Shaun Donovan, secretary of the Department of Housing and Urban Development, visited Richmond on Wednesday to promote Project Rebuild, a piece of the President Barack Obama's American Jobs Act.
Project Rebuild is a continuation of a neighborhood stabilization program started by President George W. Bush, but with a few new twists and a lot more money.
It would be expanded under Obama's proposal to include commercial projects, and it would allow for private developers to participate in the program. Previous programs were limited to residential projects, and the money flowed through state agencies or municipalities.
"Up until now, the money could only go to local governments or nonprofits," Donovan said. "With this, for-profits can participate."
The $15 billion program would create 200,000 jobs and be used to renovate 150,000 properties nationwide, Donovan said during a meeting with the Richmond Times-Dispatch's editorial board and news staff.
Federal dollars used to improve neighborhoods with high unemployment and foreclosure rates help spur private investments and turn neighborhoods around, Donovan said.
Donovan stopped in Richmond as part of a multicity tour. His next stop is Columbus, Ohio, on Friday. "Every member of the president's Cabinet is out talking about the importance of the American Jobs Act," he said.
Donovan also toured the 800 block of North 27th Street in Church Hill with Richmond Mayor Dwight C. Jones to see how a previous program helped revitalize that neighborhood.
Three houses on the block were renovated using federal money from the original $4 billion Neighborhood Stabilization Program implemented in 2008 under Bush.
"The three houses were vacant for a long time and having a chilling effect on the neighborhood," Donovan said. One foreclosure on a block can push home values down by as much as $10,000, depending on the neighborhood, he said.
These three houses were renovated using HUD grant money and sold to two teachers and a machinist. They sparked private investments in what Donovan referred to as a "ripple effect."
Project Rebuild can help stabilize home prices, revitalize neighborhoods and create jobs, Donovan said.
Obama's proposal for this piece of the jobs act is for more than twice what was spent on the combined previous three neighborhood revitalization programs.
After the initial $4 billion, a second round of $2 billion for neighborhood revitalization efforts was provided through the American Recovery and Reinvestment Act of 2009 and a subsequent $1 billion was in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
Donovan said the reason that Project Rebuild is so much more is the success of the previous programs.
Virginia has received about $51 million from previous neighborhood stabilization programs, according to HUD.
Richmond was allocated $2.4 million to address foreclosed and abandoned properties in the first round of funding through the Virginia Department of Housing and Community Development.
Through the third round, the city was given a direct grant of $1.25 million and about $300,000 as part of funds allocated to the state for neighborhood stabilization.
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