U.S. Department of Housing

and Urban Development

FY 2000–FY 2006

Strategic Plan

September 2000 

U.S. Department of Housing and Urban Development i

Table of Contents

I. INTRODUCTION................................................................................................................1

The Department’s mission is to “Promote adequate and affordable housing, 

economic opportunity, and a suitable living environment free from 

discrimination.” This section introduces you to what HUD does and outlines 

the goals to which we are committed through 2006. It offers highlights of the 

plan as a whole.

Mission................................................................................................................................2

What Does HUD Do?..........................................................................................................2

Whom Does HUD Serve? ...................................................................................................3

Streamlining the Agency.....................................................................................................3

Our Strategic Goals and Plans.............................................................................................4

II. THE CONTEXT FOR OUR STRATEGIC PLAN .........................................................7

We have shaped our plan based on HUD’s role and partnerships, research 

and trends, consultation with customers, HUD’s legislation and programs, 

and our commitment to excellence and to results.

Trends that Affect American Housing and Communities...................................................8

Recent Legislation Affecting HUD’s Work......................................................................11

HUD’s Span of Influence and Span of Control.................................................................11

HUD’s Relationships with Our Partners...........................................................................13

Feedback From Customers and Stakeholders ...................................................................15

HUD’s Performance Management Cycle..........................................................................17

III. HUD’s STRATEGIC GOALS........................................................................................19

Strategic Goal 1: Increase the Availability of Decent, Safe and Affordable 

Housing in American Communities.....................................................................................21

Safe, decent, affordable housing for all Americans is a cornerstone of our 

Nation that many of us take for granted. But it remains out of reach for 

millions of people. This section describes HUD’s strategy to increase 

homeownership, to expand affordable rental housing opportunities, and to 

improve housing quality and safety.

Objective 1.1: Homeownership is increased..................................................................28

Objective 1.2: Affordable rental housing is available for low-income households.......30
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U.S. Department of Housing and Urban Development ii

Objective 1.3: America’s housing is safer, of higher quality and disaster resistant. .....32

Strategic Goal 2: Ensure Equal Opportunity in Housing for All 

Americans...............................................................................................................................35

Over the past 30 years, America has made great strides in opening housing 

markets. But many doors still remain closed for people of color and others 

whose rights HUD is charged to protect. This section describes HUD’s 

strategy to reduce housing discrimination, ensure that housing options exist in 

the full range of neighborhoods, and increase homeownership among racial 

and ethnic minorities and persons with disabilities.

Objective 2.1: Housing discrimination is reduced.........................................................41

Objective 2.2: Minorities and low-income people are not isolated geographically in 

America..........................................................................................................................43

Objective 2.3: Disparities in homeownership rates are reduced among groups defined 

by race, ethnicity and disability status. ..........................................................................45

Strategic Goal 3: Promote Housing Stability, Self-Sufficiency and Asset 

Development of Families and Individuals............................................................................47

There are many who have not found a foothold on the path to the American 

dream. HUD administers a menu of programs that can help people move from 

poverty to self-sufficiency. This section describes HUD’s strategy to promote 

housing stability, self-sufficiency, asset development, and independence for 

homeless families and individuals, poor and disadvantaged households, the 

elderly and persons with disabilities.

Objective 3.1: Homeless families and individuals achieve housing stability. ...............53

Objective 3.2: Poor and disadvantaged families and individuals become self-sufficient 

and develop assets..........................................................................................................55

Objective 3.3: The elderly and persons with disabilities achieve maximum 

independence..................................................................................................................56

Strategic Goal 4: Improve Community Quality of Life and Economic 

Vitality.....................................................................................................................................59

Pockets of poverty continue to have devastating effects on the social and 

economic fabric of communities across the country. This section describes 

HUD’s strategy to help struggling communities create and maintain viable job 

markets, reinvigorate distressed areas and make neighborhoods more livable.

Objective 4.1: The number, quality, and accessibility of jobs increase in urban and 

rural communities. .........................................................................................................65

Objective 4.2: Economic conditions in distressed communities improve. ...................67
U.S. Department of Housing and Urban Development iii

Objective 4.3: Communities become more livable.......................................................69

Strategic Goal 5: Ensure Public Trust in HUD...................................................................71

HUD’s stewardship of billions of Federal dollars must continually earn the 

confidence of Congress and the public. HUD has just completed a 

fundamental overhaul to build performance, customer service, and 

accountability into every part of our operations. This section describes our 

plans to deliver results to customers, to lead the national discussion of 

housing and community development policy, and to prevent fraud, waste, and 

abuse in HUD program activities.

Objective 5.1: HUD and HUD’s partners effectively deliver results to customers. ......74

Objective 5.2: HUD leads housing and urban research and policy development 

nationwide......................................................................................................................81

IV. RESOURCES, INTERAGENCY PARTNERSHIPS AND 

PROGRAM EVALUATIONS ..............................................................................................83

This section provides in-depth background information on three key aspects of 

our implementation of this plan: resources, interagency partnerships, and 

program evaluations.

Resources ..........................................................................................................................83

Cross-Cutting Programs and Interagency Partnerships.....................................................86

Program Evaluations.........................................................................................................91

Appendix: Key Legislation ...............................................................................................95

Introduction

U.S. Department of Housing and Urban Development 1

I. INTRODUCTION 

The Department’s mission is to “Promote adequate and affordable housing, economic 

opportunity, and a suitable living environment free from discrimination.” This section 

introduces you to what HUD does and outlines the goals to which we are committed 

through 2006. It offers highlights of the plan as a whole. 

We are pleased to present the U.S. Department of Housing and Urban Development’s (HUD) 

Strategic Plan for fiscal year (FY) 2000–FY 2006. This plan describes HUD’s strategic goals 

for the next six years and how we plan to achieve those goals. It outlines the trends and 

challenges affecting our programs, and describes the partnerships, policies, means and 

strategies needed to ensure that HUD is a high-performing agency that fulfills our mission to 

promote adequate and affordable housing, economic opportunity and a suitable living 

environment free from discrimination.

This plan builds upon the successes and lessons learned while implementing our last 

Strategic Plan and assumes a continuation of annual increases in HUD budgets throughout 

the life of this document, as has been the trend in recent years. Based on these assumptions, 

HUD will focus on five distinct but interrelated goals, and will continue to strengthen our 

partnerships with State and local governments, public housing and redevelopment authorities, 

national for- and non-profit intermediaries, community-based non-profit organizations and 

others throughout the Nation.

This introductory section presents an overview of the Strategic Plan. It describes HUD’s 

impact on America’s communities and the challenges we face in achieving our objectives. It 

explains how we developed this plan and outlines HUD’s Strategic Goals. 

The next section presents the broader context of our strategic plan including an overview of 

recent housing and community development legislation and the trends affecting the Nation’s 

housing and communities. It offers an overview of HUD’s role and our partnerships and 

consultations with States, communities and other stakeholders.

The third section reviews each of our five Strategic Goals. It provides substantial detail about 

our objectives and performance goals, summarizes relevant research, and explains how we 

will use our programs and partnerships to achieve each goal.

The fourth section provides background information on three key aspects of our 

implementation of this plan: how we allocate resources to meet each of our Strategic Goals, 

how we partner with other Federal agencies to achieve our objectives, and how we plan to 

improve our programs through research and evaluation. We also include an appendix of 

HUD’s key legislative milestones.
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2 U.S. Department of Housing and Urban Development

MISSION

HUD’s mission is to Promote adequate and affordable housing, economic opportunity, and a 

suitable living environment free from discrimination. To fulfill this mission, HUD will be a 

high-performing, well-respected, and empowering partner with all levels of government, with 

the private sector, and with families and individuals.

WHAT DOES HUD DO? 

By working closely with our partners, HUD provides a coordinated and comprehensive 

response to America’s housing and community development needs.1 Among the key 

activities of the Department are to:

• Insure loans for first-time and low-income homebuyers to increase access to the benefits 

of homeownership.

• Provide grants to communities to help meet locally defined needs for housing, economic 

development, and infrastructure.

• Support the Nation’s Public Housing Authorities so they can provide housing for poor 

and disadvantaged families. 

• Enforce fair housing laws to ensure equal opportunity in homeownership and rental 

housing.

• Provide grants to community-based organizations and local governments to support a full 

range of assistance to people who are homeless so they can move to permanent housing. 

• Help families and individuals make progress towards self-sufficiency by providing 

housing assistance, job training, and other supportive services.

• Provide housing vouchers that give families access to safe and decent housing in 

communities with lower poverty rates and greater economic opportunity.

• Insure loans for owners of multifamily housing to increase the availability of affordable 

rental housing.

• Establish and monitor affordable housing goals for Fannie Mae and Freddie Mac to 

assure homeownership opportunities for lower-income families and for underserved 

neighborhoods.

• Provide housing-related assistance for the elderly, persons with disabilities, and people 

with HIV/AIDS.

• Provide grants to communities to remove lead based paint hazards.

 

1

 For a complete list of HUD’s programs, visit our website at www.HUD.gov or see the Annual Performance 

Plan.
Introduction

U.S. Department of Housing and Urban Development 3

WHOM DOES HUD SERVE? 

Here are a few examples of the people and communities that benefit from HUD programs:

• The home mortgages of more than 6.7 million families are insured with Federal Housing 

Administration (FHA) mortgage insurance. FHA insurance helps families afford 

homeownership.

• More than 4.5 million low-income, elderly and formerly homeless households and 

persons with disabilities receive HUD rental assistance, which enables them to afford a 

decent place to live. 

• $163.5 billion was made available to homeowners for mortgages in 1999 through HUD’s 

Government National Mortgage Association (Ginnie Mae), which channeled funds from 

investors to purchase new mortgages for approximately 1.8 million housing units. 

• Every State and about 1,000 cities receive a direct share of HUD’s Community 

Development Block Grant and a large portion also participate in the HOME Investment 

Partnerships and Housing Opportunities for People with AIDS funding so that they can 

meet locally defined needs for housing, economic development, and dozens of basic 

services. 

• HUD and HUD-approved Fair Housing agencies review or adjudicate thousands of 

housing discrimination complaints each year, taking vigorous legal action where 

appropriate. HUD has also established a myriad of voluntary agreements with lenders, 

real estate agents and builders to ensure that fair housing laws are upheld.

• Hundreds of thousands of other people benefit from programs providing home 

improvement loans, housing counseling, job creation and job training.

To fulfill our mission, HUD seeks to empower our partners at all levels of government, in the 

private sector, and among families and individuals. Our headquarters staff and 81 field 

offices work with cities, counties, States, lenders, community-based non-profit organizations, 

the housing industry, individual Americans, neighborhood organizations, and others. We 

strive to help local communities and residents use our programs to meet their needs. We 

build partnerships with other Federal agencies to maximize the benefits of Federal programs. 

In FY 2000, Congress approved a budget of over $26 billion for HUD programs. 

