Public Housing
HUD's Oversight of HOPE VI Sites Needs to Be More Consistent Gao ID: GAO-03-555 May 30, 2003Congress established the HOPE VI program to revitalize severely distressed public housing. In fiscal years 1993 to 2001, the Department of Housing and Urban Development (HUD) awarded approximately $4.5 billion in HOPE VI revitalization grants. The Ranking Minority Member, Subcommittee on Housing and Transportation, Senate Committee on Banking, Housing, and Urban Affairs, asked GAO to examine HUD's process for assessing grant applications, the status of work at sites for which grants have been awarded, and HUD's oversight of HOPE VI grants.
HUD has generally used the same core rating factors to assess HOPE VI grant applications--need, capacity, quality, and leveraging. However, HUD has, over time, increased the requirements that housing authorities must meet for each of these factors in order to make better selection decisions. Although authorities' historical program performance had been considered under various rating factors, it was not until fiscal year 2002 that past performance became a threshold requirement that an applicant must meet to be eligible for a grant. The status of work at HOPE VI sites varies greatly, with construction complete at 15 of the 165 sites. As of December 31, 2002, grantees had completed 27 percent of the total planned units and spent approximately $2.1 of the $4.5 billion in HOPE VI revitalization funds awarded. However, the majority of grantees have not met their grant agreement deadlines. For example, the time allowed for construction has expired for 42 grants, yet grantees completed construction within the deadline on only 3 grants. Several factors affect the status of work at HOPE VI sites, including the development approach used and changes made to revitalization plans. HUD's oversight of HOPE VI grants has been inconsistent, due partly to staffing limitations and confusion about the role of field offices. Both headquarters and field office staff are responsible for overseeing HOPE VI grants. However, HUD field offices have not systematically performed required annual reviews. Additionally, despite grantees' inability to meet key deadlines, HUD has no formal enforcement policies. Instead, the agency determines if action should be taken against a grantee on a case-by-case basis. Although HUD has declared 9 grants to be in default and issued warnings regarding 3 grants, it has not done so for other grants in a similar situation.
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Report to the Ranking Minority Member, Subcommittee on Housing and
Transportation, Committee on Banking, Housing, and Urban Affairs, U.S.
Senate:
May 2003:
Public Housing:
HUD's Oversight of HOPE VI Sites Needs to Be More Consistent:
GAO-03-555:
GAO Highlights:
Highlights of GAO-03-555, a report to the Ranking Minority Member,
Subcommittee on Housing and Transportation, Committee on Banking,
Housing, and Urban Affairs, U.S. Senate
Why GAO Did This Study:
Congress established the HOPE VI program to revitalize severely
distressed public housing. In fiscal years 1993 to 2001, the
Department of Housing and Urban Development (HUD) awarded
approximately $4.5 billion in HOPE VI revitalization grants.
The Ranking Minority Member, Subcommittee on Housing and
Transportation, Senate Committee on Banking, Housing, and Urban
Affairs, asked GAO to examine HUD‘s process for assessing grant
applications, the status of work at sites for which grants have been
awarded, and HUD‘s oversight of HOPE VI grants.
What GAO Found:
HUD has generally used the same core rating factors to assess HOPE VI
grant applications”need, capacity, quality, and leveraging. However,
HUD has, over time, increased the requirements that housing
authorities must meet for each of these factors in order to make
better selection decisions. Although authorities‘ historical program
performance had been considered under various rating factors, it was
not until fiscal year 2002 that past performance became a threshold
requirement that an applicant must meet to be eligible for a grant.
The status of work at HOPE VI sites varies greatly, with construction
complete at 15 of the 165 sites. As of December 31, 2002, grantees had
completed 27 percent of the total planned units and spent
approximately $2.1 of the $4.5 billion in HOPE VI revitalization funds
awarded, and finished the construction or rehabilitation of 21,000 of
86,000 planned units. However, the majority of grantees have not met
their grant agreement deadlines. For example, the time allowed for
construction has expired for 42 grants, yet grantees completed
construction within the deadline on only 3 grants. Several factors
affect the status of work at HOPE VI sites, including the development
approach used and changes made to revitalization plans.
HUD‘s oversight of HOPE VI grants has been inconsistent, due partly to
staffing limitations and confusion about the role of field offices.
Both headquarters and field office staff are responsible for
overseeing HOPE VI grants. However, HUD field offices have not
systematically performed required annual reviews. Additionally,
despite grantees‘ inability to meet key deadlines, HUD has no formal
enforcement policies. Instead, the agency determines if action should
be taken against a grantee on a case-by-case basis. Although HUD has
declared 9 grants to be in default and issued warnings regarding 3
grants, it has not done so for other grants in a similar situation.
What GAO Recommends:
To improve its selection and oversight of HOPE VI grants, GAO
recommends that HUD (1) continue to include past performance as an
eligibility requirement in each year‘s notice of funding availability;
(2) clarify the role of HUD field offices in HOPE VI oversight and
ensure that the offices conduct required annual reviews of HOPE VI
grants; and (3) develop a formal, written enforcement policy to hold
public housing authorities accountable for the status of their
grants.
HUD found this report to be fair and accurate, and it agreed with the
three GAO recommendations.
www.gao.gov/cgi-bin/getrpt?GAO-03-555.
To view the full report, including the scope and methodology, click on
the link above. For more information, contact David G. Wood at (202)
512-8678.
[End of section]
Letter:
Results in Brief:
Background:
HUD Uses Core Factors to Assess Applications but Has Not Consistently
Followed Its Selection Procedures:
Status of Work Varies Greatly, and Most Grantees Have Not Met Grant
Agreement Deadlines:
HUD's Oversight of HOPE VI Grants Has Been Inconsistent:
HUD Has Obligated the Majority of Funds Budgeted for Technical
Assistance for Support to Grantees and HOPE VI Program Reporting:
Conclusions:
Recommendations for Executive Action:
Agency Comments:
Appendixes:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: HOPE VI Revitalization Grants:
Appendix III: Fiscal Year 2002 Application Screening and Scoring
Process:
Appendix IV: Site Visit Summaries:
ABLA Homes--Brooks Extension, Chicago, Illinois:
Arverne/Edgemere Houses, Queens, New York:
Bedford Additions, Pittsburgh, Pennsylvania:
Connie Chambers, Tucson, Arizona:
Cotter and Lang Homes, Louisville, Kentucky:
Dalton Village, Charlotte, North Carolina:
Durkeeville, Jacksonville, Florida:
Heman E. Perry Homes, Atlanta, Georgia:
Henry Horner Homes, Chicago, Illinois:
Herman Gardens, Detroit, Michigan:
Hollander Ridge, Baltimore, Maryland:
Jackson Parkway, Holyoke, Massachusetts:
Lamokin Village, Chester, Pennsylvania:
North Beach, San Francisco, California:
Riverview and Lakeview Terraces, Cleveland, Ohio:
Robert S. Jervay Place, Wilmington, North Carolina:
Robert Taylor Homes B, Chicago, Illinois:
St. Thomas, New Orleans, Louisiana:
Theron B. Watkins Homes, Kansas City, Missouri:
Tobe Hartwell Courts and Tobe Hartwell Extension, Spartanburg, South
Carolina:
Appendix V: Comments from the Department of Housing and Urban
Development:
Appendix VI: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Staff Acknowledgments:
Glossary:
Tables:
Table 1: Average Number of Days to Complete Key Program Activities:
Table 2: 165 Revitalization Grants Awarded, Fiscal Years 1993-2001:
Table 3: Fiscal Year 2002 Rating Factors:
Figures:
Figure 1: Changes to the HOPE VI Program Over Time:
Figure 2: Percentage of Planned Revitalization Activities That
Grantees Completed, by Fiscal Year Awarded:
Figure 3: Percentage of Construction Completed at 165 HOPE VI Sites:
Figure 4: Status of HOPE VI Funds Budgeted and Expended for
Revitalization Activities:
Figure 5: Grant Manager Workload, by Fiscal Year:
Figure 6: Technical Assistance Funding, by Fiscal Year:
Figure 7: Total Obligations for Technical Assistance, by Funding
Category:
Figure 8: Obligations for Technical Assistance, by Fiscal Year:
Figure 9: Time Line for ABLA Homes:
Figure 10: Time Line for Arverne/Edgemere Houses:
Figure 11: Time Line for Bedford Additions:
Figure 12: Time Line for Connie Chambers:
Figure 13: Time Line for Cotter and Lang Homes:
Figure 14: Time Line for Dalton Village:
Figure 15: Time Line for Durkeeville:
Figure 16: Time Line for Heman E. Perry Homes:
Figure 17: Time Line for Henry Horner Homes:
Figure 18: Time Line for Herman Gardens:
Figure 19: Time Line for Hollander Ridge:
Figure 20: Time Line for Jackson Parkway:
Figure 21: Time Line for Lamokin Village:
Figure 22: Time Line for North Beach:
Figure 23: Time Line for Riverview and Lakeview:
Figure 24: Time Line for Robert S. Jervay Place:
Figure 25: Time Line for Robert Taylor Homes B:
Figure 26: Time Line for St. Thomas:
Figure 27: Time Line for Theron B. Watkins Homes:
Figure 28: Time Line for Tobe Hartwell Courts and Tobe Hartwell
Extension:
Abbreviations:
ACLU: American Civil Liberties Union: :
CSS: community and supportive services:
HUD: Department of Housing and Urban Development:
NOFA: notice of funding availability:
REAP: Resource Estimation Allocation Process:
TIF: tax increment financing:
HOPE VI: Urban Revitalization Demonstration Program:
Letter May 30, 2003:
The Honorable Jack Reed
Ranking Minority Member
Subcommittee on Housing and Transportation
Committee on Banking, Housing, and Urban Affairs
United States Senate:
Dear Senator Reed:
For decades, some of the nation's public housing sites have exemplified
urban decay. In 1992, the National Commission on Severely Distressed
Public Housing reported that approximately 86,000, or 6 percent, of the
nation's public housing units were severely distressed--characterized
by physical deterioration and uninhabitable living conditions, high
levels of poverty, inadequate and fragmented services, institutional
abandonment, and location in neighborhoods often as blighted as the
sites themselves. In an effort to address these long-standing problems
in a new way, Congress, in October 1992, established the Urban
Revitalization Demonstration Program, commonly known as HOPE VI, which
is administered by the Department of Housing and Urban Development
(HUD). The program provides grants to public housing authorities to
rehabilitate or rebuild severely distressed public housing and improve
the lives of public housing residents through supportive services, such
as child care and job training. In fiscal years 1993 to 2001, HUD
awarded approximately $4.5 billion in HOPE VI revitalization grants to
98 public housing authorities (grantees) for 165 sites.[Footnote 1]
While each HOPE VI project is unique, all projects generally involve
(1) the preparation of a comprehensive revitalization plan; (2)
relocation of the original residents; (3) demolition of the distressed
public housing units; (4) construction of new public housing units,
often intermingled with other types of housing, or rehabilitation of
existing public housing units; (5) "reoccupancy," or the movement of
some original residents to completed units; and (6) occupancy, or the
filling of all of the completed housing units. To select housing
authorities for participation in HOPE VI, HUD publishes an annual
notice of funding availability (NOFA) setting forth the program's
current requirements and available funds. Housing authorities then
prepare applications from which HUD selects those that best satisfy the
NOFA requirements and signs grant agreements that serve as contracts
with the housing authorities. Grant agreements specify the activities
and documentation, such as revitalization plans, that grantees must
complete as well as key deadlines that they must meet. Grantees that
HUD determines are in default of grant agreement terms are subject to
various sanctions, including having their remaining HOPE VI funds
rescinded.
You requested that we comprehensively review the HOPE VI program.
Because of the scope of the request, we agreed with your office to
provide the information in a series of reports. The first report,
issued in November 2002, discussed the financing of HOPE VI
sites.[Footnote 2] This second report focuses on HUD's management of
the HOPE VI program. Specifically, as agreed with your office, this
report examines (1) HUD's process for assessing HOPE VI revitalization
grant applications and selecting grantees, (2) the status of work at
sites for which grants have been awarded and compliance with grant
agreement deadlines, (3) HUD's oversight of HOPE VI grants, and (4) the
amount of program funds that HUD has budgeted for technical assistance
and the types of technical assistance it has provided.
To address these objectives, we first obtained and analyzed information
from HUD's HOPE VI reporting system on the 165 revitalization grants
awarded through fiscal year 2001, including production data and key
milestones. We assessed the reliability of these data by reviewing
information about the system and performing electronic testing to
detect obvious errors in completeness and reasonableness. We determined
that the data were sufficiently reliable for the purposes of this
report. Second, we visited the 18 housing authorities that were awarded
revitalization grants in fiscal year 1996. We selected 1996 because it
was the first year that grants were subject to a standard construction
deadline, and the deadline had passed for the majority of the grants by
the time we began our site visits. In addition, we interviewed the HUD
headquarters officials responsible for administering the program.
We performed our work from November 2001 to April 2003 in accordance
with generally accepted government auditing standards. Appendix I
provides additional details on our scope and methodology.
Results in Brief:
To assess HOPE VI revitalization grant applications, HUD has
consistently used four core factors--that is, the demonstrated need for
revitalization assistance, the capacity of applicants to use grants
effectively, the quality of proposed revitalization plans, and the
potential for applicants to use grants to leverage funds from other
sources. However, the agency has imposed more stringent requirements
over the years to facilitate and improve its decision-making process.
For example, to demonstrate need, HUD has required applicants since
fiscal year 1993 to provide basic statistics, such as crime and vacancy
rates; but, in fiscal year 1999, it began requiring applicants to also
submit an independent engineer's certification that public housing
units targeted for revitalization are "severely distressed." Further,
in fiscal year 2002, HUD imposed an additional eligibility criterion to
eliminate applicants that had made little progress with revitalization
grants received in prior years. Previously, such applicants were not
excluded, and some were awarded multiple grants. Although the core
assessment factors have been consistent over the years, the HUD
Inspector General--in annual reviews of the grant award process--found
that the agency has not consistently followed the HOPE VI grant
selection procedures that it establishes each year; for example, the
Inspector General reported that the staff making selection decisions
did not always document their justifications for scoring and rating
individual applications. HUD has taken steps to improve the process in
response to the Inspector General's findings.
As of December 31, 2002, construction was complete at 15 of the 165
HOPE VI sites, and the majority of grantees had not met deadlines
established in their grant agreements with HUD. Relocation was complete
at 101 sites, demolition was complete at 87 sites, and at least some
units were built at 99 of the 165 sites. Grantees had completed 27
percent of the total planned units and spent approximately $2.1 of the
$4.5 billion in HOPE VI revitalization funds awarded. However, the
majority of grantees had missed at least one of the deadlines in their
grant agreements. For example, grantees did not submit the
revitalization plan to HUD within the time frame specified in the grant
agreement for 75 percent of the grants awarded through fiscal year 1999
(for grants awarded after 1999, the deadline had not yet passed at the
time of our study). Similarly, grantees did not complete construction
within the deadline on 39 of the 42 grants for which the standard time
allowed for construction (54 months) had expired at the time of our
study. Several factors affect the status of work at HOPE VI sites,
including the development approach used, changes to revitalization
plans, and relationships with residents. For example, sites funded with
a mix of public and private financing tend to take longer because
housing authorities must hire additional staff or outside consultants
proficient in private-sector real estate construction, financing, and
lending practices in order to put together financing and retain
developers.
HUD's oversight of HOPE VI grants has been inconsistent due to staffing
limitations, confusion about the role of field offices, and a lack of
formal enforcement policies. Both grant managers who report directly to
HUD headquarters and staff in HUD field offices are responsible for
overseeing HOPE VI grants. The workload assigned to HUD grant managers,
who have primary responsibility for HOPE VI grants, has been increasing
since HUD last hired a large group of grant managers in 1998, and HUD
has reported that one reason for project delays has been the limited
number of grant managers. Staff in HUD's field offices are required to
monitor grants by conducting annual reviews. However, by the end of
2002, HUD had not conducted any annual reviews for 8 out of the 20
grants awarded in fiscal year 1996. According to field office managers,
the reviews were not performed either because of a lack of staff or
because the offices did not understand their role in HOPE VI oversight.
In a 1998 report, the HUD Inspector General noted that HUD had not been
performing even the minimal monitoring required for the HOPE VI
program, in part due to understaffing in both headquarters and the
field offices. HOPE VI oversight also is hampered by a lack of
enforcement policies. While HUD's grant agreements describe conditions
that the agency may consider a default, HUD lacks specific policies on
when it will declare a grantee to be in default or apply sanctions.
Although HUD has issued nine default notices to grantees that have not
demonstrated significant progress, it has not done so for other
grantees showing a similar lack of progress.
Since the HOPE VI program began in fiscal year 1993, about $63 million
in HOPE VI funding has been budgeted for technical assistance, and HUD
has obligated the majority of its technical assistance funding for
services provided directly to grantees. Of the $51 million that HUD
estimates it has obligated to date, 55 percent has been obligated for
services provided directly to grantees. This included, in fiscal years
1996 to 2000, providing each new grantee with an expediter--a private-
sector expert in finance, real estate development, and community
revitalization--to assist with the implementation of its HOPE VI grant.
HUD obligated the remaining funds for services that help it to manage
the program. For example, it obligated 21 percent of the funding to
develop and implement the HOPE VI reporting system. In recent years,
HUD has eliminated some services previously provided to grantees. In
fiscal year 2001, for example, HUD stopped providing expediters
because, according to program officials, the practice had become too
expensive. Currently, only at-risk grantees--grantees that are
experiencing problems with their grants or that do not have adequate
capacity to manage their grants--are considered for technical
assistance.
This report contains recommendations designed to improve HUD's
management of the HOPE VI program. HUD agreed with each of our
recommendations.
Background:
Under the Housing Act of 1937, as amended, Congress created the federal
public housing program to help communities provide housing for low-
income families. Congress annually appropriates funds for the program,
and HUD allocates these funds to the approximately 3,400 public housing
authorities nationwide. Housing authorities are typically created under
state law, and a locally appointed board of commissioners approves
their decisions. HUD and the housing authorities have an annual
contributions contract--a written contract under which HUD agrees to
make payments to the housing authority and the housing authority agrees
to administer the housing program in accordance with HUD regulations
and requirements. In addition to competitively awarded HOPE VI grants,
HUD provides housing authorities with several types of assistance,
including operating subsidies to cover the difference between rent
payments and operating expenses and capital funds to improve the
physical condition of properties and upgrade the management and
operation of existing public housing sites.
HOPE VI is one of the few active federal housing production programs.
By providing funds for a combination of capital improvements and
community and supportive services, HOPE VI seeks to (1) improve the
living environment for public housing residents of severely distressed
public housing through the demolition, rehabilitation,
reconfiguration, or replacement of obsolete public housing; (2)
revitalize sites on which such public housing is located and contribute
to the improvement of the surrounding neighborhood; (3) provide housing
that will avoid or decrease the concentration of very low-income
families; and (4) build sustainable
communities.[Footnote 3] With the 165 grants awarded through fiscal
year 2001, grantees planned, as of December 31, 2002, to demolish
78,265 public housing units and construct or rehabilitate 85,327 units,
including 44,757 public housing units.
HUD's requirements for HOPE VI revitalization grants are laid out in
each fiscal year's NOFA and grant agreement.[Footnote 4] NOFAs announce
the availability of funds and contain application requirements,
threshold requirements, rating factors, and the application selection
process.[Footnote 5] Grant agreements, which change each fiscal year,
are executed between each grantee and HUD and specify the activities,
key deadlines, and documentation that grantees must meet or complete.
For example, the fiscal year 2001 grant agreement specified that the
grantee must complete construction within 54 months of the date on
which the grant agreement was executed.
From fiscal years 1993 to 2001, HUD received 609 revitalization grant
applications.[Footnote 6] HUD uses the same basic procedures each year
to screen, review, and rank grant applications. When grant applications
are received, they are screened to determine whether they meet the
eligibility and threshold requirements in the NOFA. Next, reviewers
rate the grant applications on the basis of the rating factors
described in the NOFA and rank them in score order. Generally, a group
of applications representing twice the amount of funds available is
sent to a final review panel, which may include the Deputy Assistant
Secretary for Public Housing Investments, the Assistant Secretary for
Public and Indian Housing, and other senior HUD staff. The final review
panel assigns a final score and recommends for selection the most
highly rated competitive applications, subject to the amount of
available funding. For a list of the 165 grants awarded through fiscal
year 2001, see appendix II.
Public housing authorities with revitalization grants can use a variety
of other public and private funds to develop their HOPE VI sites.
Public funding can come from federal, state, and local sources. For
example, housing authorities can use funds raised through federal low-
income housing tax credits. Under this program, states are authorized
to allocate federal tax credits as an incentive to the private sector
to develop rental housing for low-income households.[Footnote 7]
Private sources can include mortgage financing and financial or in-kind
contributions from nonprofit organizations. Developing public housing
with a combination of public and private financing sources is known as
mixed-finance development.
HUD's Office of Public Housing Investments, housed within the Office of
Public and Indian Housing, manages the HOPE VI program. Grant managers
within the Office of Public Housing Investments are primarily
responsible for overseeing HOPE VI grants. They approve changes to the
revitalization plan and coordinate the review of the community and
supportive services plan that each grantee submits.[Footnote 8] In
addition, grant managers track the status of grants by analyzing data
on the following key activities: relocation of original residents,
demolition of distressed units, new construction or rehabilitation,
reoccupancy by some original residents, and occupancy of completed
units. Public and Indian Housing staff located in HUD field offices
also play a role in overseeing HOPE VI grants, including coordinating
and reviewing construction inspections.
HUD Uses Core Factors to Assess Applications but Has Not Consistently
Followed Its Selection Procedures:
According to our analysis, HUD has generally used a core of four rating
factors as the basis for assessing HOPE VI revitalization grant
applications. Although HUD's fundamental factors have remained the
same, the requirements that housing authorities must fulfill under each
factor have become more stringent from year to year. Additionally,
until the most recent NOFA, HUD had not eliminated applicants on the
basis of poor performance on previously awarded grants. HUD's Inspector
General also has reported that HUD has not consistently followed its
selection procedures that are established for each annual assessment.
Although HUD Generally Uses the Same Core Factors to Assess
Applications, Applicants Must Now Meet More Stringent Requirements:
HUD has generally evaluated applications for HOPE VI revitalization
grants on the basis of four core rating factors. Although other factors
have been added and removed over time and the names of the factors have
varied somewhat throughout the years, four key concepts--need,
capacity, quality, and leveraging--have been used consistently to
assess applications.[Footnote 9] As defined in the most recent NOFA,
need should indicate the severity of distress at the targeted public
housing site. Information provided under capacity is used to assess the
experience of the applicant's team in planning, implementing, and
managing comparable physical development, financing, leveraging, and
partnership activities.[Footnote 10] HUD determines quality by
evaluating the overall quality of the plan, the likelihood of success,
project readiness, and design. Finally, information provided under
leveraging is used to assess the extent to which funds will be
leveraged for physical development and community and supportive
services, what other revitalization activities have been carried out in
the targeted area in anticipation of the HOPE VI grant, and if there
are physical development activities under way that will enhance the new
HOPE VI site. For more information on the most recent NOFA, see
appendix III.
Although the core factors have remained the same, the information that
housing authorities must submit and the requirements that they must
fulfill under each factor have generally increased over time (see fig.
1). For example, although housing authorities have been required to
provide basic statistics, such as crime and vacancy rates, to document
severe distress or need since fiscal year 1993, housing authorities
also were required, beginning in fiscal year 1999, to submit a
certification from an independent engineer that the public housing
targeted for revitalization met HUD criteria for severe distress. Since
fiscal year 1993, applicants also were required to provide information
on their own capacity to implement their plans. But, beginning in
fiscal year 1997, housing authorities also were required to document
the ability of their proposed partners to develop, construct, and
manage the proposed activities. To receive the maximum amount of points
for the quality rating factor in fiscal year 1996, applicants were
required to submit several pieces of information, including budgets, a
certification that the proposed activities could not be completed
without HOPE VI funding, and a description of how the housing authority
planned to maintain the proposed programs and policies over the long
term. By fiscal year 2002, housing authorities additionally had to
submit documentation that the revitalization plan would result in
outside investment in the surrounding community and evidence that, if
funded, work could commence immediately. To indicate that they could
leverage funds, housing authorities were encouraged to submit evidence
of outreach and support for the project in fiscal year 1995. However,
by fiscal year 2000, applicants had to show that they would obtain at
least $4 in leveraged funds for every HOPE VI dollar requested for
development in order to receive the maximum amount of points under
leveraging.
Figure 1: Changes to the HOPE VI Program Over Time:
[See PDF for image]
[End of figure]
Note: This figure is based on GAO analysis of HUD's legislative
appropriations and NOFAs.
[A] Section 202 sites are distressed public housing sites with more
than 300 units that HUD has determined to be subject to conversion to
rental assistance under Section 202 of the Omnibus Consolidated
Rescissions and Appropriations Act of 1996.
According to HOPE VI officials, HUD has increased the types and
quantity of information required each year in an effort to obtain
information that makes it easier to rate and rank applications and
allows the agency to make improved selection decisions. In addition,
the agency has made some changes in an effort to make the application
process easier for housing authorities. Finally, HOPE VI officials
noted that the program's annual appropriation legislation can change
the requirements each year and that the NOFAs must be revised to
reflect these changes.
Although the changes have given HUD better information upon which to
base selection decisions, some of the housing authority and public
housing industry group officials that we interviewed expressed concerns
about the changes in the application requirements that housing
authorities must meet. According to these officials, such changes make
it difficult for housing authorities to anticipate what HUD intends to
emphasize and to make detailed revitalization plans until each NOFA is
published. The officials also noted that it is challenging for
previously denied applicants to determine how to revise their
applications. Housing authorities and interest groups report that it
generally costs $75,000 to $250,000 to prepare a HOPE VI grant
application. The fiscal year 2002 NOFA was of particular concern to
some of the housing authority officials and industry group
representatives that we interviewed. According to these officials, the
NOFA required housing authorities to conduct impractical up-front
planning and to obtain commitments at an unrealistically early date.
For example, an applicant had to certify that it had procured a
developer for the first phase of construction by the application due
date. Officials we interviewed stated that this requirement would be
costly to the applicant, who at that point would have no guarantee of
funding.
Until Fiscal Year 2002, HUD Did Not Declare Applicants Ineligible
because of Past Performance:
Although HUD's annual selection process had considered the performance
of applicants who had received HOPE VI grants in prior years, it was
not until the fiscal year 2002 NOFA that past program performance
became a mandatory threshold requirement for an applicant to be
eligible for a HOPE VI revitalization grant. Incorporating past
performance--specifically, the demonstrated ability to efficiently
manage projects--can help direct HOPE VI funds to where they can most
effectively produce results.
