Developmental disability: HUD boondoggles show why bad government programs are so hard to kill.

Author:Lynch, Mike
Position:Columns - Housing and Urban Development

WITH AMERICAN SPECIAL forces calculating smart bomb coordinates overseas and legions of students, seniors, and sociology graduates preparing to secure the home front in the USA Freedom Corps, commentators are hailing the return of big government as a glorious ideal. (As a lived reality, it never left.) "President Bush has broken the libertarian grip on the GOP," crows The Weekly Standard's David Brooks, a founding scholar of the "national greatness" school of conservatism.

Against this backdrop, a pair of Washington Post investigative reports on economic development in the nation's capital was most welcome.

Three reporters spent six months digging into the federal, local, and nonprofit partnerships charged with revitalizing economically depressed Washington, D.C., neighborhoods. Like almost every other U.S. city of any significant size, the District supports Community Development Corporations (CDC), whose ostensible mission is to mix taxpayer money with private funds and build things to make neighborhoods better.

The federal money comes in block grants from the Department of Housing and Urban Development (HUD), which each year spreads $4.3 billion among 3,600 groups. Mayors and local pols love the program, which provides them with free money, ribbon cutting ceremonies, and organizations where they can place cronies in cushy jobs. Since much of the money comes from HUD, actually making communities better places to live isn't a requirement.

The District of Columbia is partitioned into eight wards, each overseen by a community development monopolist. During the last decade these groups have blown through $100 million in taxpayer money. The funds have leased a Mercedes-Benz and two Jaguars, paid for a trip to Africa, provided the start-up capital for a law firm in the suburbs, and helped get local political benefactors of the CDCs re-elected. What they haven't funded is community development.

Of the 200 projects that got taxpayer money, only 70 have been completed, and few of those were on schedule and within budget. This failure stands out starkly against a backdrop of economic prosperity and rapidly increasing real estate values in D.C. that has prompted private developers to transform neighborhoods at a profit. "Private developers this summer finished converting two battered 40-unit apartment buildings into condos, which sold out in a few weeks," reports the Post, which notes that they are "just steps from...three boarded-up, decaying...

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