Part Two: The 21st Century Agenda for Cities and Suburbs

The Clinton Administration's 21st Century Agenda for Cities and Suburbs outlined in this report is designed to capitalize on today's favorable conditions for tapping new markets, to anchor the positive trends in central cities, and to help cities and suburbs address their remaining challenges. The Agenda is intended to help metropolitan communities deal with sprawling development and forge coordinated regional approaches to growth. While many cities and suburbs are beginning to recognize their common stake in ensuring economic competitiveness and a high quality of life throughout our metropolitan areas, many communities need support to take the next step toward effective metrowide cooperation.

The 21st Century Agenda relies on the strategies and approaches that have already proven their effectiveness over the past 6 years. It builds on the successful efforts of President Clinton and Vice President Gore, together with Congress, to help local leaders find solutions that work:

• Public-private partnerships. The right mix of public incentives, combined with the willingness of the private sector to invest in untapped markets, is highly effective as a recipe for revitalizing distressed communities. The Administration's 21st Century Agenda for Cities and Suburbs uses targeted public incentives to encourage partnerships among the public, private, and nonprofit sectors and to attract more private sector investment in businesses and redevelopment projects.

• Comprehensive approaches. In the past, well-meaning programs often meant a narrow, single focus on urban problems. We have now learned that the most effective initiatives tackle distress in a much more comprehensive and integrated manner. In recognition of this fact, the initiatives in the 21st Century Agenda span multiple Federal agencies and departments.

• Local and bottom up. Today's successful revitalization initiatives operate on a smaller scale than the large Federal programs of the past. They focus on the neighborhood level and are more local and more personal. The Administration's 21st Century Agenda continues the efforts of the past six years to refashion Federal programs to support and encourage the work of community-based organizations and local governments.

• Individual empowerment and financial self-sufficiency. The Administration's Empowerment Strategy is grounded in a philosophy of rewarding work and ensuring that everyone has the opportunity to improve their economic condition. There is also a growing understanding that an effective anti-poverty strategy must incorporate initiatives to help people build assets and equity through homeownership, savings programs, innovative "development" accounts, and microenterprise development.

• A strong and capable HUD. Urban communities benefit from a strong and reinvented HUD as their partner. The FY2000 budget underscores HUD's renewed strength -- through Secretary Andrew Cuomo's Management 2020 reinvention efforts -- in offering a comprehensive menu of integrated, flexible, decentralized Federal support. Reinvented and powered by a national workforce composed of Community Builders and the new Public Trust Officers, HUD's role is not to dictate but to act as a facilitator and ensure that cities have the resources needed to create jobs; promote affordable housing; fight crime; and create healthier, more livable communities for all citizens.

The 21st Century Agenda for Cities and Suburbs has four parts:

• Opening Doors to New Markets. The evidence strongly suggests that there are attractive business opportunities in rural and inner city communities that are not being met. Among the most critical needs of these communities is access to equity investment and technical assistance. President Clinton's New Markets Initiative is designed to make it more attractive to invest in these communities to ensure that central cities' untapped markets for labor, retail opportunities, and land are utilized. The Agenda includes initiatives to close the equity and debt capital gaps faced by public, private, and nonprofit developers that are ready to meet the untapped market demand in cities for homes, stores, offices, entertainment facilities, and business services.

• Investing in America's Working Men and Women. The Agenda also provides the tools to help workers take advantage of the 21st century job market, including the skills, information, training, and access to jobs that may be distant from their homes, and the supports to succeed in those jobs.

• Expanding Homeownership and Affordable Rental Housing. Promoting homeownership must be a vital component of any national urban strategy. Homeownership fosters community stability and safety by encouraging families to maintain their properties, watch out for their neighbors, and get involved in neighborhood improvement activities. Providing more assistance for rental housing is equally critical, particularly to overcome the spatial isolation that limits access to jobs and to relieve the distress rent levels (housing that costs over half the family's income) that exacerbate poverty and rob families of the stability needed to be productive. These initiatives are especially needed given that this strong economy is pushing up rents which is intensifying the current affordable housing crisis. The landmark Public Housing Reform Act, enacted in 1998 with HUD support, transforms the provision and funding of affordable housing for low-income families, the elderly, and people with disabilities. Expanding the low-income housing tax credit and implementing a housing security agenda for the Nation's booming population of elders are also vital.

• Promoting Smarter Growth and Livable Communities. To realize the billions in savings that could be generated by curtailing sprawl and promoting growth in already-developed communities, the Agenda provides support to State and local governments and private sector partners in six areas: creating smart-growth strategies, redeveloping urban land and industrial sites, removing blighted and vacant buildings, reducing congestion on roads and highways, promoting community involvement in promoting safe streets and better schools, and preserving natural resources and historic amenities.

