Public Housing

In 1992, the National Commission on Severely Distressed Public Housing reported that about six percent of the nation's public housing could be considered severely distressed and that traditional methods of revitalizing this housing had been ineffective. In response, Congress created the HOPE VI program to address the following three conditions common to severely distressed areas: (1) physically deteriorated buildings, (2) residents living in despair and needing high levels of social and support services, and (3) economically and socially distressed surrounding communities. Of the $1.58 billion appropriated by Congress for the HOPE VI program for fiscal years 1993-1995, the Department of Housing and Urban Development (HUD) had awarded $1.54 billion for capital improvements and community and support services as of September 30, 1996. Congress also earmarked $5 million for HUD to provide technical support to housing authorities. HUD has identified several innovative approaches used by HOPE VI grantees to implement their projects, including Cleveland's concept of centralizing social services and Milwaukee's street layout to reduce density and enhance neighborhood security. HUD is conducting a phased 10-year evaluation of the program; in August 1996, it completed a baseline study of 15 HOPE VI activities and plans 5-year and 10-year followup evaluations of these activities.

GAO found that: (1) of the $1.58 billion that Congress appropriated for the HOPE VI program for fiscal years 1993-95, HUD had awarded $1.54 billion for capital improvements and community and supportive services as of September 30, 1996; (2) in addition, Congress earmarked $5 million of the appropriation for HUD to provide technical assistance to housing authorities; (3) the awards, which fund 39 HOPE VI projects at 32 public housing authorities, range in size from $7.5 million to $50 million and averaging about $39 million; (4) these funds have been used primarily for capital improvements to the housing stock, for which housing authorities have budgeted an average of 87 percent of their grants; (5) the participating authorities, as of September 30, 1996, had: (a) demolished 6,538 housing units out of a planned total of 22,573 units; (b) rehabilitated 705 units out of a planned total of 5,407 units; (c) constructed 419 new units out of a planned 15,299 units; and (d) provided housing vouchers to 1,639 families displaced by the demolition or rehabilitation; (6) HUD has identified several innovative approaches used by HOPE VI grantees to implement their projects; (7) these approaches, which could serve as models for other housing authorities, include Cleveland's concept of centralizing its social services, Milwaukee's street layout to reduce density and enhance the neighborhood's security and cohesiveness, and Atlanta's use of private investors to help finance its improvements; (8) to assist other HOPE VI grantees, HUD has disseminated information about these and other approaches; (9) to evaluate the long-term effectiveness of the HOPE VI program, HUD is conducting a phased 10-year evaluation; (10) in August 1996, HUD completed a baseline study of 15 HOPE VI grantees' distressed housing and early revitalization activities; (11) HUD plans 5- and 10-year follow-up evaluations of these activities; (12) according to HUD, an evaluation at this time of the HOPE VI program's progress to date could be premature because several significant housing policies and regulatory ground rules changed after the program started; and (13) these changes resulted, in turn, in changes to the implementation plans for many HOPE VI projects and in delays in meeting initial milestones.