pf_03405 - Laserfiche WebLink

Home

1960s. The federal government paid two-thirds of the costs of these projects. Minneapolis was required to contribute one-third in cash or in non-cash contributions, such as land, roads, and sewers. In the late 1960s, the federal government decided it would no longer continue this form of basic project financing. It moved to establish Neighborhood Development Project financing and then, in the mid-1970s, Community Development Block Grants (CDBG). This was a dramatic change in the federal government's role in local efforts, since its participation now came in annual increments rather than as one-time funding at the beginning of a project, and the permitted uses of funds were limited. This approach was designed to ease budgetary problems at the federal level and to generally reduce federal funding for housing. While the federal government continues to provide CDBG financing, the bulk of these monies are used for neighborhood revitalization and improved community faGilities and services. Only a small percentage of these funds are available for economic development activities. Tax increment financing has thus become the main tool cities use for redevelopment. In the Twin Cities metropolitan area, tax increment financing is also a tool for reducing urban sprawl by containing development within existing urban areas, as specified in the Metropolitan Land Use Bill and the Metropolitan Council Development Framework. The tools that are used for economic development have thus evolved as a response to a broad national policy that encourages local initiatives and local control of urban development and redevelopment. The most useful of these tools include industrial revenu,e bonds, tax increment financing, and CDBG funding. A combination of these tools has been used to combat a set of factors that would otherwise discourage development: multiple ownelrship patterns, incompatible land uses, underutilized land, contaminated land, unwilling sellers (slumlords), title problems, and suburban competition. In order to maintain vital urban centers, cities thus provide the vital public assistance to stimulate private development that othelwise would not occur. 6