At CNU 18, Donovan Announces a Federal First —HUD Will Use Location-Efficiency, LEED-ND Criteria to Score its Grant Applications

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U.S. Housing and Urban Development Secretary Shaun Donovan brought welcome news to his plenary address this morning at the 18th Congress for the New Urbanism (CNU) in Atlanta, announcing that HUD will begin incorporating criteria from the LEED-ND green neighborhood rating system to score HUD grant applications on their location efficiency — the degree to which they help residents connect conveniently and affordably to jobs, schools, shops and other amenities through a range of transportation options.

Donovan said this new scoring criteria would apply broadly to grants distributed by HUD — $3.25 billion total.

"For the first time in the history of federal grant competitions, I want to announce today that HUD will be using location-efficiency to score our grant applications," Donovan told more than 1000 attendees of the annual gathering of the leading national group promoting walkable, mixed-use neighborhood development, sustainable communities and healthier living conditions. "Using the LEED-ND green neighborhood rating system CNU developed in partnership with the National Resources Defense Council and Green Building Council, it’s time that federal dollars stopped encouraging sprawl and started lowering the barriers to the kind of sustainable development our country needs and our communities want."

Donovan said lessons of the dangers of looking at housing independently from transportation have been readily apparent in the fallout from the current crisis in housing foreclosures. "Lenders bought into the “Drive to Qualify” myth as well — giving easy credit to homebuyers without accounting for how much it might cost families to live in these areas or the risk they could pose to the market," said Donovan. "It’s no coincidence that neighborhoods and families facing the brunt of the crisis — with the highest foreclosure rates and the deepest job losses--are often those with the least access to transportation, the most troubled schools, and the least economic opportunity...We’ve learned from foreclosure patterns that hidden costs like transportation can put families over the edge into increased financial vulnerability — and that tying the quality and location of housing to broader opportunities like access to good jobs, quality schools, and safe streets is essential to building sustainable communities.

“This is how federal action can make cities better," said CNU Board Chair Victor Dover, principal of Dover, Kohl and Partners. "The Secretary’s announcement is a giant step in the right direction of restoring America’s great cities, and will result in making them better in every way you can name—more practical for day to day living, more durable, more valuable, more self-reliant, and integral to the global environmental solution.”

With his successful career promoting housing affordability and neighborhood revitalization, Donovan says he has appreciated the closely aligned worked of the CNU to advance livable alternatives to sprawl. "CNU has helped change the way we think about our communities — helping us more closely see the connection between the blocks we live on and the neighborhoods and regions we live in," Said Donovan. "CNU understands something elemental: That when you choose a home, you don’t just choose a home — you choose transportation to work and schools for your children. You choose a community and the choices available in that community. Our challenge now is to bring that holistic view of community development into the mainstream "

As consumer preferences shift towards walkable neighborhoods with many transportation options in region after region — including Atlanta where Donovan shared the stage with Mayor Kasim Reed and praised him for renewing the city — Donovan says he eagerly welcomes the opportunity to team the Federal government with local and regional partners to pursue a shared vision that has come into focus through the interagency Partnership for Sustainable Communities of HUD, US DOT and US EPA. In requesting comments from mayors, business leaders, governors and other leaders on its regional planning grants, Donovan says one message came through loud and clear. "If there was one common theme we heard it was that while community after community is ready to embrace the kinds of sustainable practices CNU has been preaching for 20 years — the federal role can’t be about dictating what they can or can’t do, but rather offering them the resources and tools to help them realize their own visions for achieving the outcomes we all want and more and more are insisting on."

Read the entire text of Secretary Donovan's remarks.

Prepared Remarks for Secretary of Housing and Urban Development Shaun Donovan at the Congress for the New Urbanism

Hilton Atlanta
Atlanta, Georgia
Friday, May 21st, 2010

Thank you, Mayor Reed -- for that generous introduction and for your leadership here in Atlanta. I also want to thank John Norquist and Ray Gindroz for their leadership as well.

It’s a pleasure to join the Congress for the New Urbanism -- to be with so many planners and architects, traffic engineers and developers, local officials and activists, and public health officials.

Over nearly two decades, CNU has helped change the way we think about our communities -- helping us more closely see the connection between the blocks we live on and the neighborhoods and regions we live in.

CNU understands something elemental:

That when you choose a home, you don’t just choose a home -- you choose transportation to work and schools for your children.

You choose a community and the choices available in that community.

Our challenge now is to bring that holistic view of community development into the mainstream -- to help build sustainable neighborhoods, communities and regions that are as interconnected as the challenges they face.

A Different Kind of Moment

To be sure, this housing and economic crisis has reaffirmed the need for federal leadership in this area.

