Has the federal role in neighborhood revitalization shifted in the face of the current urban landscape of older, distressed cities? The recent $6 billion federal stimulus program, the Neighborhood Stabilization Program (two rounds of funding termed NSP1 and NSP2), is intended to stabilize neighborhoods through the purchase of foreclosed or abandoned residential properties— properties that will be demolished, rehabilitated, and/or redeveloped for sale or rent to low- and middleincome households.

With this program, the government has asserted a new, albeit limited, role in helping cities address neighborhood revitalization. NSP funding has expanded the ability of local governments to react to market strengths and neighborhood vitality through two specific areas established or expanded by NSP—allowing new construction for other organizations besides the regular nonprofit firms, and permitting the banking of land for future use.

The long-term vitality of older, distressed cities hinges, in part, on building sustainable residential areas, yet many cities lack effective strategies to maintain and strengthen their neighborhoods. For years, local governments and community development corporations have needed access to tools to stimulate market demand in at-risk and tipping-point neighborhoods. Federal funding programs must expand and restructure funding sources in order to assist the transformation of cities into stronger, more resilient organizations that are responsive to, and sensitive of, market building behavior. In turn, older cities must develop an understanding of the connections among neighborhood vitality, consumer choice, and housing market strengths. The cities’ ability to understand these market and nonmarket economies is the key in developing effective, long-term, market- recovery strategies that effectively leverage federal funds.

At the center of the transformation are partnerships—and not the same neighborhood “revitalization” partnerships that have subsisted over the past six decades of community development policy that have ushered in urban renewal, model cities, and community development block grants, to name a few. When implemented, these programs can, and often do, work virtually outside the marketplace. Therefore, any programmatic success of federal community development funding sources for these cities is difficult to maintain or build upon over the years. With the lack of coherent federal strategic investment and unsustainable citywide revitalization strategies, cities have limited potential for strong, stable, diverse partnerships to rely on, yielding a vicious circle of disinvestments, spotty community development programs, and decreased economic choices to encourage neighborhood vitality.

The two programmatic breakthroughs at the federal level encourage older, distressed cities both to increase their sophistication of strategic partnerships to help open up the marketplace to bear the highest and best use, and to be market sensitive and neighborhood responsive in order to return land to productive use only when consumer choice and market strength yield potential.

Now, the question remains, are there early success stories of older, distressed cities planning and implementing sustained neighborhood revitalization strategies and redevelopment with NSP funding? Is this $6 billion in funds adequate in view of the expanded notion of community development? Or, will this just constitute the same old story perpetuated in a new urban landscape?