This category covers government establishments primarily engaged in planning, administration, and research for the development of urban and rural areas, including programs for slum clearance, community redevelopment, urban renewal, and land clearance. Also included are zoning boards and commissions. Private establishments primarily engaged in urban planning, rural planning, and community development planning are covered by several SICs in the Engineering, Accounting, Research, Management, and Related Services category.
Administration of Urban Planning and Community and Rural Development
In U.S. Metropolitan Economies: The Engines of America's Growth, the role that U.S. cities have played in generating national and global economic growth could not have been emphasized more. It is generally understood that the United States is first-named on any list of the world's largest economies. What is less known is that, if an urban equivalent to "gross domestic product" (referred to in the study as gross metropolitan product) were used as the primary ranking criterion, 46 of the world's top 100 economies would be U.S. metropolitan areas. Thus, the health of America's cities and metropolitan communities remains vital to the health of this country.
Accordingly, each year Congress allocates billions of dollars to ensure the continued well-being and development of urban and rural communities, through economic incentive programs such as block grants, matching funds, and the creation of "empowerment zones," selected areas deemed worthy of special attention, either for renewal or stimulated growth. Another area of focus is the "enterprise zone." An enterprise zone program targets economically distressed areas and cuts the taxes of businesses within those areas to attract investment, raise employment, and foster economic development.
The phrases "community development" and "planning" refer to the processes by which cities, towns, and rural communities consciously shape the course of their physical and economic growth to improve their economic health and the quality of their residents' lives. Community development is used to describe a wide range of strategies for improving conditions within a community, whereas planning usually describes the process of managing the details of a community's physical environment so that they conform to a comprehensive scheme for the community's future development. The planning and development process involves many different governmental activities, from constructing streets to regulating banks; therefore, it is conducted by a variety of separate, loosely coordinated governing bodies and agencies.
Government administration of planning and development takes place at the federal, state, and local levels. At every level, government agencies must work closely with organizations outside of the government—from private companies and trade organizations to neighborhood associations. In the 1990s there were approximately 3,500 special governmental districts devoted to housing and community development in the United States, the vast majority at the local level.
At the federal level, agencies and cabinet departments in the executive branch put into practice policies mandated by acts of Congress or by the president. While the Department of Housing and Urban Development (HUD) enacts most national community development programs, a wide variety of development activities are conducted by administrative entities outside of HUD. The U.S. Department of Agriculture, for example, runs the Rural Electrification Administration, which provides loans for the creation of power supply systems, telephone services, and job development projects in rural areas. The Appalachian Regional Commission and the Tennessee Valley Authority conduct development programs targeted at specific geographic regions.
Federal agencies can implement planning and development initiatives primarily through either loans and grants, or legislation and regulation. Loans and grants may be given to private individuals (home buyers or real estate developers, for example) or to state or local governments and involve varying degrees of restrictions on the uses of funds. HUD's Rental Rehabilitation program, for example, grants funds to residential property owners specifically for improving the stock of low-income housing. HUD therefore specifies that program funds must be used to rehabilitate housing in neighborhoods whose residents have a median income no higher than 80 percent of the median income for the region surrounding the neighborhood. Community Development Block Grants, in contrast, are provided to state and local governments with few restrictions on use. Some loan programs involve collaboration between government and private financial institutions. Through its coinsurance program, for example, HUD aimed to encourage private lending for development purposes by offering to help private lenders absorb the cost of defaulted loans.
In addition to distributing financial aid, the federal government can shape community development through direct regulation. The Community Reinvestment Act of 1977 (CRA) was designed to penalize banks that drain capital away from economically distressed or minority neighborhoods by refusing to extend credit to the residents of these neighborhoods (a practice known as red-lining). Under CRA, banks are required to serve "the convenience and needs" of their communities by providing credit services tailored to suit the needs of low-income community residents. The Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Office of Thrift Supervision enforce the act through regular examinations of financial institutions. These agencies can, if necessary, deny a financial institution permission to open, relocate, merge, or acquire a deposit facility on the basis of that institution's CRA record.
Through the allocation of aid and the creation of regulations, the federal government can try to guide communities toward very general goals, such as universal access to housing and equitable distribution of credit. But the U.S. national government has little power to decide where to locate public housing projects, which slums to demolish and rebuild, whether to devote a given area to industrial uses or to residences, what the direction of a city's growth will be, or any of the more detailed questions involved in a community's development. With the exception of a few experiments in national and regional planning, responsibility for resolving questions such as these falls on local governments' planning process.
In a typical community, the state or local government grants a local planning commission the power to create a master plan that makes proposals concerning the city's growth, the purposes for which its various sections of land will be used, how utilities such as water and electricity will be provided, where to build schools and libraries, how to lay out new...