Big Money for “Livable Communities” in FY2011 Federal Budget

In this issue of APA Advocate, the American Planning Association’s Update on Legislative and Policy Issues:

HUD Issues Advance Notice on Planning Grants, Seeks Comment

Congress approved $150 million FY 2010 funding to the Department of Housing and Urban Development for a new sustainable communities program. $100 million was set aside for regional planning grants and $40 million for “challenge grants” to provide capital funds to implement regional plans. On February 5, 2010, HUD issued an Advance Notice with a description and framework for a new Sustainable Communities Planning Grant Program. This allows the agency to get feedback prior to issuing a Notice of Fund Availability (NOFA).

HUD is requesting comments on the program and the proposed funding structure. Because the program is for multi-jurisdictional regional planning efforts, HUD is particularly seeking input from local governments, regional bodies, community development entities, and other stakeholders about how best to structure the program to have the most meaningful impact in creating “economically competitive, healthy, opportunity-rich communities.”

Comments will be accepted on the Advance Notice until March 12, 2010. HUD expects to release the final NOFA on the planning grants by April 12. Regions would likely have until the end of June to apply, and grant announcements would be made in early August.

Three funding categories are being considered. First, support for preparing Regional Plans for Sustainable Development that integrate housing, economic development, transportation, and environmental quality where such plans do not currently exist. Second, support for preparing more detailed execution plans and programs to implement existing regional sustainable development plans. Third, implementation funds for regions that have regional sustainable development plans and implementation strategies in place and need support for a catalytic project or program.
APA will submit formal comments to HUD. We want your input. If you would like to submit comments or ideas, please contact APA at govtaffairs@planning.org.

The Obama administration is also asking Congress to approriate an additional $150 million for the program in FY 2011. Congress is considering legislation to provide a multiyear authorization for the program. That legislation, the Livable Communities Act (S. 1619) may come before the Senate Banking Committee later this month. A House companion bill is expected as soon as next week. APA has endorsed the legislation.

$1.5 BILLION FOR SUSTAINABILITY, NEW INFRASTRUCTURE FUND

On February 1, the Obama administration released its FY2011 budget proposal. The budget contains a previously promised overall freeze in discretionary domestic spending. However, within the context of the overall freeze, there are several new programs and increases for selected priorities. Sustainable and livable community programs fared well in the budget and clearly constitute a priority for the administration. In total, sustainability-focused programs received $1.5 billion in funding. Additionally, the budget requests $6 billion for several new infrastructure investment programs, with the majority of the funding in a $4 billion National Infrastructure Innovation and Finance Fund at the Department of Transportation.

The budget proposal structures most of the sustainability and livability programs and new infrastructure funding as competitive grants instead of formula-based programs. In the case of HUD funding, both the sustainability grant program and the new catalytic grant program are competitive grants established within the Community Development Block Grant program (a formula program).

The programs also reflect a focus within the administration on “place-based strategies” and “leveraging” investment. In many instances, the budget proposal specifically suggests that the grant programs would work together to concentrate investment in targeted communities. A third emphasis in the sustainability and livability components of the budget is capacity building and technical assistance. HUD, for example, is expanding and consolidating its capacity building in a $60 million program and shifting some of the initial emphasis of the sustainability office and grant program toward community technical assistance, training, and capacity building. The budget also suggests that some agencies will be pursuing significant changes in the planning process, including HUD’s consolidated plan.

Congress has already begun hearings on the budget and will work throughout February on adopting a budget resolution that will set spending parameters for appropriators. Leaders of the House and Senate Appropriations Committees have signaled general support for holding overall domestic spending to FY 2010 levels but also suggested that the committees would likely make a variety of changes to individual programs.

A chart detailing proposed FY 2011 funding for individual programs (with comparisons to FY 2010 and the American Recovery and Reinvestment Act of 2009 [ARRA]) is posted at www.planning.org/features/2010/federalbudget.htm.