Starting in fiscal year 1995, an applicant's score for capacity was
partially based on the extent to which any previously awarded HOPE VI
grants had progressed. In fiscal years 1993, 1996, and 1997, applicants
were also required, under the capacity factor, to submit Public Housing
Management Assessment Program scores, which were a measure of a housing
authority's performance in all major areas of management operations.
HUD stopped requiring this information in fiscal year 1998, after the
Public Housing Management Assessment Program was
discontinued.[Footnote 11] The fiscal year 2002 NOFA was the first that
stated that an applicant with one or more existing HOPE VI
revitalization grants would be disqualified if one or more of those
grants failed to meet certain performance requirements as required in
the applicable HOPE VI revitalization grant agreement.
During the years that past performance was a rating factor--rather than
a threshold eligibility requirement--multiple HOPE VI revitalization
grants were awarded to housing authorities that had made little
progress in constructing new units under previous grants. For example,
the Chicago Housing Authority was awarded grants in fiscal years 1998,
2000, and 2001, although construction, as of December 31, 2002, was 21
percent complete at the Cabrini-Green site (fiscal year 1994 grant); 26
percent complete at the Robert Taylor B site (fiscal year 1996 grant);
27 percent complete at the ABLA Brooks Extension site (fiscal year 1996
grant); and 0 percent complete at the Henry Horner site (fiscal year
1996 grant). Similarly, the Detroit Housing Commission has received
three grants and constructed 25 percent of the units planned.
In a June 2002 report to Congress, HUD acknowledged that it has done
little to rectify the problems among low performers and has often
awarded poorly performing housing authorities multiple grants despite
low or no unit production, inadequate oversight, and capacity
issues.[Footnote 12] HUD also acknowledged that awarding multiple
grants to poor performers further strains the institutional and staff
capacity of these public housing authorities, intensifying existing
problems. Finally, HUD noted that it had initially awarded grants to
large housing authorities for large-scale developments, without fully
recognizing that most of the grantees included at-risk and troubled
public housing authorities.[Footnote 13] Some of these large housing
authorities were awarded multiple revitalization grants, and the burden
of managing the grants resulted in slow planning, redevelopment, and
construction.
According to HUD, it elevated the importance of past performance in the
fiscal year 2002 NOFA because it wanted to emphasize accountability and
readiness. It determined that applicants that already had one or more
HOPE VI revitalization grants should demonstrate the capability to
manage them before HUD awarded them more funds. It also concluded that
poor performers should not be rewarded with additional funding when
other housing authorities possibly could implement the grants better.
HUD Has Not Consistently Followed Its Grant Selection Procedures:
In annual reviews of the HOPE VI grant selection process, HUD's
Inspector General has found that the agency has not consistently
followed its grant selection procedures for each year. For example, in
an audit of the fiscal year 1996 grant award process, the Inspector
General found that HUD revised its screening procedures to allow
applicants to comply with only one of the two eligibility criteria in
the NOFA.[Footnote 14] Under the revised screening procedures, HUD
awarded $269 million to applicants that should have been ineligible for
funding because they did not demonstrate compliance with the two
criteria as specified in the NOFA. Similarly, when HUD encountered a
defect in a fiscal year 1996 application, often the reviewers resolved
the defect in a manner that improved the applicant's application but
did not always comply with the NOFA procedures for resolving
application defects. The Inspector General concluded that, as a result,
some applications that should have been ineligible for funding were
inappropriately funded.
Similarly, the Inspector General also has found that in both fiscal
years 1998 and 1999 HUD did not fully or consistently implement key
application review procedures.[Footnote 15] Specifically, the final
review panel, and to a lesser degree the initial reviewers, did not
always document their justifications for scoring and rating individual
applications. For example, in its fiscal year 1998 audit, the Inspector
General reviewed 24 applications and identified 6 on which the final
review panel changed preliminary scores without providing adequate
documentation or justification to support all the changes. The scoring
changes resulted in 5 of the applicants obtaining funding and 1 losing
funding. In its fiscal year 1999 audit, the Inspector General reviewed
25 applications and found that HUD's final review panel had changed
scores for 6 applications without providing adequate documentation or
justification. The scoring changes resulted in 5 of the applicants
obtaining funding.
In response to these and other Inspector General criticisms of the HOPE
VI grant selection process, HOPE VI officials told us that they follow
their review procedures to the best of their ability, given the time
constraints of the annual competition. Although the Inspector General
generally has about 4 months to review the previous year's
applications, HOPE VI officials noted that they have shorter time
frames--generally, 6 weeks. HUD officials also stated that they have
made efforts to address the Inspector General's concerns, including
efforts to better screen applications. In its report on the fiscal year
1999 HOPE VI competition, the Inspector General determined that HUD had
addressed issues in its fiscal year 1998 review, relating to the need
to ensure that (1) each rejected applicant would be provided specific
written notification as to why the application was not successful and
(2) all evaluations were based on the facts presented in the
applications.
Status of Work Varies Greatly, and Most Grantees Have Not Met Grant
Agreement Deadlines:
The status of work at HOPE VI sites varies, with construction completed
at 15 of the 165 sites that received revitalization grants through
fiscal year 2001. Overall, at least some units have been constructed at
99 of the 165 sites, and 47 percent of all HOPE VI funds have been
expended. In general, more recently awarded grants are progressing more
quickly than earlier grants. Nevertheless, the majority of grantees
missed at least one of the deadlines in their grant agreements. For
example, grantees did not submit the revitalization plan to HUD on time
for 75 percent of the grants awarded through fiscal year 1999. Many
factors affect the status of work at HOPE VI sites, including the
development approach, housing authority management, and relationships
with residents and the surrounding community.
Status of Work Varies Widely at HOPE VI Sites:
Our analysis of data from HUD's HOPE VI reporting system shows that
work status varies at HOPE VI sites. As of December 31, 2002,
relocation was complete at 101 of the 165 sites, demolition at 87
sites, and construction at 15 sites.[Footnote 16] Reoccupancy--the
return of some original residents to revitalized units--was complete at
37 sites, while occupancy was complete at 14 of the 165 sites. Grantees
had demolished 57,772 units of severely distressed public housing and
constructed or rehabilitated 23,109 units. Figure 2 shows the
percentage of planned revitalization activities completed by each
fiscal year's grantees.
Figure 2: Percentage of Planned Revitalization Activities That Grantees
Completed, by Fiscal Year Awarded:
[See PDF for image]
Note: This figure is based on GAO analysis of data from HUD's HOPE VI
reporting system (as of Dec. 31, 2002).
[End of figure]
Although construction was complete at only 15 sites as of December 31,
2002, construction was nearing completion at additional sites. As shown
in figure 3, at least some units had been constructed at 99 of the 165
sites. Where construction was still ongoing, it was 50 percent or more
complete at 40 sites and 75 percent or more complete at 25 sites. No
units had been completed at 66 sites. Overall, 27 percent of the total
planned units were complete as of December 31, 2002.
Figure 3: Percentage of Construction Completed at 165 HOPE VI Sites:
[See PDF for image]
Note: This figure is based on GAO analysis of data from HUD's HOPE VI
reporting system (as of Dec. 31, 2002).
[End of figure]
In general, grantees with more recently awarded grants are completing
activities more quickly than those with the earlier grants. The fiscal
year 1993 grantees took an average of 31 months after execution of
grant agreements to start construction. The fiscal year 1994 grantees
took an average of 41 months.[Footnote 17] However, the 14 grantees
awarded grants in fiscal year 1999 that have started construction did
so an average of 16 months after grant agreement execution.
Furthermore, the 9 fiscal year 2000 grantees that have started
construction did so, on average, 10 months after grant agreement
execution.[Footnote 18] According to HUD, there are several possible
reasons for this improvement, which include that the later grantees may
have more capacity than the earlier grantees, the applications
submitted in later years were more fully developed to satisfy NOFA
criteria, and HUD has placed greater emphasis on reporting and
accountability.
Overall, grantees have expended about $2.1 of the $4.5 billion (47
percent) in HOPE VI revitalization funds awarded.[Footnote 19] As
expected, a greater percentage of the funds budgeted for planning and
demolition has been expended than of the funds budgeted for
construction and community and supportive services (see fig. 4). For
example, 67 percent of all HOPE VI funds budgeted for demolition have
been expended, while 42 percent of all HOPE VI funds budgeted for
construction have been expended.
Figure 4: Status of HOPE VI Funds Budgeted and Expended for
Revitalization Activities:
[See PDF for image]
Note: This figure is based on GAO analysis of data from HUD's HOPE VI
reporting system (as of Dec. 31, 2002).
[End of figure]
Majority of Grant Agreement Deadlines Have Not Been Met:
The majority of grantees missed at least one of the deadlines
established in their grant agreements.[Footnote 20] Grantees must meet
three major deadlines according to their grant agreements: the
submission of a revitalization plan to HUD, the submission of a
community and supportive services plan to HUD, and completion of
construction. Overall, for 75 percent of the grants awarded through
fiscal year 1999, the grantees did not submit the revitalization plan
to HUD on time.[Footnote 21] For 70 percent of the grants subject to a
standard deadline for the submission of a community and supportive
services plan, the grantees did not meet the deadline.[Footnote 22]
Additionally, grantees completed construction within the deadline on
only 3 of the 42 grants for which the time allowed for construction--54
months from grant execution for grants awarded since fiscal year 1996-
-had expired. For 9 of the 39 grants that missed their construction
deadline, the grantees had not constructed any units as of December 31,
2002.
HUD data show that the time it has taken grantees to submit key
documents has shortened over the life of the program. For example, as
shown in table 1, grantees have been taking less time to submit
revitalization plans to HUD. On average, the fiscal year 1994 grantees
took about 790 days after the execution of their grant agreements to
submit a revitalization plan. By fiscal year 2000, the grantees took an
average of 185 days after the execution of their grant agreements to
submit a revitalization plan. Similarly, although there is no specific
grant agreement deadline related to submitting mixed-finance proposals-
-documents that HUD must approve before mixed-finance construction can
begin--the recent grantees have done so in less time than did earlier
grantees. The average number of days between grant execution and
submission of a mixed-finance proposal fell from 2,255 days for the
fiscal year 1994 grantees to 508 days for the fiscal year 2000
grantees.
Table 1: Average Number of Days to Complete Key Program Activities:
Fiscal year awarded:
1993; Average number of days from grant execution to revitalization
plan submission: 137; Average number of days from grant execution to
submission of mixed-finance proposal: 2,047.
1994; Average number of days from grant execution to revitalization
plan submission: 790; Average number of days from grant execution to
submission of mixed-finance proposal: 2,255.
1995; Average number of days from grant execution to revitalization
plan submission: 287; Average number of days from grant execution to
submission of mixed-finance proposal: 1,276.
1996; Average number of days from grant execution to revitalization
plan submission: 400; Average number of days from grant execution to
submission of mixed-finance proposal: 1,421.
1997; Average number of days from grant execution to revitalization
plan submission: 290; Average number of days from grant execution to
submission of mixed-finance proposal: 983.
1998; Average number of days from grant execution to revitalization
plan submission: 317; Average number of days from grant execution to
submission of mixed-finance proposal: 1,005.
1999; Average number of days from grant execution to revitalization
plan submission: 259; Average number of days from grant execution to
submission of mixed-finance proposal: 912.
2000; Average number of days from grant execution to revitalization
plan submission: 185; Average number of days from grant execution to
submission of mixed-finance proposal: 508.
2001; Average number of days from grant execution to revitalization
plan submission: 93; Average number of days from grant execution to
submission of mixed-finance proposal: 296.
Source: HUD.
Note: Not all of the grantees have submitted a revitalization plan. For
example, 1 of the fiscal year 2000 grantees and 4 of the fiscal year
2001 grantees have not submitted a revitalization plan. Until these
grantees have submitted a plan, we cannot determine the average number
of days for the fiscal year 1999 and 2000 grantees, as a whole.
[End of table]
HUD has taken steps to encourage adherence to deadlines. For instance,
the agency notified grantees in March 2002 that, as part of HUD's
increased focus on readiness, 10 dates could no longer be revised in
the HOPE VI reporting system as of June 30, 2002. The dates included
planned completion of the revitalization plan, planned completion of a
mixed-finance proposal, planned start of construction, and planned
completion of construction. Prior to this decision, grantees had been
allowed to adjust their planned dates when delays occurred, making it
difficult for HUD to determine the extent of delays. In its fiscal year
2002 NOFA, HUD also stressed project readiness. For example, the NOFA
required applicants to provide a certification stating either that they
had procured a developer for the first phase of development by the
application due date or that they would act as their own developer.
Similarly, applicants that proposed off-site replacement housing were
required to submit evidence of control of the proposed off-site
locations.
Many Factors Affect Work Status:
Our visits to the sites that were awarded revitalization grants in 1996
show that many factors--including the development approach, housing
authority management, and relationships with residents and the
community--can affect the status of work at a site. In its June 2002
report to Congress, HUD stated that a mixed-finance development
approach might cause delays because housing authorities often lack
staff with expertise in development and complex financing approaches.
They must hire additional staff or outside consultants proficient in
private-sector real estate construction, financing, and lending
practices to put together financing and retain developers. For example,
the redevelopment of Dalton Village in Charlotte, North Carolina, was
delayed about 1 year due to the denial of its initial application for
low-income housing tax credits. In addition, the Housing Authority of
New Orleans decided to use tax increment financing to raise additional
funds for its St. Thomas site.[Footnote 23] It took more than 2 years
for the housing authority to get all of the approvals necessary. In
contrast, the Chester Housing Authority was able to complete
construction at Lamokin Village within 5 years of grant execution
because it used only public housing funds, which did not require them
to acquire additional expertise.
Other aspects of the development approach, such as the type and
location of planned revitalization efforts, also can affect status. For
example, rehabilitation of existing buildings tends to take less time
than construction of new ones. As of December 31, 2002, over half of
the HOPE VI units scheduled for rehabilitation had been completed,
while less than a quarter of the new planned units had been
constructed. The Cuyahoga Metropolitan Housing Authority's fiscal year
1996 grant involves both rehabilitation of existing units and
construction of new units. As of April 2003, rehabilitation of 56 units
was under way, whereas the construction of new units was not scheduled
to begin until October 2004. Also, on-site construction tends to occur
faster than off-site construction. As of December 31, 2002, 29 percent
of on-site construction was complete, while 19 percent of off-site
construction was complete. Grantees planning for off-site construction
sometimes have to purchase the property or properties on which the
units will be built. For example, the Housing Authority of the City of
Pittsburgh plans to acquire numerous parcels of land in the community
surrounding the Bedford Additions site and construct new off-site units
prior to beginning construction on-site. Because acquiring the sites is
taking longer than anticipated, the housing authority has yet to
relocate residents and demolish the original site. For more examples of
how development approaches can affect work status, see appendix IV.
The extent to which revitalization plans were changed during the course
of redevelopment also affects work status. The Housing Authority of the
City of Atlanta's original application for a fiscal year 1996 HOPE VI
grant outlined a plan for 100 percent public housing at the Perry Homes
site. Two years after the grant award, HUD conducted a site visit and
determined that the site should include a wide range of units,
including market-rate units. Due to these changes, a revitalization
plan was not approved until October 2002. The Cuyahoga Metropolitan
Housing Authority changed the plans for its Riverview site due to
environmental problems. In contrast, the Housing Authority of
Louisville, another fiscal year 1996 grantee, has not had to make any
significant modifications to its revitalization plan for Cotter and
Lang Homes, and over 60 percent of the 1,213 planned units were
complete as of December 31, 2002.
Several grantees we visited stated that the performance of housing
authority management staff affected the status of their revitalization
plans. For example, residents in Jacksonville and housing authority
staff in Spartanburg stated that their fiscal year 1996 grants had
progressed significantly, in part, because the executive director
communicated well with residents, the housing authority board, and
local community leaders. In contrast, the Cuyahoga Metropolitan Housing
Authority was experiencing internal problems at the time its fiscal
year 1996 grant was awarded. Its executive director was ultimately
convicted for theft of public funds, mail fraud, and lying about a
loan. A new executive director was hired in late 1998, and the housing
authority was finally able to focus on the fiscal year 1996 HOPE VI
grant in 1999, according to housing authority officials. In Detroit,
the revitalization plans for Herman Gardens changed multiple times
because there were several changes in executive leadership and each
executive director had a different plan for the site. Because the
Detroit Housing Commission had not submitted a formal revitalization
plan for Herman Gardens, HUD notified the commission in March 2000 and
March 2002 that it was in default of its grant agreement.
The extent of support from residents and the local community also can
affect the timing of progress at HOPE VI sites. For example, the Tucson
Community Services Department, which serves as the city's public
housing authority, worked closely with its residents and the local
community during the planning process for its fiscal year 1996 grant.
Tucson did not submit its revitalization plan until a majority of the
residents had approved it. In contrast, resident or community
opposition delayed progress at several of the sites we visited. For
instance, the Chicago Housing Authority's plans for Henry Horner Homes
were delayed 4 years by legal actions related to a resident lawsuit.
Residents at San Francisco's North Beach site did not want to relocate
from the site during the redevelopment, which caused the redevelopment
to take longer than it would have otherwise. Because the Housing
Authority of New Orleans's St. Thomas site is located in a historic
district, local preservationists opposed the construction of a retail
store at the site. In July 2002, a nonprofit organization filed a
lawsuit against the housing authority for failing to comply with
environmental and historic preservation laws. The case was dismissed in
April 2003. See appendix IV for more information on each of the 20
sites we visited.
HUD's approval process can also affect the status of work at HOPE VI
sites. Officials responsible for managing 12 of the 20 grants awarded
in fiscal year 1996 told us that HUD's approval process for key
documents, such as the revitalization plan and mixed-finance proposals,
was too slow. However, according to a HUD report, the agency's approval
process has been improving. For instance, HUD's data show the average
number of days from the submission of a mixed-finance proposal to
approval was 185 days for the fiscal year 1996 grantees. For the fiscal
year 1999 grantees, the average number of days between submission and
approval of a mixed-finance proposal was 126 days.
HUD's Oversight of HOPE VI Grants Has Been Inconsistent:
HUD grant managers located at HUD headquarters and in the field are
primarily responsible for overseeing HOPE VI grants, but staff in HUD's
field offices also assist grant managers in monitoring grants. In
particular, field office staff are to perform annual on-site monitoring
reviews. However, by the end of 2002, HUD had not conducted any annual
reviews for 8 out of the 20 grants awarded in fiscal year 1996.
According to HUD, staffing limitations have constrained its ability to
oversee grants. Additionally, despite grantees' inability to meet key
deadlines, HUD has not developed a formal enforcement policy, which is
an important part of oversight.
While Grant Managers Oversee Grants, Field Office Staff Share HOPE VI
Oversight Responsibilities:
Both HUD headquarters and field office staff are responsible for
overseeing HOPE VI revitalization grants. HUD has 30 grant managers
that report directly to the Office of Public Housing Investments--17
located at HUD headquarters and 13 located in field offices. Grant
managers are primarily responsible for overseeing HOPE VI grants and
perform a number of duties, including tracking the overall status of
the grant, reviewing and approving mixed-finance proposals, reviewing
and approving all proposed changes to program schedules, and reviewing
and approving procurement documents. According to HOPE VI officials,
the main tool that grant managers use to oversee grants is the HOPE VI
reporting system, which since 1998 has provided information on the
status of each grant. (Grantee reporting existed before 1998, but not
in the form of the quarterly reporting system currently used.) Grantees
enter data into the Web-based system at the end of each
quarter.[Footnote 24] According to the grant managers, the reports from
the system enable them to track grant activity and deadline compliance.
Office of Public and Indian Housing staff in HUD's field offices also
play a role in overseeing HOPE VI grants, but their responsibilities
vary. Three field offices that contain grant managers--located in New
York, New York; Miami, Florida; and Cleveland, Ohio--have signature
authority, meaning that the office's local Director of Public Housing
can approve documents without approval from headquarters. Other field
offices contain grant managers but do not have signature authority.
However, most field offices do not have a grant manager, but rather
have a HOPE VI coordinator, whose responsibilities include assisting
grantees with preparing demolition applications, reviewing
environmental assessments, and coordinating and reviewing inspections
of HOPE VI construction sites performed by the U.S. Army Corps of
Engineers. The field offices also are responsible for performing an
annual on-site monitoring visit to each HOPE VI grant. Following this
visit, the field office is to prepare a report for both the housing
authority staff and the grant manager detailing grantee systems and
controls in place and compliance with HOPE VI program requirements. The
site visit reports also provide an assessment of the overall status of
grant activities.
Staffing Limitations and Confusion about the Role of Field Offices
Constrain HUD's Ability to Oversee Grants:
According to various reports and HUD field staff, the limited number of
grant managers, a shortage of field office staff, and confusion about
the role of field offices have diminished the agency's ability to
oversee HOPE VI grants. As shown in figure 5, grant manager workload
has been increasing since HUD last hired a large group of grant
managers in 1998, but the workload remains below the previous level. As
of fiscal year 2001, each grant manager was responsible for an average
of about 6 grants totaling about $157 million in HOPE VI funding. In
its June 2002 report to Congress, HUD stated that one factor
contributing to delays at HOPE VI sites was limited HUD grant managers.
Similarly, some of the grantees we visited stated that they believe
grant manager workload contributed to the slow approval process
previously discussed in this report.
Figure 5: Grant Manager Workload, by Fiscal Year:
[See PDF for image]
Note: This figure is based on GAO analysis of data provided by HUD.
[End of figure]
HUD reports that HOPE VI oversight also has been affected by a shortage
of field office staff and confusion about the role of field offices.
Our site visits showed that HUD field staff are not systematically
performing the required annual reviews. Of the 20 revitalization grants
awarded in fiscal year 1996, 8 had never had an annual review performed
as of the end of 2002, and no grant had had an annual review performed
each year since the grant award. Overall, only one in five of the
required annual reviews were performed. However, the annual reviews
that were performed did contain important findings. For example,
several of the annual reviews performed for the fiscal year 1996
grantees noted that housing authorities were not following procurement
policies and lacked proper documentation of resident relocations.
From our interviews with field office managers, we determined that
there are two reasons why annual reviews were not performed. First,
many of the field office managers we interviewed stated that they
simply did not have enough staff to get more involved in overseeing
HOPE VI grants. For example, one field office manager told us that,
because of staffing constraints, his office did not perform any HOPE VI
oversight. Second, some field offices did not seem to understand their
role in HOPE VI oversight. For instance, one office thought that the
annual reviews were primarily the responsibility of the grant managers.
Others stated that they had not performed the reviews because
construction had not yet started at the sites in their jurisdiction or
because they did not think they had the authority to monitor grants.
The HUD Inspector General and the agency itself have reported that
staffing shortages, particularly in the field, have resulted in a lack
of program oversight. In a 1998 review of the HOPE VI program, the
Inspector General stated that HUD had not been performing even the
minimal monitoring requirements for the HOPE VI program in part due to
understaffing in both headquarters and the field offices.[Footnote 25]
As noted in that report, lack of monitoring led to grant implementation
problems remaining unresolved. In addition, HUD's most significant
workforce planning activity to date--its Resource Estimation Allocation
Process (REAP)--cited staffing shortages related to the HOPE VI
program. Under REAP, HUD systematically estimated the number of
employees needed to do its work, on the basis of current workload and
operations. The final resource estimation report, which was issued in
April 2001, noted that the Office of Public and Indian Housing needed
to add approximately 38 full-time employees in the field to conduct
tasks such as monitoring and providing assistance to HOPE VI
grantees.[Footnote 26] The report also concluded that the Office of
Public Housing Investments should more clearly articulate its own role
and the role of field offices in the oversight of HOPE VI grants.
HUD Lacks Clear Enforcement Policies and Has Not Always Enforced Grant
Agreement Deadlines:
Although the majority of grantees have missed key deadlines, HUD has
not developed and provided to grantees an official HOPE VI enforcement
policy, according to program officials. Instead, the agency determines
if action should be taken against a grantee on a case-by-case basis. A
clear enforcement policy could provide grantees with more certainty
regarding the consequences of not meeting grant agreement deadlines. In
a December 1999 memorandum, HUD's Office of General Counsel noted that
no statutory or program provisions required grantees to expend HOPE VI
funds within a set period of time. Therefore, it concluded that HUD may
grant extensions to time frames established in the grant agreements,
thus avoiding the need to declare grantees that have missed deadlines
to be in default of their grant agreements.[Footnote 27]
In the absence of a formal enforcement policy, HUD has outlined in
general terms its default policy in grant agreements. In each grant
agreement, HUD describes several occurrences that might constitute a
default by the grantee under the grant agreement, including a grantee's
failure to comply with the conditions and terms of its grant agreement.
HUD provides written notice of all defaults and gives the grantee 30
days to remedy the default or to submit evidence to HUD that it is not
in default. If the default cannot be remedied within 30 days, grantees
have an additional 60 days to rectify the default situation. At that
time, if the condition(s) noted in HUD's initial letter to the grantee
has not been resolved, HUD may require the grantee to revise its
program schedule, management plan, or program budget. HUD also may
restrict the grantee's authority to draw down grant funds or require
reimbursement by the grantee. HUD also reserves the right to appoint a
receiver to carry out HOPE VI activities, reduce the amount of the
grant award, or terminate the grant.
According to HOPE VI officials, all grantees would have been considered
in default of their grant agreements at some point in their grant
process if HUD had not been flexible regarding time frames. For
example, virtually all of the fiscal year 1996 grantees were allowed an
extension to the date construction was to be completed, and some were
allowed multiple extensions. The Chicago Housing Authority's Henry
Horner grant and the Housing Authority of the City of Atlanta's Perry
Homes grant received extensions for the execution of a general
contractor's agreement and for the date construction was to be
completed. In 2000, the Housing Authority of the City of Pittsburgh's
grant for Bedford Additions received an extension until early 2003 to
complete construction; in 2002, the authority received an additional
extension to complete construction by July 2007.
Although HUD has not developed a formal enforcement policy, it has
issued default notices to grantees. It has generally issued these
notices when there is no evidence of a formal and comprehensive
approach to the grantee's revitalization effort. As of March 2003, HUD
had declared nine grants to be in default and issued warning notices
regarding three other grants. According to program officials, HUD
expects to increase the use of the default tool because a default
letter tends to garner enough attention with the local media and
political leaders to prompt action. However, HUD has never rescinded
any HOPE VI funds, even when it has issued default letters.
