Sustainable Communities Initiative: HUD requests $150 million for a new Sustainable Communities Initiative to integrate transportation and housing planning and decisions in a way that maximizes choices for residents and businesses, lowers transportation costs and drives more sustainable development patterns. Funding for this initiative would be set aside from the proposed increase in the CDBG program.

This investment reflects HUD’s strong belief that housing is best developed “in context” of  communities and regions, as proximity to transit, jobs, and retail amenities influence the  long term success of both the housing and its occupants. Walkable, transit-oriented, mixed  income and mixed use communities substantially reduce transportation costs (now a greater part of many family budgets than housing costs), create energy savings (by reducing Vehicle Miles Traveled), and enhance access to employment and educational opportunities.

The initiative would address three central efforts:

First, the Initiative would dedicate $100 million for a regional planning effort to be jointly administered by HUD and DOT. The goal of this effort would be to enable metropolitan areas to set a vision for growth and then apply federal transportation, housing and other investments in an integrated way in support of the broader vision. HUD and DOT would entertain joint applications between metropolitan planning organizations and consortia of local recipients of HUD block grant assistance. States could be co-applicants where appropriate. Funding would generally be used to support the development of integrated, state of the art regional development plans that use the latest data and most sophisticated analytic, modeling and mapping tools available.

This funding would help HUD and DOT overcome the current fragmentation of transportation and housing planning. For example, HUD requires states, cities and counties, as a condition to receiving formula grants, to prepare a five-year consolidated Plan, as well as an annual Action Plan, estimating housing status and needs. These plans have become largely pro forma, do not take land use or  transportation into account, and are for political jurisdictions, not regions. At the same time, the Department of Transportation requires states and metropolitan areas (through Metropolitan Planning Organizations) to develop a 20 year Long Range Transportation Plan and a four-year Transportation Improvement Program (TIP). While taken more seriously, and regional in scope, these plans generally do not consider housing and land use patterns, or broader sustainability goals.

Second, this Initiative would include $40 million in community challenge grants to entice metropolitan and local leaders (and states in certain cases) to make market-shifting changes in local zoning and land use rules, as well as building codes. These investments will provide a local complement to the regional planning initiative, enabling those changes in local land use policy and practice that are necessary to carry out the broader scale vision for growth.

Challenge grants would help states and localities design and implement a variety of reforms.  Cities and smaller municipalities and towns hoping to build mixed use districts might seek funds to revise local zoning rules for downtown areas, commercial and even industrial areas. States might request resources to make it easier to rehabilitate older buildings through an overhaul of building codes. Rural counties might seek support for innovative techniques (e.g., transfer of development rights) to augment the conservation of open space and the preservation of farmland.

Finally, the Initiative would dedicate $10 million for a major research and evaluation effort that is jointly administered by DOT and HUD. This effort would aggressively engage on joint data development, information platforms, analytic tools and research. Efforts would be made to better track housing and transportation expenditures by location, create broader measures of affordability, establish standardized and efficient performance measures, identify best practices in transit-oriented development and evaluate location efficient mortgages.

To the greatest extent possible, the goal of research would be to gauge the effectiveness of federal investments as well as inform private investment and consumer decisions.

Fair Housing Initiatives: HUD requests substantial increases in its signature fair housing programs to combat discrimination in the housing market and enable growth patterns that are not only sustainable but inclusive.

HUD requests $42.5 million for the Fair Housing Initiatives Program (FHIP), an increase of $15 million over the fiscal year 2009 appropriated level. The FHIP program generally provides funding to help private non profit fair housing organizations carry out programs that enhance compliance with fair housing laws. The Department proposes to dedicate $12 million of the increase in funding to the agency wide effort to curb mortgage fraud and predatory practices.

HUD also requests $29.5 million for the Fair Housing Assistance Program (FHAP), an increase of $3.5 million over the fiscal year 2009 appropriated level. The FHAP program  provides assistance to State and local agencies that administer fair housing laws certified by the Department as “substantially equivalent” to Title VIII of the Civil Rights Act of 1968.

The Department proposes to dedicate $1 million of the increase in funding to the agency wide effort to curb mortgage fraud and predatory practices.

Office of Sustainable Housing and Communities: HUD requests $2.4 million for a new HUD Office of Sustainable Housing and Communities, reporting directly to the Deputy Secretary. Currently, HUD has no lead on energy and sustainability issues, with responsibility for overseeing the relationship of housing programs to broader energy and sustainability goals spread across the agency.

The creation of the Office of Sustainable Housing and Communities will resolve this organizational fragmentation. The mission of the new Office will be to advance housing and communities that promote affordable, livable and sustainable living environments.

With an expected staff of 20 professionals with special skills and knowledge, the Office will provide technical and policy support for energy, green building, and integrated housing and transportation programs at HUD and around the nation. The Office will co-manage the Sustainable Communities Initiative as well as the Energy Innovation Fund. In addition, the Office will manage the Department’s key relationships with other federal agencies in this arena like the Departments of Transportation and Energy and the Environmental Protection Agency. The Office will also work closely with the philanthropic sector on a range of activities including but not limited to research and evaluation, demonstrations, technical assistance and capacity building.