EMPHASIS ON LIVABILITY, SAFETY, AND PLACE-BASED DEVELOPMENT

For FY 2011, the Department of Transportation requested a total of $78.8 billion, which is a modest 2 percent increase over the $77 billion appropriated last year. The highway funding request decreased slightly to $42.8 billion; transit increased slightly to $10.8 billion. Amtrak funding would increase by $50 million in FY 2011, from $1.565 billion to $1.615 billion. DOT’s budget plan also assumes an extension of the current surface transportation bill, SAFETEA-LU, into 2011. The administration has restructured many programs to reflect its new emphasis on “transportation safety, livable communities, and place-based development.”
A significant change includes the creation of the Livable Communities Program, which would be funded at $527 million. This funding comes from three separate pots: $307 million in transit funding to increase planning and project development capabilities, $200 million in highway funding for a competitive livability grant program, and $20 million to establish an Office of Livable Communities in the Office of the Secretary. As part of the Partnership for Sustainable Communities Initiative, this funding will be combined with $150 million in planning grants from HUD and $10 million for technical assistance from EPA.

The FY 2011 budget includes $4 billion for a new National Infrastructure Innovation and Finance Fund, established to provide grants and loans for multi-modal projects of regional or national significance. Included in the request is $150 million for planning and feasibility studies necessary to identify potential projects. This total funding request is a down payment on a $25 billion commitment to the fund, which is modeled generally on the multimodal discretionary grants (TIGER), and includes ARRA. The TIGER program did not receive any funding for FY 2011, but an additional $600 million in TIGER grants is available for FY 2010. The budget also calls for $1 billion in new high-speed rail funding.

NEW $150 MILLION “CATALYTIC GRANTS” INCLUDED
The President requested $41.6 billion in discretionary funding for the FY 2011 HUD budget, which is down approximately 2 percent from the FY 2010 request for $43.6 billion. The HUD budget reflects a major focus on community sustainability and economic development programs. The budget also shifts emphasis toward rental assistance and continuing innovation in HUD rental programs and interagency partnerships. Funding for several housing capital programs was either flat or declined. The request does call for $1 billion to capitalize the new Housing Trust Fund.

The budget calls for $3.946 billion for the Community Development Block Grant program. Within CDBG, HUD is proposing to continue providing $150 million for the Sustainable Communities Initiative and calls for $150 million for new Catalytic Investment Grants. The Sustainable Communities Initiative funding would not change from FY 2010, but program scope changed slightly from the three areas announced for 2010. According to the budget, the Sustainable Communities Initiative will have four “components” in 2011: planning grants, challenge grants for project implementation, creation of a capacity building program, and joint research on transportation and housing linkages.

The new Catalytic Grant program is a part of CDBG but, like the Sustainable Communities Initiatives, the funding is competitive and not formula-based. HUD Secretary Shaun Donovan said the program was designed to support “job creation and large scale transformative projects in hard-hit neighborhoods.” Four programmatic eligibilities were outlined: reclaim vacant property and create green infrastructure, remove property-related obstacles to recovery, facilitate economic development, and support TOD.
The Brownfields Economic Development Initiative (BEDI) program was zero-funded in the budget and officials suggest that the Catalytic Grant program is intended in part as a replacement for other, smaller economic development programs like BEDI.
Last year, Choice Neighborhoods was funded as a $65 million pilot. This budget proposal calls for taking the program “to scale” and replacing the existing HOPE VI program with $250 million in funding. The intention is to create a grant program focused broadly on distressed neighborhoods with a “strong emphasis” on community planning for school and educational improvements as part of neighborhood revitalization. Grantee eligibility would be expanded beyond public housing authorities. The budget also suggests that Choice Neighborhoods grants would be “coordinated” with programs at HUD and other federal agencies as part of the administration’s “place-based strategy.”

The budget proposes $60 million to consolidate and expand HUD’s local capacity-building efforts and connect capacity-building funding with the Sustainability, Catalytic, and Choice Neighborhood programs.

AREA-WIDE PLANNING INCLUDED IN BROWNFIELDS FUNDING

The Obama administration proposed $10 billion in discretionary funding for the Environmental Protection Agency in FY 2011. The proposed EPA budget reflects the administration’s continuing efforts to address climate change through various programs including increased funding for brownfield cleanup and the sustainable communities program.

The budget includes $215 million in brownfield funding to accelerate and expand cleanup, with a new focus on integrated, area-wide planning. This $41.5 million increase from FY 2010 is aimed at the administration’s goal of initiating 20 enhanced, community-level brownfield projects that will include a new area-wide planning effort to benefit underserved and economically disadvantaged communities.