HUD was founded at a moment when cities were literally burning -- and when the nation was also looking to the Federal government to help. But the question today isn’t whether we step up to lead on these issues -- but how.

What is different about this moment than it was a half century ago? And what have we learned?

To be sure, we learned from the current housing crisis that homeownership may not be for everyone.

We’ve also learned from foreclosure patterns that hidden costs like transportation can put families over the edge into increased financial vulnerability -- and that tying the quality and location of housing to broader opportunities like access to good jobs, quality schools, and safe streets is essential to building sustainable communities.

It’s no coincidence that neighborhoods and families facing the brunt of the crisis--with the highest foreclosure rates and the deepest job losses--are often those with the least access to transportation, the most troubled schools, and the least economic opportunity.

Today, the average household spends more than half of its budget on housing and transportation. They have become American families’ two single biggest expenses.

During the housing boom, real estate agents suggested to families that couldn’t afford to live near job centers that they could find a more affordable home by living farther away. Lenders bought into the “Drive to Qualify” myth as well -- giving easy credit to homebuyers without accounting for how much it might cost families to live in these areas or the risk they could pose to the market.

And when these families moved in, they found themselves driving dozens of miles to work, to school, to the movies, to the grocery store, spending hours in traffic and spending nearly as much to fill their gas tank as they were to pay their mortgage -- and in some places, more.

The third lesson we’ve learned is that we have to approach the way we plan and design our communities differently.

Here, the planning community has an opportunity to lead the change. As modernism emerged a century ago, the architectural community engaged in affordable housing design because architects understood the impact of the built environment on neighborhoods and society as a whole.

But the urban renewal movement that began in the 1930’s and the one-size-fits-all approach that typified federal policy in the decades to come didn’t end poverty. Much as author Charles Murray argued about welfare in Losing Ground, in many ways, urban renewal entrenched poverty, isolating many families from opportunity -- not simply for years, but for generations.

Peter Calthorpe and others have noted that architects weren’t simply bystanders in this effort -- many were complicit. They saw communities not for what they were and built within that context, but as a tabula rasa -- a blank slate.

And as the idealistic architects saw the trauma urban renewal caused for families, many found themselves disillusioned. Others found work designing what was decidedly un-affordable housing.

What has made CNU unique is that it has been one of the voices of the past few decades to reengage architects and planners in community development in a way that is about preserving communities.

I believe the time has come to restore federal leadership that does the same -- that nurtures and encourages the innovations you’ve pioneered and takes them to scale.

But as clear as the need for this new federal role is, just as clear is that it can’t be about returning to the one-size-fits-all approach we saw during urban renewal.

Rather, we must use new tools that help us partner with local governments in ways that recognize the variations of communities -- and neighborhoods within those communities.

Today, I’m proud to share with you some of the things we’re doing to foster those kinds of solutions at HUD -- and across the Federal government.

Building Sustainable Communities, Supporting Local Innovation

As many of you know, HUD launched our new Office of Sustainable Housing and Communities in February -- allowing us to work directly with communities to support innovative planning and practice at the local level and helping to coordinate our investments with the Departments of Transportation, Energy, and EPA, and other agencies at the federal level.

And I’m proud to say that this office is led by one of your own, Shelley Poticha. Shelley’s not on the outside anymore trying to influence government policy, but very much on the inside making that policy.

In fact, to give you an idea of how inside Shelley is, she wasn’t able to come today -- because we didn’t let her out of the HUD building as we prepare to launch our Sustainability Planning Grant program.

Indeed, the first thing way we’re embracing sustainability at HUD is by making the most significant federal investment in planning in a generation.

With the $140 million in regional planning and community challenge grants that we will be issuing NOFAs for in the coming weeks, we hope to send a message to every community in the country that planning is important.

With our $100 million Sustainability Planning Grant program, we want to encourage metropolitan and rural regions to plan for the integration of economic development, land use, and transportation investments.

Earlier this year, we issued an Advanced Notice and Request for Comment for the program, inviting feedback through a new online “Wiki” accessible via HUD’s website and through an extensive listening tour around the country.

The idea was simple:

We wanted communities to tell us what works for them, what isn’t working, and how we can use this program to help them build sustainably. Just as importantly, we hoped to send a very important signal that we in the Obama Administration are serious about being the kind of partner that listens and learns.

And the response exceeded even our expectations. We received over 900 written comments, met with over 1,000 stakeholders in seven listening sessions, and staged webcasts that touched thousands more.

The feedback we received was overwhelmingly positive as well -- from mayors and other officials of both small and large communities, to business leaders in growing regions, to governors of states that have been hit hard economically.

Indeed, if there was one common theme we heard it was that while community after community is ready to embrace the kinds of sustainable practices CNU has been preaching for 20 years -- the federal role can’t be about dictating what they can or can’t do, but rather offering them the resources and tools to help them realize their own visions for achieving the outcomes we all want and more and more are insisting on.