STREAMLINING THE AGENCY

Over the last several years, the Department has streamlined functions into specialized centers 

that use state-of-the-art technology. These include the Real Estate Assessment Center, 

Enforcement Center, Troubled Agency Recovery Centers, Homeownership Centers and the 

Section 8 Financial Management Center. All accounting operations have been combined into 

one office in Fort Worth, Texas. Field offices now concentrate on forming partnerships to 

enhance program performance rather than on technical and repetitive functions.
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4 U.S. Department of Housing and Urban Development

HUD is a leader in conducting business electronically. Examples include processing over one 

million FHA single-family mortgages online each year, automating data input from physical 

inspections of HUD housing, providing advanced geographic information to help 

communities and citizens understand local needs and plan development activities, allowing 

brokers to bid for HUD homes, enabling employees to handle travel, payroll, and benefits 

transactions, and being one of the first agencies linked through a single local area network 

and intranet. HUD’s award-winning website, www.HUD.gov, receives over 600,000 visitors 

per month.

The Department has embraced management reform and process improvement to reduce 

overlap and duplication. New investments—particularly in information systems—support 

streamlined work processes.

HUD has established performance-based management throughout the Department by 

developing and implementing Business and Operating Plans (BOPs) for each field and 

headquarters office. These internal plans set targets for the activities and products of each 

part of HUD. The BOPs align operations with Annual Performance Plan goals, while 

permitting field offices to work with local partners on unique local problems.

OUR STRATEGIC GOALS AND PLANS

In 1997, we developed our first six-year Strategic Plan for the fiscal years 1998-2003. This 

plan, combined with the HUD 2020 Management Reform Plan2, helped make the Department 

more effective and efficient. Since 1999, the Department has produced Annual Performance 

Plans that focus on achieving outcomes, in accordance with the Government Performance 

and Results Act (GPRA). HUD continues to review and strengthen these plans by better 

identifying outcomes through outreach to constituents and by improving the scope and 

accuracy of the data we collect.3

Building on this foundation we have established five strategic goals to direct our policies 

over the next six years: 

• Increase the availability of decent, safe, and affordable housing in American 

communities;

• Ensure equal opportunity in housing for all Americans;

• Promote housing stability, self-sufficiency and asset development of families and 

individuals;

• Improve community quality of life and economic vitality;

• Ensure public trust in HUD.

 

2

 For more information see “HUD 2020 Management Reform Plan” (1997).

3

 See the National Academy of Public Administration’s report “GPRA in HUD: Changes for the Better,” 

detailing the “substantial progress HUD has made...toward GPRA implementation.”
Introduction

U.S. Department of Housing and Urban Development 5

We developed our strategic plan after a great deal of thought and consultation. Among other 

groups, we consulted with Congress, the Office of Management and Budget, HUD employees 

and many of our customers and stakeholders. We continue to seek and welcome feedback. It 

will take coordinated deliberation and action, at the grassroots level and at the national level, 

to achieve our strategic goals and provide decent housing and a suitable living environment 

for all Americans.

The Context for Our Strategic Plan

U.S. Department of Housing and Urban Development 7

II. THE CONTEXT FOR OUR STRATEGIC PLAN

We have shaped our plan based on HUD’s role and partnerships, research and trends, 

consultation with customers, HUD’s legislation and programs, and our commitment to 

excellence and to results. 

Since developing our first Strategic Plan in 1997, HUD has completed a fundamental overhaul of 

our operations. We have refocused on our mission, streamlined operations, and built real 

accountability into our programs and our internal management systems. Since 1999, we have 

used Annual Performance Plans to stay focused on the specific objectives and standards we seek 

to achieve. 

This new Strategic Plan reflects what we have learned in this process. Among other changes, we 

have clarified the outcomes we seek to achieve, as well as the data we use to measure our 

progress. 

In developing this Strategic Plan, we built on HUD’s performance management cycle. We also 

examined:

• Trends that affect American housing and communities;

• HUD’s role and our programs as tools;

• Recent housing and community development legislation;

• HUD’s span of influence and span of control;

• Partnerships that help us achieve our goals;

• Feedback from customers and stakeholders about our plans and ideas. 

This section discusses the complexities inherent in achieving our mission. The broad context for 

our work on this plan has been established by the direction that Congress has given through the 

years on HUD’s purpose and programs. An appendix to this plan summarizes key legislation 

guiding HUD programs.
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8 U.S. Department of Housing and Urban Development

TRENDS THAT AFFECT AMERICAN HOUSING AND COMMUNITIES

To be effective in achieving our mission, HUD must use strategies that respond to an everchanging social, political, and technological environment. This section highlights important 

societal trends in these areas and how they affect the achievement of our Strategic Goals and 

Objectives. Our strategies for dealing with these trends, and in some cases capitalizing on them, 

are described in the “Means and Strategies” section of each Strategic Goal.

Economy. The Nation currently is experiencing the longest economic expansion in U.S. history.

• The prolonged economic boom has positively affected employment and consumer 

confidence. Combined with low interest rates, economic prosperity has led to increased 

homeownership rates. It also has led many homebuyers to seek larger single-family homes 

with more amenities. Increases in interest rates or an economic downturn, however, could 

slow or reverse increases in homeownership.

• Strong job growth has reduced unemployment and poverty in many distressed communities; 

cities are closing the poverty gap relative to suburbs. Nevertheless, these positive outcomes 

are vulnerable to macroeconomic shocks.

• Despite general economic growth, the share of income of the poorest fifth of families has 

decreased, making it more difficult for these families to compete for housing.

• In the New Economy, education in technology fields is even more crucial for obtaining highwage jobs, and low-skilled jobs that pay a living wage are becoming more scarce. 

Technological advances are creating a “digital divide” between those who have access to 

computer technologies and the Internet and those who do not. Without such access, persons 

with lower incomes are becoming more disadvantaged in the education and employment 

arenas.

Decrease in affordable housing units. The number of housing units affordable to people with 

extremely low incomes4 has declined even as the number of such households increases.

• The worst case housing needs population (unassisted very-low-income5 renters spending 

more than half of their income on housing costs or living in severely substandard rental 

housing) is increasing at twice the rate of population growth.

• Shortages of affordable housing in areas where employment is increasing constrain 

employment opportunities for extremely-low-income families.

• Higher rent burdens make it difficult to maintain self-sufficiency and accumulate assets and 

may force more people into homelessness.

• Increases in population and reductions in average household size combine to increase 

 

4

 Extremely low income is defined as income below 30 percent of area median family income.

5

 Very low income is defined as income below 50 percent of area median family income.
The Context for Our Strategic Plan

U.S. Department of Housing and Urban Development 9

household formation and, along with income increases, are creating high demand for new 

housing units.

Changes in welfare laws. Since Congress passed welfare reform legislation in 1996, States have 

developed a variety of different programs aimed at encouraging self-sufficiency.

• More Federal and State resources are being shifted from cash welfare payments to 

employment and training programs that help people move from welfare to work, creating 

challenges and opportunities for housing providers and others to promote self-sufficiency 

among assisted renters.

• The need for coordination of self-sufficiency efforts between housing assistance providers, 

welfare agencies and communities has increased. 

• Welfare time limits and work requirements may decrease income and increase costs of 

housing subsidies for some subsets of the welfare population if economic conditions do not 

support entry-level jobs.

Increasing need for housing for the elderly and persons with disabilities. There are two 

major components to this trend. First, the share of Americans who are elderly (65 years and 

older) is projected to increase from 13 percent to 20 percent of the population by 2030, with 

rapid growth beginning around 2010. The fastest growing segment of the elderly population is 

already those 85 and older. Elderly women outnumber elderly men and are most likely to live 

alone.

Second, the Supreme Court recently ruled that States must place persons with disabilities in 

community settings rather than institutions when treatment professionals determine that 

community placement is appropriate.6 As a result of this decision, more persons with disabilities 

will be moving into communities at a time when affordable housing is increasingly scarce. This 

decision will increase the need for accessible housing and housing that is linked to supportive 

services.

• Changes in the demographic composition of the population may require changes in the mix 

and design of housing.

• Demand for physically accessible housing and housing linked with supportive services is 

likely to increase. Transportation and other specific needs related to an increased elder 

population raise land use planning issues.

• A disproportionate number of the elderly poor live in cities; therefore, burdens on cities will 

increase.

Sprawl and metropolitan decentralization. Many central cities are still decreasing in 

population while their surrounding suburbs expand.

• Middle-class flight increases fiscal stress in central cities. Inner suburbs are beginning to 

 

6

 See 1999 Supreme Court decision Olmstead v. L.C.
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10 U.S. Department of Housing and Urban Development

experience similar stress as their housing ages.

• The expansion of urbanized land has far outpaced population growth for the past three 

decades through sprawl development. 

• Infrastructure spending patterns continue to drive residential and business development to the 

metropolitan fringe.

• Rapid changes in information technology are having positive and negative impacts on cities. 

Improved communication technologies reduce the need for physical centrality in the 

economy, encouraging further decentralization and the decline of cities. On the other hand, 

changes in information technology increase the salience of in-person information exchange in 

creating new products and services and make cities more profitable locations for newlyforming networks.

• There is an evolving consensus on the need for joint city-suburb Smart Growth strategies to 

address sprawl and the structural decline of some cities and older suburbs.

Building technology. Housing materials and construction methods are being transformed by 

technology.

• New information technologies have the potential to be applied to the traditionally 

disaggregated and localized housing industry, providing opportunities for significant cost 

savings in materials, processing time and construction. Dissemination of new methodologies, 

as well as low research and development spending, remain issues in this fragmented industry.

• Because of changes in housing preferences, homes will continue to grow in size and in use of 

amenities, both of which can increase energy use. However, with research and dissemination 

of energy-efficient technologies, energy costs can also be reduced, reducing operating costs 

as well as environmental impacts such as air pollution, power brownouts and urban heatisland effects.

• Continued urbanization and coastal development will place more housing at risk of natural 

disasters. However, the application of new technologies can significantly reduce damage and 

make housing more disaster-resistant.

Information technology and the Internet. Citizens’ expectations are rising and the housing 

industry is being reshaped by the use of Internet and information technology.

• In an effort to simplify their lives and save money, people increasingly utilize the Internet to 

obtain information and make transactions. People expect housing products and services to be 

available online 24 hours a day and 7 days a week.

• The housing industry is moving to address new consumer demands via the Internet by 

offering integrated, one-stop solutions to search for homes and obtain mortgage products and 

other services. The industry is also utilizing the Internet to conduct internal and business-tobusiness processes better, faster, and more cost-effectively. 
The Context for Our Strategic Plan

U.S. Department of Housing and Urban Development 11

RECENT LEGISLATION AFFECTING HUD’S WORK

The trends discussed above are a key part of the context for HUD’s activities and our Strategic 

Plan. Another critical part of this context is the housing and community development legislation 

passed by Congress and signed by the President. The following is a brief summary of recent 

legislation in these areas. Additional information on the legislative direction that guides HUD’s 

programs is provided in the appendix. 

