Federal Resources Aid Local Responses

Federal Resources Aid Local Responses

A vacant lot in North Philadelphia.
Photo courtesy: Harvey Finkle Local governments, nonprofits, and residents combat vacancy and abandonment with limited and often dwindling resources. The areas hardest hit by the high costs of vacancy and abandonment tend to be those struggling most with economic decline and falling public revenues. Federal programs and policies offer important aid to municipalities facing the challenges posed by foreclosed and vacant properties, including longstanding programs such as HUD’s Community Development Block Grant and HOME Investment Partnerships programs. Both of these programs offer localities considerable flexibility in how they allocate funding; they can be used, for example, to fund the purchase and rehabilitation of vacant homes.1

In response to the foreclosure crisis, the Neighborhood Stabilization Program (NSP) was created to significantly augment local efforts to purchase, rehabilitate, demolish, and reuse foreclosed and vacant properties.2 The program originated through a $3.9 billion appropriation in the Housing and Economic Recovery Act of 2008, with another $2 billion (NSP 2) as part of the American Recovery and Reinvestment Act of 2009 and a third, $1 billion allocation (NSP 3) as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. No continuing appropriations exist for NSP, although some grantees have yet to expend their funds.

As of June 2013, the NSP programs had affected nearly 70,000 housing units around the United States: 7,836 units had been acquired, 26,595 units had been cleared or demolished, 9,893 families received homeownership assistance, and 25,119 units had been rehabilitated or newly constructed.3

The Reinvestment Fund conducted an evaluation that compared NSP Investment Clusters — areas in which NSP investment was concentrated — with three comparable markets without concentrations of NSP investments. The study found that “74% of all [NSP Investment Clusters] trended better than at least one of their comparable markets when it came to vacancy rate change between the first half of 2008 and the first half of 2012. 28% beat every comparable against which they were studied [emphasis in original].”4 A HUD-funded evaluation of NSP conducted by Abt Associates began in early 2011 and will be released in 2014.

1. John Kromer. 2002. “Vacant-Property Policy and Practice: Baltimore and Philadelphia,” Brookings Institution Center on Urban and Metropolitan Policy, 41; Justin B. Hollander, Niall G. Kirkwood, and Julia L. Gold. 2010. Principles of Brownfield Regeneration: Cleanup, Design, and Reuse of Derelict Land, Washington, DC: Island Press, 12–3; U.S. Government Accountability Office. 2011. “Vacant Properties: Growing Number Increases Communities’ Costs and Challenges,” 7–8.
2. Paul A. Joice. 2011. “Neighborhood Stabilization Program,” Cityscape: A Journal of Policy Development and Research 13:1, 136–8.
3. “NSP Production Reports,” OneCPD Resource Exchange website (www.onecpd.info/resource-library/nsp-production-reports/). Accessed 23 February 2014.
4. The Reinvestment Fund. 2013. “Summary of Nationwide NSP Investment Cluster (NIC) Performance and Analysis Methodology,” 2.