Outcomes like less time commuting and more time with family and neighborhoods where kids can play outside and breathe clean air.

Complementing this regional planning investment will be our $40 million Community Challenge Planning Grant program targeted to local communities. HUD will issue the NOFA for this program in conjunction with DOT’s NOFA for its $35 million “TIGER II” planning grant program.

Where DOT’s program will fund planning activities that relate directly to a future transportation capital investment, HUD’s program will fund land-use related planning activities that would be linked to a future transportation investment -- modernizing the building codes, zoning laws and other barriers communities face to sustainable development.

Secondly, we’re breaking down silos. While this office is critical, it’s clear that when it comes to housing, environmental and transportation policy, the Federal government must speak with one voice.

That’s why we formed a Sustainability Partnership with DOT and EPA, which is already producing results. In cities like Detroit, you can see that we are not only talking to one another -- we are making funding decisions together.

In the first round of DOT’s TIGER grant program under the Recovery Act, DOT awarded $25 million for the Woodward Avenue streetcar project in Detroit. HUD, DOT and EPA jointly reviewed the city’s application.

HUD brought to DOT’s attention community development activities already planned or underway in the Woodward Avenue corridor, which made the site a more attractive investment for DOT.

The EPA was able to highlight Brownfield remediation efforts in the vicinity of the project which will allow abandoned properties along the streetcar line to be “recycled” for economic development and affordable housing.

Not only does this comprehensive investment have the potential to fundamentally transform one of the most historic neighborhoods of the city -- for us, it is the model for the more effective award process we want to see in communities throughout the country.

Third, we’re building capacity. As you know, while communities are increasingly demanding tools that allow them to build more walkable neighborhoods with accessible job centers, not everybody is CNU. Some are leaders -- others aren’t yet but want to become leaders. They just don’t have capacity.

By making funding for both of HUD’s grant programs available to a wide variety of multi-jurisdictional and multi-sector partnerships and consortia, from MPOs, COGs and State governments, to non-profit and philanthropic organizations, we’ll be ensuring those communities don’t have to go it alone -- and bring the right partners to the table.

And we’re thinking ahead. For our budget request for FY 2011, we have asked Congress to create a tools clearinghouse that would give HUD the ability, for instance, to provide model codes for inclusionary housing learned in this year’s process that communities could use as a starting point for getting this work done locally.

By exposing our grantees to the most cutting-edge methods and tools for planning and designing sustainable communities, we can ensure every community benefits from these programs and encourage maximum community participation.

Mainstreaming Sustainability at HUD

Of course, $140 million alone isn’t going to build more sustainable communities.

And as important as planning and building capacity is, it’s all for naught if you fail to execute.

You’ve probably heard me say that I believe the real size of HUD’s sustainability budget is nearly $44 billion--the size of HUD’s overall budget--and how we intend to begin using every dollar of it to put more power in the hands of communities and more choices in the hands of consumers.

Well, today I’m excited to share with you one way we’re doing just that.

One of the most important ways we can drive funding toward sustainable development and the plans is through our grant competitions.

It probably won’t surprise you that for all of our NOFAs this year, we’ve established criteria that will incentivize our grantees to think about how they can incorporate green building and features into their plans. This year, however, we’ve decided to take an additional step.

You and I both know that for decades, the Federal government has actually encouraged sprawl -- whether it’s building the beltways and highways in the second half of the 20th century that connected employment centers outside city limits or, more recently, a housing finance system that perpetuated the “Drive to Qualify” myth.

But you also know that today, we live in a changing world where cities, suburbs and the rural areas that surround them share an economic future and metropolitan regions are the engines of our economy.

Where people are voting with their feet more and more -- in search of walkable neighborhoods with transportation options.

And where the global threat of climate change is very real.

That’s why, for the first time in the history of federal grant competitions, I want to announce today that HUD will be using location-efficiency to score our grant applications.

Using the “LEED-ND” green neighborhood rating system CNU developed in partnership with the National Resources Defense Council and Green Building Council, it’s time that federal dollars stopped encouraging sprawl and started lowering the barriers to the kind of sustainable development our country needs and our communities want.

And with $3.25 billion at stake in these competitions, that’s exactly what they will start to do.

Getting Out of the Way

As important as it is for the Federal government to scale up and lead the change, sometimes the best thing it can do is simply to get out of the way.

Right now, communities face a maze of roadblocks that prevent them from promoting infill development near transit or mixed-use development which brings residential and commercial development under the same roof.

With the leadership of Commissioner David Stevens and his Multifamily Deputy Assistant Secretary Carol Galante, FHA has already made environmental changes to expand our ability to do infill development and recycle polluted land near transit.