Because HUD does not have a formal enforcement policy, its issuance of
default notices can be viewed as arbitrary. For example, in July 2000,
HUD declared the Housing Authority of Baltimore City's fiscal year 1996
grant for Hollander Ridge to be in default of its grant agreement on
the basis of "failure to comply with the HOPE VI requirements or any
other Federal, State or local laws, regulations or requirements
applicable in implementing the Revitalization Plan." The default letter
also noted that, because the housing authority's revitalization plan
was no longer consistent with the requirements of a consent decree, the
grant was deemed to be in default. In March 2000 and March 2002, HUD
declared the Detroit Housing Commission's fiscal year 1996 grant for
Herman Gardens to be in default because the housing authority had not
submitted a revitalization plan as required in its grant agreement.
However, HUD has not issued default letters to other grantees who have
not met grant agreement deadlines for completing construction. For
example, even though no units have been completed at St. Thomas in New
Orleans or Bedford Additions in Pittsburgh and, according to grant
agreement deadlines, construction was to be completed by early 2002,
neither fiscal year 1996 grant has been declared in default.
HUD Has Obligated the Majority of Funds Budgeted for Technical
Assistance for Support to Grantees and HOPE VI Program Reporting:
HUD estimates that it has obligated about $51 million of the $63
million in HOPE VI funds that have been set aside for technical
assistance, with the majority of this obligation funding services
provided directly to grantees and program reporting. As shown in figure
6, the funding budgeted for technical assistance has fluctuated. Over
the first 4 years of the program, funding ranged between $2.5 and $3.2
million, annually. In fiscal year 1998, funding increased to $10
million and consistently remained at or above that level until fiscal
year 2002, when it decreased to $6.2 million.
Figure 6: Technical Assistance Funding, by Fiscal Year:
[See PDF for image]
Note: This figure is based on GAO analysis of data provided by HUD.
[End of figure]
As shown in figure 7, HUD has obligated the majority of its technical
assistance funding for services provided directly to grantees and
program reporting. Of the $51 million that HUD estimates it has
obligated to date, 55 percent has been obligated for technical
assistance provided to grantees. For example, HUD assigns each grant an
outside technical assistance provider to help the grantee develop its
community and supportive services plan. In fiscal years 1996 to 2000,
HUD assigned each new grant an expediter to assist the grantee with its
HOPE VI plans. These expediters were private-sector experts in finance,
real estate development, and community revitalization. Another major
category of technical assistance has been program reporting. According
to HOPE VI officials, HUD spends about $2.5 million annually on the
HOPE VI reporting system. A contractor maintains the reporting system
and staffs a help desk to respond to questions from grantees. The
remaining technical assistance funding has been obligated for
headquarters management assistance, such as consultants; site
inspections performed by the U.S. Army Corps of Engineers; and staff
training and travel.
Figure 7: Total Obligations for Technical Assistance, by Funding
Category:
[See PDF for image]
Note: This figure is based on GAO analysis of estimates provided by
HUD.
[End of figure]
In recent years, HUD has eliminated some services previously provided
to grantees. For example, in fiscal year 2001, HUD stopped providing
expediters because, according to program officials, the practice had
become too expensive. Currently, only at-risk grantees--grantees that
are experiencing problems with their grants or do not have adequate
capacity to manage their grants--are considered for technical
assistance. According to HUD officials, HUD has decreased the amount of
technical assistance it provides because the agency believes that
grantees should be responsible for retaining and funding their own
technical assistance. Figure 8 shows the percentage of technical
assistance funds provided directly to grantees over the life of the
program.
Figure 8: Obligations for Technical Assistance, by Fiscal Year:
[See PDF for image]
Note: This figure is based on GAO analysis of estimates provided by
HUD.
[End of figure]
Conclusions:
HOPE VI is one of the few active federal housing production programs
and is supposed to deliver almost 45,000 units of rehabilitated or new
public housing. During these tight budgetary times, when Congress faces
difficult choices in deciding how to provide affordable housing, it is
increasingly important that federal housing programs produce results.
After 10 years of the HOPE VI program, construction has been completed
at 15 of 165 sites. However, work is proceeding more quickly at sites
financed by more recently awarded grants. The HOPE VI program has
incorporated measures to increase efficiency--in part attributable to
HUD's requesting more information from grant applicants and a renewed
emphasis on meeting deadlines. In addition, the emphasis on performance
measures, such as HUD's incorporation of past performance as an
eligibility requirement in the fiscal year 2002 NOFA, should help
direct HOPE VI funds to where they can most effectively produce
results.
However, the HOPE VI program could be improved further. By emphasizing
the need for regular grant oversight and review and improving and
clarifying the lines of communication between headquarters and the
field offices, HUD can eliminate existing confusion about staff roles,
build a consistent record of site reviews and oversight, and improve
communications with grantees to facilitate progress on grants. Since
the HOPE VI grant process involves both HUD and public housing
authorities, HUD can further improve the efficiency of the grant
program and help achieve its goal of revitalizing public housing by
holding grantees accountable for performance, particularly in the areas
of meeting deadlines and producing deliverables. The HOPE VI program,
as it is currently set up, does not have a clear and consistent system
for determining if grantees are not in compliance with grant
requirements, nor does it offer clear incentives for grantees to change
behavior or correct undesirable conditions.
Recommendations for Executive Action:
To improve its selection and oversight of HOPE VI grants, we recommend
that the Secretary of Housing and Urban Development:
* continue to include past performance as an eligibility requirement in
each year's notice of funding availability;
* clarify the role of HUD field offices in HOPE VI oversight and ensure
that the offices conduct required annual reviews of HOPE VI grants;
and:
* develop a formal, written enforcement policy to hold public housing
authorities accountable for the status of their grants.
Agency Comments:
We provided a draft of this report to HUD for its review and comment.
In a letter from the Assistant Secretary for Public and Indian Housing
(see app. V), HUD stated that it found the report to be fair and
accurate in its assessment of the management of the program. HUD also
agreed with our three recommendations. Specifically, it stated that it
would take action to incorporate past performance as an eligibility
criterion in the fiscal year 2003 HOPE VI Revitalization NOFA.
Regarding the recommendation to develop a formal enforcement policy,
HUD stated that it regards the development of management tools such as
the locked checkpoint system described in this report to be a key step
in the establishment of a formalized enforcement policy and will
endeavor to institute other responsive measures. Additionally, HUD
provided clarifications on several technical points, which have been
included in this report as appropriate.
:
As agreed with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 10 days
after the date of this report. At that time, we will send copies of
this report to the Chairman, Subcommittee on Housing and
Transportation, Senate Committee on Banking, Housing, and Urban
Affairs; the Chairman and Ranking Minority Member, Senate Committee on
Banking, Housing, and Urban Affairs; the Chairman and Ranking Minority
Member, Subcommittee on Housing and Community Opportunity, House
Committee on Financial Services; and the Chairman and Ranking Minority
Member, House Committee on Financial Services. We will also send copies
to the Secretary of Housing and Urban Development and the Director of
the Office of Management and Budget. We will make copies available to
others upon request. This report will also be available at no charge on
GAO's Web site at http://www.gao.gov.
Please call me at (202) 512-8678 if you or your staff have any
questions about this report. Key contributors to this report are listed
in appendix VI.
Sincerely yours,
David G. Wood
Director,
Financial Markets and Community Investment:
Signed by David G. Wood:
[End of section]
Appendixes:
Appendix I: Objectives, Scope, and Methodology:
Our objectives were to examine (1) the Department of Housing and Urban
Development's (HUD) process for assessing HOPE VI revitalization grant
applications and for selecting grantees, (2) the status of work at
sites for which grants have been awarded and compliance with grant
agreement deadlines, (3) HUD's oversight of HOPE VI grants, and (4) the
amount of program funds that HUD has budgeted for technical assistance
and the types of technical assistance it has provided.
To accomplish these objectives, we analyzed the data contained in HUD's
HOPE VI reporting system on the 165 sites that received revitalization
grants in fiscal years 1993 through 2001 and visited 20 sites in 18
cities. We selected these 20 sites because they received HOPE VI
revitalization grants in fiscal year 1996, which was the first year
that grants were subject to a standard construction deadline. Using the
1996 grants also allowed us to assess whether grantees had met their
deadlines, which had passed for the majority of the grantees by the
time we began our site visits. In addition, we interviewed the HUD
headquarters officials responsible for administering the HOPE VI
program.
To determine the criteria that HUD uses to assess HOPE VI
revitalization grant applications, we analyzed each year's notice of
funding availability (NOFA). Specifically, we examined the rating
factors used each year to determine if there were any similarities
between the different NOFAs. We also analyzed the information that
housing authorities were required to submit for selected rating factors
and identified changes in these requirements over time. To determine
how HUD has followed its grant selection procedures, we obtained and
reviewed HUD Office of Inspector General reports on the HOPE VI grant
selection process for fiscal years 1996 and 1998 to 2001.[Footnote 28]
Finally, we interviewed public housing industry groups--the Council of
Large Public Housing Authorities, the Public Housing Authorities
Directors Association, and the National Association of Housing and
Redevelopment Officials--regarding the grant selection process.
To determine the status of work at sites for which grants have been
awarded, we obtained and analyzed information from HUD's HOPE VI
reporting system. Specifically, we obtained data as of December 31,
2002, for the 165 revitalization grants awarded through fiscal year
2001. We used these data to determine the status of relocation,
demolition, construction, reoccupancy, and occupancy and the amount of
expended HOPE VI funds. For each of the 1996 grants, we interviewed
housing authority and HUD officials to determine the status of each
grant and the factors affecting that status. To determine the extent to
which grantees have met grant agreement deadlines, we obtained and
analyzed each year's grant agreement. We then used milestone data from
HUD's HOPE VI reporting system to determine the extent to which
grantees had met the deadlines in their grant agreements. To assess the
reliability of the data in HUD's HOPE VI reporting system, we
interviewed the officials that manage the system; reviewed information
about the system, including the user guide, data dictionary, and steps
taken to ensure the quality of these data; and performed electronic
testing to detect obvious errors in completeness and reasonableness. We
determined that these data were sufficiently reliable for the purposes
of this report.
To identify how HUD oversees HOPE VI grants, we obtained and analyzed
HUD's HOPE VI monitoring guidance and interviewed program officials. We
obtained and analyzed information on the number of grants and grant
managers at the end of each fiscal year to determine grant manager
workload. During each of our site visits, we interviewed housing
authority staff regarding HUD's oversight of their grants. We also
obtained and analyzed copies of the annual reviews performed for the
1996 grants and interviewed HUD field office staff regarding their role
in HOPE VI oversight. Finally, we reviewed HUD Inspector General
reports on the HOPE VI program and HUD's final report on its Resource
Estimation and Allocation Process.
To determine how much HUD has budgeted for technical assistance, we
reviewed information provided by HUD on the total amount budgeted each
fiscal year for technical assistance. To determine the types of
technical assistance HUD has provided, we obtained and analyzed data on
the major types of technical assistance provided with each fiscal
year's budget. The data HUD provided were estimates of the amounts it
had obligated for technical assistance over the life of the program. We
also interviewed program officials regarding the types of technical
assistance provided and 1996 grantees regarding the types of technical
assistance they received from HUD.
We performed our work from November 2001 through April 2003 in
accordance with generally accepted government auditing standards.
[End of section]
Appendix II: HOPE VI Revitalization Grants:
In fiscal years 1993 to 2001, HUD awarded 165 revitalization grants to
98 public housing authorities (see table 2). Nearly half of all of the
HOPE VI revitalization grant funds awarded have been granted to 20
housing authorities. Within this group of housing authorities, 8 have
received 4 or more revitalization grants: the Housing Authority of the
City of Atlanta, the Housing Authority of Baltimore City, the Chicago
Housing Authority, the Housing Authority of the City of Oakland, the
District of Columbia Housing Authority, the Philadelphia Housing
Authority, the Seattle Housing Authority, and the City and County of
San Francisco Housing Authority. The Chicago Housing Authority has been
awarded 8 HOPE VI revitalization grants, more than any other housing
authority. The Housing Authority of Baltimore City follows with 6
revitalization grants.[Footnote 29]
Table 2: 165 Revitalization Grants Awarded, Fiscal Years 1993-2001:
Public housing authority: Albany Housing Authority; Albany, New York;
Site: Edwin Corning Homes; Fiscal year awarded: 1998; Amount awarded:
$28,852,200.
Public housing authority: Alexandria Redevelopment and Housing
Authority; Alexandria, Virginia; Site: Samuel Madden Homes; Fiscal year
awarded: 1998; Amount awarded: 6,716,250.
Public housing authority: Allegheny County Housing Authority;
Pittsburgh, Pennsylvania; Site: McKees Rocks Terrace; Fiscal year
awarded: 1997; Amount awarded: 15,847,160.
Site: Homestead Apartments; Fiscal year awarded: 1998E[A]; Amount
awarded: 2,549,392.
Public housing authority: Housing Authority of the City of Atlanta;
Atlanta, Georgia; Site: Techwood/Clark Howell/Centennial Place; Fiscal
year awarded: 1993; Amount awarded: 42,562,635.
Site: Perry Homes; Fiscal year awarded:
1996; Amount awarded: 20,000,000.
Site: Carver Homes; Fiscal year awarded:
1998; Amount awarded: 34,669,400.
Site: Joel Chandler Harris Homes; Fiscal year
awarded: 1999; Amount awarded: 35,000,000.
Site: Capitol Homes; Fiscal year awarded: 2001; Amount awarded:
35,000,000.
Public housing authority: Atlantic City Housing Authority and Urban
Redevelopment Agency; Atlantic City, New Jersey; Site: Shore Park;
Shore Terrace; Fiscal year awarded: 1999; Amount awarded: 35,000,000.
Public housing authority: Housing Authority of Baltimore City;
Baltimore, Maryland; Site: Lafayette Courts; Fiscal year awarded: 1994;
Amount awarded: 49,663,600.
Site: Lexington Terrace; Fiscal year awarded:
1995(2)[B]; Amount awarded: 22,702,000.
Site: Hollander Ridge; Fiscal year awarded:
1996; Amount awarded: 20,000,000.
Site: Murphy Homes; Julian Gardens; Fiscal year awarded: 1997;
31,325,395.
Site: Flag House Courts; Fiscal year awarded: 1998; Amount awarded:
21,500,000.
Site: Broadway Homes; Fiscal year awarded: 1999; Amount awarded:
21,362,223.
Public housing authority: Housing Authority of the City of Biloxi;
Biloxi, Mississippi; Site: Bayview Homes; Bayou Auguste; Fiscal year
awarded: 2000; Amount awarded: 35,000,000.
Public housing authority: Housing Authority of the Birmingham District;
Birmingham, Alabama; Site: Metropolitan Gardens; Fiscal year awarded:
1999; Amount awarded: 34,957,850.
Public housing authority: Boston Housing Authority; Boston,
Massachusetts; Site: Mission Main; Fiscal year awarded: 1993; Amount
awarded: 49,992,350.
Site: Orchard Park; Fiscal year awarded: 1995(2)[ B]; Amount awarded:
30,000,000.
Site: Maverick Gardens; Fiscal year awarded: 2001; Amount
awarded: 35,000,000.
Public housing authority: Housing Authority of the City of Bradenton;
Bradenton, Florida; Site: GD Rogers and Addition; Fiscal year awarded:
1999; Amount awarded: 21,483,332.
Public housing authority: Housing Authority of the City of Bridgeton;
Bridgeton, New Jersey; Site: Cohansey View; Fiscal year awarded: 2001;
Amount awarded: 10,945,944.
Public housing authority: Buffalo Housing Authority; Buffalo, New York;
Site: Lakeview Homes; Lower West Side; Fiscal year awarded: 1997;
Amount awarded: 28,015,038.
Public housing authority: Cambridge Housing Authority; Cambridge,
Massachusetts; Site: John F. Kennedy Apartments; Fiscal year awarded:
1998E[A]; Amount awarded: 5,000,000.
Public housing authority: Camden Housing Authority; Camden, New Jersey;
Site: McGuire Gardens; Fiscal year awarded: 1994; Amount awarded:
42,177,229.
Site: Westfield Acres; Fiscal year awarded: 2000; Amount
awarded: 35,000,000.
Public housing authority: Housing Authority of the City of Charlotte;
Charlotte, North Carolina; Site: Earle Village; Fiscal year awarded:
1993; Amount awarded: 41,740,155.
Site: Dalton Village; Fiscal year awarded: 1996; Amount awarded:
24,501,684.
Site: Fairview; Fiscal year awarded: 1998; Amount awarded:
34,724,570.
Public housing authority: Chattanooga Housing Authority; Chattanooga,
Tennessee; Site: McCallie Homes; Fiscal year awarded: 2000; Amount
awarded: 35,000,000.
Public housing authority: Housing Authority of Chester City; Chester,
Pennsylvania; Site: Lamokin Village; Fiscal year awarded: 1996; Amount
awarded: 14,949,544.
Site: McCafferey Village; Fiscal year awarded: 1998; Amount awarded:
9,751,178.
Public housing authority: Chester County Housing Authority; West
Chester, Pennsylvania; Site: Oak Street; Fiscal year awarded: 1997;
Amount awarded: 16,434,200.
Public housing authority: Chicago Housing Authority; Chicago, Illinois;
Site: Cabrini-Green; Fiscal year awarded: 1994; Amount awarded:
50,000,000.
Site: ABLA Brooks Extension; Fiscal year awarded: 1996; Amount
awarded: 24,483,250.
Site: Henry Horner; Fiscal year awarded: 1996; Amount awarded:
18,435,300.
Site: Robert Taylor; Fiscal year awarded:
1996; Amount awarded: 25,000,000.
Site: ABLA; Fiscal year awarded: 1998; Amount awarded: 35,000,000.
Site: Madden/Wells/Darrow; : 2000; 35,000,000.
Site: Robert Taylor; Fiscal year awarded: 2001; Amount awarded:
35,000,000.
Site: Rockwell Gardens; Fiscal year awarded: 2001; Amount awarded:
35,000,000.
Public housing authority: Cincinnati Housing Authority; Cincinnati,
Ohio; Site: Lincoln Court; Fiscal year awarded: 1998; Amount awarded:
31,093,590.
Site: Laurel Homes; Fiscal year awarded: 1999; Amount awarded:
35,000,000.
Public housing authority: Housing Authority of the City of Columbia,
South Carolina; Columbia, South Carolina; Site: Saxon Homes; Fiscal
year awarded: 1999; Amount awarded: 25,843,793.
Public housing authority: Columbus Metropolitan Housing Authority;
Columbus, Ohio; Site: Windsor Terrace (Rosewind); Fiscal year awarded:
1994; Amount awarded: 42,053,408.
Public housing authority: Cuyahoga Metropolitan Housing Authority;
Cleveland, Ohio; Site: Outhwaite Homes; King Kennedy Estate South;
Fiscal year awarded: 1993; Amount awarded: 50,000,000.
Site: Carver Park; Fiscal year awarded: 1995(2)[B]; Amount awarded:
21,000,000.
Site: Riverview; Fiscal year awarded: 1996; Amount awarded: 29,733,334.
Public housing authority: Dallas Housing Authority; Dallas, Texas;
Site: Lakewest; Fiscal year awarded: 1994; Amount awarded: 26,600,000.
Site: Roseland; Fiscal year awarded: 1998; Amount awarded: 34,907,186.
Public housing authority: Danville Redevelopment and Housing Authority;
Danville, Virginia; Site: Liberty View; Fiscal year awarded: 2000;
Amount awarded: 20,647,784.
Public housing authority: Dayton Metropolitan Housing Authority;
Dayton, Ohio; Site: Edgewood Court; Metro Gardens; Metro Annex; Fiscal
year awarded: 1999; Amount awarded: 18,311,270.
Public housing authority: Decatur Housing Authority; Decatur, Illinois;
Site: Longview Place; Fiscal year awarded: 1999; Amount awarded:
34,863,615.
Public housing authority: Housing Authority of the City and County of
Denver; Denver, Colorado; Site: Quigg Newton Homes; Fiscal year
awarded: 1994; Amount awarded: 26,489,288.
Site: Curtis Park; Arapahoe Courts; Fiscal year awarded: 1998;
Amount awarded: 25,753,220.
Public housing authority: Detroit Housing Commission; Detroit,
Michigan; Site: Jeffries Homes; Fiscal year awarded: 1994; Amount
awarded: 39,807,342.
Site: Parkside Homes; Fiscal year awarded: 1995(1)[ B]; Amount
awarded: 47,620,227.
Site: Herman Gardens; Fiscal year awarded: 1996; Amount awarded:
24,224,160.
Public housing authority: District of Columbia Housing Authority;
Washington, D.C.; Site: Ellen Wilson Homes; Fiscal year awarded: 1993;
Amount awarded: 25,075,956.
Site: Valley Green, Skytower; Fiscal year
awarded: 1997; Amount awarded: 20,300,000.
Site: Frederick Douglass Homes; Stanton
Dwellings; Fiscal year awarded: 1999; Amount
awarded: 29,972,431.
Site: East Capitol Dwellings; Capitol View
Plaza; Fiscal year awarded: 2000; Amount
awarded: 30,867,337.
Site: Housing Authority of the City of Durham:
Arthur Capper; Carrollsburg; Fiscal year awarded: Housing Authority of the City of Durham: 2001; Amount awarded:
Housing Authority of the City of Durham:
34,937,590.
Public housing authority: Housing Authority of the City of Durham;
Durham, North Carolina; Site: Few Gardens; Fiscal year awarded: 2000;
Amount awarded: 35,000,000.
Public housing authority: Housing Authority of the City of El Paso; El
Paso, Texas; Site: Kennedy Brothers; Fiscal year awarded: 1995(1)[ B];
Amount awarded: 36,224,644.
Public housing authority: Housing Authority of the City of Elizabeth;
Elizabeth, New Jersey; Site: Pioneer Homes; Migliore Manor; Fiscal year
awarded: 1997; Amount awarded: 28,903,755.
Public housing authority: Housing Authority of the City of Gary; Gary,
Indiana; Site: Duneland Village; Fiscal year awarded: 1999; Amount
awarded: 19,847,454.
Public housing authority: Greensboro, North Carolina Housing Authority;
Greensboro, North Carolina; Site: Morningside Homes; Fiscal year
awarded: 1998; Amount awarded: 22,987,722.
Public housing authority: Housing Authority of the City of Greenville,
South Carolina; Greenville, South Carolina; Site: Woodland Homes;
Pearce Homes; Fiscal year awarded: 1999; Amount awarded: 21,075,322.
Public housing authority: Housing Authority of the City of Hagerstown;
Hagerstown, Maryland; Site: Westview Homes; Fiscal year awarded: 2001;
Amount awarded: 27,357,875.
Public housing authority: Helena Housing Authority; Helena, Montana;
Site: Enterprise Drive; Fiscal year awarded: 1997; Amount awarded:
939,700.
Public housing authority: Housing Authority of the City of High Point,
North Carolina; High Point, North Carolina; Site: Springfield
Townhouses; Fiscal year awarded: 1999; Amount awarded: 20,180,647.
Public housing authority: Holyoke Housing Authority; Holyoke,
Massachusetts; Site: Jackson Parkway; Fiscal year awarded: 1996; Amount
awarded: 15,000,000.
Public housing authority: Houston Housing Authority; Houston, Texas;
Site: Allen Parkway Village; Fiscal year awarded: 1993; Amount awarded:
36,602,761.
Fiscal year awarded: Indianapolis Housing
Authority: 1997; Amount awarded: Indianapolis
Housing Authority: 21,286,470.
Public housing authority: Indianapolis Housing Authority;
Indianapolis, Indiana; Site: Concord Village; Eagle Creek; Fiscal year
awarded: 1995(1)[ B]; Amount awarded: 29,999,010.
Public housing authority: Jacksonville Housing Authority;
Jacksonville, Florida; Site: Durkeeville; Fiscal year awarded: 1996;
Amount awarded: 21,552,000.
Public housing authority: Housing Authority of the City of Jersey City;
Jersey City, New Jersey; Site: Curries Woods; Fiscal year awarded:
1997; Amount awarded: 31,624,658.
Site: Lafayette Gardens; Fiscal year awarded: 2001; Amount awarded:
34,140,000.
Public housing authority: Housing Authority of Kansas City; Kansas
City, Missouri; Site: Guinotte Manor; Fiscal year awarded: 1993; Amount
awarded: 47,579,800.
Site: Theron B. Watkins Homes; Fiscal year
awarded: 1996; Amount awarded: 13,000,000.
Site: Heritage House: Fiscal Year Awarded: 1997; Amount awarded:
6,570,500. Fiscal year Awarded: 1998E[A]; Amount awarded: 3,429,500.
Public housing authority: King County Housing Authority; Tukwila,
Washington; Site: Park Lake Homes; Fiscal year awarded: 2001; Amount
awarded: 35,000,000.
Public housing authority: Knoxville's Community Development
Corporation; Knoxville, Tennessee; Site: College Homes; Fiscal year
awarded: 1997; Amount awarded: 22,064,125.
Public housing authority: Housing Authority of the City of Lakeland,
Florida; Lakeland, Florida; Site: Washington Ridge; Fiscal year
awarded: 1999; Amount awarded: 21,842,801.
Public housing authority: Lexington-Fayette Urban County Housing
Authority; Lexington, Kentucky; Site: Charlotte Court; Fiscal year
awarded: 1998; Amount awarded: 19,331,116.
Public housing authority: Housing Authority of the City of Los Angeles;
Los Angeles, California; Site: Pico Gardens; Fiscal year awarded: 1993;
Amount awarded: 50,000,000.
Site: Aliso Village; Fiscal year awarded: 1998; Amount awarded:
23,045,297.
Public housing authority: Housing Authority of Louisville; Louisville,
Kentucky; Site: Cotter and Lang Homes; Fiscal year awarded: 1996;
Amount awarded: 20,000,000.
Public housing authority: Macon Housing Authority; Macon, Georgia;
Site: Oglethorpe Homes; Fiscal year awarded: 2001; Amount awarded:
19,282,336.
Public housing authority: Memphis Housing Authority; Memphis,
Tennessee; Site: LeMoyne Gardens; Fiscal year awarded: 1995(1)[ B];
Amount awarded: 47,281,182.
Site: Hurt Village; Fiscal year awarded: 2000; Amount awarded:
35,000,000.
Public housing authority: Mercer County Housing Authority; Sharon,
Pennsylvania; Site: Steel City Terrace Extension; Fiscal year awarded:
2000; Amount awarded: 9,012,288.
