Hoover Institution - Policy Review

A consensus has emerged in the field of urban politics: The glory days of national urban policy were actually quite inglorious. Mainstream urban scholars and practitioners — on both the left and right — have become dismissive of, and even hostile towards, programs once heralded as bold and visionary. National urban initiatives of the New Deal (federal home lending and large-scale public housing), the postwar era (slum clearance and other forms of urban “renewal”), and the Great Society (Model Cities, community action) are now widely seen as harmful to cities and their residents. Federal urban policy, as implemented from the 1930s to the 60s, has become associated with cronyism, racism, welfarism, sprawl, and hubristic top-down planning.

But why get hung up on the past? As the presidential election approaches, urban leaders and political candidates have taken the Bush administration to task for its lack of an urban agenda. The president has been charged with a lack of interest in cities and a stinginess with federal dollars. Detroit mayor Kwame Kilpatrick, delivering the Democratic Party’s weekly radio address in February 2004, noted that his city “has been woefully neglected by the federal government. Funding cuts have hobbled our schools, eaten away at our infrastructure, and dismantled programs to help the poor and those who need help to rise up in the workforce.” The solution? “The time has come for the federal government to pay its fair share.” Howard Dean won the endorsement of several prominent mayors around the country — including Minneapolis’s R.T. Ryback and Baltimore’s Martin O’Malley — by attacking Bush’s policy of “neglect” and promising a $100 billion “urban affairs agenda” to replace it. In one of the more entertaining moments of the primary season, Al Sharpton agreed to support candidate Kerry if — and only if — the latter implements his anti-Bush, pro-spending, national urban program. (According to Sharpton’s website, Kerry gamely agreed.) A similar view, though more politely stated, is expressed by organizations that lobby for urban governments’ benefit — particularly the U.S. Conference of Mayors and the Urban League.

It would be a mistake, though, to attribute this view only to those with a stake in the opposition to Bush or in increased aid to cities. Bruce Katz, founding director of the Brookings Institution’s Center on Urban and Metropolitan Policy and a widely respected authority on urban policy issues, has made a similar critique. In a chapter for What We Stand For: A Program for Progressive Patriotism (Mark Green, ed., Newmarket Press, 2004), he argues, “[t]he Bush Administration’s record on cities and metropolitan areas has veered between general neglect and outright hostility.” The administration, he explains, has walked away from successful polices of the past, withheld desperately needed funding from cities, and pursued major policy initiatives like homeland security and educational reform “without regard to their disparate impact on older, mostly poorer communities.” (More succinctly stated in an interview for the Cleveland Plain Dealer, “I think the only clear direction you can discern to date is ‘do less.’”) As Governing magazine editor Alan Ehrenhalt put it when asked about the president’s urban policy, “there isn’t one to talk about.”

Is the Bush administration lacking an urban agenda? It is useful, before answering, to consider the neglect-and-hostility charge in comparison to congressional behavior. One searches in vain for a congressional committee devoted exclusively, or even largely, to urban reform, or a subcommittee charged with responsibility for urban programs. The closest candidate, the Senate’s Committee on Banking, Housing, and Urban Affairs, spends an infinitesimal amount of time on urban issues. There are no significant bills pending or recently passed on urban affairs. The one working group devoted to urban issues, optimistically named Saving America’s Cities, hasn’t done much to date except convene lobbyists and draft press releases.

The absence of congressional interest manifests itself in congressional spending habits. As chronicled in the October 2003 issue of Government Finance Review, funds to municipal governments have been shrinking for decades. Congressmen prefer sending money to states, particularly through block grants, rather than to city governments. The most galling recent example, from the cities’ perspective, is in the context of homeland defense. According to a 2004 study by the U.S. Conference of Mayors, funds sent to state governments for support of first responders, critical infrastructure, and domestic preparedness are systematically withheld from urban areas. Congress has also shown a growing interest in funding non-municipal local governments, such as counties and school districts.