We’re making headway promoting mixed-use financing as well. As you know, right now FHA is prohibited from insuring any multifamily homes in a building in which commercial use requires more than a quarter of the property.

Commissioner Stevens and his Deputy Assistant Secretaries have begun to look at placed-based ways FHA can insure more mixed-use financing in the communities that need it -- taking into account issues like access to transit and jobs and providing the flexibility we need to ensure we don’t replace one “one-size-fits all” policy with another.

Using Rental Assistance to Drive Sustainable Development

Of course, sprawling suburbs are not the only communities struggling with sustainability.

Throughout this crisis, in urban cores of older industrial cities, we saw 15 years of gains in neighborhood revitalization rolled back within a matter of not decades, not years -- but months.

This sharp decline after years of progress was magnified in minority communities -- where African Americans and Latinos have experienced not only a drop in homeownership rates and lost billions in wealth, but also suffered disproportionate declines in public health, educational and economic opportunities.

These developments point to a broader challenge facing localities: that you can’t have a truly sustainable community if you promote segregated development patterns and concentrated poverty.

This is something CNU recognized at its founding.

It was people like Ray Gindroz who worked so closely with one of my predecessors, Henry Cisneros, who helped change the face of public housing by identifying a tool that had been inherited from the previous administration and taking it to scale in communities across the country.

HOPE VI wasn’t just about tearing down buildings -- it was about tearing down ossified social and community development policies. It was about making the Federal government a partner to communities to build high quality affordable housing, with design patterns that attract people to live there.

With our Choice Neighborhoods demonstration soon underway, HUD will be bringing to bear private capital and mixed-use, mixed income tools to transform all housing in a neighborhood. Just as importantly, it will make the non-profits and private sector that have participated in HOPE VI full partners in this transformation.

But we won’t remake public housing with just five projects a year. HOPE VI has transformed a handful -- and while we hope Choice Neighborhoods will transform many more, to really take the lessons we have learned to scale in communities across the country, we need to embed these principles into our broader public housing policy.

That’s one reason why we are working with Congress on what we call our Transforming Rental Assistance initiative.

TRA will put an end to the parallel system where most families live in housing that is financed, developed and managed through mechanisms that can be integrated with the communities around them, while the two-and-a-half million poor families served by HUD’s oldest programs live in another.

TRA will also help drive more economic development in the communities that need it most.

As hard as it is to finance mixed-use development using FHA insurance right now, it’s virtually impossible in the case of public housing -- despite the fact that the need for economic development near those properties is certainly far greater.

With TRA, we are proposing to replace those restrictions with a long-term Use Agreement that will preserve affordable housing on the site but also allow for additional incomes and uses, including commercial, recreational, and transit-oriented development.

We have recently proposed legislation--The Preservation, Enhancement, and Transformation of Rental Assistance Act--that would codify these changes into law and make sustainable development a central feature of our rental assistance programs.

And I ask all of you today to take the time to study this bill -- and not just support this legislation, but be a part of this transformation.

Sustainable, Inclusive Communities

In so doing, we can prove that housing and neighborhoods can be a platform for a new kind of sustainability -- equitable, inclusive neighborhoods, with opportunities for people of all ages, incomes, races and ethnicities.

The truth is, we know that diverse, inclusive communities offer the most educational, economic, and employment opportunities to their residents.

We know they cultivate the kind of social networks our communities and our country need to compete in today’s increasingly diverse and competitive global economy.

And we know students of all races and backgrounds are better prepared for the workforce and engage in more complex and creative thinking when they learn in a diverse environment.

Ensuring sustainable development is equitable development is not only something we all have a stake in.

I believe that in many ways, this work starts with you.

With all our challenges, we can’t afford to fall back into the trap that happened after urban renewal -- where designers and planners withdraw from social sphere. There is too much at stake -- and too much to gain. For all of us.

Over half a century ago, in 1954, the Warren Court’s unanimous decision in Brown vs. Board of Education declared that “separate educational facilities are inherently unequal.”

In America, we don’t accept one public education system for one group of children -- and a better one for everyone else.

We don’t accept one set of rules about what pollutants can be in the water some people drink -- and another set for the rest of us.

We don’t accept a worse set of health outcomes for one population -- and another for everyone else.

So, why should we when it comes to housing and community development -- with all that we know about how central it is to creating a geography of opportunity?

Why shouldn’t we make this right -- and work together to complete this unfinished business of the Civil Rights movement?

Together, I believe we can. I believe we have more than enough evidence to provide every community with the tools they need to build sustainably -- and to ensure that every family has the opportunity to live in one of those communities.

The time for action is now. Let’s get started today. Thank you.