• In 1997, Congress passed the Multifamily Assisted Housing Reform and Affordability Act of 

1997. This legislation established the Office of Multifamily Housing Assistance 

Restructuring (OMHAR) to implement the Mark-to-Market Program (M2M). Under this 

program, which is authorized through September 30, 2001, HUD’s multifamily portfolio of 

insured Section 8 housing projects will be restructured by resetting rents to market levels and 

reducing mortgage debt, if necessary, to permit a positive cash flow.

• In 1998, Congress passed the Quality Housing and Work Responsibility Act. This law 

substantially deregulates public housing authorities, institutes policies to decrease poverty 

concentrations in public housing and to promote mixed-income communities, ensures that a 

threshold share of public housing units and housing vouchers remains available for 

extremely-low-income families with the greatest needs, and creates incentives for residents to 

become self-sufficient.

• In 1997 Congress authorized and in 1998 HUD announced 15 new Empowerment Zones. 

These areas will receive a combination of tax incentives and grants over 10 years to promote 

economic opportunity and sustainable community development. In 1998, Congress also 

increased FHA’s loan limits, giving HUD the opportunity to provide more affordable 

mortgages to first-time, minority and central-city homebuyers.

• For FY 1999, Congress approved 50,000 new housing vouchers to help reduce the number of 

individuals and families with worst case housing needs and help families move from welfare 

to work. This was the first significant appropriation of new housing vouchers in four years. 

For FY 2000, Congress approved 60,000 new vouchers, demonstrating renewed commitment 

to reducing the severe shortage of affordable housing.

• In FY 1999, Congress enacted the Housing Security Plan for Older Americans, which will 

enable HUD to develop a broad range of housing options to meet the changing housing needs 

of senior citizens, and Mark-up-to-Market legislation, which protects low-income renters by 

preventing opt-outs by owners of their project-based housing assistance contracts. 

HUD’S SPAN OF INFLUENCE AND SPAN OF CONTROL

Our Strategic Plan establishes ambitious goals to ensure that our programs effectively promote 

adequate and affordable housing, economic opportunity, and a suitable living environment free 

from discrimination. Through HUD’s programs and related activities, we influence the quality of 

life in the vast majority of American communities as well as the housing choices available to 

millions of American households. Because our programs provide great flexibility for individuals 

and communities to address their own needs, however, we have limited control of the outcomes 
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12 U.S. Department of Housing and Urban Development

of our programs. In sum, we have a broad span of influence, but a much narrower span of 

control.

HUD’s broad span of influence is reflected in many aspects of our programs:

• All States and the vast majority of communities receive HUD funding for housing, economic 

development, job training, homeless assistance and infrastructure. 

• HUD provides direct and indirect rental and homeowner assistance to millions of households, 

including almost a third of low-income renters and a substantial proportion of first-time and 

minority homebuyers.

• HUD is the lead Federal agency to enforce housing related discrimination laws. HUD fair 

housing efforts are particularly targeted at low income persons and ethnic groups, minorities, 

people with disabilities and families who are experiencing significant levels of housing 

discrimination. 

• The Department has an ambitious research agenda that seeks to better understand the nature 

and dynamics of housing markets, develop more efficient housing construction techniques, 

and evaluate the impact of housing and community development programs. 

• HUD’s activities and research inform and serve as models for housing and community 

development programs internationally.

Other aspects of our programs illustrate HUD’s narrower span of control in meeting our national 

goals: 

• In FY 1999, FHA helped finance 1.2 million single-family homes, but this was only about 

one-fifth of all home purchases. 

• HUD distributes funding as flexible grants to States, cities and smaller communities. Because 

these grantees best understand their own needs, they have discretion to determine how to use 

Federal funding to support local housing and community development activities. This 

discretion brings communities together to plan their futures and ensures that their most 

important needs are met, but it makes strategic planning difficult because there are as many 

specific strategies as there are communities.

• State and local laws and regulations can have a direct impact on the success of affordable 

housing initiatives. Zoning regulations and building codes can be a barrier for housing 

development serving households with low income or special needs.

• HUD provides grants and funding to organizations such as Public Housing Authorities, State 

housing agencies, community-based organizations, and other non-governmental entities to 

deliver housing and services to American citizens. We rely on these partners to carry out our 

programs, and they often have considerable discretion in the use of funds.

• Economic conditions are a severe constraint on HUD’s span of control with respect to 

housing affordability. Hot local housing markets, limited availability of land for 

development, and continued unemployment or poverty are major factors that limit HUD’s 

ability to help more families find decent, safe and affordable housing.
The Context for Our Strategic Plan

U.S. Department of Housing and Urban Development 13

HUD’S RELATIONSHIPS WITH OUR PARTNERS 

The Nation’s housing and community development needs are complex and difficult to meet. We 

cannot accomplish our goals working in isolation. Our governing legislation makes clear that 

Congress wants HUD to work in partnership with other entities at the Federal, State, and local 

levels in both the public and private sectors. HUD fully agrees with this strategy and philosophy. 

Our Strategic Plan identifies partnership efforts with a wide variety of private and public 

organizations, and we encourage partnerships among the different entities that administer HUD 

programs. These partnerships leverage other resources, making our limited funding more 

effective. 

The following are some of the ways in which we work with our partners to achieve our Strategic 

Goals: 

Federal Agencies

This Strategic Plan discusses relationships with other Federal agencies in areas such as helping

families move from welfare to work, combating homelessness, ensuring fair housing, and 

encouraging economic development. By coordinating with other agencies, we ensure that our 

efforts are complementary and not duplicative, with each agency making unique contributions to 

these goals. Coordinating policy, funding, and regulation in this manner leads to more effective 

and holistic responses to the concerns of America’s communities. Our cross-cutting programs 

and interagency partnerships are detailed in Section IV.

State and Local Agencies

The Department relies on a range of public and private partners to provide public housing and 

assisted housing opportunities to low-income families. HUD intends to help housing providers 

improve operations and conditions and to ensure that they uphold the public trust.

• Communities that receive funds under the formula grant programs—Community 

Development Block Grants (CDBG), HOME Investment Partnerships, Emergency Shelter 

Grants (ESG) and Housing Opportunities for Persons with AIDS (HOPWA)—do so by 

developing a local Consolidated Plan that identifies local needs and strategies, through a 

process that ensures participation by low- and moderate-income residents. HUD is taking 

steps to strengthen joint accountability with our partners for achieving the locally-determined 

goals identified in their plans. The integration of these community development and housing 

programs with other HUD housing and economic development programs is critical to the 

overall success of our programs.

• HUD’s award-winning “Continuum of Care” uses a similar approach to encourage local 

partnerships that integrate a full range of services for homeless people. A Continuum of Care 

is a coordinated network of public and private homeless assistance providers serving a 

specific geographic area. Each Continuum submits a single application to compete for 

Homeless Assistance Grants. 

• One of HUD’s oldest partnerships is with local Public Housing Authorities (PHAs), which 

are established under State laws to develop, own and operate low-rent public housing using 
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14 U.S. Department of Housing and Urban Development

HUD subsidies. The partnership with PHAs has continued and evolved over the years as 

housing styles emerged and were tested, and as changes occurred in urban conditions, 

statutory requirements, funding levels, private housing markets and in the populations served. 

The progress experienced recently—through HOPE VI redevelopment of distressed housing 

and neighborhoods, statutory and regulatory reforms, funding modifications and enhanced 

performance-based oversight—bodes well for a rejuvenated public housing program that 

ensures the public trust.

• HUD depends on State Housing Finance Agencies and other State housing agencies to 

perform a variety of housing activities at the State and local level. Their work is integral to 

the successful use of HOME funds and low-income housing tax credits in communities. 

FHA’s risk-sharing agreements with State Housing Finance Agencies support increased 

affordable rental housing development. 

• In FY 1998, the Department identified 15 Round II Empowerment Zones in addition to the 

eight Round I Zones designated in 1994. Through this program, HUD encourages residents, 

States and localities—as well as private companies and non-profit organizations—to work 

together to address local needs for urban revitalization. These “EZs” are eligible for many 

benefits to support their strategic plans, including direct grants and tax incentives.

• HUD relies on State and local partners, both governmental and non-profit, to help in the fight 

for fair housing, using the Fair Housing Assistance Program (FHAP) and the Fair Housing 

Initiatives Program (FHIP). Under FHAP, agencies that enforce local laws “substantially 

equivalent” to provisions of the Fair Housing Act are treated as equal partners. Under FHIP, 

public and private organizations conduct education, outreach and enforcement activities to 

ensure compliance with fair housing laws.

• HUD relies on a nationwide network of State and local housing agencies, as well as nonprofit 

and for-profit entities, to guide owners through the Mark-to-Market restructuring process. 

HUD manages the process through portfolio restructuring agreements. HUD also has 

established partnerships with a number of other nonprofit organizations to provide technical 

assistance to tenants and communities and grants to tenant organizations. These groups will 

help organize and train tenants so they can participate meaningfully in the Mark-to-Market 

Program.

The Private Sector 

• Mortgage bankers are HUD’s largest group of for-profit partners. FHA mortgage insurance 

enables lenders to reduce interest rates, and Ginnie Mae facilitates investment in mortgages 

by packaging them in pools for resale to private investors. 

• The “One Million Homes” initiative represents a partnership among the National Association 

of Home Builders, the United States Conference of Mayors and HUD. The ambitious goal of 

this initiative is to promote the construction of an additional one million new single-family 

homes in urban areas across the Nation by 2010.

• HUD works with the business community to increase investment and economic activity in the 

most needed areas. HUD’s 1999 report New Markets: The Untapped Retail Buying Power in 

America’s Inner Cities describes the extensive potential for economic activity in both inner 

city and rural markets. Our continuing strategy will be to encourage and support private 
The Context for Our Strategic Plan

U.S. Department of Housing and Urban Development 15

sector investment in these markets.

Non-profit Community and Faith-Based Groups 

• The non-profit sector is a vital partner for HUD. Community-based and faith-based 

organizations understand local needs and are uniquely positioned to serve them. Many nonprofit organizations have direct roles, as grantees or sub-grantees, in the administration of 

HUD’s programs and the delivery of HUD-funded services. 

• Many institutions of higher education have become partners with HUD and with local 

government and non-profit groups to revitalize neighborhoods. More than 100 universities, 

colleges, and community colleges receive HUD support, which they match with their own 

resources to provide technical assistance, training, and student community service to 

organizations in low- and moderate-income neighborhoods.

International Partnerships

• HUD has enhanced our partnerships with other nations to foster mutually beneficial 

exchanges of data and information. Those cooperative efforts strengthen the Department’s 

ability to improve housing and community development in our Nation and to help other 

countries achieve similar goals. 