A. Opening Doors to New Markets

New Markets Initiative

The President's New Markets Initiative is a series of measures designed to stimulate $15 billion in new private capital investment in low-income areas with high concentrations of poverty. This initiative is aimed at ensuring that the opportunities for growth and neighborhood and economic development of America's untapped new markets are not lost.

• The New Markets Initiative will build a new national network of private investment institutions to provide the capital and expertise needed to flourish in distressed communities by the full continuum of businesses -- from the largest companies to microenterpises. America's Private Investment Companies (APIC), jointly administered by HUD and the Small Business Administration (SBA), will create private companies to invest in large businesses seeking to expand or locate in inner cities and distressed rural communities -- investments are expected to total $1.5 billion. Small Business Investment Companies (SBICs) Targeted to New Markets will invest between $100,000 and $1 million in small businesses, while New Market Venture Capital Companies provide additional venture capital and technical assistance for start-ups. Expanded support for Community Development Financial Institutions (CDFIs) will provide a range of financial products and services directly to small businesses and individuals. Microenterprises will receive additional loans and technical assistance. A New Markets Tax Credit will help spur $6 billion in private equity investment in low and moderate-income communities, providing the extra fuel needed for businesses of all sizes to invest and grow. BusinessLINC will encourage mentoring relationships between large and small firms.

• The private sector will provide the time, energy, and creativity needed for successful investment in low and moderate-income areas, while entrepreneurial and forward-looking governments help create the needed institutional framework. For example, the Community Empowerment Fund (CEF) will streamline two existing HUD programs (grants and loan guarantees) to create jobs in new markets. An innovative pilot (CEF Trust) will standardize underwriting and create loan pools for a secondary market for economic development loans.

• These new and enhanced initiatives to stimulate investment in untapped markets will be joined to existing programs with a proven track record in community development. These programs -- Enterprise Zones/Empowerment Communities (EZ/EC), with a proposed FY2000 funding level of $1.6 billion, and Community Development Block Grants, with a proposed $4.8 billion funding -- are already helping to revitalize distressed areas and stimulate economic activity in communities that have been left behind in the new economy.

• Brownfields -- former industrial sites in need of clean-up before they can be redeveloped as community assets -- represent a special challenge, and also a terrific job-generating opportunity, for our cities. Not only is the Administration proposing a doubling of HUD's Brownfields Redevelopment funding, from $25 million to $50 million per year for the next three years. Newly proposed Better America Bonds (see below) would also be available to help fund clean-up. The Community Revitalization and Brownfields Clean-up Act of 1999 would provide funding for State and local governments to accelerate such clean-ups. It also includes liability protections for prospective purchasers and innocent landowners -- a key to triggering more private investment in brownfields redevelopment -- along with appropriate environmental safeguards.

B. Investing in America's Working Men and Women

• Preparing America's Working Men and Women to Succeed in the Workforce. The FY2000 budget proposes a range of initiatives to strengthen adult education, provide re-employment services to all displaced workers, and expand youth employment programs. Spending to help adults become more literate and ensure they have the skills needed for today's workforce would grow by $190 million, to $575 million. The FY2000 budget also provides $1.6 billion to assist 840,000 displaced workers, and $1 billion to expand the Employment Service and One Stop Career Centers. Youth employment programs would also be expanded, including Youth Opportunity grants to low-income areas, a new $100 million Right Track Partnership program to improve high school achievement and college prospects for disadvantaged youth, and Youthbuild, giving school dropouts the opportunity to develop academic and education skills while producing affordable housing.

• Helping Families Move from Welfare to Work. To help families in the poorest neighborhoods and those facing the greatest challenges move from welfare to work, the Administration has proposed $1 billion to reauthorize the Welfare-to-Work program to increase the employment of long-term welfare recipients in high poverty areas and to help low-income fathers better support their children. In addition, full funding of the Administration's FY2000 proposals for Job Access transportation grants and 25,000 Welfare-to-Work Housing Vouchers will help more Americans leave welfare behind by getting and moving to where the jobs are.

• Providing Supportive Services. To help urban families balance the demands of work and family, the Administration's FY2000 budget proposes a significant new investment in strengthening childcare -- making it better, safer, and more affordable.

C. Expanding Homeownership and Affordable Rental Housing

Second, both the economic boom and the pattern of metropolitan development have created a crisis of housing affordability and a "jobs/housing mismatch" that undermines regional competitiveness.

