CY PLAN 113B Lecture Notes - Lecture 12: Hope Vi, Market Rate, For Against
22 May 2018
School
Department
Course
Professor
HOPE “F March ,
• HOPE SF
o Take the est of HOPE VI ad tryig to do it right ad reediatig the orsts of CD fiae
• Arguments for and against CD finance
For
Against
• Allows us to leverage the private sector (less
cost to the public sector)
• Government money can be used for fiscal
expenditures instead
• Oversight role led to the improvement of
the quality of housing and management
• Moral culture: expands political support for
investing in CD in low-income communities
• Increased efficiencies and scale - can help
more households than before (compared to
a lot of small CDCs working on a few
projects)
• Less stigmatization of properties and CD
projects in general (it is not government
welfare)
o Compared to public housing,
projects led ito the
neighborhood and is
indistinguishable from market rate
projects
• Innovation and flexibility
o Local actors know the community
better than the federal government
and can respond to those needs
o Less bureaucracy than federal
government
• Dichotomy between renters and
homeowners and where benefits go
• Need the market rate component to cross
subsidize affordable units → can lead to
gentrification
• Private market investments will follow
market cycles; cyclical (may pull away when
financing is needed most (ie: during
recessions))
o Government can play a role in
filling funds when needed
• Inefficient
o Projects take a lot of lawyers,
management fees, etc., so it may
be cheaper to give just the CD the
money
o Some projects just fail and
continue to struggle with
disinvestment
o Giving tax credits to banks when
they would have helped anyways;
these programs are just a boon to
developers and investors
• Really bad at collecting data
o Do’t see hat the returs are for
banks and what they are investing
in
• Dupliatie: e’re spedig a lot of puli
funds in the capital stack on a small
number of projects (ie: you can be poor
and get nothing and be lucky and score a
housing unit)
• CDFIs and CDCs are incentivized to do
projects that have returs, ut the
increased scale can lead to a disconnection
from the community
• Acceptance of capitalism and
contemporary power structures; inherent
structure that creates inequality
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