HUD is so convinced of the importance of partnerships that we have charged a specific set of 

employees, called Community Builders, to focus on partnerships, customer service and 

leveraging resources. Those functions used to be intermixed with other program responsibilities, 

and too often received less attention as a result. According to an independent audit, our new 

community builders are “providing increased responsiveness to community needs and 

requests...expanding outreach to new and in some cases previously under-served partners... [and] 

facilitating working partnerships furthering the Department’s mission.”

FEEDBACK FROM CUSTOMERS AND STAKEHOLDERS

In recognition of the importance of partnerships with national and local organizations and 

governments, HUD has undertaken an extensive consultation effort as part of the development of 

this Strategic Plan. We have solicited comments from all of our major constituents. 

We received comments from stakeholders through national stakeholder consultation meetings, 

regional forums with community development leaders, specific requests for comment from key 

national partners and solicitation of comments on the Department’s web page. A draft Strategic 

Plan was made available to HUD employees and outside stakeholders for comment. 

In our initial consultations, we placed a special emphasis on our partners at the local level who 

administer HUD funds. Flexible formula block grant programs provide substantial resources to 

communities around the country, but they present significant difficulties for performance 

measurement. Both the Office of Management and Budget (OMB) and the National Academy of 

Public Administration (NAPA) have encouraged HUD to strive for “joint accountability” with 

these partners.
Strategic Plan

16 U.S. Department of Housing and Urban Development

In October 1999, the Department met with Congressional staff. Through the meeting HUD 

sought input on the proposed consultation plan and the outline of the Strategic Plan. 

Congressional staff were kept informed of the subsequent consultations with other stakeholders 

and in some cases attended the consultations. 

From December 1999 through September 2000, HUD held eighteen meetings with stakeholders, 

covering most sectors of HUD’s operations, and sought additional input through concerted 

outreach to constituents. Hundreds of comments were received through meetings, phone 

conversations, letters and e-mail. These comments helped shape this plan. The consultative 

efforts led directly to the addition of our new Strategic Objective 3.3, which focuses on the 

elderly and persons with disabilities. It also led to modifications to Strategic Goal 3 and Strategic 

Objectives 3.1, 4.2 and 4.3 to better capture the type of work HUD and HUD’s partners do in 

communities. Because many comments dealt with how to measure success of specific programs 

over time, they will assist HUD in developing our future Annual Performance Plans. Many 

comments identified additional means and strategies to address our goals or suggested greater 

emphasis on certain policies, programs or partnerships. The following briefly summarizes our 

consultation process:

National organizations. The Department held a series of stakeholder meetings in Washington, 

DC, with national organizations. The discussions gave organizations and governmental entities 

with shared goals the opportunity to suggest how to better integrate HUD’s efforts with their 

work and how best to measure outcomes. Stakeholders also presented their ideas about which 

goals and performance indicators in recent Annual Performance Plans were valid, inappropriate, 

in need of improvement, or missing. Among the consulted stakeholders were many of our 

partners in States and local governments, non-profit groups, industry representatives, and 

advocates and representatives from specific interest groups. The organizations consulted 

included:

• U.S. Conference of Mayors, Community Development Committee;

• National Community Development Association, including State and local members;

• National Elderly Housing Coalition;

• Council of State Community Development Associations;

• National Low Income Housing Coalition;

• Public Housing Agency groups and advocates;

• Homeless advocates and service providers;

• Multifamily industry and tenant representatives;

• Fair Housing groups;

• Council for Excellence in Government;

• National Academy of Public Administration.
The Context for Our Strategic Plan

U.S. Department of Housing and Urban Development 17

National Partners for Homeownership. In recognition of their unique contributions to the 

advancement of the Department’s homeownership goals, the 66 national partners were 

specifically asked to comment on the Strategic Plan, paying particular attention to the 

Department’s goals related to increasing homeownership opportunities for all Americans.

Regional groups. Regional stakeholder meetings with housing and community development 

leaders around the country have been conducted with recipients and beneficiaries of the 

Department’s formula block grants. These consultations focused on how best to measure the 

success of these difficult-to-measure programs. The meetings emphasized shared outcomes, joint 

accountability and data issues that are particularly key to Community Planning and Development 

programs and other flexible grant programs. Regional stakeholder consultations were conducted 

in or near: Philadelphia, Chicago, Atlanta, and San Francisco.

Public comment. We made HUD’s draft Strategic Plan available to the public through HUD’s 

web site during August and September of 2000. Through the Internet we received hundreds of 

recommendations from a variety of HUD stakeholders. 

HUD employees. The Strategic Plan was made available for comment to all HUD staff. HUD’s 

Deputy Secretary held an all-employee broadcast specifically to solicit comments on the Strategic 

Plan. Many HUD employees submitted comments through HUD’s internal website.

HUD’S PERFORMANCE MANAGEMENT CYCLE

This Strategic Plan establishes a vision of what HUD seeks to achieve during the next six years. 

We express that vision in terms of long-term, measurable changes in American housing and 

urban conditions—our performance goals for 2006. 

Each year, we develop an Annual Performance Plan (APP). We send our APP to Congress along 

with our budget proposal to identify the results we intend to achieve with the funds that we are 

requesting. Over the next several years, HUD will further integrate these two documents to give 

Congress a better sense of the link between budget resources and outcomes.

Future APPs will specify what we will do each year to achieve the vision for 2006 articulated in 

this Strategic Plan. They will specify detailed performance indicators that will help us gauge our 

progress in achieving both our strategic goals and objectives and our six-year performance goals. 

In general, readers should consult the APPs for more information on HUD’s specific plans and 

measures for meeting our Strategic Goals.

The performance goals in this Strategic Plan will help us focus our APP indicators. Those 

indicators assess both outcomes (changes in society that our customers and stakeholders can 

readily recognize) and outputs (products of our programs that contribute to the outcomes). HUD 

has developed performance measures that cover every major program and function of the 

Department. 
Strategic Plan

18 U.S. Department of Housing and Urban Development

Once Congress acts on our budget proposal for a fiscal year, we establish internal annual plans to 

make sure we achieve our intended results. These internal, office-by-office Business and 

Operating Plans (BOPs) measure the activities and products of each part of HUD. We allocate 

resources consistent with those plans. To ensure accountability to the BOPs—and ultimately to 

the performance goals in this Strategic Plan—we evaluate performance in terms of how 

effectively organizations and individual managers contribute to those plans. BOP goals are 

included in the individual performance plans of senior managers affecting bonuses, raises and 

promotions. 

As we implement our Business and Operating Plans, we pay attention to what works and what 

does not work. That experience, in turn, feeds back into our Annual Performance Plan for the 

next year. Thus we have a complete cycle: from strategies to plans to budgets to operations to 

evaluation and ultimately back to a review of strategies. Every part of this cycle reinforces our 

focus on HUD’s mission and the measurable progress we are making toward its achievement.

HOW IT ALL TIES TOGETHER

The Strategic Planning 

process at HUD starts with 

our mission, which stems 

from our authorizing 

legislation. To fulfill our 

mission, we develop 

Strategic Goals and 

Objectives and indicators 

to measure our progress. 

We constantly tailor and 

sometimes overhaul our 

programs to better achieve 

our goals. All of this is 

done with consultation 

from Congress and our 

other partners.

HUD’s Mission

Strategic Goals

and Objectives

Societal Outcomes

(measured by Outcome Indicators)

Programs

(measured by Output Indicators)

Activities

(measured by BOP Indicators)

HUD’s programs 

produce outputs that 

support societal 

outcomes as described 

in our Annual 

Performance Plans. 

These outcomes 

contribute to our 

Strategic Goals and 

Objectives, and 

ultimately to our 

mission as described in 

this Strategic Plan. 

Business and Operating 

Plans provide the 

foundation for 

performance 

management.
HUD’s Strategic Goals

U.S. Department of Housing and Urban Development 19

III. HUD’s STRATEGIC GOALS

HUD’s five Strategic Goals and Objectives are intended to encompass the broad scope of HUD’s 

activities. The following five sections describe the means by which we intend to reach each goal, 

the program evaluations that have assisted the Department in developing policies and programs, 

and the external factors that could affect achievement of each goal. Each section also describes 

the Department’s strategic objectives and specific performance goals we seek to achieve over the 

next six years. The table below summarizes HUD’s Strategic Goals and Objectives.

HUD’s Mission, Vision, Goals, and Objectives 

HUD’s Mission: Promote adequate and affordable housing, economic opportunity, and 

a suitable living environment free from discrimination.

Vision: To fulfill our mission, HUD will be a high-performing, well-respected, and 

empowering partner with all levels of government, with the private sector, and with 

families and individuals.

Strategic Goal 1 Strategic Goal 2 Strategic Goal 3 Strategic Goal 4 Strategic Goal 5

Increase the 

availability of 

decent, safe and

affordable 

housing in 

American 

communities.

Ensure equal 

opportunity in 

housing for all 

Americans.

Promote housing 

stability, selfsufficiency and 

asset development

of families and 

individuals.

Improve community

quality of life and 

economic vitality.

Ensure public 

trust in HUD.

Strategic

Objectives

Strategic

Objectives

Strategic

Objectives

Strategic

Objectives

Strategic

Objectives

1.1 Homeownership is increased.2.1 Housing 

discrimination is 

reduced.

3.1 Homeless 

families and 

individuals achieve 

housing stability.

4.1 The number, 

quality, and 

accessibility of jobs 

increase in urban and 

rural communities.

5.1 HUD and 

HUD’s partners 

effectively deliver 

results to 

customers.

1.2 Affordable 

rental housing is 

available for lowincome households.

2.2 Minorities 

and low-income 

people are not 

isolated 

geographically in 

America.

3.2 Poor and

disadvantaged 

families and 

individuals become 

self-sufficient and 

develop assets.

4.2 Economic 

conditions in 

distressed 

communities 

improve.

5.2 HUD leads 

housing and 

urban research 

and policy 

development 

nationwide.

1.3 America’s 

housing is safer, of 

higher quality, and 

disaster resistant.

2.3 Disparities in 

homeownership 

rates are reduced 

among groups 

defined by race, 

ethnicity and 

disability status.

3.3 The elderly 

and persons with 

disabilities achieve 

maximum 

independence. 

4.3 Communities 

become more 

livable.

HUD’s Strategic Goals

U.S. Department of Housing and Urban Development 21

Strategic Goal 1:

Increase the Availability of Decent, Safe and Affordable 

Housing in American Communities

Safe, decent, affordable housing for all Americans is a cornerstone of our Nation that many 

of us take for granted. But it remains out of reach for millions of people. This section 

describes HUD’s strategy to increase homeownership, to expand affordable rental housing 

opportunities, and to improve housing quality and safety. 

OVERVIEW

Increasing the availability of decent, safe, and affordable housing for all Americans is at the heart 

of HUD’s mission. This general goal has three main components: increasing homeownership 

rates; increasing the availability of affordable rental housing for low-income households; and 

ensuring that America’s housing is safer, of higher quality and disaster resistant.

