1980s
Summary
Congress continues to decentralize authority and responsibility to states and local governments, which are required to finance and develop their own programs. This shift also includes a reduction in federal domestic spending, increased privatization, and deregulation.
Tax and other financial incentives expand the role of the private sector in housing and urban development, as NGOs and private investors become the developers of lower-income housing.
Local economic development becomes an important priority at all government levels, and economic restructuring leads to painful manufacturing job losses in industrial rust belt urban areas, displacing workers and creating the structural unemployed.
Influences
- "Not in my backyard" (NIMBY) opposes planning issues (e.g., land uses, transport, affordable housing).
- United Kingdom influences HUD policy by introducing enterprise zones.
- Housing affordability declines due to increased interest rates and double-digit inflation.
- Hispanic/Latino-American population increases from 14.6 million in 1980 to 22.4 million in 1990.
- Post-Vietnam Asian immigration.
- Homelessness becomes increasingly visible.
- Savings and Loan (S&L) crisis reduces the role of S&Ls in providing housing financing.
- Average yearly legal immigration increases from 450,000 during the 1970s to 740,000.
- U.S. Supreme Court rules that land-use restriction, to be valid, must be tied directly to a specific public purpose (Nollan, 1987).
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Policies and Programs
- Financial Institutions Reform, Recovery and Enforcement Act (FIRREA, 1989) bails out S&Ls, and reforms financial institutions.
- Housing and Community Development Act (1988) allows sale of public housing to resident corporations.
- Fair Housing Amendments Act (1988) bans housing discrimination against persons with disabilities and families with children.
- McKinney-Vento Homeless Assistance Act (1987) addresses the problems of homelessness.
- Tax credits for low-income housing development are competitively awarded to developers through the states (Tax Reform Act, 1986).
- Enterprise zone programs are enacted to encourage private sector solutions to inner-city problems.
- HUD Community Action Agencies Home Improvement program offers aid for home improvement.
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Institutional Roles
- The private sector, using federal, state, and local subsidies and tax credit incentives, becomes the major sponsor/developer of many housing and urban development initiatives.
- Local government growth management widens in use beyond 1970s pioneer programs; certain state governments also create land-use legislation to guide local government actions.
- State finance agencies play an important role in housing and urban development.
- Base Realignment and Closure (BRAC) Commission (1988) sells military bases and installation infrastructure for private use.
- NGOs continue to be important developers of affordable housing.
- CDCs expand in number and scope.
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Methods, Tools, and Practices
- Local economic development becomes a state and local government priority.
- Local building codes specify compliance for natural disasters.
- Private housing finance system: Secondary mortgage market, standardized mortgage instruments, and securitization.
- Public-private partnerships and development agreements improve local service delivery.
- Downtown development is made contingent on provision of low- and moderate-income housing.
- Local government practices — e.g., Management by Objective (MBO); strength, weakness, opportunity, threat (SWOT) analysis; capital and performance budgeting; citizen participation; land banking — become integral part of local planning process.
- IBM personal computer improves planning and project management.
- Mega-malls, mixed-use developments, and pedestrian malls are built in suburbs.
- Annual Housing Survey of U.S. housing stock is inaugurated.
- New Urbanism becomes popular (e.g., Seaside).
- HUD experiments with tenant management of public housing.
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Lessons and Outcomes
- Home equity loans become a popular way for homeowners to access capital.
- High concentration of poor minorities in urban neighborhoods.
- Citizen participation becomes good practice.
- Tax credits encourage the private sector to build low- to moderate-income rental housing.
- States are more responsive to urban problems in suburban cores.
- Mayors work more closely with community groups.
- Urban issues arise in inner suburbs.
- Public housing selection criteria excludes many working poor.
- Local Initiative Support Corporation (LISC) helps finance resident-led, community-based development organizations to transform distressed communities and neighborhoods.
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