The factors behind this urban “neglect” are not difficult to discern. Cities have become far less powerful at the national level because their clout has been dwarfed by suburban growth. In 1950 fewer than one in four Americans lived in the suburbs. According to the 2000 census, virtually half of all Americans now make their homes there. Contrast this to 30 percent of Americans living in central cities, a number that has remained roughly fixed since the 1940s. A comparison of who votes is even more striking. According to the political analyst Al From, the 2000 electorate was 43 percent suburban/9 percent large cities. Fewer urban voters make for fewer urban representatives in Congress. There are more suburban congressional districts, at present, than urban and rural combined, and accordingly little pressure to put urban items on the agenda. Further, cities are not helped by the current fiscal situation of high deficits and high nondiscretionary expenditures. Federal officials are not feeling particularly generous toward municipal governments in the face of high debts and ballooning health care expenses.

The era of large federal outlays for urban reform, for the foreseeable future, is over. It has been over since the Nixon administration. It would not be fair, in this context, to ask whether President Bush has a hundred billion dollar “urban revitalization plan” to wow November voters. Better to ask whether his administration has an urban agenda — and vision — that reflects demographic and budget realities. It does. After sorting through the detritus of bureaucratic detail, and disregarding many policies that exist through inertia and legal obligation, it is clear that current urban policy has two primary objectives: 1) to uplift struggling communities and 2) to uplift struggling citizens. What is less clear is whether the administration is cognizant of these goals or wants to talk about them.

Cities have had an antagonistic relationship with the business community since Progressive Era reformers attacked the selfishness of private interests. But for all the rhetoric of greedy bosses and crooked special interests that has existed since the early twentieth century, civic officials have always understood that private investment is essential for cities’ well-being. As Alan Altshuler and David Luberoff discuss in Mega-Projects (Brookings Institution Press, 2003), “local politics has always been an aspect of business — a way of bringing government power to bear in support of private investment opportunities.” The idea of private/public “partnering” to promote urban development has been around for decades. It takes a variety of forms — land grants, tax breaks, the creative use of eminent domain, delegated taxing authority, favorable regulatory treatment. As Altshuler and Luberoff explain, these partnerships became popular as a way to get around resistance to disruptive projects and voter resistance to new taxes. Public expenses for these partnerships are overlooked by all but the most perspicacious of citizens: Funding mechanisms like tax incentives and land use are largely “off the books” and invisible to voters.

As Ron Utt of the Heritage Foundation points out, friendliness to business should not be confused with friendliness to markets. The inherent message in most partnerships: Civic leaders can’t rely on market incentives alone to spur private investment. Favorable terms are necessary to prompt city, and especially inner-city, investment because of the risks involved, suburban competition, and regulatory inconveniences. The result of this partnering is a matter of interpretation. Boosters point to development in former urban wastelands as vindication of these arrangements. (According to a recent report from the Ford Foundation, “businesses are creating win-win relationships with communities and discovering that both are bound in the common quest for wealth creation, asset building, and sustained prosperity.”) Skeptics, like Utt, point out that businesses habitually benefit through sweetheart deals at public expense. Kickbacks, tax breaks, and preferential zoning encourage projects that benefit the few over the many, and short- over long-term interests — such as superfluous convention centers, unprofitable sports stadiums, and ill-conceived tourist attractions.

The federal government has been drawn to public/private partnering in the urban context since (at least) the late 1970s, when the Urban Development Action Grant program offered federal matching grants for development in depressed areas. The Carter administration, like the Nixon administration, realized that the public’s appetite for massive federal urban policy was limited. Public/private partnering was a way to promote urban revitalization at a time when large-scale urban renewal was politically unfeasible. It was also a way to support urban causes without visible public expenses: Partnering at the federal level, like partnering at the state level, is typically encouraged by off-the-books financing. Also like local private/public partnering, federal public/private partnering combines government incentives with market forces. With the exception of an enterprise zone concept championed by former hud secretary Jack Kemp (who argued that private investment is encouraged by removing, not creating, regulation), federal policy officials have historically assumed that carrots are necessary, particularly in inner cities, to encourage private investment.

