On November 3, 1966 the United States Congress passed the Demonstration Cities and Metropolitan Development Act of 1966. Through this act, Congress initiated an assistance program to rebuild facilities and services necessary to improve the general welfare of the people who live in such areas. Services included educational and social services vital to health and welfare. Through the Model Cities Program, many agencies would be used in the revitalization of the target cities. It also proposed to assist and encourage planned metropolitan development.

Early in 1968 New Orleans applied to participate in the Model Cities Program. The final meeting to review the problems in the proposed application occurred in April 1968. On September 6, 1968 Mayor Victor Schiro received notice that the Department of Housing and Urban Development had awarded the City of New Orleans a Model Cities Planning Grant for nine to twelve months. The three neighborhoods to be affected were: Central City, Desire-Florida, and Lower Ninth Ward.

In January of 1969 the City of New Orleans established the City Demonstration Agency as an agency within the Mayor's Office. In February of 1969 the City Council passed an ordinance to add positions, titles, and salaries for Model Cities employees to the Unclassified Pay Plan of the City of New Orleans (4368 M.C.S.). The planning committees had begun to meet by April. Eventually these committees proposed a total of 33 projects to be included in the First Action Year's program.

The 1969 Planning Project was funded totally by the Model Cities Grant. In 1970 the City of New Orleans began funding the City Demonstration Agency. This funding, however, was partial. Of the administrative costs, the City of New Orleans funded 20 percent and the Department of Housing and Urban Development funded 80 percent. The implementation of the projects was funded totally by this federal department. Only in 1972 did the percentage that the City of New Orleans budgeted decrease; that year it decreased to 15 percent. In 1975 the City of New Orleans ceased funding for the City Demonstration Agency. The following year, the functions of the City Demonstration Agency were absorbed by the Office of Manpower and Economic Development and the Program Development Division of the Chief Administrative Office.

Altogether, the City Demonstration Agency operated thirty-nine projects. These projects were: Community Schools, Home Start, School for High School Dropouts, Success in Reading, Curriculum Change, Undergraduate Social Welfare, Comprehensive Health Planning, Environmental Health, Narcotics Addiction, Health Services Clinics, Day Care Center for Mentally Retarded, Educational Day Care Centers, Free Breakfast, MNA Cultural Needs, Desire Community Center, Better Young Men Boy's Club, MNA Resident Recruitment and Training; Council for Minority Economic Development, Bonding Working Capital and T.A. for Minority Contractors, Desire Credit Union, Central City Credit Union, Ninth Ward Credit Union, Central City Housing Development Corporation, Desire Housing Development Corporation, Lower Ninth Ward Housing Development Corporation, Press Park Homes, Neighborhood Facilities Grant, Central Relocation, Relocation Payments, Certified Area, Metro-link Community Design Center, Neighborhood Assistance, Central City Citizen Participation, Information System Design and Development, Program Evaluation, Project Evaluation, and Program Administration.

The City Demonstration Agency was administered through the Mayor's Office. The Mayor appointed a director to oversee the operation of the agency. Also there existed a Model Cities Policy Advisory Board. Through a dialogue with this board, the Mayor surfaced programming and coordination problems. However, the director of the agency was not responsible to the board; the director was responsible to the Mayor. Lower levels in the administrative structure of the City Demonstration Agency were similar to other city agencies.