A multimethodological impact analysis of Urban Development Action Grants for projects related to the steel industry

This study assessed the impact of 12 Urban Development Action Grants (UDAG) that assisted steel-related projects in nine U.S. cities and one urban county. Impact was measured by benchmarks established by the U.S. Department of Housing and Urban Development (HUD) for the UDAG program—provision of jobs, leverage of private investment, and enhancement of tax base.; Quantitative and qualitative methods were used to evaluate impact in the communities that received UDAG funds (“treatment cities”). Methodology included a comparative change design evaluation in which treatment cities were matched with and compared to similar cities that had not received UDAGs for steel-related projects (“comparison cities”). The matching process employed factor analysis for data reduction and Euclidean distance measurement to determine which among a pool of potential comparison cities was most similar to respective treatment cities. Paired cities were compared utilizing Wilcoxon's rank sum test, paired t-test, and analysis of pretreatment/post-treatment benchmark changes. Case studies gauged whether UDAG projects fulfilled goals.; The statistical analysis revealed insufficient evidence to reject the null hypotheses on all three benchmarks. Comparison cities generally fared better than treatment cities from 1980 to 1990; seven comparison cities either lost less or gained more employment than did matched treatment cities; five of nine treatment cities performed better than comparison cities in terms of tax base enhancement. Case studies revealed that of 12 projects, 5 met employment goals, 6 met tax base enhancement projections, and 8 met private investment goals.; Generalizability of these findings is tenuous in that not all contravening variables were not controlled and due to the specifics of the steel industry. However, findings suggest that as a vehicle for industrial policy and urban revitalization, UDAG was inadequate to the rather Herculean task. Additionally, the capacity of local economic development staff to operate efficaciously in a decentralized environment is questionable; requiring them to discern “winners” from “losers,” especially in a time of severe economic dislocation, seems at best problematic. Despite HUD's technical assistance to assure the market viability of potential projects, many of the purported “winners” in this study emerged as “losers” for their communities and the taxpayers.