It is worth noting, though, that one of the most important federal private investment programs operates more like stick than carrot. The Community Reinvestment Act (cra), enacted in 1977, contains provisions that encourage banks to invest in low-income and minority neighborhoods. Failure to meet the “credit needs” of the “entire” community gives federal regulators grounds to decline applications for mergers, acquisitions, and branch openings. As Paul Grogan, president and ceo of the Boston Foundation, explains in Comeback Cities (Westview Press, 2001), punishment is not frequently applied: Fewer than half a dozen bank requests have been denied on cra grounds during the history of the program. But the threat of opposition — and the hassle of being accused of discrimination — has been enough to encourage massive investment in urban areas. Trillions of dollars, usually in the form of business lines of credit and home loans, have been extended to community development organizations and individual homebuyers. Banks, instead of resenting this arrangement, have grown to appreciate its incentives: Impressive profits have been made in “new” credit markets. As Grogan explains, in a chapter called “the credit revolution,” “not one financial institution has ever failed — or even suffered a bad night’s sleep — because it overextended itself in poor or minority communities.”

Federal urban policy under President Clinton embodied the private/public, carrot-driven, Field-of-Dreams approach to community development (build nice things and people will come). His signature initiative, the Empowerment Zone and Enterprise Community (ez/ec) program was a politically savvy mix of community grants and private incentives, providing funds for local governments, nonprofits, and businesses. (Under this program, selected cities are given block grants and tax breaks, and businesses receive incentives to build in depressed areas.) The administration often spoke of its visionary approach, its “third way” combination of progressive values and friendliness to capitalism. Public/private partnering was not new, of course, but the administration had an unprecedented ability to tout the arrangement.

That, then, is President Bush’s community uplift strategy? It is a collection of public/private initiatives passed during previous administrations. The cra is alive and well, having survived Senator Phil Gramm’s lonely attempt to clip its wings in the late 1990s. The Community Development Block Grant program (circa 1974) and the ez/ec program still distribute goods to urban (and nonurban) areas. The two main pillars of the president’s urban renewal program — the low-income tax credit and the “new markets” program — were passed, respectively, under Presidents Reagan and Clinton. Both operate on the assumption that business activity (that is, subsidized business activity) is the key to neighborhood revitalization.

The low-income housing tax credit (lihtc) program, established in 1986, is the centerpiece of the administration’s community uplift agenda. It is a low-income housing program with a disproportionately high effect on urban areas. Federal tax credits are distributed to states on a per capita basis. State agencies (typically housing agencies) award these credits to developers who build or refurbish affordable rental units. The credits are distributed for up to 10 years, as long as units are made available to tenants earning significantly less than the area’s median income. lihtc operates through a complicated allocation system, and the delivery of credits admits of much discretion. States have significant leeway in distribution, and developers are free to sell their credits for equity to investors such as banks and insurance companies. Extra credits are available for developments located in poor or “difficult” (that is, prohibitively expensive to develop) areas to encourage inner-city investment.

The lihtc program is extremely popular among businesses. Multi-Housing News, a journal for executives in the housing industry, calls it the “best ever” vehicle for providing affordable housing. Little wonder: It provides an impressive dollar-for-dollar offset against other federal taxes. Credits can generate 50 percent — or more — of the cost of development. And the program is great public relations. Businesses participating in lihtc can boast of their commitment to inner-city revitalization, generating good will among officials and investors. (Fannie Mae advertises its participation in lihtc as part of its “American Dream Commitment”; banks often participate in the program to gain credit with cra regulators.) Community development corporations — which, as noted, have profited nicely under the cra — have benefited significantly from this program. Businesses frequently fund cdc housing projects through lihtc to demonstrate their commitment to grassroots city programs.

Compared to lihtc, other programs that fund community revitalization — ez/ec, Community Development Block Grants — cannot compete in terms of either private investment raised or support within the administration. hud calls lihtc “the most important resource for creating affordable housing in the United States” and maintains a broad database to encourage research and disseminate information. The credit accounts for most new affordable apartment production (estimates are as high as 90 percent) — according to hud, between 75,000 and 90,000 units per year.