For many families, buying a home is the most important, most costly and most complicated 

financial transaction they will face—yet it is a central feature of the American Dream. HUD’s 

programs help underserved groups, including low- and moderate-income households, to receive 

the benefits of homeownership. The availability of safe, affordable and accessible rental housing, 

especially for low- and moderate-income individuals and families, strengthens the ladder to 

homeownership and self-sufficiency. Supporting new and rehabilitated housing in distressed 

communities is also an important aspect of community and economic development.

A combination of low interest rates, low unemployment, and rising incomes has helped boost 

homeownership for many. But the strong housing market has led to higher housing prices, with 

house prices rising at more than twice the rate of overall inflation and rents rising at more than 

one-and-a-half times the rate of inflation. Combined with slow income growth for low-income 

households, this has led to an increasing affordability gap. This phenomenon, documented in the 

1999 HUD report Rental Housing Assistance—The Worsening Crisis, has resulted in a record 5.4 

million households with “worst case housing needs.”7

The variation in the housing needs of different communities and populations presents additional 

challenges and requires targeted efforts. Rural and urban housing needs differ as do the 

mechanisms for delivering services to households in these areas. As the elderly population 

increases, there will be an increased demand for affordable housing that meets their special 

needs, including housing with supportive services. Persons with disabilities require accessible 

homeownership and rental housing, making it essential to enforce accessibility laws, encourage 

 

7

 Worst case housing needs are defined as unassisted very low-income renters who pay more than half of their 

income for housing or live in severely substandard housing. Very low-income families are those whose income is 

less than 50 percent of median income.
Strategic Plan

22 U.S. Department of Housing and Urban Development

appropriate building standards and ensure that assisted and supportive housing is available where 

needed.

MEANS AND STRATEGIES

The Department employs several types of programs to achieve this goal. First, there are a variety 

of loan and mortgage-insurance-related programs that increase the availability of housing loans 

to individuals and to private and public organizations. 

• In FY 1999, FHA’s Mutual Mortgage Insurance and General/Special Risk Insurance provided 

over $130 billion in loan guarantees for a range of needs, including first-time homebuyers 

and multifamily housing. 

• Ginnie Mae pools these FHA-insured loans for sale by lenders in the secondary market, 

reducing lenders’ holding costs and enabling them to make new loans. 

• Ginnie Mae also promotes homeownership in lower-income neighborhoods through the 

Targeted Lending Initiative, which reduces the securitization fee paid by lenders to Ginnie 

Mae for loans in targeted low-income areas.

• Under the Real Estate Settlement Procedures Act (RESPA), the Department regulates 

housing transactions to protect consumers from referral and unearned fees, thereby reducing 

the cost of homeownership. 

The Department also administers programs that give communities discretion to use funds to meet 

locally defined needs. A significant share of these resources is used for housing development. 

• The largest block grant program is the Community Development Block Grant program 

(CDBG). Allocated by formula to cities, urban counties and States, CDBG provides funding 

for a wide variety of locally determined needs.

• The HOME Investment Partnerships program supports housing construction, rehabilitation, 

and rental and homebuyer assistance.

• The Rural Housing and Economic Development Program builds capacity at the State and 

local level for rural housing and economic development and supports innovative housing and 

economic activities in rural areas. The program provides direct grants and supports a 

clearinghouse, which receives and disseminates information on rural issues.

• The Self-Help Homeownership Opportunity Program (SHOP) supports land and 

infrastructure costs for a low-income housing program run by the Housing Assistance 

Council. These costs are the most difficult items for local non-profits to finance. Permanent 

financing for most SHOP homes comes from Rural Housing Service Sec. 502 

homeownership loans. 

• Native American Community Block Grants and Indian Housing Block Grants support 

housing needs in Native American communities.

• Housing Opportunities for Persons with AIDS (HOPWA) funds provide a range of housing 

assistance and related support for low-income persons living with HIV/AIDS and their 
HUD’s Strategic Goals

U.S. Department of Housing and Urban Development 23

families.

• Homeless Assistance Grants can be used by communities to provide permanent housing for 

homeless people.

The largest single program the Department operates is the Section 8 rental assistance program. 

• The Section 8 program provides housing vouchers8 to approximately 1.4 million very-lowincome households, adding more each year through the enactment of appropriations for 

incremental vouchers. The vouchers help families afford the cost of rental housing of their 

choice.

• The Section 8 program also provides funding for 1.3 million units of project-based housing 

for which HUD contracts directly with housing providers. Through the Office of Multifamily 

Housing Assistance Restructuring (OMHAR) and the Mark-to-Market Program, HUD is 

cutting the cost of rent subsidies and ensuring that the project-based Section 8 program 

continues to provide decent, safe and affordable housing for very-low-income families.

• When public housing units are demolished or when private owners choose to leave the 

project-based Section 8 program, HUD seeks to maintain the overall size of the public and 

assisted housing inventory by adding to the number of vouchers serving the same locality.

HUD provides funds for 1.2 million units of public housing.

• The Public Housing Operating Fund subsidizes the operation and maintenance of public 

housing projects.

• The Public Housing Capital Fund supports modernization and rehabilitation of public 

housing, as well as development and management improvements.

• HOPE VI demolishes or revitalizes severely distressed public housing, taking substandard 

housing off the market and replacing it with a combination of vouchers and public housing 

units that are part of mixed-income developments.

Several programs help make America’s housing safer and more disaster resistant: 

• The Partnership for Advancing Technology in Housing (PATH) is a relatively new program 

with ambitious goals for promoting the use of new technology in housing production. In the 

coming years, this effort should result in more affordable, durable, disaster-resistant, safe and 

energy-efficient housing.

• The Office of Healthy Homes and Lead Hazard Control is beginning a greatly expanded 10-

year program to eliminate lead as a hazard in low-income housing occupied by families with 

children. This effort relies on a significant commitment toward correcting lead paint hazards 

in housing, scientific research, outreach and education, technical assistance and enforcement 

of Federal lead safety laws.

 

8

 Under the Section 8 Housing Choice Voucher program, a household generally pays 30 percent of its income in rent, 

and the voucher pays the difference between the household contribution and the payment standard established by the 

local housing authority. The payment standard is based on the local Fair Market Rent set by HUD.
Strategic Plan

24 U.S. Department of Housing and Urban Development

• HUD establishes standards for the manufactured housing industry to increase the durability 

and disaster resistance of all manufactured homes built with a permanent chassis for 

transportation. Since 1976, more than 5 million manufactured homes have been built under 

HUD’s consumer protections. Manufactured housing constitutes roughly one-third of all new 

single family housing sales and a majority of single family housing that is affordable for lowand moderate-income Americans.

• HUD’s 203(k) mortgage insurance helps provide financing for homebuyers who wish to 

rehabilitate their single family property. 

• Elderly homeowners can convert all or some of their home equity into cash through the 

Home Equity Conversion Mortgage (HECM) program. The cash can be used for a variety of 

purposes including rehabilitation. 

The Department employs a variety of targeted programs to meet the specific housing needs of 

people with HIV/AIDS, homeless people, the elderly, and residents of rural areas. HUD also has 

two sources for providing Section 8 tenant-based assistance to persons with disabilities. 

Program Enhancements

HUD has begun a variety of initiatives to meet the goal of increasing the availability of 

homeownership opportunities and safe and affordable rental housing.

• HUD is seeking to expand our housing voucher program with vouchers targeted to special 

needs as well as untargeted vouchers that housing agencies can use to meet locally defined 

needs. HUD’s FY 2001 budget request seeks 120,000 new vouchers, half of which target 

special needs including: 

– Homeless vouchers to help people find permanent housing; 

– Welfare-to-Work vouchers, which make housing affordable and support the transition 

from welfare to work; 

– Housing production vouchers, which will be combined with Low-Income Housing Tax 

Credits and FHA’s multifamily insurance programs to secure the construction of new 

units for extremely-low-income renters. 

• In recent years, HUD has undertaken a series of steps to improve success and utilization rates 

in the Section 8 Housing Choice Voucher program, thereby improving the effectiveness of 

this program in providing families with affordable housing. 

– HUD has requested that Congress fund a Voucher Success Fund. The fund would 

facilitate the use of vouchers by providing voucher-holders with housing search 

assistance and other services to help them locate suitable rental housing. 

– HUD raised Fair Market Rents in areas where families are experiencing difficulties using 

their vouchers from the 40th to the 50th percentile rent of standard quality apartments. 

This policy increases by 25 percent the proportion of rental units affordable to voucher 

holders in affected areas. 

– HUD has also developed a process that will rate PHAs based on the proportion of funds 

they are utilizing; PHAs that are utilizing less than 90 percent of their funds and their 
HUD’s Strategic Goals

U.S. Department of Housing and Urban Development 25

units could have their funding reduced. 

– Other recent policy changes likely to result in improved success and utilization rates 

include conversion of certificates to vouchers, discretion for PHAs to raise payment 

standards to 110 percent of the Fair Market Rent and elimination of the 120-day 

maximum search time.

• FHA is continuing to refine its automated mortgage scorecard to make FHA insurance more 

accessible and to reduce the time it takes to get an FHA loan.

• In conjunction with the Department of Treasury, HUD is seeking an increase for the LowIncome Housing Tax Credit, which gives States tax credits to allocate to developers for 

producing affordable housing. While this credit is not part of HUD’s budget, the Department 

coordinates our programs with the credit to provide additional leverage to produce and 

preserve affordable housing.

• HUD has proposed higher affordable housing goals for Fannie Mae and Freddie Mac, the two 

government-sponsored housing enterprises it regulates. These goals will ensure that more 

low-income and minority families and families in underserved areas gain access to home 

loans.

• As part of the Housing Security Plan for Older Americans, the Department supports 

construction of affordable assisted living facilities by providing operating subsidies to these 

facilities and by funding the conversion of some elderly developments. This will create new 

housing with services that support elderly Americans. 

• HUD will help expand homeownership opportunities for very-low-income families by 

facilitating and encouraging the use of Section 8 vouchers to assist those families in 

purchasing their own homes.

Program Evaluations 

In developing and implementing this Strategic Goal, the Department applies the results of 

research studies on FHA programs, public housing, Section 8, Community Development Block 

Grants, HOME and Native American Housing programs. Examples include:

• In 1999 HUD completed the final report of a study of insured multifamily housing. The 

study provides representative estimates of the extent of unfunded maintenance backlogs in 

private assisted housing and supported policy development and implementation of the Markup-to-Market legislation (Status of HUD-Insured (or Held) Multifamily Rental Housing, 

1999).

• The first phase of a long-term evaluation of the HOPE VI redevelopment program for 

distressed public housing documented that extreme poverty prevailed at 15 study sites before 

the program began (An Historical and Baseline Assessment of HOPE VI, 1996). Updated 

results are expected in 2000.

