There’s news today of two new bills that may provide funding to cities.
First, as reported by Craig Chester at Atlantic Cities, is the Brownfields Utilization, Investment and Local Development Act of 2013, the “BUILD Act,” aimed at assisting local governments “clean up and revitalize brownfield sites.” Chester sums up the proposal, and its bipartisan support:
The BUILD Act has bipartisan support—noteworthy in and of itself in this Congress—and its sponsors hail from a broad array of states, each with their own brownfield challenges. Senators Lautenberg (D-NJ), Inhofe (R-OK) Crapo (R-ID) and Udall (D-NM) all signed on as original sponsors of the bill, a telling example of just how ubiquitous the issue is.
The bill reauthorizes a wide array of financial and development tools for communities to help with site assessment and cleanup, all administered by the EPA’s Brownfields program. Among its provisions, the BUILD Act expands non-profit eligibility to receive brownfields grants and also allows the EPA to award flexible multipurpose grants to take into account the varied nature of many projects. More information about the specifics of the bill is available at Smart Growth America.
Ultimately the BUILD Act could help communities across the country create the kind of development that’s an integral part of the country’s most vibrant places. Brownfields represent tremendous economic development opportunities. The BUILD Act could help communities make it happen.
Second, as discussed by Alan Mallach at the Center For Community Progress Blog, is the Restore Our Neighborhoods Act of 2013, which also has bipartisan support and “would provide $4 billion in new funding for demolition activities through bonding to states.” Mallach explains the benefits of the bill:
[The Act] would amend the Internal Revenue Code to allow for qualified urban demolition bonds, a type of tax credit bond that can be sold to investors. Under this approach, in lieu of receiving interest, bond holders would receive a Federal tax credit equal in value to the interest they would otherwise receive. The bond issuer would only be responsible for repaying the principal when the bond became due, after 20 or 30 years.
The bill would allocate $2 billion in bonds equally to all 50 states, or $40 million each, while an additional $2 billion in bonding authority would be granted to “qualified” states – the states with the highest levels of vacancies, unemployment and mortgage foreclosures, and the lowest rate of population growth (H.R. 656, Sec 2 (g)(3)). The bill would also amend the provisions governing the Hardest Hit Fund Program to include demolition as a permitted use of those funds. States would have to commit their funds in two years, or they would be re-allocated to other states. All funds must be spent within five years of the legislation’s effective date.
But there are also downsides he discusses, such as this one:
The qualified bond approach, as described earlier, is an effective way of reducing the cost to the bond issuer while limiting the cost to the federal treasury, but bond issuers will still have to spend their money to get this money. Specifically, they will have to create a sinking fund, and deposit enough money into the fund up front so that, after 30 years, that money along with the interest it earns will be enough to pay off the principal on the bonds. A fair estimate, given today’s interest rates, is that they will have to come up with about 40% of the amount of the bond; in other words, if a state were to issue $100 million in bonds, they would have to come up with $40 million from somewhere else to create the sinking fund. The question is: will hard-strapped states and cities be able to come up with that money?
He instead advocates what he calls “a more comprehensive approach” that addresses not only demolition but also “incentives for people to buy and rehabilitate vacant homes in designated neighborhoods, as well as to provide funds for the essential ‘glue’ of neighborhood revitalization – improving the public realm, building stronger neighborhood institutions, marketing and more.”
It is encouraging to see bipartisan support for rebuilding America’s cities. I agree that it needs to be comprehensive and support revitalization whenever possible, as with brownfield sites. What do you think?