Public housing authority: Miami-Dade Housing Agency; Miami, Florida;
Site: Ward Towers; Fiscal year awarded: 1998E[A]; Amount awarded:
4,697,750.
Site: Scott Homes; Carver Homes; Fiscal year awarded: 1999;
Amount awarded: 35,000,000.
Public housing authority: Housing Authority of the City of Milwaukee;
Milwaukee, Wisconsin; Site: Hillside Terrace; Fiscal year awarded:
1993; Amount awarded: 45,689,446.
Site: Parklawn; Fiscal year awarded: Public
housing authority: 1998; Amount awarded:
35,000,000.
Site: Lapham Park; Fiscal year awarded: 2000; Amount awarded:
11,300,000.
Public housing authority: Mobile Housing Board; Mobile, Alabama; Site:
Central Plaza Towers; Fiscal year awarded: 1998E[A]; Amount awarded:
4,741,800.
Public housing authority: Metropolitan Development and Housing Agency -
Nashville; Nashville, Tennessee; Site: Vine Hill Homes; Fiscal year
awarded: 1997; Amount awarded: 13,563,876.
Site: Preston Taylor Homes; Fiscal year awarded: 1999; Amount awarded:
35,000,000.
Public housing authority: New Bedford Housing Authority; New Bedford,
Massachusetts; Site: Caroline Street Apartments; Fiscal year awarded:
1998E[A]; Amount awarded: 4,146,780.
Public housing authority: Housing Authority of the City of New
Brunswick; New Brunswick, New Jersey; Site: New Brunswick Homes; Fiscal
year awarded: 1998; Amount awarded: 7,491,656.
Public housing authority: Housing Authority of the City of New Haven;
New Haven, Connecticut; Site: Elm Haven Terrace; Fiscal year awarded:
1993; Amount awarded: 45,331,593.
Public housing authority: Housing Authority of New Orleans; New
Orleans, Louisiana; Site: Desire; Fiscal year awarded: 1994; Amount
awarded: 44,255,908.
Site: St. Thomas; Fiscal year awarded: 1996; Amount awarded: 25,000,000.
Public housing authority: New York City Housing Authority; New York,
New York; Site: Arverne Homes; Edgemere Homes; Fiscal year awarded:
1995(1)[ B]; Amount awarded: 47,700,952. Fiscal year awarded: 1996;
Amount awarded: 20,000,000.
Site: Prospect Plaza; Fiscal year awarded: 1998; Amount awarded:
21,405,213.
Public housing authority: Housing Authority of the City of Newark;
Newark, New Jersey; Site: Archbishop Walsh Homes; Fiscal year awarded:
1994; Amount awarded: 49,996,000.
Site: Stella Wright Homes; Fiscal year awarded: 1999; Amount awarded:
35,000,000.
Public housing authority: Newport, Kentucky Housing Authority; Newport,
Kentucky; Site: Peter G. Noll; Booker T. Washington; McDermott-McLane;
Fiscal year awarded: 2000; Amount awarded: 28,415,290.
Public housing authority: Norfolk Redevelopment and Housing Authority;
Norfolk, Virginia; Site: Roberts Village; Bowling Green; Fiscal year
awarded: 2000; Amount awarded: 35,000,000.
Public housing authority: North Charleston Housing Authority; North
Charleston, South Carolina; Site: North Park Village; Fiscal year
awarded: 2001; Amount awarded: 30,347,921.
Public housing authority: Housing Authority of the City of Oakland;
Oakland, California; Site: Lockwood Gardens; Lower Fruitvale; Fiscal
year awarded: 1994; Amount awarded: 26,510,020.
Site: Chestnut Court; Fiscal year awarded: 1998; Amount awarded:
12,705,010.
Site: Westwood Gardens; Fiscal year awarded:
1999; Amount awarded: 10,053,254.
Site: Coliseum Gardens; Fiscal year awarded: 2000; Amount awarded:
34,486,116.
Public housing authority: Housing Authority of the City of Orlando;
Orlando, Florida; Site: Colonial Park; Fiscal year awarded: 1997;
Amount awarded: 6,800,000.
Public housing authority: Housing Authority of the City of Paterson;
Paterson, New Jersey; Site: Christopher Columbus; Fiscal year awarded:
1997; Amount awarded: 21,662,344.
Public housing authority: Peoria Housing Authority; Peoria, Illinois;
Site: Colonel John Warner Homes; Fiscal year awarded: 1997; Amount
awarded: 16,190,907.
Public housing authority: Philadelphia Housing Authority;
Philadelphia, Pennsylvania; Site: Richard Allen Homes; Fiscal year
awarded: 1993; Amount awarded: 50,000,000.
Site: Schuylkill Falls; Fiscal year awarded:
1997; Amount awarded: 26,400,951.
Site: Martin Luther King Plaza; Fiscal year
awarded: 1998; Amount awarded: 25,229,950.
Site: Mill Creek; Fiscal year awarded: 2001; Amount awarded: 34,825,000.
Public housing authority: City of Phoenix Housing Department; Phoenix,
Arizona; Site: Matthew Henson Homes; Fiscal year awarded: 2001; Amount
awarded: 35,000,000.
Public housing authority: Pittsburgh Housing Authority; Pittsburgh,
Pennsylvania; Site: Allequippa Terrace; Fiscal year awarded: 1993;
Amount awarded: 31,564,190.
Site: Manchester; Fiscal year awarded: Public
housing authority: 1995(2)[ B]; Amount awarded: 7,500,000.
Site: Bedford Additions; Fiscal year awarded: 1996; Amount awarded:
26,592,764.
Public housing authority: Housing Authority of Portland; Portland,
Oregon; Site: Columbia Villa,; Columbia Villa Additions; Fiscal year
awarded: 2001; Amount awarded: 35,000,000.
Public housing authority: Portsmouth Redevelopment and Housing
Authority; Portsmouth, Virginia; Site: Ida Barbour; Fiscal year
awarded: 1997; Amount awarded: 24,810,883.
Public housing authority: Puerto Rico Housing Administration; San Juan,
Puerto Rico; Site: Cristantemos y Manuel A. Perez; Fiscal year awarded:
1994; Amount awarded: 50,000,000.
Public housing authority: Housing Authority of the City of Raleigh;
Raleigh, North Carolina; Site: Halifax Court; Fiscal year awarded:
1999; Amount awarded: 29,368,114.
Public housing authority: Housing Authority of the City of Richmond,
California; Richmond, California; Site: Easter Hill; Fiscal year
awarded: 2000; Amount awarded: 35,000,000.
Public housing authority: Richmond Redevelopment and Housing Authority;
Richmond, Virginia; Site: Blackwell; Fiscal year awarded: 1997; Amount
awarded: 26,964,118.
Public housing authority: City of Roanoke Redevelopment and; Housing Authority; Roanoke, Virginia; Site: Lincoln Terrace; Fiscal year
awarded: 1998; Amount awarded: 15,124,712.
Public housing authority: St. Louis Housing Authority; St. Louis,
Missouri; Site: Darst-Webbe; Fiscal year awarded: 1995(1)[ B]; Amount
awarded: 46,771,000.
Site: Housing Authority of the City of St.
Petersburg: Blumeyer Homes; Fiscal year awarded: Public housing
authorityHousing Authority of the City of St. Petersburg: 2001; Amount
awarded: Housing Authority of the City of St.
Petersburg: 35,000,000.
Public housing authority: Housing Authority of the City of St.
Petersburg; St. Petersburg, Florida; Site: Jordan Park; Fiscal year
awarded: 1997; Amount awarded: 27,000,000.
Public housing authority: San Antonio Housing Authority; San Antonio,
Texas; Site: Springview; Fiscal year awarded: 1994; Amount awarded:
48,810,294.
Site: Mirasol; Fiscal year awarded: 1995(1)[ B]; Amount
awarded: 48,285,500.
Public housing authority: City and County of San Francisco Housing Authority; San Francisco, California; Site: Bernal; Plaza East; Fiscal
year awarded: 1993; Amount awarded: 49,992,377.
Site: Hayes Valley North and South; Fiscal
year awarded: 1995(2)[ B]; Amount awarded:
22,055,000.
Site: North Beach; Fiscal year awarded: 1996; Amount awarded: Public housing
authority: 20,000,000.
Site: Housing Authority of Savannah: Valencia
Gardens; Fiscal year awarded: Housing Authority
of Savannah: 1997; Amount awarded: Housing
Authority of Savannah: 23,230,641.
Public housing authority: Housing Authority of Savannah; Savannah,
Georgia; Site: Garden Homes; Fiscal year awarded: 2000; Amount awarded:
16,328,649.
Public housing authority: Seattle Housing Authority; Seattle,
Washington; Site: Holly Park; Fiscal year awarded: 1995(1)[ B]; Amount
awarded: 48,116,503.
Site: Roxbury; Fiscal year awarded: 1998; Amount awarded:
17,020,880.
Site: Rainier Vista Garden; Fiscal year
awarded: 1999; Amount awarded: 35,000,000.
Site: High Point Garden; Fiscal year awarded: 2000; Amount awarded:
35,000,000.
Public housing authority: Housing Authority of the City of Spartanburg;
Spartanburg, South Carolina; Site: Tobe Hartwell; Tobe Hartwell
Extension; Fiscal year awarded: 1996; Amount awarded: 14,620,369.
Public housing authority: Springfield Housing Authority; Springfield,
Illinois; Site: John Hay Homes; Fiscal year awarded: 1994; Amount
awarded: 19,775,000.
Public housing authority: Housing Authority of the City of Stamford;
Stamford, Connecticut; Site: Southfield Village; Fiscal year awarded:
1997; Amount awarded: 26,446,063.
Public housing authority: Housing Authority of the City of Tacoma;
Tacoma, Washington; Site: Salishan; Fiscal year awarded: 2000; Amount
awarded: 35,000,000.
Public housing authority: Housing Authority of the City of Tampa;
Tampa, Florida; Site: Ponce de Leon; College Hill; Fiscal year awarded:
1997; Amount awarded: 32,500,000.
Site: Riverview Terrace; Tom Dyer; Fiscal year awarded: 2001; Amount
awarded: 19,937,572.
Public housing authority: Tucson Public Housing Authority; Tucson,
Arizona; Site: Connie Chambers; Fiscal year awarded: 1996; Amount
awarded: 14,600,000.
Site: Robert F. Kennedy Homes; Fiscal year awarded: 2000; Amount
awarded: 12,748,000.
Public housing authority: Housing Authority of the City of Tulsa;
Tulsa, Oklahoma; Site: Osage Hills; Fiscal year awarded: 1998; Amount
awarded: 28,640,000.
Public housing authority: Housing Authority of the City of Wheeling,
West Virginia; Wheeling, West Virginia; Site: Grandview Manor; Lincoln
Homes; Fiscal year awarded: 1999; Amount awarded: 17,124,895.
Public housing authority: Wilmington, Delaware Housing Authority;
Wilmington, Delaware; Site: Eastlake; Fiscal year awarded: 1998; Amount
awarded: 16,820,350.
Public housing authority: Housing Authority of the City of Wilmington,
North Carolina; Wilmington, North Carolina; Site: Robert S. Jervay
Place; Fiscal year awarded: 1996; Amount awarded: 11,620,655.
Public housing authority: Housing Authority of the City of Winston-
Salem; Winston-Salem, North Carolina; Site: Kimberly Park Terrace;
Fiscal year awarded: 1997; Amount awarded: 27,740,850.
Source: HUD.
[A] 1998E indicates a special grant for elderly projects.
[B] There were two funding rounds in fiscal year 1995.
[End of table]
[End of section]
Appendix III: Fiscal Year 2002 Application Screening and Scoring
Process:
The fiscal year 2002 NOFA for the HOPE VI program explained the process
that HUD would use to screen and score applications. It stated that HUD
would first screen applications to determine if they met threshold
requirements--requirements that must be met in order for a HOPE VI
revitalization grant application to be considered for funding. The NOFA
also stated that if the application failed to meet any one of these
thresholds, HUD would not rate or rank the application.[Footnote 30]
The NOFA contained 28 threshold requirements, for which applicants had
to attest or document compliance, including certification signed by an
engineer or architect that the targeted public housing project meets
the definition of severe physical distress and certification either
that the applicant had procured a developer for the first phase by the
application deadline or that it would act as its own developer.
Additionally, an applicant that had one or more existing HOPE VI
revitalization grants would be disqualified if one or more of those
grants failed to meet the performance requirements described in the
NOFA; applications that included a proposal to develop market-rate
housing had to include a preliminary market assessment letter.[Footnote
31]
If an application met all of the threshold requirements, HUD would rate
it using the rating factors outlined in the NOFA. As shown in table 3,
the 2002 NOFA listed nine rating factors, some of which comprised
various subfactors. An application could receive a maximum of 114
points.
Table 3: Fiscal Year 2002 Rating Factors:
[See PDF for image]
Source: GAO analysis of the fiscal year 2002 NOFA.
[A] Although points could not be earned under this subfactor, points
would be deducted if certain activities, such as submission of the
community and supportive services plan, had not been carried out within
the initial time frames established. Points also would be deducted on
the basis of the percentage of the grant funds obligated. For example,
if a housing authority received a HOPE VI revitalization grant in
fiscal year 1996 or prior and had obligated less than 60 percent of its
grant funds, 5 points would be deducted.
[B] Two points would be awarded if the revitalization plan described in
the application had been incorporated into the applicant's public
housing authority plan, and if the public housing authority's plan had
been approved by its local HUD field office.
[C] HUD would evaluate the extent to which the applicant could
undertake the proposed revitalization activities without a HOPE VI
grant. Large amounts of available capital funds may indicate that the
revitalization could be carried out without a HOPE VI grant.
[D] In many cases, public housing authorities, cities, or other
entities may have carried out revitalization activities in previous
years in anticipation of the applicant's receipt of a HOPE VI
revitalization grant. These expenditures, if documented, may be counted
as leveraged anticipatory resources.
[E] Collateral investment includes physical redevelopment activities
under way or projected to be completed before October 2007 that would
enhance the new HOPE VI community, but would occur whether or not the
public housing project was revitalized. This includes economic or other
kinds of development activities that would have occurred with or
without the anticipation of HOPE VI funds.
[F] Points are awarded if the applicant describes a plan to provide
housing and services for persons with disabilities, such as
accessibility in homeownership units or accessibility modifications.
[G] Adaptability means that certain elements of a dwelling unit, such
as kitchen counters, sinks, and grab bars, can be added to, raised,
lowered, or otherwise altered to accommodate the needs of persons with
or without disabilities.
[H] Visitability standards allow a person with mobility impairments
access into the home but do not require that all features be made
accessible.
[I] Applicants are encouraged to work with their local university(ies),
other institutions of learning, foundations, or others to evaluate the
performance and impact of their HOPE VI revitalization plan over the
life of the grant. The proposed methodology must measure success
against goals set at the outset of the revitalization activities.
Evaluators must establish baselines and provide ongoing interim reports
that will allow the applicant to make changes as necessary as the
project proceeds.
[End of table]
[End of section]
Appendix IV: Site Visit Summaries:
Between January and October 2002, we visited the 18 housing authorities
that were awarded HOPE VI revitalization grants in fiscal year 1996.
For each of the 20 sites that were awarded grants that year, we
describe below background information on the conditions at the original
site for which the grant was awarded, the housing authority's
revitalization and community and supportive services (CSS) plans for
the site, the status of those plans as of March 2003, and the factors
that affected the status. We also include a time line and photographs
for each site. Because the site summaries incorporate a number of
program-specific and technical terms, we have included a glossary at
the end of this report.
ABLA Homes--Brooks Extension, Chicago, Illinois:
As figure 9 shows, the Chicago Housing Authority was awarded a $24.5
million HOPE VI revitalization grant for the Brooks Extension portion
of ABLA Homes in October 1996.[Footnote 32] Relocation and demolition
have been completed at the ABLA Brooks Extension site, but the new
construction has not yet begun. The Chicago Housing Authority's
scattered site program, which includes the development of any
nonelderly public housing, has been under judicial receivership since
1987. The housing authority is in the midst of implementing a 10-year
transformation plan, which is a $1.5 billion blueprint for rebuilding
or rehabilitating 25,000 units of public housing--enough for every
leaseholder as of October 1999--and transforming isolated public
housing sites into mixed-income communities. The housing authority was
awarded another HOPE VI revitalization grant for ABLA in fiscal year
1998 and also has received revitalization grants for the following
sites: Cabrini-Green (fiscal year 1994), Henry Horner (fiscal year
1996), Robert Taylor (fiscal years 1996 and 2001), Madden/Wells/Darrow
(fiscal year 2000), and Rockwell Gardens (fiscal year 2001).
Figure 9: Time Line for ABLA Homes:
[See PDF for image]
Note: This time line is based on GAO analysis of data provided by the
Chicago Housing Authority.
[End of figure]
Background:
The five sites that comprise ABLA Homes had more than 3,500 original
units. Three of the five ABLA sites were included in the authority's
fiscal year 1996 revitalization plans. Brooks Extension, the focus of
the fiscal year 1996 revitalization grant, was completed in 1961 and
consisted of three, 16-story buildings containing 453 units. Robert
Brooks Homes was completed in 1943 and contained 834 units. Loomis
Courts--a project-based Section 8 development--was completed in 1953
and contained 126 units.
The density at ABLA was 37.33 units per acre, as compared with
Chicago's average density of 28 units per acre. The buildings at ABLA
suffered from significant structural deficiencies as a result of age,
weathering, and the lack of proper maintenance. A central heating
plant, located at the Jane Addams site, provides the heat for the
complex. This system is inadequate, and regulating the amount of heat
for each unit has been a problem. The Chicago Housing Authority was
awarded a fiscal year 1995 HOPE VI planning grant totaling $400,000 for
ABLA and two other sites.
Revitalization and Community and Supportive Services Plans:
In addition to the $24.5 million HOPE VI revitalization grant, the
Chicago Housing Authority was awarded four HOPE VI demolition grants
totaling $2.5 million for Brooks Extension and Robert Brooks Homes. The
total budget for the renovation of Brooks Extension, Robert Brooks
Homes, and Loomis Courts is $186 million and includes other public
housing funds, equity from low-income housing tax credits, and tax
increment financing. The revitalization plans call for the
rehabilitation of 330 public housing units at Robert Brooks Homes; the
construction of 777 new units at Brooks Extension (336 public housing
units, 90 tax credit units, and 351 homeownership units); and the
rehabilitation of 126 subsidized units at Loomis Courts. A 57,000-
square-foot community center to be funded by the city is also part of
the plans.
Of the $24.5 million revitalization grant, the housing authority plans
to set aside $3.6 million for community and supportive services. The
community and supportive services plan for ABLA, which was approved in
January 2002, focuses on employment, education, health, community
building, and pilot programs. In addition to special programs funded by
the HOPE VI grant, the housing authority plans to implement its service
connector system at ABLA. The service connector system will help
residents access services through a system of outreach, assessment,
referral, and follow-up.
Current Status:
The rehabilitation at Robert Brooks Homes has been completed. The
reconstruction of 132 units was completed in 1998, and the
reconstruction of the remaining 198 units was completed in 2000. Brooks
Extension has been demolished (see fig. 9). The housing authority
selected a developer for the entire ABLA development area in December
2002. Construction on the new units at Brooks Extension is expected to
start in March 2004.
The housing authority has hired a nonprofit organization to serve as
ABLA's service connector, and the program has been in operation since
August 2001. A consultant has also been hired to implement the
community and supportive services plan, including facilitating task
forces on employment, education, and health.
Factors Contributing to Current Status:
The ABLA revitalization has been affected by the need for the
revitalization plans to comply with the Gautreaux consent decree. In
1966, African American residents of Chicago public housing filed suit
against the Chicago Housing Authority for creating a segregated public
housing system. In response, the court issued a judgment that prohibits
the housing authority from constructing any new public housing in a
neighborhood in which more than 30 percent of the occupants are
minorities (limited areas) unless it develops an equal number of units
in neighborhoods where less than 30 percent are minorities (general
areas). In 1987, the court appointed a receiver for the housing
authority's scattered site program, including the development of
nonelderly public housing. In the case of ABLA, the receiver and the
housing authority had to show the court that, while ABLA was currently
in a limited area, the area was going to be revitalized by HOPE VI. In
June 1998, the court approved the housing authority's request to
designate ABLA a revitalizing area, thus allowing the development of
new nonelderly public housing at the site without requiring an equal
number of units to be built in a general area.
According to a housing authority official, site planning was
progressing at the Brooks Extension site until the housing authority
applied, in 1997, for a HOPE VI revitalization grant for the Grace
Abbott Homes portion of ABLA. HUD rejected the application, stating
that the housing authority needed to develop plans for the entire ABLA
site and establish better relationships with the city and the receiver.
In 1998, the housing authority submitted a new application that covered
all of ABLA and showed that it had worked closely with the city and
receiver. While the housing authority was preparing this application,
work at Brooks Extension stopped. HUD ultimately awarded the housing
authority a fiscal year 1998 grant for the portions of ABLA not covered
by the fiscal year 1996 grant.
:
Management changes at the housing authority have also affected
implementation of the grant, according to a housing authority official.
After placing the housing authority under administrative receivership
for approximately 4 years, HUD returned control of the housing
authority to Chicago in May 1999. During the reorganization that
occurred after the city resumed control, decisions were delayed. For
example, the housing authority's negotiations with the program manager
selected for ABLA were delayed, in part, because the agency had just
regained control of its operations and was developing an overall plan
for transformation.
According to a housing authority official, the receiver raised some
legal issues that slowed progress at the ABLA site. HOPE VI
revitalization grants are typically awarded to housing authorities.
However, under the Gautreaux case, the receiver believed that the two
ABLA grants should be split so that the funds for "hard" construction
costs were awarded to the receiver, while the funds for social services
were awarded to the housing authority. It took almost 2 years to settle
this issue. In October 2000, the grants were split between the receiver
and the housing authority. The only funds that the housing authority
controls are funds for demolition, relocation, and community and
supportive services.
The housing authority had to issue two requests for proposals before
selecting a developer. The first request for proposals to develop
Brooks Extension was issued in November 2001, and the authority
received three responses. The housing authority did not think that the
respondents had sufficient capacity; therefore, it decided to issue
another request for proposals to develop the entire ABLA site. The
second request for proposals was issued in June 2002, and a developer
was selected in December 2002.
Arverne/Edgemere Houses, Queens, New York:
The New York City Housing Authority is using $67.7 million in HOPE VI
revitalization grant funds to renovate Arverne and Edgemere Houses.
Some of these revitalization funds were originally awarded to another
site, Beach 41ST Street Houses, and transferred to Edgemere in December
1996 (see fig. 10). All three sites are in Far Rockaway, a peninsula on
the southern edge of Queens, south of Jamaica Bay and Kennedy Airport.
The housing authority expects to complete the rehabilitation of Arverne
and Edgemere by the end of 2004. In addition to the Arverne/Edgemere
grant, the authority is overseeing another HOPE VI revitalization grant
awarded in fiscal year 1998 for Prospect Plaza.
Figure 10: Time Line for Arverne/Edgemere Houses:
[See PDF for image]
Note: This time line is based on GAO analysis of data provided by the
New York City Housing Authority.
[End of figure]
Background:
The New York City Housing Authority received a $400,000 planning grant
for the Arverne and Edgemere sites in fiscal year 1995. In 1996, the
authority was awarded a revitalization grant for Arverne, and HUD
transferred the revitalization grant originally awarded to Beach 41ST
Street Houses to Edgemere. The funding was transferred from Beach 41ST
Street after an impasse over the residents' role in the planning
process could not be overcome. The Arverne site, with 418 units, was
completed in 1951; the Edgemere site, with 1,395 units, was completed
in 1961 (see fig. 10). Although soundly constructed, they were in need
of significant modernization and improvement.
The area surrounding Arverne/Edgemere lacks essential retail services
and adequate recreation and community space. In addition, the high
density and current configuration of the buildings have contributed to
vandalism and other criminal activity. Joblessness and low educational
achievement among residents further weaken the community. Though
situated in an attractive locale, between Jamaica Bay and the Atlantic
Ocean, the community is extremely isolated with limited transportation
links to other parts of New York City.
Revitalization and Community and Supportive Services Plans:
The total projected budget for the renovation of Arverne and Edgemere
is $233 million, which includes other public housing funds, city funds,
and private funds. The revitalization plans for Arverne/Edgemere,
renamed Ocean Bay Apartments, call for the modernization of 1,803
apartments, including lobby and facade improvements and site
improvements such as upgrading infrastructure and landscaping. The
plans also include the construction of a recreational facility, the
expansion of the existing community center and day-care center, and the
off-site construction of a health and education center and two retail
centers.
Of the $67.7 million in revitalization grant funds, the housing
authority has budgeted $6.8 million for community and supportive
services. The community and supportive services plan, which was
approved in May 1999, focuses on case management, training, and self-
sufficiency programs.
Current Status:
Because the majority of residents chose to remain on-site during the
renovation, only 211 residents were temporarily relocated, with the
majority of households relocating to vacant units within the
development. The renovation is being done in phases. For example, all
of the asbestos was removed and electrical work completed before the
kitchens and bathrooms were renovated. As of March 2003, 79 percent of
the interior modernization work at Arverne and 85 percent of the
interior modernization work at Edgemere was complete. The housing
authority estimates that all of the apartment modernization work will
be completed by June 2003. Under the revised revitalization plan, the
community center will now be combined with the new recreational
facility to reduce the overall costs of the plan. This work is under
design and is expected to bid fall 2003. Also, the day-care center will
be upgraded and expanded to create a state of the art facility with
expanded capacity. The day-care center expansion design documents are
completed.
Community and supportive services are being offered to residents and
other community residents. In November 1999, the housing authority
opened a Family Resource Center where it administers various training
and self-sufficiency programs for the residents. Already operating are
the computer lab (see fig. 10), after-school program, and job training
classes. A popular project has been the computer incentive program that
provides a personal computer system to residents who either work 96
hours volunteering on HOPE VI recruiting and other HOPE VI activities
or who participate in a HOPE VI training program. The authority also
has contracted with Goodwill Industries to provide case management,
counseling, and job preparation, placement, and retention services. To
sustain community and supportive services after the expiration of the
HOPE VI grant, the authority has created the Ocean Bay Community
Development Corporation.
