Sixty-one small cities will receive $60.6 million in federal grants designed to attract private money for restoraction of commercial areas and residential neighborhoods, the Department of Housing and Urban Development announced yesterday.
Funds for the urban development action grants total $400 million a year, with $100 million devoted to cities that have populations under 50,000. Large cities have received $260 million so far.
Yesterday was the first time small cities received such grants. More grants for small cities will be parceled out in November.
HUD Secretary Patricia Roberts Harris said that to receive a grant a city must show that private money has been committed to development projects. It also must have a high proportion of relatively old housing, a high poverty level and a declining population between 1970 and 1975.
Harris said the grants will attract $580.67 million in private money and will create 18,100 new permanent jobs. She said 9,524 construction jobs also will be created.
Neighborhood groups have charged that HUD has neglected housing for low-and middle-income familiies in favor of projects that could be developed without federal money. HUD has replied that bringing more businesses to cities would result in more jobs for low-and middle-income people, which in turn would improve neighborhoods.
In the current round of grants, neighborhood projects received almost $15 million, commerical projects received roughly $17 million and industrial projects about $30 million.
Of 65 projects, 14 were neighborhood, 17 were commercial and 34 were industrial. The projects were chosen from 193 applications - 35 for neighborhood, 64 for commercial and 94 for industrial.
"This is the same pattern we've been seeing," said Gale Cincotta of the Chicago-based National People's Action, a neighborhood group. "The neighborhood projects are being short-shifted. The commercial projects don't really need this money. We see so much development without it. The funds are just a little sweetener."
An aide to Harris said that the projects could not be constructed without HUD money. "The grants finance road improvements are used to lower interest rates so that the private sector can afford to spend its money," the spokesman said.