Ten months in, Obama housing officials are paying more in attention than cash

 A vacant home in Humboldt Park, one neighborhood Adolfo Carrion toured on a recent visit to Chicago. Grant Slater/MEDILL

Susana Vazquez has been in the business of building cities now for seven years, funneling federal money to projects across Chicago.

But she had never actually met a federal bureaucrat with his hand on the spigot until Adolfo Carrion came in from a driving rain to speak with community leaders in Humboldt Park recently.

“When things are tough, you really appreciate any recognition from the federal government,” said Vasquez, a program director for Local Initiatives Support Corporation, a group that provides loans to support activity in underdeveloped neighborhoods.

Ten months ago, President Barack Obama came to office trumpeting the role of America’s cities in his plan for economic recovery, saying he would create a new Office of Urban Policy to recast the relationship between the federal government and metropolitan areas – in which 80 percent of the population lives.

Since then, officials from the Department of Housing and Urban Development have visited Chicago regularly, a stark contrast to the absence of officials during the George W. Bush era. But they have been, for the most part, fact-finding missions aimed at crafting a new approach to federal investment in urban areas, community developers say.

The economic stimulus package that passed shortly after Obama took office provided a test case for this approach, but community developers and urban planners are looking forward to the 2011 budget and an upcoming transportation bill as major tests of the Obama approach.

That approach has two major tenets.

First, it will attempt to force disparate federal agencies to adopt similar criteria when determining who will receive federal money and then coordinate those investments, said MarySue Barrett, the president of Metropolitan Planning Council in Chicago.

The second and perhaps bigger shift is that administration officials say they hope to apply these criteria across vast swaths of the metropolitan landscape instead of parsing them out to interest groups.

“In almost every respect, the distinctions between cities and suburbs – and the challenges they face – are blurring,” HUD Secretary Shaun Donovan said last month in a speech summing up changes in philosophy under Obama. “In fact, in many ways the most important frame for place today is the metropolitan area.”

This idea, known as regionalism, has been incubating for years in the urban policy divisions of progressive think tanks like the Brookings Institution. It is now finding voice in the speeches and policy papers of officials such as Donovan and Carrion.

“In the past, there's been a constituency-based approach where you throw a bone to people,” Barrett said. “You might be able to get them on the phone, but there's no commitment to move the bureaucracy.”

Barrett said she views Carrion’s main role as cutting through that bureaucracy. As head of the Office of Urban Affairs – the name changed slightly when the office was founded – he has access to more than a dozen federal agencies that overlap with urban issues.

But the approach – and Carrion himself – are not without critics. Fred Siegel, a senior fellow at the Manhattan Institute, said Carrion’s experience in the Bronx is scant and shows little promise for the new approach.

“Regionalism – this is something that Brookings has been pushing for years, metro government, back to [the Clinton administration],” Siegel said. “This has some virtues and it has enormous drawbacks.”

Regionalism – the idea of linking up and connecting vast metropolitan areas – is better suited to urban planning issues than as a tool of federal policy, he said.

All of this can be seen as a power grab by cities and interest groups to wrest control from state capitals, Siegel said.

Thomas Geoghegan, a Chicago lawyer and author who has lamented the growth of state governments, said Obama should wield a more blunt instrument in his efforts to stave off the economic crisis.

“He needs to stop the recession. What's the easiest way to do that? That's to stop layoffs. To stop layoffs, he needs to give money to the City of Chicago,” Geoghegan said. “I would say the way to do that is to think of the cities as the real General Motors.”

Geoghegan noted one problem with this approach.

What were once city problems – poverty, crime, drugs – have slowly moved out of the reach of city government and into the near suburbs, where the smaller governments have little experience in dealing with them.

Barrett, of the planning council, said that these newly suburban issues force the government toward the regional approach. The Obama administration will have to figure out how to work regionally when the only governmental bodies exist for specific limited purposes, such as the Metropolitan Water Reclamation District and the Regional Transit Authority.

State governments are not the answer, she said, but they need to work more efficiently with cities.

“Bush was a former governor and they just weren't going to challenge that structure of so many dollars flowing through states directly to governors,” Barrett said. “Those governors tended to take some cuts off the top and a lot of those dollars never made it to cities. But you can't just advocate to take away something that has been longstanding.”

Two weeks ago, Carrion visited Chicago’s Auburn-Gresham and Humboldt Park neighborhoods, meeting with the sort of third-way developers that Chicagoans rely on to press for neighborhood improvements.

At the cluttered office of the Greater Auburn-Gresham Development Corporation, Carlos Nelson said that Carrion’s arrival marked the end of a tough era for the operation he leads

“During the Bush years, the money started dwindling,” Nelson said. “All the things that the Clinton administration had done as it related to focusing on community development on urban areas were really undone.”

Nelson’s group is at the end of the pipeline for federal money doled out in community block grants through a byzantine system of congressional approval down to the state government, through the city or an organization like Vasquez’s.

They come in blocks of hundreds of thousands or tens of thousands of dollars, and each year from 2001 onward, those blocks got smaller, about $10,000 or $20,000 at a time, Nelson said.

He said he expects those numbers to start ticking back up, though they haven’t yet.

But the new money will come with its own bureaucracy – measures to prove that Nelson’s ideas adhere to new policy initiatives.

“It requires community-based organizations to be razor-sharp when it comes to telling our story, advocating for our story.”