Downtown Housing Incentive: Another Perspective

For the sake of argument, pretend you are a distressed municipality. Unemployment is high, population drifting away and industry has largely dried up. It sounds like you could use a hand. Well, you are in luck, because the federal government is ready and willing to help. The federal government is using your tax dollars to make it happen, but hey, that’s what it’s for, right?

Niagara Falls has its hat in hand by looking to spend $200,000 over a two-year period to reimburse recent college graduates for their student loans while they live in targeted neighborhoods. The arrangement requires them to live within the target area for no less than two years. The loan repayment is up to $291 per month or $3,492 per year. The Niagara Falls Community Development Department is seeking 20 individuals who will serve to enhance the city’s population and home ownership.

 From a practical standpoint, this does not make sense. This program, the Downtown Housing Incentive Program (“DHIP”) wants to boost Niagara Falls, but the investment is both too small and largely wasteful as an investment. According to the Community Development Department’s request, they will spend $69,840 per year on applicant tuition reimbursement. They will spend $30,160 on marketing, oversight and inspection costs to operate the program. Does it really cost over $30,000 to make sure a college graduate lives at a particular address? Does this really help the community? 

This targeted program is at its heart, elitist and biased. The underlying assumption is that college-educated young people will somehow better the communities in which they move. However, given that DHIP is only reimbursing tuition, there is no guarantee of higher or better employment. The current residents of the targeted area, anchored by Third and Fourth Sts., are presumably not affluent or otherwise well-to-do. To be eligible to use Community Development Block Grant funds, the census tract must contain largely low and moderate income households. Basically, it is government-sponsored gentrification.

 Seth Piccirillo, Director of Community Development, views this initiative as necessary to attract a young professional demographic to Niagara Falls. The concern is that because the population is dropping too quickly, the City runs the risk of losing additional federal aid. Such a circumstance begs the question what is being done with the financial aid the City it now receives if it can use it to repay college loans for incoming graduates.

 But what does that say about current Niagara Falls residents and those living in the targeted neighborhood? Their presence is appreciated for the population count, but they are not viewed as valued residents to market the region. The national media attention to the program suggests that they find it an intriguing idea, though it still slights those presently living here.

 Piccirillo’s plan called for over $8,000 just to market the concept, though free media has generated more than 200 interested applicants. It makes one wonder how efficiently block grant funding is utilized when budgets are prepared with the idea of spending just because the money is there. The Community Development Department’s “detailed” budget proposal lists over $60,000 in administrative costs for the two years of the program, but is that necessary given the widespread interest it has already generated?

 The Code of Federal Regulations which governs the use of CDBG funds requires that 51% of those benefiting from the use of such funds be low-to-moderate income individuals. The determination of what or who qualifies is made locally, so it is not hard to meet the standard.

Any unemployed or underemployed group could fall within that definition. Infusing young professional people into an area may look like improvement, but where does it end? Is there an age limit? Does marital status matter? Child bearing? Who decides what constitutes community and economic development? Who are “appropriate” persons to bring that to bear?

 The lingering question is who truly benefits from DHIP? The current residents of the targeted neighborhoods may see their property values rise, assuming they are owners, not renters. The landlords will likely see some benefit, if they can snare one of the 20 who are fortunate enough to be enrolled in the program.

 That is the challenge to downtown Niagara Falls. Can 20 college graduates change the path of a declining city? Tuition reimbursement may seem like an investment, but does it really spell genuine community development in an economically challenged neighborhood?

 Creative? Ambitious? Or is it another idea that goes too far using other people’s money, namely your own?