By Dave Gatton
June 19, 2006

The Council for the New American City, chaired by Detroit Mayor Kwame M. Kilpatrick, met at the 74th Annual Meeting of the Conference of Mayors June 4 to discuss strategies to increase investment in America’s cities.

“We have had an exciting and productive year with concrete, tangible results,” said Kilpatrick. “We must continue to provide our mayors with valuable metro economy data, housing information, and opportunities to meet with commercial developers and investors.”

The Council, a coalition of the mayors, non-profits and business representatives, will focus on homeownership, financial literacy and mixed-use development in the coming year.

“One way to increase investment in our cities is to increase our homeownership rates,” said Birmingham Mayor Bernard Kincaid, who has launched an initiative within Birmingham to help current residents buy a home. Kincaid described how he had worked with the mortgage lending industry and non-profit groups to help residents become eligible for mortgages and down payment assistance programs.

Charlotte Mayor Patrick McCrory discussed the importance of mixed-use development in his city and the need for mayors to exchange information on zoning decisions and strategies. “Zoning is something we need to spend more time talking about,” he said. His remarks were followed by a spirited discussion of the use of inclusionary zoning in various cities and certain legal challenges.

Pleasanton (CA) Mayor Jennifer Hosterman presented affordable housing strategies underway in the expensive residential market in her city. “We have a real challenge holding on to the affordable stock that we have,” she said. She described how the city is helping first time homebuyers with solar and other alternative energy technologies to lessen skyrocketing utility bills that in some instance threaten a family’s ability to sustain mortgage payments.

The Council agreed that more needed to be done to increase homeownership and asset building among city residents, and concern was expressed that the current increase of adjustable rate and interest only mortgages, coupled with rising interest rates may put additional pressures on first time homebuyers. Mary Jane Seebach of Countrywide Financial said that the concern only increases the importance and commitment of the Council to expand its Dollar Wi$e Financial Education Campaign to help families manage their finances, credit scores, and assets.

Paul Richman of the Mortgage Bankers thanked the Council for its work and discussions on Federal Housing Administration reforms that, when enacted, should help to provide an FHA alternative to certain scrupulous lending practices in the market place.

Herb Tyson of the International Council of Shopping Centers reported on the recent Investment Forums held in conjunction with the Council for the New American City and plans to hold additional forums around mixed use development this year.

The Council also heard from James Diffley, Senior Vice President for Regional Economics for Global Insight, on the Conference’s recent metro economy report on wages and gas prices. The report showed that in 2005 one third of average wage gains in the U.S. were eaten up by increased gas prices, and that most American experienced an actual decline in wages.

The Council agreed that at its next meeting a more in-depth discussion of housing and development issues would be held.