• An evaluation beginning in FY 2000 will survey a representative sample of tenants of rental 

developments funded through HOME to assess income eligibility and rent appropriateness 

over time. A 1995 evaluation showed that HOME effectively delivers affordable housing 

opportunities to communities (Evaluating the Nation’s Supply of Affordable Housing: An 
Strategic Plan

26 U.S. Department of Housing and Urban Development

Evaluation of the HOME Investment Partnership Program, 1999).

• In an ongoing study assessing the Moving To Opportunity for Fair Housing Demonstration 

(MTO), initial findings indicate that helping families move from highly concentrated areas of 

poverty with Section 8 vouchers leads to significantly improved outcomes—especially for 

families with children, and including substantially improved health status and reductions in 

children’s behavioral problems (Moving to Opportunity for Fair Housing Demonstration 

Program, 1999).

• HUD has conducted a series of research projects on the use of Section 8 vouchers. One recent 

study examined the success of giving tenants vouchers when project-based assistance is 

withheld for regulatory reasons or when an owner “opts out” upon completion of a projectbased contract. This study found that, in general, tenants have a high success rate in using 

replacement vouchers (Case Studies of the Conversion of Project-Based Assistance to 

Tenant-Based Assistance, forthcoming). Another pending study is examining the extent to 

which success rates in the Section 8 voucher program are correlated with particular agency 

policies or market conditions.

• Interim evidence from an evaluation of the Lead-Based Paint program indicates that three 

years after addressing household lead, dust lead levels were no longer a significant cause of 

elevated blood lead in children. However, clearance testing of treated units was found to 

remain necessary (Evaluation of the Lead-Based Paint Hazard Control Grant Program: 

Fifth Interim Report, 1998). The evaluation is on-going to measure the long-term 

effectiveness of the hazard control methods used, and another major report is expected in 

2001. 

• HUD has engaged the National Academy of Public Administration to assess the effectiveness 

of various methods of evaluating public housing agencies and other providers of public 

housing. An interim report is expected in November 2000.

• Among other in-house efforts, HUD is developing and is in the process of implementing an 

automated underwriting system for FHA mortgage loans (Understanding Consumer and 

Mortgage Scoring, 1999). 

• HUD is analyzing the potential of using Government-Sponsored Enterprise9 (GSE) housing 

goals to promote greater availability of affordable multifamily units (Segmentation of the 

Multifamily Mortgage Market, 2000).

• An in-house study of homeownership increases among minority and low-income households 

and the impact of homeownership initiatives, particularly FHA initiatives, was completed in 

2000. See U.S. Housing Market Conditions, February 2000.

• Four studies informed the Department’s decision in 2000 to increase the underserved 

populations goals for the GSEs, Fannie Mae and Freddie Mac. A 1998 report found that the 

GSEs generally increased their performance and exceeded existing goals during the 1996-

 

9

 There are two Government-Sponsored Enterprises—Fannie Mae and Freddie Mac—that provide a secondary 

market for home mortgages. HUD oversees GSEs and establishes public interest goals such as purchasing mortgages 

for low- and moderate-income households.
HUD’s Strategic Goals

U.S. Department of Housing and Urban Development 27

1997 period (Characteristics of Mortgages Purchased by Fannie Mae and Freddie Mac: 

1996-97 Update, 1998). This result was considered in light of two studies using historical 

data. A study of GSE performance at the metropolitan level during 1995-1996 found that the 

GSEs served minority and low- and moderate-income populations at a lower rate than did 

lenders overall (Performance of the GSEs at the Metropolitan Level, 2000). Another study 

examined GSE mortgage purchases in low-income and high-minority neighborhoods in 

metropolitan areas during the 1994-1996 period. GSE purchases were found to fall short in 

low-income tracts (mirroring primary lending activity), but not in high-minority middleincome tracts (Fannie Mae and Freddie Mac Mortgage Purchases in Low-Income and HighMinority Neighborhoods: 1994-1996, 2000). A 1998 review of HMDA coverage of the 

mortgage market found that HMDA data provide the most comprehensive picture of the 

mortgage market available, but under-report GSE acquisitions in non-metropolitan areas 

(HMDA Coverage of the Mortgage Market, 1998).

• A study of mortgage underwriting guidelines will guide policymaking to ensure fair treatment 

of all borrowers. 

External Factors

Economic conditions have a major influence on the attainment of HUD’s housing goals. Interest 

rates affect the affordability of homeownership. HUD’s target homeownership constituency of 

first-time, low-income and minority homebuyers is particularly interest-rate sensitive. As interest 

rates rise fewer and fewer can afford the initial financial hurdle or mortgage payments. 

Unemployment rates and income levels have large impacts on mortgage defaults by homeowners 

and on worst-case needs for affordable rental housing. Other unforeseen events such as energy 

crises or natural disasters could affect housing needs drastically on a regional or national scale. 

Changes in economic conditions also can affect the affordability of rental housing.

Many of HUD’s Federal, State and local government partners have great influence on tax policy, 

housing priorities, transportation, and regulatory and funding decisions. The policies of these 

partners may provide incentives or disincentives to purchase, develop, rehabilitate or preserve 

housing. Finally, the private sector controls most of the capital available for housing activities. 
Strategic Plan

28 U.S. Department of Housing and Urban Development

STRATEGIC OBJECTIVES

Objective 1.1: Homeownership is increased.

Performance Measurement: The national homeownership rate will increase to 70 

percent by the end of 2006.

Through homeownership, an individual or family makes an investment in the future. A home is 

an asset that can grow in value and provide capital for a family’s future financial needs. 

Homeownership also stabilizes neighborhoods and strengthens communities. Over the last six 

years, significant progress has been made towards President Clinton’s goal of reaching a 

homeownership rate of 67.5 percent by the end of the year 2000. The homeownership rate has 

increased from 64.2 percent at the end of 1994 to an all-time high of 67.2 percent in the second 

quarter of 2000. Much of this overall increase was due to increased homeownership rates among 

minorities and lower-income families. Since 1994, the minority homeownership rate has 

increased by nearly 10 percent and the homeownership rate of families with incomes below the 

median income has increased by 5.4 percent.

While a strong economy and low interest rates help boost homeownership, government 

involvement is also critical. HUD plays a particularly important role in increasing 

homeownership for first-time, low-income, and minority homebuyers through FHA and Ginnie 

Mae, oversight of GSEs, and other HUD programs such as HOME and the newly offered 

homeownership vouchers. 

Although not every person wishes to buy a home, the Department has decided on a bold target of 

a 70 percent homeownership rate by 2006. This target is largely driven by the Department’s 

commitment to reduce the substantial homeownership gaps between minorities and nonminorities and between lower-income and higher-income Americans. If the gap between minority 

and non-minority homeownership rates for similarly situated households were reduced by 15 

percent and the gap between the homeownership rates of higher-income and lower-income 

households were reduced by 25 percent, these improvements alone would result in a 70 percent 

homeownership rate.

This goal will be measured through the Current Population Survey.10 For the first quarter of 

2000, this survey showed a minority homeownership rate of 48 percent and a homeownership 

rate of 51.4 percent for families with incomes below the median.

See Objective 2.3 for additional information on the Department’s plans for reducing the 

disparities in homeownership rates among groups defined by race, ethnicity and disability status.

 

10 For detailed information about the sources, advantages and limitations, and validation and verification of data 

referenced in this Strategic Plan, see HUD’s Annual Performance Plan.
HUD’s Strategic Goals

U.S. Department of Housing and Urban Development 29

Means and Strategies

Increasing the availability and affordability of home mortgages. Through FHA and Ginnie 

Mae, and by setting housing goals for Freddie Mac and Fannie Mae, the Department provides a 

broad range of mortgage products and increases the liquidity of the mortgage market. These 

activities increase the attainability of mortgage credit, especially for first-time, low-income, 

minority, and central-city homebuyers. The Department also guides potential homeowners 

through the complex process of homebuying and will more efficiently provide information and 

assistance to FHA’s clients, lenders, and borrowers. We will continue to convene 

homeownership fairs and recruit businesses, local governments, and non-profits into the effort to 

boost homeownership. 

Promoting new technologies. The Partnership for Advancing Technology in Housing (PATH) 

reduces the cost of building and operating homes by helping to speed the adoption of new 

technologies. 

Construction and rehabilitation. HUD provides support to local governments to construct, 

rehabilitate and enable ownership of single-family housing through a variety of programs 

including communities’ use of HOME and CDBG. HUD also provides funding for the Self-Help 

Homeownership Opportunity Program, which uses “sweat equity” to produce affordable homes 

for new homebuyers.
Strategic Plan

30 U.S. Department of Housing and Urban Development

Objective 1.2: Affordable rental housing is available for low-income 

households.

Performance Measurement: By 2005, the number of families with children, elderly 

households and persons with disabilities with worst case housing needs will decrease by 

30 percent from the 1997 levels.

In 1997, a record 5.4 million households experienced worst case housing needs,11 including 2.0 

million families with children and 1.2 million elderly households. Housing costs exhaust the 

resources of these families, leaving them with inadequate income to meet other basic needs and 

accumulate assets. Through the means and strategies identified below, HUD seeks to reduce by 

30 percent over the next six years the number of elderly households, families with children, and 

persons with disabilities with worst case needs. This would reduce worst case needs by 

approximately 600,000 families with children, 350,000 elderly renters, and 350,000 persons with 

disabilities. By helping these households find affordable rental housing, HUD will help reduce 

the risk of eviction or homelessness and give them a greater opportunity to invest in themselves 

and their children. To meet this Objective, substantial additional funding for housing subsidies 

will be required. This goal will be measured through the biennial American Housing Survey 

conducted in 2005.

Performance Measurement: The number of units affordable to extremely-low-income 

households increases to 85 units for every 100 renters, and the number of units both 

affordable and available to very-low-income households increases to 75 units for every 

100 renters.12

One of the housing challenges facing very-low-income (VLI) and extremely-low-income (ELI) 

renters is the absolute shortage of affordable housing units available to them. This scarcity forces 

many families to pay an excessive share of their income for rent and limits their ability to locate 

near quality schools and employment opportunities. In 1997 there were 78 affordable units for 

every 100 ELI households and 69 affordable and available units for every 100 VLI households. 

These figures declined steadily during the 1990s because of decreases in the number of 

affordable units and increases in the number of very- and extremely-low-income households and 

because many affordable units are occupied by higher income renters. Achieving these targets 

would reverse the decline and restore the indicators to their 1991 levels. 

Means and Strategies

Rental assistance. HUD provides rental assistance vouchers to low-income families to ensure 

that they can afford their housing costs. Because this assistance is flexible, families can use it to 

 

11 Worst case housing needs are defined as unassisted very-low-income renters who pay more than half of their 

income for housing or live in severely substandard housing.