Despite its wide popularity, lihtc has yet to be mentioned in a state of the union address with other domestic initiatives. The president has not called for increased funding. Indeed, his commitment to lihtc was widely questioned in 2003, when he proposed the end of “double taxation” of corporate dividends, which would have reduced participation in the program. (If the proposal had passed, stock dividends would have been tax-free only if they were paid out of fully taxed corporate profits — not a great way to encourage the use of tax credits.) The reaction of the housing industry was, to put it mildly, thundering. Bush did not bother to defend the program. It was left to the secretary of the Treasury to explain, rather unconvincingly, that job creation from new tax cuts would offset lihtc disincentives. Congress eventually passed a tax cut package that does not jeopardize lihtc, and did so on its own initiative. Oddly, a program central to contemporary urban policy does not seem to capture the interest of the president.

A similar silence envelops the New Markets Initiative. The law was developed by Bill Clinton and Dennis Hastert and passed by a Republican Congress as part of the Community Renewal Tax Relief Act of 2000. New Markets extends the logic of lihtc to the goal of economic development: tax credit for money invested in “new markets” — largely depressed inner- city areas — and community renewal strategies. Businesses and nonprofits receiving credits are required to invest in these areas through a broad range of activities, including loans to local business. The program’s ends, as reported by the gao, “are to direct new business capital to low-income communities, facilitate economic development in these communities, and encourage investment in high-risk areas.”

In March 2003, under President Bush, the Department of the Treasury awarded the first round of New Markets credits. As might be expected from business enthusiasm for the lihtc program, the Treasury Department was deluged with applications; according to the New Markets Tax Credit Coalition, $2.5 billion in credits was made available, and Treasury received requests for close to $26 billion). Since the program is expected to stimulate $15 billion in equity investment during its first few years, it may soon rival the lihtc in terms of impact on urban communities. The Local Initiatives Support Corporation, an advocacy group for cdcs, describes New Markets as the “most significant federal tax initiative to support community development in nearly 20 years.”

But here, too, despite the opportunity to boast, Bush has remained silent. The White House website has no references to this initiative, and the president does not allude to it in campaign speeches or policy statements. The only official description of the program is a difficult to find — and dry as dust — application page on the Treasury Department’s website. Like the lihtc, New Markets is a significant, highly popular program that seems to energize neither the president nor his administration. It may be that President Bush has limited enthusiasm for programs enacted before his inauguration. (Indeed, he has no enthusiasm for hope vi, a much touted housing program championed by the previous administration.) It is tempting to speculate, though, that his urban priorities are somewhere else completely.

Words may speak as loudly as action when it comes to urban policy. The administration carries out community development initiatives in virtual silence but is loquacious — at least in some respects — about its citizen uplift agenda. It is important to note, at the outset, that these programs are not explicitly urban. They are, however, intended to correct personal habits associated with concentrated poverty and thus are highly relevant to central cities. Federally funded drug rehabilitation programs, marriage counseling, work programs, mentoring services, and prison release programs (a partial list) are particularly relevant to urban areas. These initiatives convey the same underlying message: Life can be dramatically improved by acquiring moral habits.

The most significant individual uplift program of this administration, judging by the attention it has been given, is its homeownership initiative. Bush’s commitment to homeownership has been a theme since taking office (and before: He ran on the issue in the 2000 campaign). Homeownership is often defended in financial terms — home buying stimulates the economy — but is generally explained as something valuable because it improves people’s character. Homeownership, according to the president, encourages commitment and responsibility, as well as attachment to the larger community. As he explained to the U.S. Conference of Mayors in January, “we understand that when somebody owns something, he or she has a vital stake in the future of this country.” It also encourages a healthy kind of self-worth, as explained at a March rally:

More people than ever in our history are able to say, “I own something. I own my own home.” I went to [audience member] Pearl’s home and it was pretty special . . . . She said, “This is my home.” When I walked up the stairs, she didn’t say this is anybody else’s home, but her home. She said, “Would you come into my home, please? Would you come in and meet my four children in our home?” . . . she was great, and it was wonderful to see.

