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How TARP Funds Could (and Should) Be Used to Improve Our Neighborhoods

How TARP Funds Could (and Should) Be Used to Improve Our Neighborhoods
2009Fair Credit/Fair Housing

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The federal Fair Housing Act – passed in 1968 – has the dual mission to both eliminate housing discrimination and promote residential integration. In order to promote integration, the Fair Housing Act requires that government agencies spend funds dedicated to housing and community development in a manner that “affirmatively furthers fair housing.” This obligation is not limited to the Department of Housing and Urban Development; rather it applies broadly and means that government agencies spending housing and community development funds – and recipients of government grants – must use those funds in way that helps create integrated, healthy neighborhoods.

As America struggles to emerge from its current economic struggles, the requirement to affirmatively further fair housing is as important as ever. Government efforts to jumpstart the economy have involved massive spending on housing and community development. For example, the Troubled Asset Relief Program (TARP), the single largest program in place to address the economic crisis, has recapitalized banks with the intention of restoring their ability to lend and has worked to provide homeowners on the brink of foreclosure with opportunities to modify their loans before it is too late. Because the recession has hit communities of color the hardest, and because the recession began in part because of failed discriminatory mortgage loans made in those communities, any attempts to ease the recession must involve explicit plans to increase residential and economic opportunities for the residents of those neighborhoods.