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How South Bend and Tulsa Are Rethinking Funding for Affordable Housing

Cities across the nation are facing difficult decisions when it comes to allocating resources. Budgets are tight, and a seemingly impermeable wall of challenges creates competing priorities as cities work to prioritize.

The affordable housing crisis is one of the most pervasive of these challenges for many cities. It has left millions of Americans struggling to make ends meet. A single emergency — such as a furnace breaking, a car accident, or a health issue — can leave families having to make a choice between making a housing payment or covering the unexpected expenses. Figuring out an effective approach to improving life for a city’s most vulnerable residents is crucial.

Federal Community Development Block Grant (CDBG) funding is one way many cities work to meet the housing needs for these residents. And yet, many cities have fallen into the rut of allocating this funding in the same way year after year. Without regular data analysis to reevaluate where this funding is directed, cities can miss out on opportunities to ensure this funding has the greatest impact on the most vulnerable residents.

Through its repurposing line of technical assistance, What Works Cities partner Results for America has been helping cities use data to make decisions about when to shift funding away from programs that aren’t working toward ones that are. Cities like Tulsa, Oklahoma, and South Bend, Indiana, have applied the best practices of repurposing to rethink the investment of their CDBG funds.

South Bend, Indiana: When What’s Being Funded Doesn’t Match the Need

Each year, South Bend receives $2.3 million in CDBG funding, part of which the City earmarks for local developers, who can bid for the funds by proposing affordable housing projects. Previously, the majority of these projects focused on building dwellings for future homeowners.

But while using data to identify the underlying issues behind the local affordable housing crisis, a key discovery emerged: Even though the cost of rent often surpasses that of a monthly mortgage, homeownership has remained out of reach for most low-income residents because they face difficulty securing financing. In short, many CDBG-funded projects were not helping South Bend’s most housing-insecure families.

The City worked to take a resident-centered approach to determine how it could redirect CDBG resources accordingly. The City went on to launch a new RFP process in order to ensure awarded contracts maximize the construction of family rental units. The revamped RFP contained new language that clarifies the City’s priorities and clearly outlined concrete criteria on which projects will be judged, helping South Bend’s development and entrepreneurial community develop new proposals and housing models that are more aligned with addressing some of the most urgent needs of South Bend families.

At the same time that the City is working to meet residents’ immediate needs, it is also focusing on the longer term goal of giving low-income renters a path to homeownership. For example, the City is working with the startup Hurry Home, which provides financing for homes that cost below that which would lead to profitable mortgages for banks.

South Bend set an example that Tulsa, Oklahoma, was able to look toward when it came to its own budgeting process.

Tulsa, Oklahoma: When the Zip Codes Receiving Funding Aren’t the Ones that Need it Most

Mayor G.T. Bynum ran on a platform of using data to run an effective government and better solve local challenges — among them, disparities between low- and high-income Tulsans. One of his first actions in office was to commission an Equality Indicators Report in 2018, establishing a baseline for the problem and informing efforts to address it. As the Mayor said in the City’s follow-up report one year later:

“While the [2018] report did not contain new revelations for many Tulsans, it did allow us to move out of the realm of anecdotes and gut feel and into a community-wide conversation more in informed by standardized data.”

This desire to strategically redress inequity presented an opportunity to align budgeting decisions with city values and priorities.

Tulsa once spread its CDBG funding across the city, making sure every area within its jurisdiction received some level of funding, regardless of need. But data analysis showed that an approach rooted in equal distribution of funding was not achieving meaningful change for many of the city’s most vulnerable communities. Additionally, staff had learned from an Urban Institute study that there is some evidence that change has the greatest impact in neighborhoods with poverty rates between 20% and 40%. As a result, city leaders redesigned their CDBG allocation process. Now they have redirected nearly a half-million dollars in funding toward the city’s Crutchfield neighborhood, where the poverty rate is 2.3 times higher than the city as a whole.

Moreover, the City is committed to consistent data analysis to ensure the new approach is yielding desired results. For example, one finding of the initial report was that life expectancy in the city is drastically reduced for residents living in poorer zip codes. Now the City is working to establish partnerships with community organizations or academic institutions that can help to evaluate the effect of the increased funding on life expectancy outcomes for the residents of Crutchfield.

Your City Can Repurpose, Too!

By turning to data, South Bend and Tulsa are not just rethinking their approach to funding, but also their approach to meeting residents’ needs. The strategy is one that any city can bring into its budgeting process. Learn how in our Q&A with What Works Cities Director of City Solutions Clarence Wardell.

Works Cities Certification — the national standard of excellence for well-managed, data-driven local government — emphasizes the importance of repurposing. Across the country, cities of all shapes and sizes are doubling down on their commitment to deliver the best possible results for residents by using Certification as a guide.

Any U.S. city with a population of 30,000 or more can receive exclusive support from What Works Cities to accelerate their progress simply by completing a What Works Cities Assessment online. Get started on yours today!

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Helping leading cities across the U.S. use data and evidence to improve results for their residents. Launched by @BloombergDotOrg in April 2015.

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What Works Cities

What Works Cities

Helping leading cities across the U.S. use data and evidence to improve results for their residents. Launched by @BloombergDotOrg in April 2015.

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