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HUD No. 97-43
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In the Washington, DC area: 202/708-14203 p.m. EDT Tuesday
Or contact your local HUD officeApril 8, 1997

HUD AWARDS $90.8 MILLION IN GRANTS AND LOAN GUARANTEES TO CREATE HOMEOWNERSHIP ZONES IN BALTIMORE, BUFFALO, CLEVELAND, LOUISVILLE, PHILADELPHIA AND SACRAMENTO

WASHINGTON -- Housing Secretary Andrew Cuomo today announced $90.8 million in grants and loan guarantees to six cities under the Homeownership Zone program to help turn blighted inner city areas into thriving neighborhoods.

The Department of Housing and Urban Development assistance will help about 2,000 families become owners of newly built or rehabilitated single-family homes and will attract new job- creating businesses, Cuomo said.

Cuomo said the six Homeownership Zones -- the first receiving funding under the program -- will receive a total of $30 million in grants and $60.8 million in Section 108 loan guarantees from HUD. The zones are part of President Clinton's strategy to increase the nation's homeownership rate to a record 67.5 percent by the year 2000.

The Homeownership Zone aid will go to: Baltimore, MD -- $5.24 million in grants, $6.7 million in loan guarantees. Buffalo, NY -- $5 million in grants, $7.7 million in loan guarantees. Cleveland, OH -- $4.64 million in grants, $18 million in loan guarantees. Louisville, KY -- $4.6 million in grants, $5 million in loan guarantees. Philadelphia, PA -- $5.52 million in grants, $18 million in loan guarantees. Sacramento, CA -- $5 million in grants, $5.4 million in loan guarantees.

"Homeownership Zones will turn back the clock on urban decay, returning vitality to inner cities after decades of decline," Cuomo said. "We will help neighborhoods that prospered in the first half of the 20th Century to achieve a new prosperity in the first half of the 21st."

"HUD's investment will serve as seed money to launch a successful partnership with state and local governments, homebuilders, non-profit groups, and the business community," Cuomo said. "Our investment will leverage greater investment by our partners, transforming urban wastelands."

Groups working with HUD to make the Homeownership Zones succeed include: The National Association of Homebuilders, Habitat for Humanity, the Enterprise Foundation, the Local Initiatives Support Corp., the Corporation for National Service (Americorps), Fannie Mae, Freddie Mac and other national and local groups. Each of these groups will make a different contribution to make homeownership in the zones more affordable, such as volunteer labor, technical assistance, low-interest loans, and a variety of mortgage products.

The six Homeownership Zones were selected by HUD from applications by 97 cities and counties in a nationwide competition.

Expenses such as the purchase of land and infrastructure improvements can be funded with HUD's Homeownership Zone assistance. This will effectively cut costs for families buying homes and for retailers and other businesses setting up shop in the zones, increasing the attractiveness of the areas.

The Homeownership Zone program will implement concepts of the New Urbanism, a type of urban planning that makes the neighborhood the focal point of planning and development. The New Urbanism principles that will be promoted by HUD and its partners in the Homeownership Zones include: defined neighborhoods of limited size; flexible zoning standards to allow a mix of compatible uses, along with a mix of housing styles and levels of income; public parks and gathering space; historic preservation; mass transit connections; and pedestrian-friendly streets and walkways connecting the neighborhood to the surrounding area.

Here is how cities will use Homeownership Zone investments:

  • Baltimore ($11.94 million in total assistance) will create a Homeownership Zone in the Sandtown-Winchester area, which is part of the city's Empowerment Zone. This will build on Baltimore's ongoing efforts to redevelop this area, which began in 1991 with 227 units of housing under the Nehemiah program. The Homeownership Zone will include 242 new homes and 80 rehabilitated homes. Plans for the zone also include new commercial development, public parks and job training programs.

  • Buffalo ($12.7 million in total assistance) will create a Homeownership Zone in the Willert Park neighborhood, which is in Buffalo's Enterprise Community. The zone will include 344 newly constructed homes. This project also includes the rehabilitation of an obsolete industrial park, new retail space, and other economic development. Buffalo has also included plans to improve delivery of social services and job training to residents of the zone, nearly all of whom have incomes below 80 percent of the area median.

  • Cleveland ($22.64 million in total assistance) will create a Homeownership Zone in the Neighborhoods of Central area, most of which is in the city's Supplemental Empowerment Zone. Cleveland will develop about 400 new homes and 65 rehabilitated homes. The plan also includes strategies for job creation and commercial development in the area. Applying the concepts of the New Urbanism, the city will market these new houses to a broad mix of incomes. A large and distressed public housing development, which recently received a HUD HOPE VI grant for remediation, is located within the zone. The zone will reintegrate this development and its residents into the revitalized neighborhood.

  • Louisville ($9.6 million in total assistance) will create a Homeownership Zone in the Park DuValle neighborhood, which is in the city's Enterprise Community. The zone will include 300 newly constructed homes. The plan also includes economic development, job creation, the improvement of social services and transportation, and new public parks. The zone also includes the integration of public housing and public housing residents. Cotter and Lang Homes, an 1,100-unit public housing development, is located in the zone and is scheduled for demolition with a HUD HOPE VI grant.

  • Philadelphia ($23.52 million in total assistance) will create a Homeownership Zone in the Cecil B. Moore neighborhood, which is located within the city's Empowerment Zone. The Homeownership Zone will include 297 new homes. The zone will reclaim much of the vacant and blighted land left after the population of the area fell from almost 13,000 in 1960 to below 3,800 in 1990. Plans incorporate many of the principles of the New Urbanism by emphasizing preservation of the historic character of the neighborhood, a broad mix of incomes, and flexible zoning standards to allow for a mix of uses.

  • Sacramento ($10.4 million in total assistance) will create a Homeownership Zone in the Del Paso Nuevo neighborhood of the Del Paso Heights/Strawberry Manor area. The zone will include 300 newly constructed homes, which will be marketed to a broad mix of incomes. The new development will unite two previously isolated areas and reclaim a large tract of vacant, blighted land. The plan integrates other activities in the area including job training, housing for senior citizens, and programs of a local community college.

    Content Archived: January 20, 2009

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