Factors Contributing to Current Status:
Resident opposition to demolition was one of the issues that led to the
impasse at Beach 41ST Street Houses. After HUD transferred the HOPE VI
funds from Beach 41ST Street to Edgemere in December 1996, the housing
authority again included demolition in the plans for Edgemere's
redevelopment. The housing authority determined that the best way to
meet the demolition requirement would be to remove some top floors from
each of three, nine-story buildings, thereby eliminating about 100
units. Subsequently, the housing authority withdrew this plan and
proposed to convert dwelling units on the first floor to space for
commercial and community services. This approach would also have
removed about 100 units. The issue became moot when Congress, in the
fiscal year 1998 appropriations act for the departments of Veterans
Affairs and Housing and Urban Development and independent agencies,
gave the New York City Housing Authority the option of not following
any HOPE VI demolition requirements, and the housing authority
abandoned the plans for demolishing the 100 units.
It took almost 18 months to get the revitalization plan for Arverne/
Edgemere Houses approved. The housing authority first submitted a
revitalization plan to HUD in June 1997. After HUD returned the plan
with comments for the housing authority to address, the housing
authority submitted a revised plan in February 1998. The housing
authority then went back and forth with HUD on changes to the plan.
According to housing authority officials, the primary point of
contention was the types of economic development activities upon which
HOPE VI funds could be spent. HUD finally approved the housing
authority's revised plan in November 1999.
The effects of September 11, 2001, have also posed challenges for the
redevelopment of Arverne and Edgemere. Some of the housing authority's
HOPE VI records were destroyed and had to be recreated. Additionally,
housing authority officials estimated that costs for one portion of the
project had escalated from $22 million to $30 million over the life of
the project--due, in part, to the labor force and materials moving
downtown after September 11. Overall, the housing authority estimated
that the Arverne/Edgemere project was delayed 6 months because of the
September 11 attack.
Bedford Additions, Pittsburgh, Pennsylvania:
The Housing Authority of the City of Pittsburgh was awarded a $26.6
million HOPE VI revitalization grant for Bedford Additions in October
1996, as shown in figure 11. Off-site construction began in September
2002, and relocation and demolition have not yet occurred. The
authority was previously awarded HOPE VI revitalization grants for
Allequippa Terrace (fiscal year 1993) and Manchester (fiscal year
1995).
Figure 11: Time Line for Bedford Additions:
[See PDF for image]
Note: This time line is based on GAO analysis of data provided by the
Housing Authority of the City of Pittsburgh.
[End of figure]
Background:
Bedford Additions, part of the larger Bedford Dwellings, was
constructed in 1954 and contains 460 units, the majority of which are
in three-story, walk-up buildings (see fig. 11). It is located in the
Hill District, a neighborhood offering access to many job centers. Many
of the buildings at Bedford Additions had leaky roofs, cracks in the
walls, and outdated mechanical systems that had not been well-
maintained. Also, 72 percent of the families in its census tract were
earning incomes below the poverty level. The housing authority was
awarded a $395,700 HOPE VI planning grant for Bedford Dwellings and
three other sites in fiscal year 1995.
Revitalization and Community and Supportive Services Plans:
The total estimated budget for the revitalization is about $102 million
and includes other public housing funds and equity from low-income
housing tax credits. The revitalization plans call for:
* construction of a two-story, 12,000-square-foot community center;
* construction of 75 off-site homeownership units and 365 off-site
rental units (phases one and two); and:
* construction of 45 on-site homeownership units and 175 on-site rental
units (phase three).
Of the 660 total units planned, 220 will be replacement public housing
units. In addition, up to 40 of the homeownership units will be made
affordable for public housing residents. The off-site units will be
constructed first, and then the existing on-site units will be
demolished and new units will replace them.
Of the HOPE VI funds, the housing authority has budgeted about $5.1
million for community and supportive services. A new community center
will house the supportive services program, including the case
management function, computer learning lab, day care, a family support
program, after-school teen program, resident council offices, and
housing authority management offices.
Current Status:
The community center has been completed, and many of the planned
services are operational, including the computer lab. As of March 2003,
the housing authority had acquired 235 of the approximately 650
separate parcels of land required for the off-site component of the
project. Construction on the first 147 off-site rental units started in
September 2002 (see fig. 11), and construction on the first 35 off-site
homeownership units is scheduled to begin in June 2003.
Factors Contributing to Current Status:
The decision to construct the off-site units first and on many
different parcels of land has been the major impediment to progress.
According to housing authority officials, the residents were fearful of
being displaced; therefore, they wanted the housing authority to build
the new off-site structures first so that they could be relocated to
the new off-site units. The housing authority has been going through
the lengthy process of acquiring parcels in the surrounding community
either by negotiating the purchase of properties or through eminent
domain. It also had to relocate 111 private households after acquiring
their properties.
Financing the redevelopment also has been a challenge. For example, it
was difficult to obtain low-income housing tax credits because the
state housing finance agency has established strict guidelines. It
wants any units developed as part of a mixed-income project to be
contiguous. Because the housing authority could not acquire certain
properties, there is a break between two sections of off-site parcels.
After convincing the state housing finance agency that it would need
two tax credit allocations, one for each section of the off-site
parcels, and that it should not finance one without the other, the
housing authority was awarded tax credits for the first phase of off-
site development. Although this process did not delay the
revitalization plans, it did make financing the first phase of
development more complicated, according to a housing authority
official.
Connie Chambers, Tucson, Arizona:
The City of Tucson Community Services Department, which serves as
Tucson's public housing authority, was awarded a $14.6 million HOPE VI
revitalization grant for Connie Chambers in late 1996, as shown in
figure 12. The grant was closed out in January 2003. The department was
also awarded a fiscal year 2000 revitalization grant for Robert F.
Kennedy Homes.
Figure 12: Time Line for Connie Chambers:
[See PDF for image]
Note: This time line is based on GAO analysis of data provided by the
City of Tucson Community Services Department.
[End of figure]
Background:
Connie Chambers, built in 1967, consisted of 200 units (see fig. 12).
The surrounding Santa Rosa neighborhood is historic and home to a lower
income population. According to housing authority officials, the
primary problem with Connie Chambers was that it was isolated from
other communities after construction of a new convention center and
police and fire department headquarters. Two out of three households on
the public housing waiting list turned it down because of a history of
high crime and poor physical conditions. The housing authority was
awarded a $370,000 planning grant for Connie Chambers in fiscal year
1995. It used the planning grant to conduct maintenance studies and
physical needs assessments and to hold meetings with residents.
Revitalization and Community and Supportive Services Plans:
The total projected budget for the project is $72 million and includes
other public housing funds, equity from low-income housing tax credits,
city funds, and bond funds. The revitalization plan for Connie
Chambers, renamed Posadas Sentinel, calls for:
* rehabilitation of 10 units at another site;
* construction of 120 on-site units (60 public housing units and 60 tax
credit units);
* acquisition of 130 scattered public housing units;
* construction of 60 homeownership units;
* construction of a child development center, learning center, and
health center and expansion of the existing recreation center;
* construction of a grocery store; and:
* an elderly building to be built by a nonprofit organization.
Of the $14.6 million revitalization grant, the housing authority has
budgeted $1.2 million for community and supportive services. The
community and supportive services plan, approved in May 1998, calls for
a neighborhood services center to serve as a resource center for
residents of the neighborhood and the provision of services such as
language classes, an expanded child-care program, and job training.
Current Status:
The 10 units at the other site have been renovated, all 120 of the on-
site units have been completed, and all 130 scattered sites have been
acquired (see fig. 12). As of March 2003, 54 of the homeownership units
had been completed. The child development center and learning center,
located in the Santa Rosa Neighborhood Center, were completed in April
2002. Construction on the recreation and health centers is under way.
The housing authority was able to close out the grant in January 2003
because the remaining homeownership units and the recreation and health
centers were not financed with HOPE VI funds.
A Head Start program has been operating in the child development center
since January 2002. Another day-care service, operated by a local
nonprofit organization, opened in the center in November 2001. It
primarily serves working families. The learning center has been
operational since April 2002 and contains a computer library. The
learning center offers basic computer classes in either Spanish or
English.
Factors Contributing to Current Status:
Because the City of Tucson Community Services Department acts as both
the city's public housing authority and community development agency,
it was able to draw on other resources for the Connie Chambers
revitalization. Funding for the project includes city funds for
infrastructure, general city funds, and bonds. In addition, the state
housing finance agency agreed to set aside 10 percent of its annual tax
credit allotment for HOPE VI sites.
The housing authority has involved the residents and the neighborhoods
surrounding the Connie Chambers site in the revitalization process.
Both residents and the surrounding neighborhoods were involved in
developing the revitalization plan. After the revitalization plan was
developed, residents were asked to vote on the plan. Of the 181 Connie
Chambers households, 107 participated in the vote. Of the 107 that
voted, 84 voted in favor of the plan. Only after the residents
expressed their support for the plan did the mayor and city council
vote to submit the plan to HUD. When the housing authority determined
that some residents did not want to relocate outside the neighborhood,
even temporarily, it decided to demolish Connie Chambers in phases,
starting at each end of the site. While the first phases were under
construction, those who did not want to leave the neighborhood were
allowed to live in the remaining units. Once construction was complete,
they were moved into the new units, and the rest of the original units
were demolished.
Cotter and Lang Homes, Louisville, Kentucky:
The Housing Authority of Louisville was awarded a $20 million HOPE VI
revitalization grant for Cotter and Lang Homes in late 1996 (see fig.
13), and about 65 percent of the planned units were complete as of
March 31, 2003.
Figure 13: Time Line for Cotter and Lang Homes:
[See PDF for image]
Note: This time line is based on GAO analysis of data provided by the
Housing Authority of Louisville.
[A] The first phase of rental units was begun prior to receipt of the
HOPE VI revitalization grant.
[End of figure]
Background:
Cotter Homes, completed in 1953, consisted of 620 units. Lang Homes,
built in 1959, contained 496 units (see fig. 13). These two contiguous
public housing sites, located in Louisville's Park DuValle
neighborhood, were the largest public housing sites in Louisville.
Together, they covered almost 80 acres. Almost 80 percent of the
residents in the Park DuValle neighborhood lived in poverty. The
neighborhood also had the highest violent crime rate per square mile in
Louisville. The local newspaper referred to one corner on the Cotter
and Lang site as the "meanest" corner in Louisville. Furthermore, the
area surrounding the two sites contained vacant or underused industrial
buildings, unused school land, vacant failed subsidized housing, and
other available housing development sites.
Revitalization and Community and Supportive Services Plans:
The total projected budget for the project is $200 million and includes
other public housing funds, other HUD funds, and equity from low-income
housing tax credits. The revitalization plans for Cotter and Lang
Homes, renamed Park DuValle, call for 1,213 new units to be completed
in five phases.
* Phase one: development of 100 rental units.
* Phase two: development of 213 rental units and 150 homeownership
units.
* Phase three: development of 108 rental units (including some elderly
units) and 300 homeownership units.
* Phase four: development of 192 rental units.
* Phase five: acquisition of 150 off-site rental units.
Of the 763 total rental units, 500 will be public housing units, 160
will be tax credit units, and 103 will be market-rate units. The 450
homeownership units will be targeted to households with a variety of
incomes. A town center will include space for various types of
commercial enterprises. The HOPE VI funds will be used to develop the
150 off-site units and to provide homeownership assistance.
Of the $20 million in HOPE VI revitalization grant funds, the housing
authority has set aside $3 million for community and supportive
services. The focus of its initial community and supportive services
plan, approved in August 1998, was lifelong learning programs and
services, such as child care, youth programs, and computer training.
The developer would provide services to residents of the Park DuValle
revitalization area, and the housing authority would provide case
management services to former Cotter and Lang residents that were not
residing at the Park DuValle site.
Current Status:
Work on the first phase of 100 rental units was begun before the
housing authority received its HOPE VI revitalization grant, and
construction was completed in 1998. The 321 rental units envisioned for
phases two and three also have been completed, and construction on the
fourth phase of 192 rental units is under way (see fig. 13). Of the 150
planned off-site units, 112 had been acquired as of March 31, 2003. As
part of the phase three rental units, a 59-unit senior building was
constructed. As of March 31, 2003, the first 150 homeownership units
had been sold, and 147 had been completed. Twenty-eight homeowners
received soft second mortgages funded by the HOPE VI program.[Footnote
33] The remaining phase of 300 homeownership units is under way.
Because it estimates that it can sell only 4 units a month in the
Louisville housing market, the housing authority does not expect all
300 units to be completed and sold until April 2008.
The housing authority hired Jefferson County Human Services to provide
intensive case management services to former Cotter and Lang residents.
The emphasis was on preparing former residents to return to Park
DuValle. The developer focused primarily on community building in the
new Park DuValle neighborhood. For instance, it served as liaison to
the Park DuValle Neighborhood Advisory Council--an organization
comprised of former residents of Cotter and Lang, Park DuValle public
housing residents, and residents of the surrounding neighborhood.
However, the housing authority determined that additional efforts were
necessary to ensure that all former Cotter and Lang residents, whether
or not they were residents of the new community, had access to services
aimed toward increasing self-sufficiency. Therefore, it developed a
revised community and supportive services plan, which it submitted to
HUD in May 2002. HUD approved the plan in November 2002.
Factors Contributing to Current Status:
According to housing authority officials, support from the city, other
local entities, and the local HUD field office has been integral to the
success of the Park DuValle project. Both the mayor at the time the
grant was awarded and the subsequent mayor were very supportive of the
project. The city has provided funds and other resources (e.g., the
services of the city's chief architect). The local school board spent
$15 million on a new school in the Park DuValle neighborhood, and the
health department spent $5 million on a new health center. Staff from
the local HUD field office have also been part of the project team.
During planning and much of implementation, a management team comprised
of representatives from the housing authority, the city, the local HUD
field office, and the developer met weekly to discuss the project. Now
that much of the construction has been completed, the team meets about
once a month.
The leadership of the housing authority's executive director was
another factor cited as contributing to the success of Park DuValle.
Housing authority officials noted that, because the executive director
formerly worked in the mayor's office, he has been able to strengthen
the city's support for the project. In addition, according to local HUD
officials, the executive director's relationship with residents was
very good. During his tenure as executive director, a public housing
resident was named the chairman of the housing authority's Board of
Commissioners.
Another factor contributing to Louisville's success is that the housing
authority has not had to make any significant modifications to its
revitalization plan. The total number of planned units (1,213) has not
changed. The few changes that have been made are minor. For example,
the housing authority originally planned for the homeownership units to
be constructed in three phases but later decided to consolidate the
last two phases for a total of two phases. Also, instead of the 125
homeownership units originally planned in phase two, the housing
authority was able to sell 150 units.
The housing authority has been able to obtain multiple sources of
funding for the project. In addition to the $20 million in HOPE VI
funds, the master budget includes $56.2 million in other public housing
funds and $20.5 million in other HUD funds. The other sources of
funding include $37.2 million in equity from low-income housing tax
credits and $56.3 million in debt financing. The state housing finance
agency set aside 6 years of tax credits for the Park DuValle project.
Dalton Village, Charlotte, North Carolina:
The Charlotte Housing Authority was awarded a $24.5 million HOPE VI
revitalization grant for Dalton Village in October 1996 (see fig. 14).
As of March 2003, 194 of 432 total planned units were complete. In
addition to the Dalton Village grant, the authority is overseeing two
other revitalization grants awarded in fiscal years 1993 and 1998.
Figure 14: Time Line for Dalton Village:
[See PDF for image]
Note: This time line is based on GAO analysis of data provided by the
Charlotte Housing Authority.
[End of figure]
Background:
Dalton Village was built in 1970 and consisted of 300 units in brick
townhouse structures with sloped roofs and clapboard facades, as shown
in figure 14. The development was located off Clanton Road, an off-
shoot from West Boulevard, which was once a major route to Charlotte's
Douglas International Airport. In addition to the presence of lead-
based paint and asbestos materials, the structures at Dalton Village
suffered from severe deficiencies due to the age of the buildings. The
site conditions were very poor with severe erosion taking place over a
large portion of the site, and the lack of adequate drainage devices
compounded the site problems. Dalton Village was isolated from the
adjoining communities by virtue of noncontinuous street access and a
steep hill that physically separated it from the neighboring community.
Revitalization and Community and Supportive Services Plans:
The total projected budget for the revitalization project is $44
million, which includes equity from low-income housing tax credits. The
revitalization plan for Dalton Village, renamed Arbor Glen, calls for:
* rehabilitation of 50 existing public housing units and the Family
Investment Center;
* on-site construction of 144 family and elderly rental units,
including 60 public housing units;
* on-site and off-site construction of 175 rental townhouses, including
70 public housing units;
* construction of 48 on-site homeownership units, including 20 for
public housing residents;
* construction of 15 off-site homeownership units designated for public
housing residents; and:
* construction of an outreach center for recreational and educational
programs.
The housing authority has budgeted $4.1 million of the HOPE VI
revitalization grant for community and supportive services. The
community and supportive services plan, approved in March 2000, calls
for services to be provided at the new outreach center, which would
house multipurpose classrooms and a full-size multipurpose gymnasium.
The focus would be on services and programs that promote self-
sufficiency.
Current Status:
The 50 existing units and the Family Investment Center have been
renovated, and the 144 family and elderly rental units are complete and
fully occupied (see fig. 14). The housing authority estimates that
construction of the on-site rental townhouses will begin in June 2003
and be completed by June 2004. The housing authority has submitted two
tax credit applications--one for an additional 23 on-site units and one
for 74 units at an off-site location. In January 2003, the housing
authority completed its acquisition of nearby county land needed for
the 48 on-site homeownership units, and groundbreaking is scheduled for
summer 2003.
The $1.5 million outreach center was completed and opened to the public
in March 2002. It is an 11,000-square-foot community and recreational
center consisting of a gymnasium, four classrooms, and a computer lab.
The center is open not only to Arbor Glen residents but also to the
entire Arbor Glen community and nearby neighborhoods. It houses
recreational and other educational programs. All of the Arbor Glen
public housing residents are required to participate in the family
self-sufficiency program. A case manager works with participants to
develop an individual service plan and to help the residents meet their
self-sufficiency goals, such as those related to education and
employment.
Factors Contributing to Current Status:
The redevelopment of Arbor Glen was delayed initially because the
Charlotte Housing Authority changed development partners. According to
housing authority officials, the first developer, signed on in 1998,
did not have much development expertise, kept changing financial
projections, and did not listen to the community or the state housing
finance agency. As a result, the initial developer's application for
low-income housing tax credits was denied. In December 1999, the
housing authority signed a new development partner for the site. This
developer was part of the initial development team; therefore, the
housing authority did not have to issue another request for proposals.
Since the new developer was retained, the project has moved forward.
The housing authority and the new developer worked to develop a new
site plan and development scheme that would be more competitive for tax
credits. In late 2000, the project was awarded tax credits for the
first phase of new construction. The first phase of 144 units was
completed and leased 6 months ahead of schedule.
Durkeeville, Jacksonville, Florida:
The Jacksonville Housing Authority was awarded a $21.5 million HOPE VI
revitalization grant for Durkeeville in October 1996 (see fig. 15). Of
the 303 planned units, 228 have been completed.
Figure 15: Time Line for Durkeeville:
[See PDF for image]
Note: This time line is based on GAO analysis of data provided by the
Jacksonville Housing Authority.
[End of figure]
Background:
The 280 units in the Durkeeville public housing complex were poorly
designed, lacked sufficient ventilation, and had extensive plumbing and
drainage deficiencies. For example, the roofs were constructed without
an overhang, which exacerbated the deterioration of the outside walls
(see fig. 15). Furthermore, the site consisted of mostly small, one-
bedroom units that no longer met the residents' needs for space. Built
in 1936, the overall design of the Durkeeville site had become
outmoded. Parking was nonexistent, the density of the housing units was
twice that of the surrounding community, and a porous design with
alleyways instead of roadways provided an environment conducive to
criminal activity.
By 1990, the Durkeeville site and its surrounding neighborhood had
become Jacksonville's most dangerous community--the violent crime rate
for Durkeeville was 12 times higher than for Jacksonville. The
neighborhood surrounding Durkeeville was once a desirable middle-class
neighborhood. However, low incomes in the neighborhood contributed to
low property values, low rents, and little economic activity; over 40
percent of neighborhood households were below the poverty level,
according to the 1990 census. The Jacksonville Housing Authority was
awarded a fiscal year 1995 HOPE VI planning grant totaling $400,000 for
Durkeeville.
Revitalization and Community and Supportive Services Plans:
The total projected budget for the revitalization is about $37 million,
which includes other public housing funds left over from the
redevelopment of another Jacksonville Housing Authority property.
Several key features of the revitalization plan for Durkeeville,
renamed The Oaks at Durkeeville, include:
* construction of 200 new rental public housing units (of which 40 will
be for seniors and the disabled) and 28 homeownership units on the
Durkeeville site;
* construction of 75 off-site public housing units;
* renovation and expansion of the community center;
* renovation of two existing buildings for historic preservation; and:
* retail space containing several businesses and a health clinic.
:
The housing authority plans to set aside $3.1 million of the
revitalization grant for community and supportive services. The
community and supportive services plan, approved in February 1999,
calls for the renovated community center to become a focal point for
the entire community and to include a computer lab; community meeting
rooms; social service agencies; adult education classes; and
recreational facilities, among other programs.
Current Status:
The Jacksonville Housing Authority has completed the on-site
construction, which includes the 200 rental units (see fig. 15), 28
homeownership units, the renovation of the community center, and
rehabilitation of two historic buildings that include a day-care center
and resident management offices. Several businesses--including a
grocery store, pizza restaurant, Chinese restaurant, and health clinic-
-have moved into the retail strip adjacent to the site. All of the
housing units are occupied. The community center houses the family
self-sufficiency program and adult literacy classes, sponsors numerous
recreational activities for children, and hosts community meetings. The
day-care facility and a museum showcasing Durkeeville's history are
operating on-site.
The housing authority does not plan to start the development of the 75
off-site rental units until October 2003. Currently, the housing
authority is planning to use a portion of their HOPE VI funds to
purchase 75 to 100 apartments and convert them to public
housing.[Footnote 34]
Factors Contributing to Current Status:
According to officials at the housing authority, on-site construction
at Durkeeville was completed in a timely manner for several reasons.
First, the housing authority was able to develop a sound, comprehensive
revitalization plan because HUD awarded it a planning grant in fiscal
year 1995. The grant provided the authority with the necessary
resources to hire several consultants and invest in extensive outreach
to public housing and community residents. Second, the on-site public
housing units were funded entirely with public housing funds. The
housing authority used only its HOPE VI grant and surplus public
housing funds from another rehabilitation project to fund Durkeeville's
redevelopment. The simpler financial structure of the redevelopment
shortened the project's time frames by over 1 year, according to one
housing authority official.
According to the executive director, in addition to these unique
features of the Durkeeville site, the housing authority enjoys the
backing of a committed board of directors, which includes prominent
Jacksonville real estate developers, attorneys, and former corporate
managers. Also represented on the board are the police department,
public housing residents, and local businesses. This broad base of
support, in conjunction with the executive director's extensive
networking with various government entities, provided the housing
authority with key partnerships that helped expedite work on the site.
Finally, according to housing authority officials, the decision to
place the HOPE VI-related offices in the community center increased the
public housing residents' sense of belonging to a community. The
increased number of interactions between public housing and local
residents has improved the overall relations between the two groups.
This has had an overall positive impact on the entire community.
Plans for the off-site portion of the revitalization have not proceeded
as smoothly. First, the initial site that the housing authority chose
could not get approval by the Environmental Protection Agency. The site
was once used for garbage incineration and contains polluted ash in its
soil. The housing authority then proposed to purchase a neglected
privately owned apartment complex (HUD was going to foreclose the
property) and convert all 78 units to public housing, but a local
citizens group opposed the plan and took legal action to enforce a
court decree from 2000, which states that only 25 percent of any
apartment complex the authority buys in an area with a low percentage
of minorities can be used for public housing. Ultimately, HUD did not
conduct foreclosure proceedings, and the housing authority is currently
researching other sites.
Heman E. Perry Homes, Atlanta, Georgia:
The Housing Authority of the City of Atlanta was awarded a $20 million
HOPE VI revitalization grant for Heman E. Perry Homes (Perry Homes) in
late 1996 (see fig. 16), but the revitalization effort did not move
forward for some time, primarily because of changes to the
revitalization plans. Construction on the first phase of units began in
November 2002. The housing authority also has received revitalization
grants for the following sites: Techwood/Clark Howell Homes (fiscal
year 1993), Carver Homes (fiscal year 1998), Harris Homes (fiscal year
1999), and Capitol Homes (fiscal year 2001). Centennial Place, the name
given to the revitalized Techwood/Clark Howell Homes, was largely
completed in 2000 and was the first mixed-use, mixed-income community
(with public housing as a component) in the nation.
Figure 16: Time Line for Heman E. Perry Homes:
[See PDF for image]
Note: This time line is based on GAO analysis of data provided by the
Housing Authority of the City of Atlanta.
[End of figure]
Background:
Perry Homes and Perry Homes Annex, constructed in 1955, consisted of
944 and 128 units, respectively, and were located on approximately 153
acres of land (see fig. 16). When the housing authority applied for the
revitalization grant, the brick exterior walls had deteriorated,
resulting in water damage to walls, floors, and personal belongings.
The sanitary sewer system leaked, and the storm drainage system did not
function properly. From 1992-95, an average of 254 Perry Homes
residents were victims of crime each year. In addition, more than 60
percent of the residents of Perry Homes and the surrounding
neighborhood were living below the poverty line. The Housing Authority
of the City of Atlanta received a $400,000 HOPE VI planning grant for
Perry Homes and one other site in fiscal year 1995.
Revitalization and Community and Supportive Services Plans:
In addition to the $20 million revitalization grant, the housing
authority also was awarded $5.1 million in fiscal year 1998 HOPE VI
demolition funds. The total projected budget for the revitalization of
the site is $143 million and includes other public housing funds and
equity from low-income housing tax credits. The revitalization plan for
Perry Homes, renamed West Highlands at Heman E. Perry Boulevard, calls
for 800 new housing units to be constructed in five phases. The
construction phases are as follows:
* Phase one: 124 rental units (50 public housing units, 12 tax credit
units, and 62 market-rate units).
* Phase two: 152 family rental units (61 public housing units, 19 tax
credit units, and 72 market-rate units) and 130 elderly rental units
(100 project-based Section 8 units and 30 market-rate units).
* Phase three: 152 rental units (61 public housing units, 14 tax credit
units, and 77 market-rate units).
* Phase four: 142 rental units (56 public housing units, 11 tax credit
units, and 75 market-rate units).
* Phase five: 100 homeownership units (40 units for public housing
eligible families and 60 market-rate units).[Footnote 35]
In addition to housing, the plan calls for a town center, an 18-hole
public golf course, and over 90 acres of green space in the form of
parklands, nature trails, and recreational fields.
