The Administration

Public-private partnerships make good on Trump’s housing promises


During his first address to Congress, President Donald Trump declared that “our neglected inner cities will see a rebirth of hope, safety, and opportunity.” That pledge is more achievable now than ever, if the administration plucks some low hanging policy fruit.

In such too-often-written-off cities as Memphis, New Orleans, and Pittsburgh, a pilot public/private neighborhood-turnaround program now called the Choice Neighborhood Initiative has produced major community improvements: a 40 percent increase in employment of public housing residents and 30 percent decrease in crime in Memphis; a 53 percent employment rate of the public housing residents in our mixed-income communities in New Orleans; and, 60 percent of the middle and high school youth from Pittsburgh neighborhoods participating in enrichment programs that keep them on-track for college and employment.

{mosads}The Initiative transforms neighborhoods. It replaces obsolete, deteriorating publicly owned housing that isolates poor residents with modern privately owned and managed mixed-income housing supported by coordinated private, philanthropic, and local neighborhood investments. It is designed to engage private developers and America’s top private-sector financial institutions to create a better model for housing, one with private market efficiencies and public accountability. According to my firm’s calculations, its projects have secured a 3:1 ratio of local and private investment for every HUD dollar spent.


To be selected for the program, communities must bring together local leaders, residents, housing authorities, educators, police, business owners, and nonprofit organizations to improve education and job training, economic development, commercial development, and job creation. These tie-ins encourage coordination with other federal investments, such as: the Justice Department’s Byrne Grants that address crime, safety and reentry and Department of Education’s Promise Neighborhoods that encourage school choice and school infrastructure, Treasury’s New Markets Tax Credits that support economic development and job creation, and Transportation and EPA programs for rehabilitating deteriorating infrastructure and public services.

The Initiative has already proven to be among the most successful uses of the IRS’ federal low income housing tax credits yet tested.

Since 1986, these credits have undergirded the financing of nearly three million apartments. In a typical year, credit-enabled projects create nearly 96,000 jobs, $3.5 billion in federal, state and local taxes paid, and $9.1 billion in wages and business income. Housing and Urban Development Secretary Dr. Ben Carson, in his confirmation hearings, called housing credits an “excellent example” of incentives that bring the private sector into low-income housing. 

In early March, Senate Finance Committee Chairman Orrin Hatch (R-Utah) and committee member Sen. Maria Cantwell (D-WA) reintroduced legislation with strong bipartisan support to increase the Low-Income Housing Tax Credit by 50 percent and make additional improvements to the program.

This suite of successful strategies has the capacity to catalyze a vast transformation to our nation’s biggest urban trouble spots.

The need is great. More than one in four American households spend 50 percent or more of their income on rent. There is a national shortage of 7.4 million homes affordable to the lowest-income families. Deferred maintenance on 100 percent publicly owned housing was estimated by HUD at $26 billion in 2010 and was growing by $3.4 billion each year. For every three units added to the overall rental stock between 1995 and 2005, two units were permanently removed from the inventory. Many of the new units targeted the higher end of the market and were unaffordable to those with more modest incomes. The housing boom-and-bust of the years that followed did little to improve the situation.

Today, a look through project submissions to HUD shows that public-private public housing transformation projects in 48 cities await federal support. In limbo is $5.7 billion in housing infrastructure investment, with most funding coming from private sources. Based on estimates by the National Association of Homebuilder, these projects would produce 26,000 tax-paying good wage construction jobs and 23,000 privately maintained, modern, healthy, low-impact apartments and homes for families, seniors and veterans. Equally important, formerly homeless veterans and others experiencing homelessness would be among those housed.

But to get these kinds of results, the Choice Neighborhood concept must go to scale. Past funding limited investment to $30 million per neighborhood. The number of awards allowed was kept at an average of three per year. Even when matched 3-to-1 by local and private investment, $30 million per award is not sufficient to achieve the intended impacts in places like Detroit, Cleveland, Cincinnati, St. Louis, and Louisville.

With President Trump intensifying focus and demanding action on our nation’s crumbling infrastructure and distressed urban neighborhoods, expanding the public-private Choice Neighborhood model — supported by efforts such as the Cantwell-Hatch Affordable Housing Credit Improvement Act of 2017 — would be a strong, cost-effective step toward fulfilling the president’s promise to urban America.

Vincent R. Bennett is president of McCormack Baron Salazar, Inc., one of the nation’s leading for-profit developers, managers, and asset managers of economically integrated urban neighborhoods. McCormack Baron Salazar, based in St. Louis, is a strategic partner of Goldman Sachs Urban Investment Group.

The view of contributors are their own and not the views of The Hill.

Tags Affordable housing Donald Trump HOME Investment Partnerships Program Housing Low-Income Housing Tax Credit Maria Cantwell Mixed-income housing Orrin Hatch Public housing Real estate Tax credit United States Department of Housing and Urban Development

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