How Cities and Counties Are Spending Their ARPA Funds

A massive factory that sprawls over 80 acres in the eastern part of Detroit is largely the reason it became known as the Motor City.

At one time, 40,000 auto workers built luxury cars and, during World War II even Rolls Royce aircraft engines, at the Packard Plant. But since it closed in 1956, it has become an eyesore for the people who live around it and a symbol of the city’s decline. 

So Detroit has opted to spend its American Rescue Plan Act dollars to tear down the plant in the next two years. It will spend about $95 million of its share of Covid stimulus dollars to demolish that and 400 other dilapidated commercial buildings that have been sitting empty around the city, many of them for decades.

“The [Packard] plant is directly across the street from residential properties,” said LaJuan Counts, director of Detroit’s demolition department. “Just think if you have to get up every morning, go out on your front porch and look at that. It's just not fair to our citizens to have to deal with this type of blight across the city.”

How Detroit and other Midwest cities are using their Covid stimulus funds is different from how, say,  Tampa, Florida, and its Southern neighbors are using their share. A recent report by the Brookings Institution, which has been tracking the way the 329 largest cities and counties have been deciding how to spend the money, found regional differences in the approaches. 

Overall, the largest portion of the $350 billion in Coronavirus State and Local Fiscal Recovery Funds has gone to government operations, according to Brookings. The most recent data available shows that 43% of ARPA funds have been slated to go to government operations as of last Sept. 30.

The next largest portion is being used for housing. Affordable housing is a challenge nationwide. Local governments in the West are planning to spend 12.3% of their ARPA funds for all types of housing programs, including eviction prevention and creating affordable housing. Roughly 9.6% of ARPA spending is being slated for housing programs in the South, 8.1% in the Northeast and 8.2% in the Midwest.

But the remaining funds are largely being used based on a region’s biggest challenges. Larger local governments in the Midwest like Detroit are using more of their Covid stimulus funds to revitalize neighborhoods. But down South, in Hillsborough County, which surrounds Tampa, the main concern is what’s happening underground.

Water and Sewer Projects in the South

Many of the homes in Hillsborough County have septic tanks, which leach nitrogen and phosphorus into the groundwater and create algae blooms known as red tides. These lead to “a lot of fish kills. You couldn't go to the beach. Your eyes would burn,” said Lisa Rhea, the county’s water resources director.

Hillsborough County is spending about $70 million of its funds to hook up homes that rely on septic tanks to its wastewater treatment system. The Brookings study found that Hillsborough and other large local governments in the South are planning to use far more of their ARPA dollars on water and sewer projects than those in other parts of the country. They are planning to use 8% of their funds on sewer and water infrastructure projects, whereas according to data Brookings supplied to Route Fifty, those kinds of projects make up only 2.8% of ARPA spending in the Northeast, 3.1% in the Midwest and 3.6% in the West.

In addition to replacing septic tanks, Hillsborough’s Rhea said the county will also be using ARPA funds to tie in neighborhoods in denser underprivileged areas to the county’s water system. These areas have been relying on private wells.

Aside from Hillsborough County, the city of Baton Rouge and the Parish of East Baton Rouge are planning to spend $40 million, or about a third of their ARPA funds, to address “widespread flooding,” according to a Brookings and National League of Cities database.

Other Southern local governments including Brevard County, Florida, are also planning to use the money to switch homes from septic tanks to sewage, as well as to pay for other water or sewage projects. Buncombe County, North Carolina, for example, is planning to spend $2 million of the funds to provide water and sewage infrastructure to a planned low-income housing development.

The Brookings report theorized that Southern states may be using a greater share of their funds on water and sewage projects because of the rapid influx of population to Southern localities.  

“Florida did not develop as early as the Northern states,” Rhea added. “And at one time, there were a lot of rural areas” and hence the reason for the prevalence of septic tanks.

Neighborhood Revitalization in the Midwest

Meanwhile, “neighborhood revitalization was a much higher priority in Midwest cities and counties” than in other parts of the country. Based on Brookings’ data, 2.4% of ARPA funds spent in the Midwest went to address “depopulation, blight, concentrated poverty and racial segregation.” 

In comparison, large cities and counties in the other three regions are planning to spend less than a tenth of their ARPA funds on neighborhood or downtown revitalization. Large local governments in the West have only spent .1% of their funds on downtown or neighborhood redevelopment and only .3% in the South and Northeast.

ARPA funds are also being used to remove 175,000 cubic yards of potentially hazardous materials to clear the way for redeveloping an abandoned RCA plant in Indianapolis, Indiana. The city and surrounding Marion County are planning to spend $5.9 million in ARPA funds for the project, according to the Brookings database.

Chicago has slated $10 million of its funds to train and hire community ambassadors to make visitors feel welcome and safer on commercial corridors that have seen a decrease in activity and an increase in crime during the pandemic. 

Housing and Homelessness in the West

Meanwhile, local governments in the West are spending much more of their funds to deal with housing and homelessness than those in other parts of the country.

Large Western cities and counties have committed 7.7% of the funds to combat homelessness—compared to only 3.4% in the South, 1.7% in the Northeast and 1.6% in the Midwest.

While housing affordability is a problem nationwide, “its impact on homelessness has been largest in West Coast regions such as the Bay Area, Denver, Las Vegas, Los Angeles, San Diego, Portland, Ore., and Seattle,” the Brookings report said.

Portland, Oregon, for instance, is planning to spend $52.2 million of its funds to create Safe Rest Villages to house the homeless and provide food, hygiene and access to services to get them off the streets.