Of the $20 million revitalization grant, the housing authority has
budgeted $2.6 million for community and supportive services. It plans
to deliver community and supportive services to Perry Homes residents
using two basic approaches. First, it provides authoritywide programs
that are available to all public housing residents, including residents
of HOPE VI sites. These authoritywide programs include the Human
Service Management Program--which provides case management services--
and the Work Force Enterprise Program--which equips participants with
the skills necessary to manage the transition from unemployment to the
workforce. Second, the housing authority plans to ensure that Perry
Homes residents have access to neighborhood-based programs. Some of
these programs will be offered at a new school, public library, and
YMCA.
Current Status:
All of the Perry Homes residents have been relocated, and demolition
has been completed (see fig. 16). Construction on the first phase of
124 rental units began in November 2002. Construction of the rental and
homeownership units is scheduled to be completed by December 2006 and
December 2008, respectively.
HUD approved the community and supportive services plan for Perry Homes
in July 2000, and Perry Homes residents have been participating in
authoritywide programs. The developer has hired a human services
provider to supply case management services specifically for former
Perry Homes residents. Services to be provided include case management
tracking and referral services. Construction has not yet begun on the
town center, which will include the school, public library, and YMCA.
The town center also will include a park, retail, and office space.
Factors Contributing to Current Status:
After the Housing Authority of the City of Atlanta submitted its
original revitalization plan for Perry Homes to HUD in September 1998,
HUD officials visited the site to discuss issues and concerns that they
had about the plan. The plan called for the development of 415 new
public housing units on the existing site; the housing authority
planned to use only HOPE VI funds and other HUD funds. In a June 2,
1999, letter to the housing authority summarizing its concerns about
the plan, HUD questioned whether rebuilding the site entirely with
public housing units, without funding to provide meaningful supportive
services and without significant partnerships, could result in a
sustainable development and provide the maximum benefits to residents.
In response to HUD's concerns, the housing authority came up with a new
concept for the Perry Homes site and started developing a new master
plan. In December 1999, the housing authority submitted a revised
revitalization plan to HUD, which called for a mixed-use, mixed-income
community consisting of 750 residential units (40 percent of which
would be public housing units), a recreation center, a public library,
and a village center. After a developer was selected, the
revitalization plan was further refined, and a supplement to the
revised revitalization plan was submitted in February 2002. HUD
approved the supplement in October 2002, and construction began shortly
thereafter.
Henry Horner Homes, Chicago, Illinois:
As figure 17 shows, the Chicago Housing Authority was awarded an $18.4
million HOPE VI revitalization grant for Henry Horner Homes in late
1996. However, the planned revitalization of the site has been delayed
by a lawsuit filed by residents and subsequent legal decisions. The
Chicago Housing Authority's scattered site program, which includes the
development of any nonelderly public housing, has been under judicial
receivership since 1987. The housing authority is in the midst of
implementing a 10-year transformation plan, which is a $1.5 billion
blueprint for rebuilding or rehabilitating 25,000 units of public
housing--enough for every leaseholder as of October 1999--and
transforming isolated public housing sites into mixed-income
communities. The housing authority has also received revitalization
grants for the following sites: Cabrini-Green (fiscal year 1994), ABLA
(fiscal years 1996 and 1998), Robert Taylor (fiscal years 1996 and
2001), Madden/Wells/Darrow (fiscal year 2000), and Rockwell Gardens
(fiscal year 2001).
Figure 17: Time Line for Henry Horner Homes:
[See PDF for image]
Note: This time line is based on GAO analysis of data provided by the
Chicago Housing Authority.
[End of figure]
Background:
Henry Horner Homes, completed in 1957, and Henry Horner Extension,
completed in 1961, consisted of a combination of high-rise and mid-rise
buildings containing 1,659 units (see fig. 17). Henry Horner Homes is
adjacent to the United Center, the arena where the Chicago Bulls play,
and is located about 1.5 miles from Chicago's central business
district. At the time that the housing authority applied for the grant,
the units targeted for revitalization had broken windows and doors,
sewage backups, insect and rodent infestation, and missing window child
guards. The violent crime rates were three to eight times higher than
those for Chicago as a whole, and the vacancy rate in the targeted area
was about 50 percent. The Chicago Housing Authority was awarded a
$400,000 HOPE VI planning grant for Henry Horner and two other sites in
fiscal year 1995.
Revitalization and Community and Supportive Services Plans:
In addition to the $18.4 million revitalization grant, the housing
authority was awarded a $2.3 million HOPE VI demolition grant for Henry
Horner in fiscal year 2000. The total projected budget for the project
is $78 million and includes other public housing funds, equity from
low-income housing tax credits, and state and city funds. The
revitalization plan calls for the construction of 764 new units on-
site--271 public housing units, 132 affordable units (80 tax credit
rental units and 52 homeownership units), and 361 market-rate units
(114 rental units and 247 homeownership units). These units will be
constructed in three phases. The housing authority has set aside almost
$30,000 of the HOPE VI revitalization grant funds for community and
supportive services. Although this amount is small, the housing
authority plans to submit a community and supportive services plan for
Henry Horner.
Current Status:
Over 600 of the planned 1,197 units have been demolished. According to
the housing authority, the revitalization plans were developed in such
a way as to minimize the temporary relocation of current residents.
After the first of three phases of construction is completed, most of
the remaining 176 households will be relocated to the new units.
Construction on the first phase of units began in January 2003. The
first units are expected to be ready for occupancy by the end of 2003.
The authority and the Horner Resident Committee are currently
negotiating the relocation notices that will go out to the residents.
The remaining buildings will be demolished on a schedule negotiated
with the Horner Resident Committee.
Factors Contributing to Current Status:
The redevelopment of Henry Horner was delayed for 4 years by legal
actions. In 1991, the Henry Horner Mothers Guild filed a suit against
the Chicago Housing Authority and HUD alleging, among other things,
that Henry Horner had been "de facto" demolished without obtaining HUD
or local government approval or providing replacement housing. The case
was settled in September 1995 when an amended consent decree was
signed. After the housing authority was awarded a HOPE VI
revitalization grant for Henry Horner in 1996, the Henry Horner
plaintiffs raised concerns about the revitalization plans, including
the number of replacement public housing units, which delayed the
project and ultimately resulted in two subsequent court orders, issued
in December 1999 and February 2000. As a result of these legal
decisions, the Chicago Housing Authority is required to designate 220
units or 35 percent of the total units, whichever is greater, as very
low-income units. Also, any decisions regarding the revitalization of
Henry Horner are subject to the approval of the plaintiffs' counsel and
the Horner Resident Committee.
Because any remaining work at Henry Horner is subject to approval by
the Horner plaintiffs' counsel and the Horner Resident Committee,
decision-making has been slow. According to housing authority
officials, it took the Henry Horner Working Group--which includes the
Horner Resident Committee and the Horner plaintiffs' counsel--about 2
years to develop the revitalization plan and issue a request for
qualifications for a developer. It took another 4 months after the
request for qualifications was issued to select a developer.
Herman Gardens, Detroit, Michigan:
The Detroit Housing Commission was awarded a $24.2 million HOPE VI
revitalization grant for Herman Gardens in October 1996 (see fig. 18).
Construction has not yet begun, and HUD notified the housing
commission, for the second time, in March 2002 that it was in default
of its grant agreement. The housing commission previously had been
awarded revitalization grants for Jeffries Homes (fiscal year 1994) and
Parkside Homes (fiscal year 1995).
Figure 18: Time Line for Herman Gardens:
[See PDF for image]
Note: This time line is based on GAO analysis of data provided by the
Detroit Housing Commission.
[End of figure]
Background:
Herman Gardens, built in 1943, originally consisted of 2,144 units on
160 acres (see fig. 18). Problems at the site included structural
decay, deterioration of underground utility systems, rodents, and
hazardous materials contamination. The Detroit Housing Commission
received a $400,000 HOPE VI planning grant for Herman Gardens and two
other sites in fiscal year 1995.
Revitalization and Community and Supportive Services Plans:
In addition to the $24.2 million revitalization grant, the Detroit
Housing Commission was awarded, in fiscal years 1998 and 1999, $3.8
million in HOPE VI demolition funds for Herman Gardens. The total
projected budget for the revitalization of the site is $232 million and
includes other public housing funds, equity from low-income housing tax
credits, and city funds. The revitalization plan calls for 804 units--
470 rental units (including 258 public housing units) and 334
homeownership units. Other elements of the plan include construction of
a regional athletic facility on the site and construction of 250,000
square feet of institutional space for a new community college.
Of the $24.2 million revitalization grant, the housing commission has
budgeted $3.5 million for community and supportive services. The
community and supportive services plan, which was approved in August
2001, focuses on case management; employment and training; youth and
senior services and activities; and partnerships to address job
readiness, placement, and retention.
Current Status:
Relocation and demolition have been completed (see fig. 18). As of
March 2002, the Detroit Housing Commission had not submitted a
revitalization plan for Herman Gardens. Therefore, HUD notified the
housing commission on March 15, 2002, that it was in default of its
grant agreement and needed to submit a default resolution plan to avoid
losing its grant. As part of the default resolution plan, HUD required
the commission to meet a number of requirements, including submitting a
revitalization plan and obtaining firm financial commitments from the
city. The Detroit Housing Commission submitted its revitalization plan
for Herman Gardens to HUD in August 2002 and submitted a supplement to
the plan in December 2002. In September 2002, the city council passed a
resolution committing $22 million to the Herman Gardens project. As of
April 2003, HUD had not lifted the default status or approved the
revitalization plan. According to a housing commission official, the
revitalization plan states that construction is scheduled to begin in
January 2004.
However, the housing commission has already formed a number of
partnerships to provide community and supportive services to Herman
Gardens residents. These services include training in retail sales,
computers, manufacturing, and child care. Additionally, 18 different
unions have formed a partnership that offers a preapprenticeship
program.
Factors Contributing to Current Status:
Due to management changes, the Detroit Housing Commission developed
several different plans for Herman Gardens. The first plan was
developed prior to the grant award and called for 672 units of public
housing. Before that plan was formally submitted to HUD, the executive
director responsible for the plan left the housing commission and was
replaced by an interim executive director. By February 1999, the
interim executive director had developed a second plan, which proposed
a combination of public and market-rate housing as well as a golf
course. After a new executive director was hired, the housing
commission proposed a third development concept. Although never
submitted as a formal revitalization plan, the concept called for a
mixed-use, mixed-income development on the site.
Problems at one of Detroit's other HOPE VI projects also contributed to
delays at Herman Gardens. According to a housing commission official,
HUD visited all three of its grant sites shortly after the commission
developed the second plan for Herman Gardens in February 1999. During
the visit, HUD recommended that the commission cease work at Herman
Gardens and Jeffries Homes until problems at Parkside Homes were
addressed. The Parkside Homes project was over budget and behind
schedule. Additionally, once work resumed at Herman Gardens and
Jeffries Homes, the Jeffries Homes project seemed to be more of a
priority for HUD, according to a commission official.
According to commission and local HUD officials, being part of city
government has also affected the pace of progress on the project. Until
recently, all of the commission's contracts had to be approved by the
city council. Currently, only contracts related to the disposition of
land upon which public housing is situated are subject to city council
approval. The commission also has to go through the city to hire staff.
According to a commission official, the commission is in the process of
seeking the authority to hire its own staff.
Because it never formally submitted a revitalization plan for Herman
Gardens, HUD notified the Detroit Housing Commission in March 2000 that
it was in violation of its grant agreement. In December 2000, HUD
issued a letter to the housing commission requiring it to develop a
default resolution plan. The two parties agreed that the housing
commission would submit biweekly progress reports on Herman Gardens.
When HUD found these biweekly reports to be inadequate, it notified the
housing commission again in March 2002 that it was in default of its
grant agreement. In the letter, HUD stated that it had been 52 months
since the grant was awarded and no substantial progress had occurred.
Hollander Ridge, Baltimore, Maryland:
The Housing Authority of Baltimore City received a $20 million HOPE VI
revitalization grant in October 1996 for Hollander Ridge (see fig. 19).
Project activity was brought to a standstill by a series of legal
actions, and the funds were ultimately transferred to another public
housing site in the city of Baltimore. The housing authority will be
selling the Hollander Ridge property to the city upon HUD approval.
Additionally, the housing authority has completed construction at two
HOPE VI sites--Lafayette Courts (fiscal year 1994) and Lexington
Terrace (fiscal year 1995)--and is administering four additional HOPE
VI grants as follows: Homeownership Demonstration (fiscal year 1994),
Murphy Homes and Julian Gardens (fiscal year 1997), Flag House Courts
(fiscal year 1998), and Broadway Homes (fiscal year 1999).
Figure 19: Time Line for Hollander Ridge:
[See PDF for image]
Note: This time line is based on GAO analysis of data provided by the
Housing Authority of Baltimore City.
[End of figure]
Background:
Hollander Ridge was built in 1976 and was located on 60 acres at the
eastern edge of Baltimore City. Hollander Ridge was once the public
housing of choice, but over time became one of the most distressed
communities in the housing authority's portfolio. The property had over
1,000 units of family and elderly public housing. By the late 1990s,
only half of the units were occupied, and the crime rate soared above
the rates of Baltimore's other public housing sites. Additionally,
Hollander Ridge suffered from significant deferred maintenance,
extensive site problems, and the deterioration of infrastructure and
major building systems (see fig. 19). Because of its isolation, the
site's residents had little access to public transportation and lacked
nearby shopping and employment opportunities. The Housing Authority of
Baltimore City received a $700,000 HOPE VI planning grant for Hollander
Ridge and one other site in fiscal year 1995.
Current Status:
Federal legislation was passed in November 2001 that enabled the
housing authority to transfer its HOPE VI funds for Hollander Ridge to
Claremont Homes. The revitalization plans for Claremont Homes, which
are in the preliminary stages, call for the demolition of all existing
low-rise buildings and the construction of a new mixed-income
development. The housing authority plans to reserve 73 units at the
Claremont Homes site for former Hollander Ridge residents. However,
according to the housing authority, the legislation enacted in November
2001 that allowed the housing authority to transfer the Hollander Ridge
funds to the site must be amended before any of the plans to revitalize
Claremont Homes can be implemented. The legislation currently only
allows for the rehabilitation of Claremont Homes. As a result of third-
party master planning, the housing authority determined that
rehabilitation is not financially feasible; therefore, housing
authority officials intend to ask Maryland's congressional delegation
to propose an amendment to the federal legislation that would allow
demolition and new construction to occur at the site. Concurrence will
be sought from the American Civil Liberties Union (ACLU)--the
representative of the residents. The authority has submitted a
disposition application to HUD for approval to sell the Hollander Ridge
site to the city of Baltimore.
Factors Contributing to Current Status:
Legal actions and community opposition halted progress at Hollander
Ridge and ultimately led to the transfer of the HOPE VI funds to
Claremont Homes. In 1995, six public housing families, represented by
the ACLU, filed suit against the Housing Authority of Baltimore City
and HUD alleging that they had engaged in racial and economic
segregation through site selection and development of public housing in
Baltimore City since 1937. On June 25, 1996, the parties entered into a
partial consent decree, which was approved by a United States District
Court Judge. Among other things, this decree provides that the housing
authority "will not seek public housing funds from HUD for public
housing construction or acquisition with rehabilitation in Impacted
Areas." The Hollander Ridge site is located in an impacted area, with a
high concentration of low-income housing and a high percentage of
minority populations.
The housing authority's original plan was to modernize Hollander Ridge
by reducing its density through demolition and reconfiguration of
existing units and upgrading the housing units and amenities. This plan
was consistent with the terms of the partial consent decree, and HUD
had awarded the HOPE VI grant on the basis of this plan. However, the
adjacent community resisted plans to place any type of public housing
back on the site. Community residents had long complained about the
site's high crime rate and its effect on nearby property values. In
response to the local opposition, the housing authority decided to
abandon plans to rebuild family public housing at Hollander Ridge.
The housing authority and the community agreed to a subsequent plan to
demolish all of the existing public housing units and replace them with
facilities for seniors. The plan called for a senior village, which
would provide affordable housing as well as community-based health and
wellness programs for low-to moderate-income seniors. All 1,000 units
would be demolished, and 450 senior units would be built on-site, 225
of which would be designated as public housing. The housing authority
also agreed to build a $1.2 million fence around the entire Hollander
Ridge site.
Because the plans for a senior village would violate sections of the
partial consent decree and residents would be displaced, the ACLU
maintained strict opposition to the senior village concept.
Nevertheless, the housing authority sought a modification to the decree
that would allow the development of public housing on the Hollander
Ridge site. In January 1999, the U.S. District Court approved this
request. On July 8, 2000, Hollander Ridge was imploded. Just a few days
later, the Fourth Circuit Court of Appeals, responding to an ACLU
appeal, reversed the District Court's order. On July 31, 2000, HUD
declared the grant to be in default. Federal legislation enacted in
November 2001 allowed the housing authority to transfer the funds to
its Claremont Homes site. As shown in figure 19, Hollander Ridge
remains a vacant lot.
Jackson Parkway, Holyoke, Massachusetts:
The Holyoke Housing Authority received a $15 million HOPE VI
revitalization grant in October 1996 for Jackson Parkway (see fig. 20).
Fifty-one of the 272 planned units have been completed.
Figure 20: Time Line for Jackson Parkway:
[See PDF for image]
Note: This time line is based on GAO analysis of data provided by the
Holyoke Housing Authority.
[End of figure]
Background:
Jackson Parkway was built in 1943 and contained 219 units on a 12.5-
acre site in the Churchill section of Holyoke (see fig. 20). According
to housing authority officials, the apartments and their residents were
isolated from the economic and social fabric of the surrounding
community. In addition, the units were run-down and unappealing. The
immediate neighborhood adjacent to Jackson Parkway was marked by
abandoned, obsolete, and vacant buildings and was affected by drug
dealing and vandalism. The Churchill neighborhood formerly was a
residential center for mill workers and other laborers. However, by the
1990 census, the neighborhood's residents had a 50 percent school drop-
out rate and only 37 percent participated in the workforce. Because
Jackson Parkway contained almost 25 percent of all residential units in
the Churchill neighborhood, its revitalization was seen as pivotal to
the success of future improvements in the area.
Revitalization and Community and Supportive Services Plans:
The revitalization of Jackson Parkway is estimated to cost around $47
million--which includes other public housing and HUD funds, other
federal funds, and equity from low-income housing tax credits--and will
occur in three phases. The first phase will consist of the demolition
of 219 units and a 42-unit elderly complex and the construction of 50
public housing units, 60 homeownership units, a park, a community
center, and a maintenance facility. The second phase will consist of
the rehabilitation of two, five-story walkups, which will result in 39
public housing units, and the construction of 11 new public housing
units. In the third phase, 112 units will be rehabilitated or
constructed in the surrounding neighborhood. The new community will be
called Churchill and Oakhill Homes.
Of the $15 million revitalization grant, $700,000 has been set aside
for community and supportive services. The focus of the community and
supportive services plan, approved in March 1998, is to implement a
comprehensive on-site service delivery system to coordinate existing
health and human services with innovative educational and employment
opportunities. The Holyoke Housing Authority plans to partner with
numerous schools, universities, churches, career development
organizations, libraries, and the Chamber of Commerce to implement its
self-sufficiency programs.
Current Status:
Of the 272 total units to be rehabilitated or constructed, 51 have been
completed. The 50 new public housing units planned for phase one were
built and fully occupied in summer 2002 (see fig. 20). Additionally,
all planned phase one demolition has been completed. The community
buildings are in the design phase, and work on the community park has
begun and is expected to be completed by summer 2003. One model
homeownership unit has been completed. Also, 270 applications to
purchase the 60 homeownership units have been received.
Selective demolition has begun for phase two--the rehabilitation of
two, five-story walkups. Additionally, land has been cleared and
footings and foundation walls have been set. These units are to be
completed in the fall of 2003. The housing authority is working with
the Catholic Diocese of Springfield and Habitat for Humanity to build
new homeownership units on one complete city block. This will be the
third and final phase of the revitalization.
By the spring of 2000, a resident services department was established
and operating to address the needs of former Jackson Parkway residents.
Each Jackson Parkway resident was assessed by one of three case
managers, who help residents to find employment, acquire GEDs, take
English as a Second Language courses, and receive homeownership
counseling.
Factors Contributing to Current Status:
Several factors contributed to delays early in the revitalization
process. Because Jackson Parkway was the authority's first experience
with the HOPE VI program, its staff had to overcome an initial learning
curve. For example, the staff had to learn about real estate
development and low-income housing tax credits and about how to work
with developers. Also, HUD's Inspector General charged the housing
authority with procurement violations related to the selection of its
first developer. According to HUD officials, they placed procurement
review restrictions on the authority because of the lack of sufficient
in-house procurement expertise. These restrictions delayed the
authority's ability to obtain an infrastructure contractor and a
developer for the site. One housing authority official estimated that
the procurement charges delayed the progress of the grant by 1 year.
Additionally, approval of key documents took longer than expected. For
example, approval of the revitalization plan took 23 months and
approval of the mixed-finance proposal for the first phase took 6
months. The housing authority has had seven different HUD HOPE VI grant
managers since 1996, and staff believe that this frequent rotation
caused temporary disconnects that resulted in delays.
Lamokin Village, Chester, Pennsylvania:
The Chester Housing Authority was awarded a $14.9 million HOPE VI
revitalization grant in October 1996 for Lamokin Village (see fig. 21).
Construction is complete, and all 150 units are occupied. Since 1994,
the housing authority has been under judicial receivership resulting
from a resident lawsuit concerning distressed housing conditions. The
housing authority also was awarded a fiscal year 1998 HOPE VI
revitalization grant for Wellington Ridge.
Figure 21: Time Line for Lamokin Village:
[See PDF for image]
Note: This time line is based on GAO analysis of data provided by the
Chester Housing Authority.
[End of figure]
Background:
Lamokin Village was built in the early 1940s and consisted of 38, two-
and three-story buildings, totaling 350 units. The site suffered from
substantial deterioration; major system problems, such as piping leaks
and water table problems; and poor site conditions (see fig. 21). The
site also had significant design problems due to its dense, maze-like
building configuration with no interior streets. According to the
Chester Housing Authority, Chester has been a distressed community for
decades. About 56 percent of the population of Chester receives some
form of government assistance, and HUD has ranked Chester as the most
depressed city of its size in the United States. The housing authority
was awarded a fiscal year 1995 HOPE VI planning grant for Lamokin
Village and one other site as a part of the overall recovery plan for
the city.
Revitalization and Community and Supportive Services Plans:
The total amount budgeted for the redevelopment of Lamokin Village is
$27 million, which includes other public housing funds and equity from
low-income housing tax credits. The revitalization plan for Lamokin
Village, renamed Chatham Estates, calls for three phases: (1) 22 new
residential buildings with a mix of 110 one-story and duplex row homes,
(2) a 40-unit senior building, and (3) 30 off-site homeownership units.
All existing units in Lamokin Village were to be demolished.
Of the $14.9 million revitalization grant, the housing authority
budgeted about $1.2 million for community and supportive services. The
community and supportive services plan, approved in December 1997,
proposes a comprehensive welfare-to-work strategy designed to cultivate
the economic self-sufficiency of Lamokin Village residents. Specific
plans include the establishment of a "one-stop shop" for social
services, a community center and educational facility to be built on-
site, and a comprehensive evaluative component that will examine the
impact of HOPE VI on the Chester community.
Current Status:
The 150 units, including the 40-unit senior building, planned for
phases one and two are 100 percent complete and occupied (see fig. 21).
Thirty-eight former residents returned to the family rental units, and
21 former residents moved to the senior building. The third phase of
the plan is being transferred to the housing authority's fiscal year
1998 HOPE VI revitalization grant.
The authority did establish an interagency "one-stop shop" in 1998 that
is used as the coordinating point for all programs and partners
servicing the authority's residents. The shop is located in the Chester
Crozier Hospital, along with various other social service agencies. For
example, the Chester Education Foundation provides an employment
program at the hospital. The authority has also included a family self-
sufficiency component, which is optional for residents and provides
services such as case management, computer hardware and software
training, van transportation, homeownership training, and
entrepreneurial training. The supportive services funding was expended
before construction of the community and educational center could
begin; the authority is currently trying to raise additional funding
for this center. Finally, Widener University's School of Social Work
has been evaluating impacts and outcomes of HOPE VI initiatives in
Chester since 1997.
Factors Contributing to Current Status:
In 1994, the Chester Housing Authority was placed on HUD's troubled
status list after receiving an extremely low evaluation score. During
this same period, a federal judge appointed a federal court receiver
for the housing authority in an effort to transform the authority. The
receivership is scheduled to end in June 2003. According to officials
at the local HUD field office, the receiver has brought about many
positive changes for the housing authority and its residents, including
the two HOPE VI revitalization grants. In 2002, the authority received
a high evaluation score, placing it in HUD's high-performer category.
The receiver ensured that the authority had the proper staffing and
knowledge to administer its HOPE VI grants. Additionally, the authority
brought the president of the resident council on staff, helping to
rebuild the relationship between the authority and its residents. The
receiver also created a separate police force to increase the safety
and security of the authority's public housing sites, the lack of which
had been a major complaint of former residents. Finally, during the
receivership, all of Chester's public housing family units have either
been demolished or rehabilitated.
Relying primarily on public housing funds simplified the development
process. Tax credit equity was only used to finance the construction of
the 40-unit senior building. The remainder of the redevelopment was
financed by HOPE VI and other public housing funds. In addition, the
housing authority elected to act as its own developer of the family
units. Finally, all units were constructed on-site, thus the housing
authority did not have to purchase additional property.
North Beach, San Francisco, California:
The San Francisco Housing Authority was awarded a $20 million HOPE VI
revitalization grant for North Beach in October 1996. Construction at
the site did not begin until November 2002 (see fig. 22). The housing
authority has also completed three sites with two HOPE VI
revitalization grants--Bernal/Plaza (fiscal year 1993) and Hayes Valley
(fiscal year 1995)--and construction at its Valencia Gardens site
(fiscal year 1997) is scheduled to begin later this year.
Figure 22: Time Line for North Beach:
[See PDF for image]
Note: This time line is based on GAO analysis of data provided by the
San Francisco Housing Authority.