12 Very-low-income is defined as less than 50 percent of the area median family income; extremely-low-income is 

less than 30 percent of the area median family income. 
HUD’s Strategic Goals

U.S. Department of Housing and Urban Development 31

find housing in lower poverty communities closer to educational and economic opportunities. 

The income targeting goals included in the Quality Housing and Work Responsibility Act of 

1998 ensure that the bulk of this assistance is provided to extremely-low-income households, 

who have the greatest need for housing assistance. HUD also provides Section 8 project based 

assistance to owners of rental developments who have agreed to rent to low-income households 

at 30 percent of their income. 

Public housing. The Department supports the Nation’s public housing by providing operating 

subsidies, capital funding, and technical assistance to public housing authorities. The Department 

also helps revitalize and replace distressed public housing units so they can become a source of 

decent, safe, and affordable rental housing. The HOPE VI program is maturing into a highly 

effective way of redeveloping the most distressed public housing developments into mixedincome neighborhoods of opportunity.

Preservation of affordable housing. Preserving the affordability of the nation’s existing rental 

stock is critical to our success under this goal. HUD and our partners are working to maintain the 

affordability and good physical condition of hundreds of thousands of units across the country. 

HUD will use the Mark-to-Market program to restructure the rents and, when required, 

mortgages in affordable multifamily properties so they can be supported by prevailing rents. 

HUD views tenants as key partners in the Mark-to-Market (M2M) program, requires that they 

have an opportunity to participate in the M2M restructuring process, and provides assistance and 

training to tenants and tenant organizations so they can more effectively participate. In tight 

housing markets, where housing providers often opt out of subsidized housing for higher market 

rents, HUD will increase subsidies. This increase, known as “mark up to market” will encourage 

property owners to continue participating in the Section 8 program. Other HUD programs, 

including the HOME program and the public housing capital fund, forestall physical 

deterioration of affordable rental properties through funding for project rehabilitation.

Construction and rehabilitation. Communities use funding from the HOME Investment 

Partnerships program and CDBG to construct and rehabilitate low-income housing based on 

locally determined needs. For additional leverage, the Department will coordinate these programs 

with the Low-Income Housing Tax Credit. HUD also is expanding efforts to ensure that newly 

constructed rental housing provides adequate housing opportunities for persons with disabilities.

Increasing capital for housing production. Through housing goals that HUD sets for Fannie 

Mae and Freddie Mac, HUD increases the capital available for affordable multifamily rental 

housing. HUD also expands the amount of private capital invested in multifamily rental housing 

through FHA Multifamily Insurance. HUD is planning a new production initiative that 

coordinates FHA insurance with low-income housing tax credits and housing vouchers to expand 

the supply of rental housing affordable to extremely-low-income families.
Strategic Plan

32 U.S. Department of Housing and Urban Development

Objective 1.3: America’s housing is safer, of higher quality and disaster 

resistant.

Performance Measurement: The share of American households experiencing moderate 

or severe physical problems in their housing drops to 5.5 percent by 2005. Among verylow-income owners, the share drops to 6 percent, and among very-low-income renters, 

the share drops to 11 percent.

Improved construction methods and materials have helped make America’s housing much safer 

over the last several decades, but much remains to be done. In 1997, 7 percent of all households, 

7.5 percent of very-low-income owners, and 15 percent of very-low-income renters lived in 

housing with severe or moderate physical problems. Improving the physical condition of these 

units will make them safer, especially for children, and more disaster resistant. It will also 

improve the overall value of homes as an asset. This goal will be measured through the biennial 

American Housing Survey conducted in 2005.

Performance Measurement: The share of public and assisted housing units in 

developments that meet HUD-defined physical standards for units, buildings and 

properties will increase by 25 percentage points in public housing and by 15 percentage 

points in multifamily housing. 

HUD’s Real Estate Assessment Center (REAC) has implemented physical inspections of every 

public and assisted housing property to ensure that they meet Departmental standards. In 1999, 

the first year of inspections, 81 percent of public housing properties and 85 percent of assisted 

multifamily housing properties met HUD-defined physical standards. These standard-quality 

developments contained 62.5 percent of public housing units and 77.3 percent of assisted 

multifamily housing units. This goal sets targets of 87.5 percent of public housing units and 92.3 

percent of assisted multifamily units by 2006. 

Performance Measurement: The number of children under the age of six who have lead 

poisoning will decline dramatically.

Lead poisoning in young children can cause severe health problems including reduced 

intelligence, hearing loss, stunted growth, and behavior difficulties. The most recent data from 

the Centers for Disease Control and Prevention, covering the time period 1991-1994, shows that 

890,000 children under age six had elevated blood lead levels. Many of these children are in 

families with low incomes that are unable to afford correction of lead paint hazards. Over the 

next 10 years, the Department plans to evaluate and control lead hazards in 2.3 million housing 

units, virtually eliminating lead hazards in the Nation’s housing. These plans are dependent upon 

Congressional appropriations consistent with the request contained in the President’s Task Force 

report. 13

 

13 For details, see Eliminating Childhood Lead Poisoning: A Federal Strategy Targeting Lead Paint Hazards 

(2000). The plan can be downloaded at www.hud.gov/lea or can be obtained by calling 1-800-424-LEAD.
HUD’s Strategic Goals

U.S. Department of Housing and Urban Development 33

Means and Strategies

Promoting new technologies. The Partnership for Advancing Technology in Housing (PATH) 

will develop and disseminate technologies that will improve durability, reduce energy and 

environmental impact and be more disaster resistant—while at the same time reducing monthly 

housing costs. Specific performance objectives for the PATH program are detailed in HUD’s 

Annual Performance Plan and in the PATH Strategic and Operating Plan.

Demolition and rehabilitation of substandard housing. In an effort that began in 1993, HUD 

will support the demolition of severely distressed public housing. By 2003, 100,000 of these 

units will be demolished and replaced with mixed-income housing units and vouchers. In 

addition, CDBG and HOME funds will be used to rehabilitate units occupied by low-income 

owners and renters. HUD will also provide loans and reverse mortgages to assist homebuyers and 

homeowners who want to rehabilitate their homes.

Inspection and enforcement. HUD will regularly inspect the physical quality and visitability of 

all public and assisted housing and enforce contracts that require housing to be kept in good 

condition. The Department will also assist public housing agencies to correct any identified 

deficiencies. HUD will ensure that FHA homebuyers receive comprehensive information on 

property condition as part of the FHA appraisal. We will enforce lead paint disclosure regulations 

to ensure that buyers and renters have the information necessary to protect their children. HUD 

also will continue to work with our State and private-sector partners to ensure that manufactured 

housing is built and sold with appropriate standards and oversight.

Education. Through the Healthy Homes Initiative, HUD will campaign for greater consumer 

awareness of household hazards that contribute to childhood illnesses. PATH will identify and 

disseminate affordable disaster-resistant technologies. 

Lead hazard reduction. The President’s Task Force on Environmental Health Risks and Safety 

Risks to Children has developed a 10-year strategy for eliminating lead hazards by 2010. As part 

of this plan, HUD will apply increased resources to removing lead-based paint hazards from 

older homes and apartments and then continue to evaluate these programs to identify those that 

are the most effective. 

HUD’s Strategic Goals

U.S. Department of Housing and Urban Development 35

Strategic Goal 2:

Ensure Equal Opportunity

in Housing for All Americans

Over the past 30 years, America has made great strides in opening housing markets. But 

many doors still remain closed for people of color and others whose rights HUD is charged 

to protect. This section describes HUD’s strategy to reduce housing discrimination, ensure 

that housing options exist in the full range of neighborhoods, and increase homeownership 

among racial and ethnic minorities and persons with disabilities.

OVERVIEW

Following the assassination of Dr. Martin Luther King, Jr., Congress passed the Fair Housing 

Act as Title VIII of the Civil Rights Act of 1968. The Fair Housing Act prohibits discrimination 

in the sale, rental and financing of dwellings based on race, color, religion, sex or national origin. 

From the beginning, HUD has led the fight for fair housing by administering the Fair Housing 

Act. Studies of the incidence of housing discrimination conducted in 1978 and 1989 showed that 

alarming levels of illegal discrimination persist.

In 1988, Congress amended Title VIII to prohibit discrimination based on disability or familial 

status, to establish new administrative enforcement mechanisms, and to expand the Justice 

Department’s jurisdiction to file discrimination suits in Federal district courts. The 1988 

amendments expanded HUD’s role to include enforcement as well as the investigation and 

conciliation responsibilities created by the Fair Housing Act, and required HUD to affirmatively 

further fair housing in all its programs. The newly protected classes have proven significant 

sources of new complaints. Other amendments have expanded protections for persons with 

disabilities by requiring that certain multifamily dwellings developed after 1991 must include 

features that ensure accessibility. 

Title VI of the Civil Rights Act of 1964 also has particular relevance for HUD because it banned 

discrimination on the basis of race, color or national origin in federally assisted programs. Title 

VI covers all HUD programs except for mortgage insurance and loan guarantee programs. It 

provides for HUD’s investigation and remediation of discrimination complaints.

All of HUD’s organizations are involved in the fight for fair housing, and the Office of Fair 

Housing and Equal Opportunity (FHEO) has primary responsibility for investigating, conciliating 

and issuing determinations in cases involving discrimination. The strategic goal of ensuring equal 

opportunity in housing for all Americans has three components: reducing discrimination in the 

home purchase and rental markets, reducing the geographical isolation of minorities and lowincome households and reducing disparities in homeownership rates among racial and ethnic 

groups and persons with disabilities. 
Strategic Plan

36 U.S. Department of Housing and Urban Development

MEANS AND STRATEGIES

There are many sets of means and strategies that HUD employs to achieve this Strategic Goal: 

investigating and pursuing charges of discrimination; supporting the fair housing efforts of State 

and local partners; reducing concentrations of minorities and poor families in public and assisted 

housing; educating the public about the requirements of the Fair Housing Act; and working to 

expand the share of housing accessible to persons with disabilities.

HUD’s primary method of ensuring equal opportunity in housing is to investigate and to file 

charges upon determining that there is reasonable cause to believe a violation of the Fair Housing 

Act has occurred. The FHEO uses the following steps in fighting for fair housing.

• FHEO first attempts to conciliate complaints. If conciliation attempts fail, then FHEO 

determines whether reasonable cause exists to believe that a discriminatory housing practice 

has occurred. 

• When FHEO finds there is “reasonable cause” to believe a violation has occurred, charges are

filed and a hearing is scheduled before a HUD administrative law judge (ALJ). 

• Either party, complainant or respondent, may terminate the HUD-scheduled administrative 

proceeding by electing to move the matter to Federal court. In such cases, the Department of 

Justice prosecutes the case against the respondent, and the matter proceeds as a civil action. 

Either form of action—the ALJ proceeding or the civil action in Federal district court—is 

subject to review in the U.S. Court of Appeals.

• HUD has greatly increased referrals of criminal discrimination to the Department of Justice 

in recent years. 