The moral component of homeownership is accentuated by a social justice objective. It is a central aim of the Bush administration to close the “housing gap” or, in other words, to increase the number of minority homeowners. (Approximately 76 percent of non-Hispanic whites own their own homes; the number is less than 50 percent for blacks and Hispanics.) The hud website states the administration’s goal of increasing minority home ownership by 5.5 million by the end of the decade — no small task considering that minority home ownership already rose by nearly 1.2 million families between 1993 and 1999. The rationale for closing the gap is identical to the rationale for the general program: People have a “better life” through the purchase of a home.

Discussing the moral and racial aspects of homeownership is not new presidential politics (President Clinton was eloquent on both themes), but the current focus and energy is unprecedented: the Affordable Communities Initiative (designed to make homes more affordable by reducing government regulation), the Blueprint for the American Dream Initiative (encouraging homeownership through public/private partnering), the American Dream Downpayment Initiative (providing federal funds to reduce closing costs), Community Ownership Tax Credits, and the Zero Down Payment program (which would eliminate the current fha requirement of three percent). The 2005 budget calls for $200 million for the American Dream Downpayment Initiative (which was enacted in 2003), doubles funding for the Self Help Homeownership Opportunity program, proposes a hefty single-family affordable tax credit, and suggests $45 million for new-buyer housing counseling. The administration celebrates “national homeownership month,” is committed to a “homeownership challenge,” and created a new office in hud devoted to fair housing, education, and outreach.

While nothing compares to the energy devoted to homeownership, the Bush administration has found other residency-related means to teach moral lessons. Significant rental initiatives seek to improve the behavior of low-income citizens. hud, for example, has (for the first time) begun to enforce community service requirements, enacted in 1998, for public housing residents. The rationale? Moral lessons can be learned through community volunteering. The task promotes a sense of duty, civic commitment, and at least the semblance of a work ethic. In the words of Mayor Michael Bloomberg, a defender of the rule against its critics, “Doing some community service isn’t the worst thing.”

A similar logic can be seen in the administration’s two attempts to change the Section 8 housing voucher program. Under current rules, local housing authorities distribute rental vouchers to low-income applicants. Recipients take the vouchers to private landlords participating in the program. Renters pay a small percentage of the rent — no more than two-fifths — and the federal government takes care of the rest. In 2003, the administration proposed changing Section 8 to a block grant allocation to states. Housing vouchers would, under this plan, be handled much like federal welfare dollars after welfare reform of 1996; that is, state officials would be encouraged to cut costs through innovation. With the discretion and incentive to control program costs, state officials could disincentivize public housing through behavioral requirements, job counseling, and time limits. Vouchers (like welfare) would no longer be a permanent benefit once received, but rather a temporary arrangement.

Congress nixed this initiative. The administration’s new proposal, the “flexible voucher plan,” is a runner-up solution. Under the flexible plan, Section 8 money is routed to local housing authorities. Payments come with freedom from many existing Section 8 rules. Housing officials — like the state officers in the 2003 plan — would be encouraged to stretch their dollars through creative management: renting to mixed income families, charging more for rents, imposing time limits on residents, encouraging tenants to use vouchers for permanent housing.