[End of figure]
Background:
Located adjacent to Fisherman's Wharf and surrounding the historic
cable car turnaround, North Beach is situated in the heart of San
Francisco's tourist attractions. The site is surrounded by a busy,
densely built, vibrant neighborhood that is well-served by public
transportation, schools, shopping, and services. However, North Beach
itself has been a pocket of poverty, with residents earning, on
average, only 17 percent of area median income. The site was built in
1952 and consisted of 13 concrete buildings with 229 walk-up units,
which filled two city blocks (see fig. 22). It was poorly designed with
large amounts of indefensible space that became havens for criminal
activity. Due to repeated earthquake stress, the buildings were
weakening and had substandard major systems, including sewer and
plumbing. A $400,000 HOPE VI planning grant awarded in fiscal year 1995
for North Beach funded a study of the site. The study determined that
due to the dilapidated condition of the site and the high crime rate in
the area, complete neighborhood revitalization would be essential to
any redevelopment plan.
Revitalization and Community and Supportive Services Plans:
In addition to the $20 million revitalization grant, the San Francisco
Housing Authority was subsequently awarded a $3.2 million HOPE VI
demolition grant for the North Beach site in fiscal year 2001. The
total projected budget is $106 million--up from the $69 million
estimated in 1996--and includes other public housing funds, other HUD
funds, other federal funds, and equity from low-income housing tax
credits. The revitalization plans call for 341 units. The 341 units
will be divided as follows:
* 229 public housing units, which will be a one-for-one replacement for
the units that were demolished on both the east and west blocks and:
* 112 rental apartments for families with incomes below 50 percent of
the city median income.
Also included in the plans are a parking garage for 323 cars and
commercial and retail space surrounding the cable car turnaround area.
Approximately $1.5 million of the revitalization grant was set aside
for community and supportive services. This service component was
created to provide residents with opportunities to achieve self-
sufficiency through education, employment, and entrepreneurship. The
community and supportive services plan, approved in May 2001, calls for
a commitment to lifelong education that includes the development of
basic intellectual skills, specific training for particular types of
employment, and a focus on life skills such as parenting.
Current Status:
Relocation, abatement, and demolition of both the east and west blocks
has been completed (see fig. 22). California awarded the authority $55
million in tax credits in the spring of 2002 for the North Beach site,
the largest award in California history. With this additional funding,
the housing authority was able to begin construction at the site in
November 2002.
About half of all residents currently participate in community and
supportive services. Participants create an individual plan with a case
manager, who then directs the resident to the various services offered,
such as employment assistance, computer, and English as a Second
Language classes. Additionally, 30 residents from North Beach are
enrolled in the housing authority's family self-sufficiency program.
Program participation enables each household to receive up to $1,200
for training in various trades.
Factors Contributing to Current Status:
According to housing authority officials, the primary factor
contributing to delays at North Beach was resident resistance. To
address resident concerns regarding relocation, a former executive
director initially promised residents that the redevelopment would
occur in two phases, which meant that they would not have to be
relocated off-site. However, the housing authority later determined
that this option would be too expensive, and that the residents would
have to be relocated off-site so that redevelopment could occur all at
once. The residents were not happy with this decision and were very
reluctant to move out of their apartments.
Funding shortfalls have also contributed to delays at the North Beach
site. San Francisco's original HOPE VI application requested $30
million to complete the revitalization of North Beach. Because HUD only
awarded them $20 million, making up the difference has been difficult.
The authority had to add 112 units to the plan in order to convince the
city to provide $10 million in funding assistance. According to housing
authority officials, now that the project has been awarded $55 million
in tax credits, the pace of the redevelopment should accelerate.
Administering over $118 million in HOPE VI funds for five sites
simultaneously has been challenging for the authority's staff. The
housing authority has a history of management and financial problems
that have affected its redevelopment efforts. HUD took over the housing
authority in 1996 after the Mayor of San Francisco requested HUD's
assistance. The authority had managerial problems, high crime at its
public housing developments, and problems with the physical condition
of its housing stock. After implementing new policies and procedures
and reorganizing the housing authority, HUD returned it to local
control in 1997. Several years after the housing authority was returned
to local control, it developed financial difficulties and again sought
HUD's assistance. HUD continues to monitor and provide assistance to
the housing authority.
Another factor that delayed the North Beach redevelopment was
environmental problems on-site. Half of the units contained lead paint
and asbestos, and the site's soil had some arsenic, mercury, zinc, and
lead contamination (due to the site's early industrial history). As a
result, the city required additional environmental reviews before it
gave its approval to begin construction.
Riverview and Lakeview Terraces, Cleveland, Ohio:
The Cuyahoga Metropolitan Housing Authority was awarded a $29.7 million
HOPE VI revitalization grant for Riverview and Lakeview Terraces in
October 1996 (see fig. 23). Although the housing authority has
completed relocation and demolition, the rehabilitation of units at
Lakeview has been slow, and little progress has been made with the
construction of new units at Riverview. The housing authority has been
awarded two other HOPE VI revitalization grants: a $50 million grant in
fiscal year 1993 for Outhwaite Homes/King Kennedy, which is complete,
and a $21 million grant in fiscal year 1995 for the Carver Park site.
Figure 23: Time Line for Riverview and Lakeview:
[See PDF for image]
Note: This time line is based on GAO analysis of data provided by the
Cuyahoga Metropolitan Housing Authority.
[End of figure]
Background:
Riverview, completed in 1963, consisted of 143 family units and 501
elderly units (see fig. 23).[Footnote 36] Lakeview, completed in 1932,
contained 570 family units and 214 elderly units. Riverview and
Lakeview are neighboring public housing sites, which collectively
housed 715 elderly units and 713 family units. Riverview is on unstable
ground, which includes numerous sinkholes. Both developments are
located in the Ohio City neighborhood, home to the West Side Market,
which has been in operation since the 1880s and attracts around 1
million visitors each year. Due to its age, the Lakeview units had many
problems, including high lead levels, lack of parking, and obsolete
underground plumbing and storm lines. In addition, the majority of the
Lakeview units were one-and two-bedroom units, while the local demand
is for three-bedroom and larger units.
Revitalization and Community and Supportive Services Plans:
The total projected budget for the Riverview/Lakeview revitalization is
about $112 million, which includes other public housing funds, other
federal funds, equity from the sale of low-income housing tax credits,
bank financing, and other local funds. The current revitalization plan
calls for 95 new public housing units, 240 rehabilitated public housing
units, and 345 new market-rate and moderate-income units. For
Riverview, there are plans to construct 45 public housing units on-site
and 50 off-site, to acquire 54 off-site public housing units, and to
construct 228 market-rate and 117 affordable (tax credit) units. At the
Lakeview site, there are plans to renovate 186 public housing units and
a community center. There are also plans for site improvements,
including the demolition of garage compounds.
Of the $29.7 million in HOPE VI funds, the housing authority plans to
set aside $5.8 million for community and supportive services. The goals
of its community and supportive services plan, approved in July 2000,
are to track and provide services to Lakeview residents and relocated
families from Riverview, make all interested residents meet the
qualifications for moving into the newly renovated units, and help
Lakeview and Riverview residents make the transition from welfare to
work.
Current Status:
The renovation of the first 56 units at the Lakeview site is under way,
and six units have been completed (see fig. 23). The demolition of the
garage compounds and rehabilitation work are moving along as scheduled,
according to the housing authority. The relocation of 98 households and
demolition of 135 units is complete at the Riverview site (see fig.
23). The housing authority has also acquired 54 single-family homes in
scattered sites, which are fully occupied, but the construction of new
units is not scheduled to begin until October 2004. In June 2002, the
housing authority received an award for its plan for the Riverview site
from the Congress for New Urbanism. The housing authority is in the
process of executing a development agreement.
Case management activities are in progress for 343 Riverview and
Lakeview residents. These residents participate in a range of
activities, including entrepreneurial and employment training and
educational programs. The housing authority is also in the process of
implementing a new system for ensuring that residents can receive the
job-training services that they need by using vouchers to purchase
services.
Factors Contributing to Current Status:
The housing authority was experiencing internal problems when the grant
was awarded in 1996. The prior administration was not following
appropriate procurement procedures, according to HUD officials, and the
former executive director was ultimately convicted for theft of public
funds, mail fraud, and lying about a loan. A new executive director was
hired in late 1998, and the housing authority was finally able to focus
on the HOPE VI grant in 1999.
The project has also experienced delays due to cost constraints,
consideration of community and resident input, and problems with the
site. First, the housing authority requested $40 million to implement
its revitalization plan, but it was awarded $29.7 million. As a result,
it took time for the housing authority to obtain other funding. Next,
the housing authority did not originally plan to put public housing
back on the Riverview site because the land was sloping and unstable.
Due to community and resident opposition to this plan, the housing
authority agreed to put public housing units back on-site. Subsequent
analysis by an engineering firm revealed that certain areas were stable
enough for new construction. Similarly, while the housing authority
originally planned to modernize 12 of the buildings at Lakeview, it
later revised these plans to include modernization of an additional 66
row-house units.
Robert S. Jervay Place, Wilmington, North Carolina:
The Wilmington Housing Authority was awarded an $11.6 million HOPE VI
revitalization grant for Robert S. Jervay Place (Jervay Place) in
October 1996 (see fig. 24). Relocation and demolition at Jervay Place
are complete, but construction has been slow to start.
Figure 24: Time Line for Robert S. Jervay Place:
[See PDF for image]
Note: This time line is based on GAO analysis of data provided by the
Wilmington Housing Authority.
[End of figure]
Background:
Jervay Place, constructed in 1951, was made up of 30, two-story, brick
buildings that housed 250 units on 14 acres of land (see fig. 24). The
building configuration yielded limited defensible space for each
dwelling unit and rendered the site vulnerable to criminal activity.
The site needed renovation, lead-based paint removal, asbestos
abatement, and modifications for the handicapped. In addition, the
resident population consisted of young, welfare-dependent, single-
parent families.
Revitalization and Community and Supportive Services Plans:
The total projected budget for the Jervay Place revitalization is $33
million, which includes equity from low-income housing tax credits,
other grants, and private debt. The revitalization plans called for 190
new units to be developed at Jervay Place and surrounding sites in four
phases, excluding a phase dedicated to the implementation of community
and supportive services. The construction phases are as follows:
* construction of 14 for-sale or lease-purchase units on the original
site;
* construction of 60 units and a community center on the original site
and 40 off-site units;
* construction of 44 for-sale or lease-purchase units on the original
site; and:
* construction of 32 scattered site for-sale or lease-purchase units.
Of the 190 new units, 71 would be public housing units, 29 would be
financed with a combination of low-income housing tax credits and
project-based Section 8, 28 would be lease-purchase units, and 62 would
be other subsidized homeownership units. A 7,000-square-foot,
commercial-retail space will also be constructed on-site, but the
housing authority has not determined in which phase this will be done.
Of the $11.6 million in HOPE VI funds, the Wilmington Housing Authority
planned to set aside $1.5 million for community and supportive
services. The focus of its service efforts would be transportation, job
training and placement, education, health care, and child care. The
housing authority also planned to establish partnerships with local
schools and businesses.
Current Status:
Relocation, demolition, and 4 of the 14 phase one homeownership units
have been completed, and construction of the next 5 units is under way
(see fig. 24). For phase two, construction began in November 2002, and
tax credits have been approved. For phase three, the housing authority
is working on its homeownership plan. The final phase of construction
has not begun. The housing authority estimates that all of the units
will be complete in August 2005.
HUD approved the housing authority's community and supportive services
plan in February 1999. The housing authority administers services
through its family self-sufficiency program, through which case
managers are assigned to work with individual households and match them
with appropriate services. Case managers have worked with participants
to assist them with their self-sufficiency goals, including working
with residents to prequalify them to purchase the homes constructed in
phase one. Residents who wish to return to Jervay Place must be
enrolled in this program. As of January 2003, 62 of the 132 original
residents were enrolled.
Factors Contributing to Current Status:
The procurement of the initial development partner was legally
challenged by one of the other bidders. According to HUD, a
considerable amount of time was spent resolving this issue, and HUD's
Office of General Counsel ultimately determined the challenge was
unfounded. However, the housing authority and the initial developer did
not work well together, and the developer was released in July 1999. A
new developer was hired in April 2001, and HUD assigned an expediter--
a private-sector expert in finance, real estate development, or
community revitalization--to help move the project. Both the housing
authority and the second developer had to work through resistance from
the community and residents, who did not understand the plans because
they were not involved in the planning by the previous developer and
who were frustrated by the lack of progress at Jervay Place, according
to housing authority officials. As a result of these issues, the
housing authority did not submit its revitalization plan until December
2000. HUD approved the plan in October 2001.
According to housing authority officials, revitalization also has been
adversely affected by the city's and HUD's slow approval processes. For
example, while the city informed the housing authority in August 2001
that its site plan had been approved, it was informed in December 2001
that the site plan should not have been approved because the setbacks,
the space between the building area and the property line, were
incorrect. As a result, the site plans had to be changed and
resubmitted to obtain the city's approval. Similarly, housing authority
officials stated that HUD's slow approval process has contributed to
delays. For example, it took HUD 5 months to conditionally approve the
revitalization plan. In addition, housing authority officials stated
that they had to take out a line of credit to begin construction
because HUD was taking too long to make the grant funds available.
According to HUD, approval could not be completed until the housing
authority fulfilled several conditions, including submission of a
mixed-finance proposal, a revised implementation schedule, proposed
unit designs, and a revised HOPE VI budget. In addition, the HUD grant
manager assigned to the housing authority was responsible for closing
six mixed-finance deals as well as reviewing new HOPE VI grant
applications during this time frame.
Robert Taylor Homes B, Chicago, Illinois:
The Chicago Housing Authority was awarded a $25 million HOPE VI
revitalization grant in October 1996 for Robert Taylor Homes B (see
fig. 25). Relocation and demolition are complete, and approximately
one-quarter of the planned units have been constructed. The housing
authority's scattered site program, which includes the development of
any nonelderly public housing, has been under judicial receivership
since 1987. The authority is in the midst of implementing a 10-year
transformation plan, a $1.5 billion blueprint for rebuilding or
rehabilitating 25,000 units of public housing--enough for every
leaseholder as of October 1999--and transforming isolated public
housing sites into mixed-income communities. The authority was awarded
a revitalization grant for Robert Taylor A in fiscal year 2001 and has
also received grants for the following sites: Cabrini-Green (fiscal
year 1994), ABLA (fiscal years 1996 and 1998), Henry Horner (fiscal
year 1996), Madden/Wells/Darrow (fiscal year 2000), and Rockwell
Gardens (fiscal year 2001).
Figure 25: Time Line for Robert Taylor Homes B:
[See PDF for image]
Note: This time line is based on GAO analysis of data provided by the
Chicago Housing Authority.
[End of figure]
Background:
The Robert Taylor Homes consisted of over 4,300 units in 28 detached,
16-story buildings along Chicago's State Street corridor, a 4-mile
stretch of five different public housing sites (see fig. 25). It was
the nation's largest, most densely populated public housing enclave.
The Robert Taylor Homes were divided into two subsites called Robert
Taylor A and B. The fiscal year 1996 HOPE VI revitalization grant is
for Robert Taylor B, which was constructed between 1959 and 1963, and
consisted of 2,400 units spread over 16 high-rise buildings. The
surrounding neighborhood included many boarded-up buildings, vacant
lots, and a few small businesses. However, the site also is near bus
and train services and a technical vocational school.
Revitalization and Community and Supportive Services Plans:
In addition to the revitalization grant for Robert Taylor B, the
Chicago Housing Authority was subsequently awarded a $6.3 million HOPE
VI demolition grant in fiscal year 2000 and a $13 million HOPE VI
demolition grant in fiscal year 2001. The total projected budget for
the Robert Taylor B revitalization is $113 million, which includes
other public housing funds, other federal funds, conventional debt, and
equity from the sale of low-income housing tax credits. The
revitalization plans call for the demolition of 762 units and the
construction of 251 public housing units in scattered off-site
locations throughout the surrounding neighborhoods.
Of the $25 million revitalization grant, approximately $1.5 million has
been budgeted for community and supportive services. The community and
supportive services plan was submitted and approved in June 1998. The
plan states that the housing authority will provide case managers to
monitor families' progress in meeting goals established in self-
sufficiency plans. The plan also allowed for the housing authority to
use a Boys and Girls Club to deliver self-sufficiency activities until
a community center was constructed in 1998. The services provided would
include a combination of employment; education; and family services,
such as child care and health care.
Current Status:
As shown in figure 25, a 116-unit site, referred to as The Langston,
has been constructed and is at capacity. Twenty-nine of these units are
public housing units and are occupied by former residents of Robert
Taylor A and B. The remaining units are a mixture of tax credit and
market-rate units. Construction of a second site, referred to as The
Quincy, is also complete. The Quincy has 107 units, including 27 public
housing units, which are fully occupied. The remaining units are also a
mixture of market-rate and tax credit units. In February 2003, HUD
approved the combination of the 1996 grant for Robert Taylor B with the
2001 grant for Robert Taylor A for planning and implementation purposes
as well as the extension of certain grant agreement deadlines affecting
the 1996 grant. As a result, while the housing authority is still
obligated to complete 195 more public housing units under the 1996
grant, these units will be developed as a part of a new three-phase
Robert Taylor Master Plan. Construction on the first phase of this plan
is scheduled to begin in late 2003.
The housing authority is currently in the process of revising its
community and supportive services plan to incorporate its service
connector program, in which case managers work individually with
residents to provide either necessary services or refer them to the
appropriate providers. The housing authority is in the process of
locating the original residents, finding out whether they are using any
supportive services through the housing choice program, and determining
what services they need. According to the housing authority, the
primary service provided to the original residents has been relocation
assistance. In addition, the Charles Hayes Family Investment Center
opened in September 1998 adjacent to the original site, offering a one-
stop source for computer training, job placement, medical, and other
supportive services.
Factors Contributing to Current Status:
The revitalization of Robert Taylor B has been slowed by tension early
in the relationship between the Chicago Housing Authority and its
receiver and by the need for the plans to comply with the Gautreaux
consent decree. In 1966, African American residents of the Chicago
public housing community filed suit against the housing authority for
creating a segregated public housing system. In response, the court
issued a judgment that prohibits the housing authority from
constructing any new family public housing in a neighborhood in which
more than 30 percent of the occupants are minorities (limited areas)
unless it develops an equal number of units in neighborhoods where less
than 30 percent are minorities (general areas). In 1987, the court
appointed a receiver for Chicago's scattered-site program, which
includes the development of nonelderly public housing.
According to a housing authority official, the first delay at Robert
Taylor B occurred because the housing authority did not develop its
revitalization plan with the input of the receiver. The housing
authority submitted the plan to HUD in January 1998, and 9 months later
HUD informed the housing authority that it could not act on the plans
without the concurrence of the receiver. It took over 1 year for the
housing authority and the receiver to revise the plans together and to
address HUD's specific concerns. HUD approved the plan in December
1999, but it only partially approved the HOPE VI budget because the
housing authority and the receiver had not come to agreement on the
receiver fee. The determination of how grant funds should be dispersed
between the housing authority and the receiver was not finalized until
May 2000.
The housing authority also has experienced difficulty obtaining off-
site locations for the balance of the public housing units that need to
be constructed. To address this difficulty, the housing authority has
proposed combining the revitalization efforts of Robert Taylor B with
the revitalization funded under the fiscal year 2001 Robert Taylor A
grant. The housing authority is working on obtaining a revitalizing
order for the Robert Taylor community, which would waive the Gautreaux
restrictions. Revitalizing orders allow the construction of new family
public housing units in limited areas without requiring an equal number
of units to be built in a general area. The revitalizing circumstances
must support a reasonable forecast of economic integration, with the
longer term possibility of racial integration. The housing authority
hopes that it can use the work already completed with the Robert Taylor
B grant to show that the area is being revitalized.
Finally, receipt of the fiscal year 2001 HOPE VI grant for Robert
Taylor A has slowed progress at Robert Taylor B. After receiving this
grant, the housing authority took time to develop a master plan to
coordinate the development of both Robert Taylor A and B. The master
plan allows the housing authority to combine the grants for planning
purposes, although they remain administratively separate. In addition,
the Robert Taylor site has not consistently been a top priority for the
housing authority. According to a housing authority official, other
sites that are further along have been selected to get the majority of
the housing authority's time, energy, and resources.
St. Thomas, New Orleans, Louisiana:
The Housing Authority of New Orleans was awarded a $25 million HOPE VI
revitalization grant for St. Thomas in 1996. Although relocation and
demolition have been completed, no new units have been constructed (see
fig. 26). The housing authority is currently under administrative
receivership. The housing authority was also awarded a HOPE VI
revitalization grant for the Desire site in fiscal year 1994.
Figure 26: Time Line for St. Thomas:
[See PDF for image]
Note: This time line is based on GAO analysis of data provided by the
Housing Authority of New Orleans.
[End of figure]
Background:
St. Thomas, completed in 1941, consisted of 1,510 public housing units
on almost 50 acres (see fig. 26). The site was located in a mixed-use
neighborhood close to the central business district and the Garden
District. The neighborhood in which St. Thomas is located was recently
designated as a historic district. St. Thomas had a vacancy rate of 50
percent when the Housing Authority of New Orleans applied for the HOPE
VI grant. The original site had a density of approximately 30 units per
acre and contained long spaces between buildings, which were conducive
to criminal and violent behavior. Moreover, underground utilities were
either obsolete or deteriorated. Stormwater flooding and sanitary line
overflows were common. The odor of sewage was pervasive throughout the
site.
Revitalization and Community and Supportive Services Plans:
In addition to the revitalization grant, the Housing Authority of New
Orleans was awarded a HOPE VI demolition grant in the amount of $3.5
million to demolish 701 units at St. Thomas. With funds from the city,
state, tax-exempt bonds, and other sources, the total projected budget
for the revitalization of St. Thomas is $293 million. The
revitalization plans call for:
* a total of 1,238 units, including construction of 182 on-site public
housing units, 107 on-site public housing eligible rental units, 15 on-
site affordable homeownership units, 100 off-site public housing
eligible rental units, and 50 off-site affordable homeownership units;
* construction of a 200,000-square-foot retail center on 17 acres
adjacent to the site; and:
* historic preservation and renovation of five of the original St.
Thomas buildings.
Of the $25 million revitalization grant, the housing authority plans to
spend $4 million on community and supportive services. The housing
authority will attempt to contact all of the original St. Thomas
households and conduct assessments of their needs. On the basis of
these assessments, a detailed case management plan will be drafted. The
St. Thomas community and supportive services plan, which HUD approved
in July 2001, documents goals and objectives for achieving self-
sufficiency for the residents of St. Thomas in the following areas:
employment and income generation, education, training, homeownership
training and assistance, health, strengthening families, and services
to build community leadership.
Current Status:
The St. Thomas site has been cleared, but construction has not yet
started (see fig. 26). The relocation of 739 families was completed in
June 2001, and demolition of 1,365 units was completed in December
2001. As of April 2003, infrastructure work at the St. Thomas site was
60 percent complete. The transfer of property from the housing
authority to the retail developer for the construction of the retail
center is scheduled to occur by June 2003. This property transfer is
contingent upon the housing authority's submission of documents to HUD
for the closing of the first phase of construction on residential
units, an escrow deposit from the developer to guarantee the
construction of residential housing, and the environmental clearance
for the retail site. State economic development bonds were approved in
December 2002, which enabled negotiations regarding the retail center
to progress. The historic preservation of five of the original St.
Thomas buildings also has begun.
The housing authority has hired Kingsley House, a social service
provider located near the St. Thomas site, to perform assessments and
provide case management plans in accordance with the community and
supportive services plan. The Kingsley House, established in 1896,
administers a variety of programs from Head Start to adult day care.
Assessments have been conducted on 451 of the 739 families that were
affected by the redevelopment plans.
Factors Contributing to Current Status:
According to housing authority officials, progress has been delayed due
to funding shortfalls. Although the housing authority requested $40
million, HUD awarded $25 million, which was not enough to revitalize
the St. Thomas site. Similarly, the city could provide $6 million of
the $20 million needed for infrastructure at the site. As a result, the
developer had to take time to identify other funding sources. Moreover,
it took approximately 2 years from the time that the developer told HUD
its intentions to employ tax-increment financing (TIF) until the New
Orleans City Council approved it. Approval of the TIF was delayed due
to public pressure against the TIF concept and the project itself.
Moreover, the state bond commission did not approve the issuance of
bonds until December 2002, after nearly 6 months of delays due in part
to the need to complete environmental review processes.
Also, although the housing authority selected a developer in September
1997, the HUD Office of Inspector General identified problems with the
selection process.[Footnote 37] Specifically, the Inspector General
found that the housing authority allowed the majority of the selection
panel members to be nonhousing authority individuals. The Inspector
General also found that the interaction of the initial developer with
certain members of the selection panel and St. Thomas residents
constituted both a perceived and actual conflict of interest. As a
result, the housing authority selected a new developer in October 1999.
Once selected, the new developer reconfigured the revitalization plan.
Delays continue because the St. Thomas site is located in a historic
district. Preservationists opposed demolition of existing buildings and
the construction of the retail center because of its size, design,
financing, impact upon traffic, and negative effect upon local
businesses. The housing authority consulted with environmental and
preservationist groups and executed a Memorandum of Agreement in
September 2000 that stipulated the preservation of five of the original
St. Thomas buildings and a warehouse as well as other measures aimed at
minimizing adverse environmental impact in and around St. Thomas.
Consultation began in 2001 for an amended Memorandum of Agreement to
consider the retail component proposed for the site.
In July 2002, a nonprofit organization filed a lawsuit against the
housing authority and HUD (1) stating that they were not in compliance
with environmental and historic preservation laws and (2) seeking HUD
to withhold all HOPE VI funds from the housing authority. Since the
filing of the lawsuit, HUD has completed a supplemental environmental
assessment and has published a finding of no significant impact.
Moreover, the housing authority, HUD, and other parties have executed
an amended Memorandum of Agreement. The case was reopened in March
2003, but it was dismissed by a judge in April 2003.
Finally, the Housing Authority of New Orleans has had a long history of
management problems, and its public housing has long been in very poor
condition. In 1996, HUD entered into a "cooperative endeavor agreement"
with New Orleans to correct problems at the housing authority. Under
this agreement, HUD dissolved the housing authority's board of
commissioners and chose a HUD representative as Executive Monitor to
oversee the authority's progress in implementing improvements. In 2002,
after the housing authority had made little progress, HUD took control
of its management and operations. According to HUD officials involved
in the receivership, they are working on reallocating staff resources,
reorganizing the housing authority's structure, and cutting back on
unnecessary expenditures.
