In terms of funding, if not actual policy development, HUD’s three major program areas have been very active players in the brownfield arena. The CPD (Office of Community Planning and Development) third of HUD, for instance, in FY ’06 spent over $331 million on property acquisition (including $7.4 million specifically on brownfield cleanup); $127 million on various economic development activities that included commercial/industrial rehab and construction, acquisition, infrastructure; $70 million on housing construction; $127 million on 108 loan repayments; and $1.5 billion on public improvements under its flagship CDBG program.

The Office of Public & Indian Housing (PIH) has also been a significant contributor. Since 1993 over $6 billion has been spent on rebuilding public housing through its HOPE VI program, and given that most public housing was first constructed in the 1940s and 50s on land no one else wanted, much of this rebuilding has included cleanup.

The third and final part of the HUD triumvirate, FHA Housing, is no slouch either. FHA has insured from $1.0 to $7.5 billion in multi-family mortgages every year since 1990, with $5.1 billion (112,221 units) in 2006. Although FHA underwrites only a small share of the rental market, FHA market rate rental units house a substantial number of low and moderate-income persons. FHA approved 229 loans that also had LIHTC (Low-Income Housing Tax Credits) financing in FY ’04. These loans represented approximately 29,400 units, with more that 25% of those units housing very low-income families.

On June 12, 2008, HUD’s Office of Policy Development and Research held a forum on the “Greening of Brownfields” to clarify the issues and suggest specific options for brownfield redevelopment practice that are in line with and support green building and development standards for housing in general, and affordable housing in particular. The moderated discussion of over 30 public and private stakeholders represented such diverse groups as builders, developers, green building practitioners, and environmental, environmental justice and public health organizations. The forum started from the universally held point that affordable housing is a key part of sustainability and green development. Most green metrics (e.g. USGBC’s LEED) attempt to reduce automobile use and encourage mixed use in mixed-income neighborhoods. The idea is that not only should neighborhoods be walkable, but also that employees should live near their place of employment and thus green neighborhoods should be diverse with mixed incomes and include affordable housing. Many of the neighborhoods being redeveloped on brownfield sites are more suited for sustainable lifestyles than greenfield locations in outlying areas, as they are located in built-up urban areas near public transportation.

When it came to HUD’s role it was pointed out that HUD has, over the years, adopted a vigilant approach to site approval for affordable housing. Although CPD and PIH generally defer to local governments and public housing authorities, FHA housing staff process projects itself, carefully examining each individual site. Driven by cost concerns and subsidies’ tendency to deaden market forces, it has not been unusual for sites proposed for affordable housing to have significant environmental issues. This has been especially true when the project is wholly subsidized with no market rate units. In this framework, HUD offices have become accustomed to the role of assuring that there is not a disproportionate impact on the users of HUD housing programs; in other words that the sites approved for affordable housing be decent, safe and sanitary, and that any adverse environmental impacts be mitigated or clearly outweighed by the positive factors.

Building ripe for affordable housing development

The conundrum of green development that favors brownfield sites and FHA’s wholehearted implementation of conservative site contamination policies, however, turns this paradigm on its head. Most green metrics are based on a vision that includes mixed use, mixed income neighborhoods located in areas with locational advantages (e.g. mass transit, walkable neighborhoods). The Center for Disease Control, which was represented at the forum, not only endorses the RBCA (Risk-Based Corrective Action) approach that minimizes risk by eliminating pathways, but also points to growing obesity as a serious national health risk, and calls for the promotion of walkable neighborhoods. Forum participants counseled that site contamination is just one environmental factor and that it shouldn’t be the sole driver of site approval, but needs to be balanced with other environmental factors. They also pointed out that one of the most important EJ (Environmental Justice) principles is to hear from the community and give them a voice in the decision-making process. Thus, if residents are not given a choice, it may be wrong to place them on a site with engineering barriers and institutional controls. But if residents and the neighborhood are part of the decision-making process, then this is acceptable. FHA’s current policy, which specifically bars the use of engineering barriers and institutional controls (by providing that “HUD will not accept property … where a site contamination problem has been capped or paved over”), was soundly criticized. A “dig to clean” approach is usually not feasible (larger cleanup expense cannot be supported by project income), especially in neighborhoods with lower land values. Given that today’s challenge is to place affordable housing in these new mixed-income neighborhoods, it was felt that this policy makes achieving that goal too difficult. HUD staff, although sympathetic, pointed out that traditional slum housing was not the result of poor construction, but poor maintenance, and, similarly, even if the engineering barriers were constructed properly, the real test would be if they would be maintained in a safe fashion 20, 40, 60 years down the road. Forum participants pointed out that state and local programs generally monitor sites that have been approved by local voluntary cleanup programs.

In the 1970’s, urban planners analyzed the demise of the central city in the years following World War II and concluded that many federal policies (e.g., interstate highway system, FHA mortgages, federal subsides for suburban public infrastructure, and tax policy) contributed to suburban sprawl and the decline of established urban centers. Today’s question is whether we will express similar misgivings 20 years from now when we examine our rejuvenated cities with their mixed-use walkable neighborhoods and ask “What happened to affordable housing?” Government participation in brownfield redevelopment, whether in the form of land acquisition and write-down, subsidies, or local approval, provides an opportunity to ask developers to deal affordable housing in. FHA policies provide an excuse, within the framework of project specific negotiations, to leave it out.

How can we improve this picture?

• Provide more flexibility in FHA brownfield policy and individual project decision-making. First off, recognize that engineering barriers and institutional controls form a legitimate approach to brownfield redevelopment by making the HUD/FHA policy neutral. The regulations, which provide that “all property proposed for use in HUD programs be free of hazardous materials, contamination, toxic chemicals and gasses, and radioactive substances, where a hazard could affect the health and safety of occupants or conflict with the intended utilization of the property” (24 CFR 50.3(i)) do not have to be revised to implement this change. Only four of the 18 HUD hubs have been willing to waive this policy for FHA mortgage insurance and the policy must be strictly enforced for all elderly and disabled housing, since it is included in the terms of the NOFA. This has resulted in the New York City office returning 202/811 funding because they cannot find “clean” sites and other offices limiting approvals to suburban locations. Give FHA field staff the discretion to approve good brownfield projects and reject poor ones, allowing them to evaluate and balance these with other environmental factors.
• Address concerns regarding the ability of State programs to evaluate and maintain risk-based corrective actions that include engineering barriers and institutional controls by developing minimum (FHA) criteria and working with USEPA to evaluate whether specific state VCP programs meet these criteria. This would not only provide assurance to those concerned with site safety, but would also provide incentives for US EPA to work with states to improve their VCP programs.
• Consider the use of different cleanup standards for projects that are wholly subsidized and those that contain less than 50% affordable units.
• Encourage building techniques to address vapor intrusion. We have established techniques for radon, a harmful naturally occurring soil gas. Why not use similar construction practices on sites where vapor intrusion is a concern (instead of rejecting them out of hand)?

Eugene Goldfarb is the Principal, Great Lakes Environmental Planning & Adjunct Assistant Professor at University of Illinois (Chicago).