really work.”

She said that close to 70% of the city’s 103 neighborhoods are potential candidates for projects, but she emphasized that the city has not decided on the areas it will propose to rebuild.

Efforts to identify those neighborhoods will move into high gear in the coming weeks, Sewill said. Among the candidates are areas of the San Fernando Valley where large tracts of housing were heavily damaged in the Northridge earthquake, she said.

Of the $100 million, $50 million would be outright grants to cities and the remainder would be in federal loan guarantees. Each city selected will receive $5 million to $10 million.

The money could go to buy land, to develop and improve infrastructure or to build houses.