Urban Development Action Grants

Urban Development Action Grants
Name	Urban Development Action Grants
Established	1979
Agency	Department of Housing and Urban Development
Program	Community Development
Headquarters	Washington, D.C.
Status	defunct (phased out)

Urban Development Action Grants

Urban Development Action Grants were a competitive federal initiative begun in 1979 to stimulate private investment in distressed urban neighborhoods through targeted capital subsidies and regulatory incentives. Launched during the Carter administration and expanded under the Reagan administration, the program sought to leverage public funds to attract private developers, nonprofit organizations, and financial institutions to projects in cities such as New York City, Chicago, Los Angeles, Detroit, and Philadelphia. It intersected with contemporaneous initiatives from agencies including the Department of Housing and Urban Development, the Department of Labor, and the Economic Development Administration.

Background and Purpose

The program originated amid late-1970s debates in the United States about deindustrialization, fiscal crisis in municipalities like New York City's 1975 fiscal crisis, and the decline of manufacturing centers such as Gary, Indiana and Youngstown, Ohio. Key policymakers including President Jimmy Carter, Patricia Roberts Harris, and HUD officials framed the grants as a means to reverse urban disinvestment that followed events like the Rust Belt decline and episodes of civil unrest such as the 1977 New York City blackout and the 1968 riots after the assassination of Martin Luther King Jr.. Influences included prior urban programs such as the Model Cities Program, the Great Society, and federal efforts embodied in the Housing Act of 1949 and the Community Development Block Grant framework.

Program Structure and Eligibility

Urban Development Action Grants were administered through competitive applications that required partnerships among local public agencies, private developers, and community-based organizations such as Local Initiatives Support Corporation partners or Enterprise Community Partners affiliates. Eligible applicants often included state and municipal redevelopment agencies like the New York City Economic Development Corporation and quasi-public entities such as the Chicago Housing Authority. Criteria emphasized projects in Qualified Census Tracts and Renewal Communities similar to later Empowerment Zone designations. Projects ranged from adaptive reuse of industrial properties in places like Pittsburgh and Cleveland to mixed-use developments in Boston and Baltimore, with eligibility shaped by statutes influenced by the Housing and Community Development Act of 1974 and executive guidance from the Office of Management and Budget.

Funding and Administration

Funding was appropriated by the United States Congress and allocated by HUD through notices of funding availability; prominent appropriations committees such as the House Committee on Appropriations and the Senate Appropriations Committee shaped budget levels. Grants were structured as low-interest capital subsidies or contingent forgivable loans intended to leverage private bank financing from institutions including the Chase Manhattan Bank, Bank of America, and regional banks engaged in Community Reinvestment Act era activity. Administrative oversight involved HUD regional offices, state economic development agencies like the New Jersey Economic Development Authority, and auditors such as the Government Accountability Office which later reviewed effectiveness.

Projects and Impact

Completed projects included waterfront revitalizations in San Francisco and Baltimore Inner Harbor-adjacent developments, industrial conversions in Milwaukee and Cincinnati, and downtown redevelopment in St. Louis and Atlanta. Notable collaborators included developers tied to firms like The Rouse Company and nonprofit partners such as Habitat for Humanity affiliates. Evaluations by academic researchers at institutions including Harvard University, Columbia University, and University of Chicago measured outcomes in job creation, tax base expansion, and commercial occupancy. The program helped catalyze transit-oriented projects near systems like the Metropolitan Transportation Authority and Bay Area Rapid Transit and interacted with tax policy tools such as New Markets Tax Credit precursors and state historic preservation tax credits.

Criticism and Controversies

Critics from advocacy groups including ACORN and scholars associated with Cornell University and University of California, Berkeley argued that benefits disproportionately favored private developers and contributed to displacement in neighborhoods of Harlem, Bronzeville, and South Bronx. Investigations by media outlets such as the New York Times and the Washington Post documented cases of cost overruns, allegations of patronage involving local political figures, and projects that failed to meet job creation promises. Congressional hearings led by members of the House Committee on Banking and Urban Affairs and the Senate Committee on Banking, Housing, and Urban Affairs scrutinized grant selection processes and raised questions about performance measurement and long-term affordability.

Legacy and Policy Influence

Although the grants were phased out and subsumed by later frameworks, the program influenced subsequent federal initiatives such as the Empowerment Zones and Enterprise Communities program, the HOPE VI public housing transformations, and incentives embedded in the Community Development Block Grant evolution. Lessons learned informed policy reports from the Brookings Institution, the Urban Institute, and the Lincoln Institute of Land Policy, and shaped municipal redevelopment practices in cities like Los Angeles under leaders such as Tom Bradley and Richard Riordan. Elements of the model—public-private leverage, competitive scoring, and place-based targeting—persist in programs administered by HUD and in state-level tools like tax increment financing used by authorities such as the California State Lands Commission and the New York State Urban Development Corporation.

Category:United States federal assistance programs Category:Urban planning in the United States Category:Department of Housing and Urban Development