Also included in the proposal is $27 million for EPA’s new Healthy Communities Initiative. This will address community water priorities; promote clean, green, and healthy schools; improve air-toxins monitoring in at-risk communities; and encourage sustainability by working to ensure that policies and spending at the national level do not adversely affect the environment and public health or disproportionally harm disadvantaged communities. This includes $10.9 million in funding to implement the Partnership for Sustainable Communities with DOT, HUD, and EPA. This partnership will focus on providing technical assistance to tribal, state, regional, and local governments in integrating smart growth.

The EPA budget contains modest decreases for water infrastructure loan funds. However, EPA officials pointed out that funding for water infrastructure in FY 2011 would still represent an increase over FY 2009 levels.

USDA BUDGET INCLUDES $400 MILLION FOR HEALTHY FOOD INITIATIVE

Agriculture: The USDA budget proposal includes record levels of support for Farm Bill conservation programs, bringing total funding to about $5 billion, an increase of $42 million (based on Farm Bill benchmarks). USDA will also provide $35 million as part of the administration’s $400 million Healthy Food Financing Initiative to bring grocery stores and other healthy food retailers to underserved communities. The Forest Service budget modestly increases support for the urban forestry program to $32 million. The Forest Service also plans to release a new forest planning rule.

Energy: The proposed budget for the Office of Energy Efficiency and Renewable Energy (EERE) includes a 5 percent increase, putting the request over $2.3 billion. However, the Energy Efficiency and Conservation Block Grants that were funded by ARRA are not included. Weatherization Assistance grants also had a significant boost in funding, up 43 percent from FY 2010 to $300 million.
Commerce: The proposed Department of Commerce budget was steeply reduced from FY 2010 because the 2010 Census will conclude. Census activities will continue, but the bulk of the data collection process will have been completed and the additional $6 billion will no longer be necessary. The Census budget does anticipate important expansions of the American Community Survey. The budget makes a slight cut in the Economic Development Administration, but EDA funding remains generally consistent with past years.

Interior: The Interior Department’s FY 2011 budget requests $2.7 billion for the National Park Service, $21.7 million below the FY 2010 enacted level, but still a significant increase above 2009. The administration has stated that fully funding the Land and Water Conservation Fund is a budget priority, adding to funds for National Park Service Land Acquisition grants and other programs. The budget for the U.S. Geological Survey totals $1.1 billion, $21.6 million above the 2010 enacted level.
Homeland Security: This budget includes an overall increase in funding for FEMA — a total of $7.4 billion in discretionary spending — but a reduction in funds for flood-map modernization and the Risk MAP (Mapping, Analysis, Planning) program. The FY 2011 request is for $194 million, a $26 million cut. Pre-Disaster Mitigation Grants are also funded at $100 million in the proposed budget to provide program support and technical assistance to reduce the risks associated with disasters, support the national grant competition, and provide the required $500,000 per state allocation.

Treasury: President Obama requested an $83 million increase in appropriations for the Treasury Department’s Community Development Financial Institutions Fund, bringing the FY 2011 request to $250 million. The CDFI Fund helps promote access to capital and local economic growth in urban and rural low-income communities through monetary awards and tax credits. Funding is also provided for the New Markets Tax Credit program. Up to $250 million is available for infrastructure and community development investment, including a specific linkage to USDA’s healthy food and farmer’s market initiative.

$8 BILLION IN HIGH-SPEED RAIL GRANT ANNOUNCED, RECIPIENTS IN 31 STATES AND D.C.

On January 28, the administration announced the recipients of high-speed rail grants made available by ARRA. The $8 billion investment will go primarily to new, large-scale projects such as developing high-speed rail corridors between Tampa and Orlando and Los Angeles and San Francisco. Thirteen corridors were selected for immediate investment, with several others getting funding for upgrades and planning studies. In total, 31 states and the District of Columbia will receive awards. Some critics complained that too little of the funding will lead to true high-speed rail. Others argued that priority should be placed on cost-effective projects that raise travel speeds in existing corridors.

Applicants for funding submitted more than $55 billion in project proposals. These grants are only a first step for the high-speed intercity passenger rail program, which is a centerpiece of the Obama administration’s transportation policy. The final FY 2010 appropriations included an additional $2.5 billion.

The administration has called for at least $5 billion over the next five years for the program. The FY 2011 budget asked Congress to approve $1 billion. At a hearing earlier this month, Transportation Secretary Ray LaHood testified before the House Appropriations Subcommittee on Transportation, Housing and Urban Development that additional money will be made available very soon for studies of future projects.