HIALEAH, Fla.— This city used a chunk of Community Development Block Grant (CDBG) money invested in one small, well-chosen project and figured out a way to compound those funds over time to develop more than a hundred senior housing units that all offer fixed rents of $300 each.

The city started using its CDBG funds for new housing development in 1984, and had to get a special dispensation from the Department of Housing and Urban Development (HUD) to do it. “At the time, CDBG couldn’t be used for new construction,” said Frederick Marinelli, director of Hialeah’s department of grants and human services.

The 32 seniors apartments built using that initial grant money have now grown to 176, and will eventually total 476 when a 300-unit development now under construction is completed.

The most recent project will tap tax-exempt bond funds, HOME funds, and federal low-income housing tax credits. The rest, however, were built without debt. Instead, the city used one or two years’ worth of HOME fund allocations (which totaled $2.2 million in fiscal 2006), combined with income generated from prior buildings, to build each new project. CDBG funds were used to pay for the developments’ recreation centers or for neighborhood infrastructure related to the projects, but not for the housing units.

How was Hialeah able to accomplish this? By using all the resources at its disposal—from building on city-owned property to eliminate land costs (which are often more than $1 million per acre in the area) to tapping city workers to handle as much of the work as possible. To start with, the city acts as general contractor during construction to save on profit and overhead costs that would be paid to a private contractor. Then Hialeah construction crews build cabinetry in the apartments, staff architects handle the design, and city maintenance workers take care of landscaping and upkeep. “We try to do it as a team approach and try to minimize costs as much as possible,” said Marinelli. “Our view is if cities are serious about creating affordable housing, it can be done. We have proven it over time.”

It’s a good thing the program for low-to moderate-income seniors has paid for itself up until now; Hialeah’s CDBG funding has shrunk from $5.5 million to $4.3 million since 2002. “We’ve lost over a million dollars and our demographics have gone up,” said Marinelli, referring to the city’s population, now at about 263,000. More than half of those residents are classified as low- to moderate-income, he said.

The city’s streamlined approach to housing development has allowed it to find creative uses for the CDBG funds it has left, including funding a technology center focused on job training and business incubation, a community health clinic, and an unusual partnership with the University of Florida that provides reduced-cost dental care to those with low and moderate incomes.