DOT + HUD + HOZ = Livable Communities

Last week HUD Secretary Donovan announced the Sustainable Community Initiative, part of a working group with DOT to jointly administer a fund to encourage the integration of housing, land use, and transportation policy for metropolitan regions. One of the programs that might receive additional attention is the Homeownership Zone (HOZ) initiative that is now approaching the end of its 11-year interim study period.

The HOZ program required coordination across governments and agencies and an extended commitment to funding large-scale neighborhood redevelopment schemes. The program involved 11 neighborhoods across the US and directed $50 million (which led to $273 million in total funds expended) toward the rehabilitation of these neighborhoods. The neighborhoods selected were dominated by low-income households, a low percentage of homeownership, high crime rates, and large tracts of vacant or abandoned properties. Cities with a strong administrative framework were the most successful.

Winning projects broadly included the following:
1. Visible improvement—provide for a significant number of new homeownership opportunities that will make a visible improvement in a concentrated area and stimulate additional investment in the area.
2. New Urbanism—incorporate the basic principles of New Urbanist design.
3. Additional investment—use the HOZ grants to leverage other support for the project.
4. Partnerships and initiatives—establish extensive partnerships with the private and nonprofit sectors.
5. Comprehensive neighborhood revitalization—demonstrate how the HOZ will contribute to the overall improvement of the entire area.
6. Rapid turnaround—demonstrate the ability to begin significant construction projects promptly upon final HUD approval of the HOZ proposal.
7. Affirmatively further fair housing—address how the applicant will affirmatively further fair housing

(Source: An Interim Evaluation of HUD’s Homeownership Zone Initiative

Although the interim report was completed while many HOZ projects were still underway, the entire report is informative.

With an well studied and reasonably successful program in existence, HUD and DOT cooperation should highlight many of the HOZ successes when establishing funding guidelines for the Sustainable Communities Initiative.