Theron B. Watkins Homes, Kansas City, Missouri:
The Housing Authority of Kansas City, Missouri, received a $13 million
HOPE VI revitalization grant for Theron B. Watkins in November 1996
(see fig. 27). This grant has funded the revitalization of the Watkins
site and will fund additional revitalization plans at another site and
off-site units. The authority has had numerous problems related to
management and maintenance of its properties, and it was placed under
judicial receivership in 1994. The authority also was awarded three
other HOPE VI revitalization grants--a fiscal year 1993 revitalization
grant for Guinotte Manor, a fiscal year 1997 revitalization grant for
Heritage House, and a smaller revitalization grant for Heritage House
awarded in fiscal year 1998 that is complete.
Figure 27: Time Line for Theron B. Watkins Homes:
[See PDF for image]
Note: This time line is based on GAO analysis of data provided by the
Housing Authority of Kansas City, Missouri.
[End of figure]
Background:
For many years, the Theron B. Watkins site served as the symbol for
urban decline in Kansas City. With its deteriorated structures, large
open entryways, and outdated and neglected electrical systems, the site
suffered from many of the same problems identified in housing of
similar design throughout the country. The site was built in 1953 and
contained 288 units in 22, three-story buildings. In the late 1980s,
living conditions at the site began to deteriorate at a rapid pace with
drug dealing and related crime rampant; units in disrepair and neglect;
and the housing authority unable to address problems due to its
mismanagement problems. These conditions created an unsafe living
environment that prompted residents to vacate the site in large
numbers. Upon the arrival of the receiver in 1994, problems at the site
included a 43 percent vacancy rate; enormous backlogs of uncompleted
maintenance work; high rates of criminal activity; and hundreds of
families living in dangerous, substandard conditions.
Revitalization and Community and Supportive Services Plans:
According to the revitalization plan, the Housing Authority of Kansas
City, Missouri, would use their $13 million HOPE VI revitalization
grant to fund portions of several redevelopment projects. The majority
of the grant would fund the rehabilitation of 75 units at the Theron B.
Watkins site. (Other public housing funds would be used to complete the
rehabilitation of the remaining units.) Additionally, some of the HOPE
VI funds would be used to rehabilitate 74 townhomes at the housing
authority's Wayne Miner site. Finally, the funding would be used to
demolish 24 units at Theron B. Watkins. These units would be replaced
in two off-site communities. Of the $13 million revitalization grant,
$1.4 million was budgeted for community and supportive services. The
funds would be used to provide case management, community policing, and
programs and activities. An additional $314,000 would be used to
renovate the housing authority's family development center.
Current Status:
Of the 173 total planned units, 149 have been completed. The
rehabilitation of 75 units at the Theron B. Watkins site is complete
(see fig. 27), as is the renovation of the family development center.
The rehabilitation of the 74 townhomes at the Wayne Miner site was
completed in March 2003. The replacement of the 24 demolished units in
two, off-site, mixed-income developments remains in the planning stage.
However, due to recent tax credit awards, construction on 13 of the 24
replacement units is scheduled to begin in June 2003.
Community and supportive services for residents of Theron B. Watkins
include bilingual case management for the large immigrant population,
community policing, transportation, public health programs, and youth
development activities. The housing authority recently conducted a
needs assessment of its residents, which demonstrated the residents'
preference for case management. Services for children are offered at an
on-site community center, including Head Start, Parents as Teachers,
Boy/Girl Scouts, and the Police Athletic League.
Factors Contributing to Current Status:
The housing authority had already begun the revitalization of Theron B.
Watkins with other public housing funds when the fiscal year 1996 HOPE
VI revitalization grant was awarded. Additionally, the receivership
improved the management of the housing authority, which ensured that
the authority had the staffing and expertise to implement its HOPE VI
grants.
Although the on-site renovation was completed by April 2000, the other
two parts of the redevelopment effort have faced challenges. The
housing authority's initial HOPE VI application included the Wayne
Miner site as a mixed-income development, but after an evaluation of
financial feasibility and market demand, the housing authority decided
that mixed-income development would not be sustainable at the site.
Thus, the housing authority had to redo its plans for the site to
include only public housing. The plans to replace the 24 demolished
Theron B. Watkins units at two, off-site, mixed-income developments
were delayed when the housing authority's fiscal years 2001 and 2002
applications for low-income housing tax credits were denied. However,
in early 2003, one of the two mixed-income developments was awarded tax
credits, and construction is expected to begin in June 2003. The
housing authority plans to reapply for tax credits for the other
development in the fall of 2003.
Tobe Hartwell Courts and Tobe Hartwell Extension, Spartanburg, South
Carolina:
The Spartanburg Housing Authority was awarded a $14.6 million HOPE VI
revitalization grant for Tobe Hartwell Courts and Tobe Hartwell
Extension in October 1996 and has completed all of the planned public
housing and homeownership units, a community center, and nearly half of
the planned tax credit units (see fig. 28).
Figure 28: Time Line for Tobe Hartwell Courts and Tobe Hartwell
Extension:
[See PDF for image]
Note: This time line is based on GAO analysis of data provided by the
Spartanburg Housing Authority.
[End of figure]
Background:
Tobe Hartwell Courts and Tobe Hartwell Extension--constructed in 1941
and 1952, respectively--contained 266 units in concrete and masonry
buildings (see fig. 28). High density, narrow streets, limited
rehabilitation options, and general disrepair characterized the
development. In 1996, incidents of crime were 19 percent higher at this
development than crime in Spartanburg public housing in general, and
nearly 40 percent of the residents did not have a high-school diploma.
The housing authority was awarded a $400,000 HOPE VI planning grant for
Tobe Hartwell Courts and Extension in May 1995.
Revitalization and Community and Supportive Services Plans:
The total projected budget for the project is $30 million, which
includes tax credit equity and private funds. The revitalization plans
for Tobe Hartwell Courts and Tobe Hartwell Extension, renamed the
Tobias Booker Hartwell Campus of Learners, call for 268 new units to be
developed in the following four phases:
* Phase one: 118 public housing replacement units and a community
center on the original site.
* Phase two: 50 single-family homes on two off-site locations.
* Phase three: 50-unit, off-site apartment complex (40 low-income
housing tax credit units and 10 public housing units).
* Phase four: another 50 low-income housing tax credit off-site units.
Of the $14.6 million in HOPE VI funds, approximately $803,000 was set
aside for community and supportive services. The community and
supportive services plan, approved in May 1998, stated that case
managers would administer the program and monitor residents' progress.
The community center would be the hub of the supportive services
component and would include a day-care facility, a computer center, a
clinic, meeting rooms, staff offices, and a combined gymnasium and
multipurpose community room.
Current Status:
The 118 replacement public housing units were completed in February
2001 and are now fully occupied (see fig. 28). All 50 homes are
complete, 36 have been sold, and contracts are in place for 7. Of the
50 tax credit units planned for phase three, all have been constructed
and accepted. Site infrastructure work is complete for phase four, and
the housing authority is awaiting the 2003 low-income housing tax
credit cycle to apply for building funds for this phase.
A needs assessment of the residents was updated in January 2000, and
provision of supportive services began in December 2000. The community
center is complete, and the day-care and health-care components are
fully operational. Classes are also under way in the computer lab, and
case managers are on-site.
Factors Contributing to Current Status:
Spartanburg Housing Authority officials believe that they have been
successful for several reasons. First, receipt of a planning grant
enabled the housing authority to thoroughly plan the revitalization. As
a result of this early planning, the housing authority made few changes
to their plans after the revitalization grant was awarded. Also,
housing authority officials emphasized that they involved their
residents early and often, enabling them to avoid the delays and
difficulties that many other housing authorities have experienced.
Moreover, housing authority officials emphasized that their previous
executive director provided strong leadership and was the driving force
behind the planning and implementation of their revitalization grant.
The financing of this grant was relatively simple compared with the
financing that other housing authorities must arrange to construct
mixed-income developments. For example, the housing authority put all
public housing units back on-site. In addition, in South Carolina, the
state housing finance agency sets aside low-income housing tax credits
for HOPE VI sites. This made it easier for the housing authority to
obtain tax credits for its off-site components.
[End of section]
Appendix V: Comments from the Department of Housing and Urban
Development:
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT WASHINGTON, D.C.
20410-5000:
OFFICE OF THE ASSISTANT SECRETARY FOR PUBLIC AND INDIAN HOUSING:
MAY 12 2003:
TO: David Wood, Director, Financial Markets and Community Investment,
U.S. General Accounting Office:
FROM: Michael Liu, Assistant Secretary for Public and Indian Housing:
SUBJECT:
Comments on GAO Draft Report, "HUD's Oversight of HOPE VI Sites Needs
to Be More Consistent" (Report to the Chairman, Subcommittee on Housing
and Transportation, Committee on Banking, Housing and Urban Affairs,
United States Senate):
HUD respectfully submits the following information for consideration in
the section of the GAO report designated for Agency Comments.
HUD would like to thank the U.S. General Accounting Office for its
thorough and perceptive review of the HOPE VI Program and the
opportunity to respond to this second report addressing HUD's
management of HOPE VI. In general, we find the report to be fair and
accurate in its assessment of the management of the program and would
like to offer additional comments and information for consideration. In
addition to the comments provided in this memorandum, Attachment 1
provides some suggestions related to specific citations in the report.
As stated, the report sought to study the following aspects of the HOPE
VI program: (1) HUD's processing for assessing HOPE VI revitalization
grant applications and selecting grantees; (2) the status of work at
sites for which grants have been awarded and compliance with grant
agreement deadlines; (3) HUD's oversight of HOPE VI grants; and (4) the
amount of program funds that HUD has budgeted for technical assistance
and the types of technical assistance it has provided.
Following careful consideration of the report, the Department agrees
with the three recommendations proposed:
(1) Continue to include the past performance as an eligibility
requirement in each year's notice of funding availability;
(2) Clarify the role of Field Offices in HOPE VI oversight and ensure
that HUD Field Offices conduct required annual reviews of HOPE VI
grants;
(3) Develop a formal written enforcement policy to hold public housing
authorities accountable for the status of their grants.
The Department appreciates GAO's support of efforts that have been
instituted to improve the HOPE VI program, including measures related
to the grant selection process and grantee performance and
accountability. The Department was pleased that GAO recognized the
decision to include criteria in the FY 2002 HOPE VI Revitalization
Notice of Funding Availability (NOFA) that would encourage readiness
and accountability. For example, GAO
recommended that the inclusion of past performance as an eligibility
criteria should be continued in future selection processes, as it can
help direct HOPE VI funds to where results can be produced most
effectively. The Department agrees with this recommendation and will
take action to incorporate it in the FY 2003 HOPE VI Revitalization
NOFA.
GAO also acknowledged that the Department has taken steps to encourage
grantees' adherence to deadlines, citing, for instance, that the
Department notified grantees in March 2002 that ten key dates could no
longer be changed in the quarterly reporting system after June 30, 2002
(page 22). While the Department appreciates GAO's recognition and
support of the institution of these "locked checkpoints," we are
concerned that the Department's commitment to ensuring grantee
performance and accountability is not duly conveyed in the report. The
Department regards the development of management tools such as the
locked checkpoint system to be a key step in the establishment of a
formalized enforcement policy, as recommended by GAO.
As stated, GAO recommends that the Department should develop a formal,
written enforcement policy to hold public housing authorities
accountable for the status of their grants. The Department agrees with
this recommendation, and will endeavor to institute responsive
measures. For example, the Department is considering possible actions
including, a schedule of fines, appointment of alternative
administration, recapture of HOPE VI funds, and penalties that would
affect a housing authority's ability to compete for non-formula grants.
We look forward to reviewing the ongoing results of your study on the
various components of the HOPE VI program. Again, we thank you for your
diligent and thoughtful review of the program.
[End of section]
Appendix VI: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
David Wood, (202) 512-8678
Paul Schmidt, (312) 220-7681:
Staff Acknowledgments:
In addition to those named above, Catherine Hurley, Kevin Jackson,
Barbara Johnson, Alison Martin, John McGrail, Sara Moessbauer, Marc
Molino, Lisa Moore, Barbara Roesmann, Paige Smith, Ginger Tierney, and
Carrie Watkins made key contributions to this report.
[End of section]
Glossary:
Case management:
An experienced case manager assesses the needs and circumstances of
each family holistically and makes referrals to an appropriate range of
service providers on the basis of priorities that these individual
assessments suggest. Also see community and supportive services.
Community and supportive services:
Services such as child care, transportation, job training, job
placement and retention services, youth programs, addictions
counseling, and parenting classes.
Community and supportive services plan:
Contains a description of the types of community and supportive
services that will be provided to residents, the proposed steps and
schedules for establishing arrangements with service providers, the
plans for actively involving residents in supportive services planning
and implementation, and a system for monitoring and tracking the
performance of the supportive services programs as well as resident
progress. Also see community and supportive services.
Consent decree:
A judicial decree that sanctions a voluntary agreement between parties
in dispute.
Defensible space program:
A program that restructures the physical layout of communities to allow
residents to control the areas around their homes and reduce crime. For
example, common entryways and grounds are replaced with private
entrances and yards.
Elderly rental unit:
A unit designated for an individual or for a family whose head, spouse,
or sole member is a person 62 years of age or older. An elderly family
may include elderly persons with disabilities and other family members
who are not elderly and who may or may not have disabilities.
Family rental unit:
A unit of affordable rental housing developed for use by two or more
persons in a development.
:
Family self-sufficiency program:
A HUD program that encourages communities to develop local strategies
to help assisted families obtain employment that will lead to economic
independence and self-sufficiency. Public housing agencies work with
welfare agencies, schools, businesses, and other local partners to
develop a comprehensive program that gives participating family members
the skills and experience to enable them to obtain employment that pays
a living wage. When a family volunteers to participate in the program,
the housing authority and the head of the family execute a contract of
participation that specifies the rights and responsibilities of both
parties. The 5-year contract specifies goals and services for each
family. The housing authority establishes an interest-bearing escrow
account for each participating family. The housing authority credits
the escrow account, based on increases in earned income of the family,
during the term of the contract. If the family completes the contract
and no member of the family is receiving welfare, the amount of the
account is paid to the head of the family.
HOPE VI demolition grant:
Awarded to housing authorities from 1996 to the present, these grants
fund the demolition of severely distressed public housing, the
relocation of residents affected by the demolition, and the
implementation of supportive services for permanently relocated
residents.
HOPE VI planning grant:
Awarded to housing authorities from 1993 to 1995, these grants were
used to fund studies for the area to be revitalized, to develop a plan
of revitalization, for economic development, and for technical support.
HOPE VI revitalization grant:
Revitalization grants--which have been awarded since the program's
inception--fund, among other things, the capital costs of major
rehabilitation, new construction, and other physical improvements;
demolition of severely distressed housing; and community and supportive
services programs for residents, including those relocated as a result
of revitalization efforts.
Low-income housing tax credit program:
Low-income housing tax credits provide tax incentives for private
investment in the development and rehabilitation of housing for low-
income households. Under this program, states are authorized to
allocate federal tax credits as an incentive to the private sector to
develop rental housing for low-income households. After the state
allocates tax credits to developers, the developers typically offer the
credits to private investors. The private investors use the tax credits
to offset taxes otherwise owed on their tax returns. The money that
private investors pay for the credits is paid into the projects as
equity financing.
Market-rate unit:
Housing unit with no income eligibility restrictions for renters or
homeowners.
Mixed-finance development:
A method of public housing development that involves a combination of
public and private financing sources and may include the ownership of
public housing units by a housing authority, or an entity other than
the housing authority in which the authority may or may not have an
ownership interest.
Mixed-finance proposal:
A proposal that must be approved by HUD prior to the development of
units financed with a combination of public and private funds. The
proposal consists of 12 sections of narrative and attachments and
includes basic descriptive information, such as the number and types of
units planned, the development schedule, and the sources and uses of
funding.
Mixed-income development:
A development that combines public housing families with other
residents of various income levels in order to decrease the economic
and social isolation of the public housing families.
Project-based Section 8 Program:
A HUD rent subsidy program that attaches the subsidy to a unit instead
of a person. Under this program, landlords are responsible for ensuring
that these units are leased only to qualified tenants and that the
units meet HUD standards.
Revitalization plan:
Consists of a series of documents and submissions that govern the
revitalization of a public housing development. The revitalization plan
includes, among other things, the grantee's HOPE VI application,
budgets, a community and supportive services plan, a relocation plan,
and any supplemental submissions that HUD requests following its review
of the HOPE VI application and as a result of a site visit to the
development.
Tax credit unit:
Units financed with low-income housing tax credit equity. Also see low-
income housing tax credit program.
Tax increment financing (TIF):
Allows a municipality to provide financial incentives to stimulate
private investment in a designated area (a TIF district) where blight
has made it difficult to attract new development. TIF can be used to
support new development or the rehabilitation of existing buildings in
industrial, commercial, residential, or mixed-use development
proposals. Funding for TIF-eligible activities is derived from the
increase in incremental tax revenues generated by new construction or
rehabilitation projects within the boundaries of the TIF district.
States determine what activities are eligible uses of TIF funds; these
activities may include land acquisition, site preparation, building
rehabilitation, public improvements, and interest subsidy.
:
(250107):
:
:
FOOTNOTES
[1] HUD did not award the 28 fiscal year 2002 revitalization grants
until March 2003; therefore, they are not covered in this report. HUD
also has awarded about $15 million in HOPE VI planning grants and
approximately $293 million in HOPE VI demolition grants, but they are
not the focus of this report.
[2] U.S. General Accounting Office, Public Housing: HOPE VI Leveraging
Has Increased, but HUD Has Not Met Annual Reporting Requirement, GAO-
03-91 (Washington, D.C.: Nov. 15, 2002).
[3] Until fiscal year 1999, the HOPE VI program operated from year to
year as a demonstration program in accordance with authorization
provided each year in appropriations acts. The Quality Housing and Work
Responsibility Act of 1998 authorized HOPE VI through the end of fiscal
year 2002. As defined in the act, severely distressed public housing
(1) requires major redesign, reconstruction, or redevelopment or
partial or total demolition; (2) is a significant contributing factor
to the physical decline of and disinvestments by public and private
entities; (3) is occupied predominantly by families that are very low-
income, whose members are unemployed, and that are dependent on various
forms of public assistance or has high rates of vandalism and criminal
activity; and (4) cannot be revitalized through assistance under other
programs.
[4] HUD had planned to develop regulations for the HOPE VI program but,
as of May 2002, had withdrawn its plans to do so.
[5] A threshold requirement is a requirement that an applicant must
meet to be eligible for a HOPE VI revitalization grant. For example,
the fiscal year 2002 NOFA states that an applicant is eligible only if
it provides a certification either that it has procured a developer for
the first phase or that it will act as its own developer. A rating
factor is a category that is used to evaluate specific aspects of the
application, such as the need for funding. For each factor, HUD can
award anywhere from zero to the maximum amount of points.
[6] Some of the 609 applications were submitted for the same public
housing site. For example, of the 66 fiscal year 2001 applicants, 43
had submitted previous applications for the same public housing site.
Of the 43 repeat applicants, 25 had applied twice, 11 had applied three
times, 3 had applied four times, and 4 had applied five times.
[7] After the state allocates tax credits to developers, the developers
typically offer the credits to private investors. The private investors
use the tax credits to offset taxes otherwise owed on their tax
returns. The money that private investors pay for the credits is paid
into the projects as equity financing.
[8] The revitalization plan includes, among other things, the grantee's
HOPE VI application, budgets, a community and supportive services plan,
a relocation plan, and any supplemental submissions that HUD requests
following its review of the HOPE VI application or as a result of a
visit to the site. The community and supportive services plan contains
a description of the supportive services that will be provided to
residents, proposed steps and schedules for establishing arrangements
with service providers, plans for actively involving residents in
planning and implementing supportive services, and a system for
monitoring and tracking the performance of the supportive services
programs as well as resident progress.
[9] For example, the need factor has also been called "Extent of Need
for Revitalization" and "Need for Funding." The capacity factor was
also called "Capability" and "Capability and Readiness." Since 1996,
HUD has evaluated the quality of the revitalization plan using terms
such as "Program Quality, Feasibility, and Sustainability" and
"Soundness of Approach."
[10] The applicant's "team" can include housing authority staff,
developer partners, program managers, property managers,
subcontractors, consultants, attorneys, financial consultants, and
other entities proposed to carry out program activities.
[11] In 1997, HUD instituted a new system--the Public Housing
Assessment System--to measure overall housing authority performance.
Because this system is still undergoing changes, applicants have not
been asked to submit their scores as part of their application.
[12] U.S. Department of Housing and Urban Development, HOPE VI: Best
Practices and Lessons Learned 1992-2002 (Washington, D.C.: June 14,
2002).
[13] Under the Public Housing Management Assessment Program, housing
authorities that received an overall score of less than 60 percent were
designated as troubled (overall). An at-risk housing authority is one
that is close to being designated as troubled.
[14] U.S. Department of Housing and Urban Development, Office of
Inspector General, Audit of the Fiscal Year 1996 HOPE VI Grant Award
Process, 98-FO-101-0001 (Washington, D.C.: Oct. 20, 1997).
[15] The results of the Inspector General's reviews of the fiscal years
1998 and 1999 award processes were captured in management letters
related to annual financial statement audits.
[16] The following 15 sites are complete: Bernal/Plaza, San Francisco,
California (fiscal year 1993 grant); Earle Village, Charlotte, North
Carolina (fiscal year 1993 grant); Outhwaite Homes/King Kennedy,
Cleveland, Ohio (fiscal year 1993 grant); Allen Parkway Village,
Houston, Texas (fiscal year 1993 grant); Hillside Terrace, Milwaukee,
Wisconsin (fiscal year 1993 grant); Quigg Newton Homes, Denver,
Colorado (fiscal year 1994 grant); Lafayette Courts, Baltimore,
Maryland (fiscal year 1994 grant); McGuire Gardens, Camden, New Jersey
(fiscal year 1994 grant); Hayes Valley, San Francisco, California
(fiscal year 1995 grant); Lexington Terrace, Baltimore, Maryland
(fiscal year 1995 grant); Valley Green/Sky Tower, Washington, D.C.
(fiscal year 1997 grant); Enterprise Drive, Helena, Montana (fiscal
year 1997 grant); Vine Hill Homes, Nashville, Tennessee (fiscal year
1997 grant); Caroline Street Apartments, New Bedford, Connecticut
(fiscal year 1998 grant); and Heritage House II, Kansas City, Missouri
(fiscal year 1998 grant).
[17] One fiscal year 1994 grant was not included in the calculation
because the grantee plans to use the grant funds to acquire, rather
than construct, homeownership units.
[18] As of December 31, 2002, 7 of the fiscal year 1999 grantees and 9
of the fiscal year 2000 grantees had not started construction. Until
these grantees start construction, we cannot be sure that the fiscal
years 1999 and 2000 grantees, as a whole, have moved faster than
earlier grantees.
[19] The percentage of HOPE VI dollars expended can be impacted by the
fact that, in some cases, other money is spent first, reserving the
HOPE VI dollars to be expended later in the project.
[20] All grants are not subject to the same time frames because the
deadlines in each year's grant agreements tend to be different.
[21] We omitted from our analysis 5 fiscal year 1995 grants that were
awarded during a second round of funding because each grantee signed a
grant agreement with HUD that contained unique deadlines specific to
that grant. The revitalization plan deadlines for the fiscal years 2000
and 2001 grants have not yet passed.
[22] We could not assess compliance for grants awarded in fiscal years
1995-99 using the data in HUD's HOPE VI reporting system because the
grant agreements stated that the activity should be completed in
accordance with the schedule in each grantee's revitalization plan,
rather than in accordance with a standard deadline.
[23] Tax increment financing allows a municipality to provide financial
incentives to stimulate private investment in a designated area, known
as a tax increment financing district.
[24] Data include current and projected production data (e.g., the
number of households relocated and the number of units demolished,
constructed, and occupied); financial information (e.g., HOPE VI funds
budgeted and expended); and key milestones (e.g., the grant award date,
the dates the revitalization and community and supportive services
plans were submitted and approved by HUD, and dates related to each
phase of construction).
[25] U.S. Department of Housing and Urban Development, Office of
Inspector General, Nationwide Audit of HOPE VI Urban Revitalization
Program, 99-FW-101-0001 (Washington, D.C.: Dec. 17, 1998).
[26] Arthur Andersen LLP, HUD Workforce Measurement Final Report -
Phase I (Washington, D.C.: Apr. 17, 2001).
[27] Prior to fiscal year 2002, HOPE VI appropriations were available
until expended. Starting in fiscal year 2002, HOPE VI appropriations
must be obligated within 2 fiscal years. Specifically, the fiscal year
2002 HOPE VI appropriations must be obligated by September 30, 2003,
while the fiscal year 2003 HOPE VI appropriations must be obligated by
September 30, 2004. For fiscal years 2002 and 2003, appropriations must
be expended within 5 years after the period of availability of
obligation.
[28] The HUD Inspector General did not publish a review of the fiscal
year 1997 HOPE VI selection process.
[29] Although the Housing Authority of Baltimore City was awarded 6
grants, 1 grant was subsequently split into 2 grants, for a total of 7
grants.
[30] Some of the threshold items were "curable," meaning that HUD would
give the applicant an opportunity to correct a technical deficiency.
Examples of curable technical deficiencies included the failure of an
applicant to include a required certification or sign a document. If
HUD identified a technical deficiency, the applicant would be notified
by fax and be required to submit information to cure the deficiency to
HUD within 14 calendar days from the date of HUD notification.
[31] A market assessment letter should (1) provide an assessment of the
demand and associated pricing structure for the proposed residential
units and any community facilities, economic development, and retail
structures and (2) be based on the market and economic conditions of
the project area.
[32] ABLA Homes consists of five contiguous sites: Jane Addams Homes,
Grace Abbott Homes, Robert Brooks Homes, Brooks Extension, and Loomis
Courts.
[33] The soft second mortgages are recorded liens for 10 years. The
amount of the soft second mortgage is forgiven at 20 percent per year
beginning with year 6. After 10 years, the equity in the home belongs
to the owner. The soft second mortgages are not transferable if the
home is sold prior to year 10.
[34] This will satisfy, in part, a federal court consent decree that
stipulates that the Jacksonville Housing Authority must create 225 new
public housing units by 2006 in designated areas of Duval County where
public housing had not previously been built.
[35] Although the revitalization plans call for 100 homeownership
units, an additional 150 market-rate homeownership units may be built
on-site, and up to 300 additional homeownership units may be built off-
site.
[36] The elderly units were modernized in March 1996 and are not
included in the HOPE VI revitalization plans.
[37] U.S. Department of Housing and Urban Development, Developer
Selection; St. Thomas HOPE VI Grant; New Orleans, Louisiana, 98-FW-201-
1813 (Fort Worth, Texas: July 24, 1998).
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