There are real economic reasons why the administration wants to modify the Section 8 program. Spending on vouchers has risen dramatically in recent years; costs currently take up approximately half of hud’s budget. But there are other considerations. The Section 8 program, as it currently operates, is troubling from a moral perspective. Participants are given numerous incentives to act irresponsibly (mostly by avoiding employment) because of the de facto poverty required to participate in the program. The virtual guarantee of vouchers, once awarded, discourages self-improving behavior. Both Bush reforms are attempts to inject positive moral messages into the public housing system. Like welfare reform, Section 8 reform makes “tough love” assumptions about human behavior: As the preceding examples suggest, Bush’s moral uplift program often takes a secular tone. Homeownership and rental reform are designed to encourage personal responsibility, hard work, shame, and community involvement. There are other virtue-building initiatives with no outward religious message: marriage promotion (such as “responsible fatherhood” programs and “healthy marriage” grants), federal funds for school drug testing, and federal funds for abstinence programs. No Child Left Behind (nclb), particularly as it redirects funds from failing Title I schools, has a central — and secular — moral message: Teachers and administrators are responsible for the well-being of their students. The penalizing aspects of nclb may be seen as an expression of the president’s tough-love approach: A little pain through decreased aid will prompt positive change among teachers and administrators.

Despite the secular aspects of these programs, the core of individual uplift is religious. While belief in individual sanctity and redemption are not exclusive to Christians, they are a central tenet of their faith, and the administration’s uplift efforts make considerably more sense when considered from this perspective. Indeed, the power of homeownership or community service or education reform, in the absence of Christian assumptions, seems excessively optimistic: Why should (simply) buying a house or volunteering eight hours a week or withholding Title I funds significantly change habits of bad behavior? Faith makes a moral uplift agenda seem reasonable despite discouraging results or the carping of participants and critics. The power of God, for the faithful, has long prevailed against long odds and the doubts of secular observers.

The overlap between religious faith and moral uplift is an old theme in American politics. The most significant moral crusades of the nineteenth and twentieth centuries — abolition, temperance, and prohibition — were informed by evangelical assumptions. Urban reformers in the nineteenth and twentieth centuries relied heavily on religious messages in their attempts to uplift slum populations. President Bush’s religious rhetoric pales in comparison to the Christian uplift of earlier generations. There is no fire and brimstone, no damnation, no promise of otherworldly salvation. There is, instead, modern egalitarian language: Bush speaks in nondenominational terms, stresses the all-inclusive nature of redemption, and relies heavily on the tender concept of compassion.

The non-threatening tone of contemporary uplift, however, should not obscure the assumptions that connect it with earlier programs. This president, like earlier evangelical reformers, believes that sin exists and needs to be countered. He assumes self-help is largely insufficient. The “miracle of recovery” (as described in the 2003 state of the union) is intractably bound with faith and divine assistance — even (in the case of forced volunteer programs) when sufferers would prefer to be left alone. Federal government involvement in moral uplift is, in this sense, wholly appropriate. As explained in the January 2001 announcement of his faith-based initiative, “We are called by conscience to respond.”

The urban nature of individual uplift is made clear by the White House’s faith-based efforts. The seven target populations identified by the Office of Faith Based Initiatives — at-risk youth, ex-offenders, the homeless, the hungry, substance abusers, those with hiv/aids, welfare-to-work families — are frequently clustered in central cities. Not surprisingly, then, urban religious programs have received an impressive share of the White House’s attention. Eight regional conferences have been held to educate religious service providers about available federal aid, all of them in major metropolitan areas. The “Compassionate Capital Fund,” created in 2002 to assist faith-based and community organizations, aggressively supports urban serving organizations. Approximately half of ccf “demonstration program” grants awarded in 2003 went to groups supporting urban organizations; over 30 of the 50 mini-grants made directly to community groups went to those located in major cities. The president has hinted at the relevance of his faith-based efforts to cities in his policy addresses. He suggested, for example, to the U.S. Conference of Mayors:

Interestingly, though, despite the significant impact uplift programs have on cities and the natural fit church-based services have with low-income and minority populations, the administration has yet to discuss these initiatives as part of an urban agenda. One searches in vain, on the hud website or at the Health and Human Services home page, for any acknowledgement that social service programs are particularly helpful for inner city residents who have not benefited from past government programs. A call to the D.C. office of the Compassion Capital Fund — which, as noted, awards a high percentage of its grants to city social service groups — produced an adamant denial that the program has an urban focus. In a strange reversal of federal politics as usual, this administration is openly supportive of religious groups and secretive about its aid to cities.