Third, crisis rent levels have swelled the number of households with worst case housing needs, now standing at a record 5.3 million. These households, home to more than 13 million persons, pay more than half of their meager incomes for rent or live in substandard housing. Families have too little left for investment in themselves and their children after paying the rent, or they must live with the fear and sometimes the reality of eviction. And housing is the number one cost burden for families in the transition from welfare to work.

The Administration's housing agenda helps more Americans realize the dream of homeownership, while ensuring others have access to affordable rental housing.

• FHA Mortgage Insurance, the ticket to homeownership for millions of moderate-income Americans, particularly minorities and central city residents, is meeting the rising demand created by the economic boom and last year's historic increase in the volume of mortgages FHA can insure. At the same time, HUD's regulation of the government sponsored housing finance institutions, Fannie Mae and Freddie Mac, helps boost homeownership in "underserved" areas and by low-income households. Homeownership Zones and a new program of Section 8 Homeownership Vouchers authorized by last year's public housing reform will create still more homeowners in low- to moderate-income neighborhoods. The PATH initiative (Partnership for Advancing Technology in Housing) will make homeownership more affordable and -- through quality improvements -- an even better investment, for families striving to create assets and build neighborhoods. In addition, earlier this year, Vice President Gore announced an agreement -- Building Homes in America's Cities -- among HUD, the National Association of Home Builders, and the U.S. Conference of Mayors, to build a million homes in urban areas over the next ten years.

• The increasing income isolation created by patterns of urban growth can be alleviated by affordable housing strategies using the housing supply programs -- HOME and the Low-income Housing Tax Credit -- that have been put into the hands of mayors, county leaders, governors, and their private and non-profit partners. Section 8 Housing Vouchers can ensure access to this and other affordable rental housing throughout metropolitan regions. Vouchers are the most direct response to the national shortages of affordable housing identified in HUD's report Waiting in Vain: An Update on America's Rental Housing Crisis. The renewal of all existing Section 8 contracts, plus the 100,000 vouchers requested in the FY2000 budget (25,000 to help move families from welfare to work, 18,000 for the homeless, and 15,000 linked to the low-income housing tax credit for extremely-low-income elderly people), will provide the cushioning families need to get and keep jobs and to improve their skills and move ahead.

• The transformation of public housing now underway will strengthen city neighborhoods and create a better environment for families to become self-sufficient. Distressed public housing projects are being replaced by attractively designed mixed-income communities through HOPE VI and by Section 8 housing vouchers. HUD is demanding that the remaining public housing units (most of the public housing stock) be well managed and maintained and is requesting the needed funding.

• Homelessness, the epitome of distress for both communities and people, is being addressed through a new approach based on long-term solutions -- not just emergency or stop-gap measures. Since 1994, the Administration has worked with communities nationwide to establish a Continuum-of-Care to help homeless people move into jobs and permanent housing.

• The housing crisis affects older Americans as well as working age families and individuals. The Administration's Housing Security Plan for the elderly will enable senior citizens to remain in their current housing and communities, will expand the number of extremely-low-income elders receiving housing assistance, and will create the combination of housing and services needed by many elders.

D. Promoting Smarter Growth and Community Livability

Cities and suburbs alike increasingly recognize that they have a common stake in ensuring economic competitiveness and a high quality of life across the metropolitan area. The 21st Century Agenda for Cities and Suburbs includes measures to support local efforts to create regional growth strategies, as well as initiatives to make central cities more attractive to both businesses and residents.

• The Livable Communities initiative includes Better America Bonds, new bond authority for State and local government to clean up brownfields, create urban parks, and protect water quality and Community Transportation Choices -- major new funding for public transit, transportation plans, and alternative forms of transportation. It also includes initiatives -- Regional Connections and Community/Federal Information Partnership -- to develop and implement smart growth strategies across jurisdictional lines. Redevelopment of Abandoned Buildings will allow smart re-use of urban land. Two programs that complement the Livable Communities initiative are Brownfields Redevelopment, which promotes redevelopment of urban industrial sites, and the Lands Legacy Initiative, which protects natural and historic sites.

• Communities must be seen as safe and attractive to new residents and businesses. The 21st Century Policing Initiative provides funds to help communities hire and redeploy 30,000 to 50,000 police and to use new technologies to prevent and solve crimes.

• Lagging educational systems remain the single most important impediment facing cities in their attempt to keep middle-income residents and to help those left behind move up the economic ladder. Strengthening Our Schools will modernize schools, hire new teachers, reduce class size, integrate technology in classrooms, and involve the community in planning and designing schools.