HUD Secretary to Urban Leaders: Place Really Matters!

Location Efficiency Trumps Sprawl, HUD’s Job is Housing AND Urban Development


At the recent 18th Congress for New Urbanism, U.S. Housing and Urban Development Secretary Shaun Donovan made a tremendous declaration: “For the first time in the history of federal grant competitions, I want to announce today that HUD will be using location efficiency to score our grant applications”.

The energy in the room was tangible. “We’re breaking down silos”, Donovan asserted, and indeed, this commitment from HUD to weight grant applications with spatial context in mind will advance the comprehensive approach to community development that CNU, CNT and other smart growth advocates have urged for years.

Over the past year, HUD has taken on an impressive task of touring cities, meeting and listening—“from mayors and other officials of both small and large communities, to business leaders in growing regions, to governors of states that have been hit hard economically”—to design and tailor a program that reflects what communities want, with the ability to apply context-sensitive solutions that work for each community. And CNT believes that the outcome and the subsequent announcement by Donovan show a real commitment to developing tools and resources that will help regions become strong economic engines—with healthy communities and reduced household expenses.

“Today, the average household spends more than half of its budget on housing and transportation. They have become American families’ two single biggest expenses”, said Donovan, affirming the findings of CNT’s H+T Index, which shows only two in five American communities—or 39 percent—are affordable for typical households when their transportation costs are considered along with housing costs.

CNT was an early developer of “location efficiency” and used the concept to design the Location Efficient Mortgage® (LEM), along with the Natural Resources Defense Council and the Surface Transportation Policy Project. When elements like compact neighborhoods with interconnected street networks, access to transit, mixed land uses, and concentration of retail and services are brought together, an efficiency of scale can be achieved that reduces the dependence on and the intensity of driving, freeing up more money for housing and other household expenses.

While the concept of energy efficiency has been more well-known and even celebrated, CNT has been a long proponent of the efficiency of locations. In 2008, CNT President Scott Bernstein testified in front of the House Financial Services Committee in support of the proposed “Green Resources for Energy Efficient Neighborhoods (G.R.E.E.N.) Act” by U.S. Rep. Ed Perlmutter (D-CO), arguing that it was a great start in providing incentives to homeowners in becoming more efficient, but that it should not overlook the importance of the ˜location” of a home when determining its efficiency.

These significant investments that HUD will make into planning sustainably complement recent investments by DOT through the TIGER program and the broad goals of the Partnership for Livable Communities to make policy and funding decisions in concert. As Secretary Donovan pointed out, “…it’s time that federal dollars stopped encouraging sprawl and started lowering the barriers to the kind of sustainable development our country needs and our communities want.”

“Secretary Donovan has made exactly the right move at the right time. This is the strongest evidence yet that the Obama administration is doing what it says it would do”, notes Scott Bernstein.

Shaun Donovan’s remarks at the CNU Conference came just two weeks after HUD released its 5-year strategic plan, deeming it a “new direction for HUD”. The 5 points that the plan outlines were implicit in the direction and goals that he stated at CNU. And the agency is already taking on a united front with this message. At the recent National Alliance of Community Economic Development Associations, Deputy Director Ron Sims, in his keynote on institutionalizing policy focused on sustainability, affirmed, “Sustainability is not the exclusive domain of the rich; it has to be for everyone.”

A message that CNT supports entirely. We are looking forward to similar commitments from other federal agencies—namely USDOT and USEPA—as well as state and local governments across the country.

Read Secretary Donovan’s remarks at the 18th CNU.

Read more on location efficiency on our website, including related testimonies and reports.

(Photo by James Hamilton, Shaun Donovan in 2007)

One Response to “HUD Secretary to Urban Leaders: Place Really Matters!”

  1. Patricia Marshall Says:

    This is very good news. I beleive, only the urbanites who are truely living the housing horror know what real sustainable housing should look like. I hope HUD has figured it out. However, I am elated to the possibilities.

    The Fact that Secretary Donovan is taking a stand against Sprawling and lowering the barriers is good.

    Maybe we’ll have an opportunity to build as novice grassroots developers and urbanites. We surely hope so.