With this tour through community and individual uplift programs concluded, we can return to the question posed at the outset. Does George W. Bush have an urban program? The answer, clearly, is yes, though he has failed to speak in a compelling way about it. In contrast to Clinton, who made public/private partnering a central theme of his domestic agenda, Bush has declined, over the past four years, to defend his record of community development. (There is considerable irony in this since it is this administration, not the last, that has carried the public/private vision into fruition.) Bush speaks forcefully about the importance of individual uplift but has yet to explain that moral education is a crucial urban issue. Why?

There are three possible reasons Bush remains mum on his urban agenda. First, and least likely, the administration may be unaware it has something interesting in operation. The president may not realize that current tax credit programs drive millions of dollars of private investment in urban areas or that funding religious organizations has a salutary effect on urban residents. Indeed, there is no Henry Cisneros, Andrew Cuomo, or Jack Kemp telling the public — and Bush, for that matter — about the power and potential of existing programs. Second, and slightly more likely, the president has little concern for cities qua cities, favoring a focus on individuals regardless of location. This would explain why community uplift programs are championed while community development programs go undefended — uplift is aimed, after all, at the souls of particular citizens. (The fact that uplift programs have a disproportionate effect on urban residents, under this hypothesis, would be largely irrelevant.)

Third, and most plausible, Bush has little to gain politically by putting forward an urban agenda. The complaints of Kwame Kilpatrick, Al Sharpton, or Brookings’s Bruce Katz are, from a certain political perspective, irrelevant. This is the age, as David Brooks has identified it, of “the great dispersal” — voters, living in suburbia and exburbia, do not give a hoot about urban politics or are positively hostile to it. Congress, as noted, has little attachment to urban causes and is not likely to vote for programs sold as city-based. Under these conditions, Bush is quite prudent to stress personal empowerment and steer clear of urban renewal; far better to defend the unmet needs of religious groups or minority renters than the needs of urban areas. This strategy, from the standpoint of budget increases, has been remarkably effective: City-serving programs, like lihtc and the faith-based initiative, have continued to grow under this administration.

There is ample reason, though, for those interested in urban politics to be less reserved in their treatment. We are currently witnessing a change in federal urban politics that is quite dramatic. In contrast to massive and highly disruptive programs of the past — such as inner-city highway construction and slum removal — Bush’s redevelopment efforts are small-scale and respectful of local needs and decisions. As Paul Grogan notes, stakeholders abound in this system. Businesses, community groups, and homeowners have a personal interest in how programs turn out and closely monitor implementation. Central urban planning has, under President Bush, turned into a decentralized and accountable system.

In contrast to private/public partnering of the past, the current model does not put exclusive emphasis on financial investments. While economic development programs continue to thrive (cra, lihtc, New Markets), they exist along with programs encouraging individual improvement — homeownership, self-reliance, community attachment. Neighborhoods matter to this administration, but so does the behavior of people who live in them. We are witnessing the fusion of “third way” urban politics with a commitment to personal reformation.

The administration’s subterranean agenda is not without its problems. Critics from the right reasonably argue that market forces aren’t being taken seriously. Business incentives will continue to be vulnerable to miscalculation and manipulation. Critics from the left reasonably point out that this agenda is too narrow — it does little to mitigate the high costs of federal mandates on cities, like homeland security and nclb. Libertarians may take offense at federally funded moral reform, and social conservatives may wish for a moral message based on more robust themes than homeownership and compassion.

It is useful to consider these critiques, however, in light of previous problems. Federal urban politics of the twentieth century encouraged some of the worst sins of national politics: monolithic planning, welfare dependency, racial politics, and urban evacuation. The Bush urban agenda — at its worst — steers far clear of these problems. At its best, it offers a new vision of federal urban politics that appreciates both neighborhoods and individuals, and the importance of both the business community and nonprofits. Considering the obstacles against an urban agenda — lack of congressional interest, the war on terror, budget constraints — the administration has something to crow about. Since it will not do so, we should.