Urban Politics Federal Urban Policy VI

Overview Nixon’s “New Federalism” and Urban Policy Reagan Retrenchment Urban Policy Today

Nixon’s New Federalism Criticism of the implementation of Great Society programs –Community Boards were ineffective –Local political opposition from entrenched municipal interests –Overly complex

Nixon’s New Federalism “The time has now come in America to reverse the flow of power and resources from the States and communities to Washington, and start power and resources flowing back from Washington to the States and communities, and, more important, to the people of America” 1972 State of the Union Address

Nixon’s New Federalism Proposes sending $5 billion/year to states No strings attached Remove $10 billion out of existing aid programs and give directly to states Advantages? –State and Local governments were closer to “the people”

Nixon’s New Federalism In particular, property tax relief for suburban homeowners was a big incentive for program. Nixon describes property taxes were “the most unfair, unpopular, and fastest- rising of all taxes”

Nixon’s New Federalism Promised his program would reduce property taxes 30% Pledged not to use federal power to force suburban and other local communities to accept low and moderate-income housing against their wishes

Nixon’s New Federalism Critiques? –State/Local government dominated by middle and upper class with little concern or attachment to inner city problems –Money would be used to reduce property taxes, pave suburban roads, build airports and other program that help suburban interests but do little to remedy problems of inner city –Implicit racism in the housing pledge, since, by law, any federal housing project had to be integrated housing (1964 Civil Rights Act; 1968 Fair Housing Act)

Nixon’s New Federalism Politically, helped solidify and take advantage of middle class opposition to high taxes going to fund government handouts to poor

Nixon Era Programs General Revenue Sharing (1972) –Cities automatically receive federal money, based on a Congressionally mandates formula that included population as one but not the sole variable to be considered –Tended to favor smaller towns and rural areas over large cities –Minimal federal auditing

Nixon Era Programs Development of “Block Grants” in place of Categorical Grants –Collapse existing categorical grant programs into broader general purpose programs –For example, Model Cities Program and Urban Renewal fused into Community Development Act

Nixon Era Programs –Legislation provided general guidelines for use of funds –Detailed application from recipient explaining intended use of the funds and their compliance with Congressional intent –Auditing by Federal Government

Nixon Era Programs Decline of Public Housing –Initially created as facilities serving diverse populations (racial, ethnical, and economic) –New Structures with modern convenience would encourage public housing residents to develop a sense of ownership in the structure –Develop stronger, healthier neighborhood communities

Nixon Era Programs Led to construction of multi-story high rise units, replacing low density older buildings Los Angeles Detroit Newark Chicago

Nixon Era Programs By mid 1970s, this type of public housing viewed as a disaster –Ruined neighborhoods –Insufficient funding for upkeep

Nixon Era Programs Pruit-Igloe Housing Project, St. Louis Built in 1972 Complex of thirty three 11-story buildings

Nixon Era Programs Graffiti-riddled corridor in Pruitt-Igloe

Nixon Era Programs Pruitt-Igloe demolition, 16 March 1972

Nixon Era Programs 1973 Nixon suspends all new federal housing construction Housing and Community Development Act (1974) –Basis of contemporary federal housing policy –Rather than build for poor, provide federal money to help supplement rent payments –Eligible participants with incomes below a federally established threshold receive voucher to help pay rent –Owner of the unit exchanges voucher for money from federal government

Nixon Era Programs Developers can receive low-interest loans for constructing low income housing units

Nixon Era Programs Federal Highway Act (1973) –Decreases funding for highway construction –Increased mass transit funding $108 million (1970) to $3.2 billion (1978) Aid for both operating assistance and capital expenditures, concentrated in 10 larges metropolitan areas

Nixon Era Programs Clean Air Act (1970) –created EPA –set federal air quality standards Amended in 1977 to provide for regional enforcement of air quality standards

Nixon Era Programs Overall impact: –shift focus from inner city poor to middle and upper classes in suburbs –urban programs for all cities regardless of need or interest

Nixon Era Programs –big increase in spending on urban matters Grants, as a proportion of state and local expenditures, rise from 18% (1968) to 24% (1975) Total aid to state and local governments increased from $13 billion (1968) to $50 billion (1975) –Attempt made to address other urban problems (transportation and air quality)

Reagan Retrenchment Basic economic theory: supply side economics Less government involvement, particularly federal government

Reagan Retrenchment HUD programs cut: –$57 billion (1978) to $9 billion (1989) 35% decrease in all aid to cities over 300,000 $5.2 billion (1980) to $3.4 billion (1989) Federal Aid to to cities as a percent of city revenue dropped from 23% (1980) to 11.6% (1986)