• HUD also is resolving more complaints with enforcement agreements, which go beyond 

standard conciliation agreements, providing especially strong remedies for aggrieved persons 

and the public interest.

HUD relies upon State and local partners to a substantial extent to increase enforcement capacity 

and to fight for fair housing in other ways:

• HUD certifies fair housing agencies operated by State and local governments as partners in 

enforcing fair housing. 

• HUD encourages State and local governments to establish and empower substantially 

equivalent agencies and supports their operation by reimbursing their enforcement activities 

under the Fair Housing Assistance Program (FHAP). This funding is available for any State 

passing fair housing laws that are substantially equivalent to the Fair Housing Act. 

• HUD also provides grants to support private fair housing groups under the Fair Housing 

Initiatives Program (FHIP). These organizations greatly support fair housing by educating the 

public, conducting tests for discriminatory behavior, and supporting victims of 

discrimination. 

• HUD especially promotes the formation and funding of private fair housing enforcement 

organizations in underserved areas.
HUD’s Strategic Goals

U.S. Department of Housing and Urban Development 37

HUD is striving to reduce concentrations of minorities and poor families in public and assisted 

housing by enforcing Title VI requirements and requiring all housing providers to affirmatively 

further fair housing. All HUD public trust officers share the responsibility for ensuring 

compliance with fair housing under Title VI and other civil rights laws.

• HUD requires PHAs to certify annually that they will affirmatively further fair housing. 

PHAs shall be considered in compliance with this certification requirement if they examine 

their programs or proposed programs, identify any impediments to fair housing choice within 

those programs, address those impediments in a reasonable fashion and work with local 

jurisdictions to implement fair housing initiatives that require the PHAs’ involvement. 

• Grantees are required to include “analyses of impediments” to fair housing in their 

Consolidated Plans, as well as action plans for removal of impediments. Field staff from the 

Office of Community Planning and Development review these fair housing components 

when approving Consolidated Plans, and likewise consider fair housing factors under annual 

review and risk analysis processes when planning for on-site monitoring. Fair housing and 

civil rights-related issues are referred to FHEO. 

• HUD requires owners of assisted and insured multifamily projects and builders of singlefamily subdivisions to develop Affirmative Fair Housing Marketing plans to ensure that 

market information is accessible on a nondiscriminatory basis to all households, including 

persons with disabilities. Office of Housing field staff assess the completeness of affirmative 

marketing plans, and systematically assess their implementation during housing management 

reviews. These reviews include assessment of whether applicants are treated without 

discrimination, whether concentrations of families in particular parts of a project may be 

caused by discrimination, and whether applicants may be steered to particular developments.

To increase homeownership in underserved areas, HUD increases the capital available for 

mortgage loans. Ginnie Mae’s Targeted Lending Initiative reduces fees charged to lenders for 

making mortgage loans in Empowerment Zones and Enterprise Communities and adjacent areas. 

Program Enhancements

HUD is working to implement the provision of the Quality Housing and Work Responsibility 

Act that requires PHAs to develop policies to reduce concentrations of poverty in public housing.

HUD has initiated its first comprehensive review of the underwriting guidelines and automated 

underwriting systems used by Fannie Mae and Freddie Mac. These guidelines and systems are 

key to determining whether applicants for mortgages receive favorable financing rates available 

in the convention mortgage market.

HUD is charged with enforcing the requirements that public and private developers design, fund 

and construct accessibility-enhancing features in multifamily housing.

• In 2000, HUD completed a review that compared the accessibility standards of the model 

building codes with the design and construction requirements of the Fair Housing Act. This 

study was used to assist in the development of revised code language that would bring the 

International Building Code (IBC) requirements into compliance with the Fair Housing Act. 
Strategic Plan

38 U.S. Department of Housing and Urban Development

Once these code revisions have been approved for formal incorporation into the IBC, 

multifamily builders who comply with the revised IBC provisions will meet the requirements 

of the Fair Housing Act and overall compliance with the Act will increase (Final Report of 

HUD Review of Model Building Codes, 2000).

• HUD is greatly increasing education of local officials responsible for granting building 

permits and inspecting new construction. Most notably, the Department has proposed in our 

FY 2001 budget allocating $2.5 million for an Education and Outreach Initiative. The 

initiative would fund training and technical assistance to builders, developers, architects, 

building code officials and others on the accessibility requirements of the Fair Housing Act 

through a new nationwide Project of Accessibility Training and Technical Assistance.

• During physical inspections of public and FHA-insured multifamily housing, the Real Estate 

Assessment Center (REAC) measures the width of doorways and routes for accessibility by 

wheelchair. A negative response to any of the accessibility questions could be cause for 

further review by FHEO. REAC’s resident satisfaction surveys also ask questions about 

accessibility issues.

• In 2000, HUD executed a Memorandum of Understanding with the Department of Treasury 

and the Department of Justice, providing for cooperation among Federal agencies in ensuring 

that properties that receive low-income housing tax credits comply with the Fair Housing 

Act.

Program Evaluations

In continuing to develop and implement this strategic goal, the Department used research from a 

variety of studies on discrimination, housing segregation, property values, and best practices.

• In 1978, HUD completed a path-breaking study that, for the first time, measured the level of 

discrimination in American rental and home sales markets against blacks. In 1989, HUD 

measured housing discrimination for the second time, providing national estimates of 

discrimination against both blacks and Hispanics. The 1989 study estimated the overall 

incidence of housing discrimination for minority homeseekers to be: 53 percent for black 

renters, 46 percent for Hispanic renters, 59 percent for black homebuyers, and 56 percent for 

Hispanic homebuyers (Housing Discrimination Study, 1991). Now HUD is engaged in the 

most ambitious effort yet to document and analyze housing discrimination in the United 

States against blacks, Hispanics, Asians, and Native Americans. This new study, authorized 

by Congress, supports President Clinton’s One America Initiative. Using matched-pair 

testers, the study will build statistically valid measures of the extent of racial and ethnic 

discrimination by real estate agents in sales and rental markets throughout America. The 

results of this study will be used, among many ways, to target future enforcement efforts 

more effectively, to direct legislative action needed to reduce discrimination, and to create 

“Report Cards,” both for the nation and for each community studied, by which to measure

progress toward a goal of “One America” and to serve as a baseline for future measurement. 

The study is being conducted in three phases. From the result of the first phase, HUD will 

publish reports in 2001 that (1) provide a national estimate of discrimination against blacks 

and Hispanics, (2) provide Report Cards for 20 metropolitan areas, and (3) provide pilot test 

results for discrimination against Native Americans and Asians. Phases 2 and 3, to be 
HUD’s Strategic Goals

U.S. Department of Housing and Urban Development 39

completed in 2002 and 2003, will provide additional report cards. 

• A study of the impacts of the Fair Housing Initiatives Program funding upon private fair 

housing groups showed that HUD’s partners view FHIP as a successful program, but also 

identified a need for greater communication, outreach, and collaboration among all parties 

involved (An Evaluation of the FHIP Private Enforcement Initiative Testing Demonstration, 

1996). 

• In an ongoing study assessing the Moving To Opportunity for Fair Housing Demonstration 

(MTO), initial findings indicate that helping families move from highly concentrated areas of 

poverty with Section 8 vouchers leads to wider opportunities, especially for the families with 

children (Moving to Opportunity for Fair Housing Demonstration Program, 1999).

• A 1994 assessment of the location and racial composition of public housing showed that 

minority residents typically were segregated in predominantly-minority and high-poverty 

neighborhoods—leading HUD to step up Title VI enforcement and, in 2000, to publish a 

proposed rule for deconcentrating public housing buildings and developments (The Location 

and Racial Composition of Public Housing in the United States, 1994).

• A 1998 report on successful mortgage lending strategies for underserved borrowers and 

neighborhoods indicated that there are many outreach and management activities lenders can 

employ to increase their business to the traditionally underserved, while maintaining 

profitability (Successful Mortgage Lending Strategies for the Underserved, 1998).

• An assessment of the impact of dispersed housing subsidy programs on neighborhood 

property values shows negligible effects—except in very poor neighborhoods, where assisted 

housing actually improves property values (Assessing Property Value Impacts of Dispersed 

Housing Subsidy Programs, 1999).

• HUD has performed an assessment and analysis of whether newly constructed multifamily 

rental properties are in compliance with the housing accessibility requirements of the Fair 

Housing Act and is now developing a statistical analysis to assess geographic areas of noncompliance (Assessment of Multifamily Buildings’ Conformity with Accessibility Provisions,

forthcoming).

• A forthcoming report on 50 case studies in 10 metropolitan areas assesses the impact of the 

1992 amendments (which allowed many assisted housing developments to be designated as 

“elderly-only”) upon the availability of affordable housing for persons with disabilities.

• A 1998 study of discrimination in home insurance in two cities did not find reliable evidence 

of discrimination by insurance agents based on the racial and ethnic mix of neighborhoods, 

but did find differences in insurance policy options and service requirements. The study 

concluded that the scope of future research should include state designation of rating 

territories, underwriting and claim adjustments (Testing for Discrimination in Home 

Insurance, 1998).

External Factors

Social, cultural and economic conditions influence the acceptance of minorities, persons with 

disabilities and other protected classes by American citizens and the housing patterns that result. 
Strategic Plan

40 U.S. Department of Housing and Urban Development

Disparities in wealth and income levels among different groups contribute to differential access 

to homeownership, affordable and accessible rental housing and economic opportunities. 

HUD depends on the Department of Justice and State and local government partners to assist in 

the fight for fair housing. State legislation that is substantially equivalent to national fair housing 

law is critical to increase the Nation’s capacity to enforce those laws. State regulation of finance, 

insurance and real estate also affects fair housing and homeownership within specific populations 

or neighborhoods. 

Local policies, including land use controls and accessible building code enforcement, will 

continue to influence the level of discrimination, income isolation, and disparate homeownership 

rates. The private sector likewise plays a central role in achieving fair housing outcomes. 

Businesses that adopt inclusive policies as central values go far to promote justice. Finally, some 

individuals continue to discriminate because they lack awareness of their fair housing 

responsibilities.
HUD’s Strategic Goals

U.S. Department of Housing and Urban Development 41

STRATEGIC OBJECTIVES 

Objective 2.1: Housing discrimination is reduced.

Performance Measurement: Disparate treatment of racial and ethnic minorities in the 

home purchase market and in the rental market will decrease substantially, as measured 

by a housing discrimination study.

Excluding minorities from homeownership in general or from homeownership or rental housing 

in specific neighborhoods has far-reaching and hurtful impacts. There are many different types of 

discrimination that prevent minority families, persons with disabilities and other members of 

protected classes from living where they choose.

Discrimination by real estate agents occurs when they steer minorities to segregated 

neighborhoods or show prospective minority homebuyers or renters fewer available units than 

they present to non-minority families. Mortgage lending institutions sometimes discriminate by 

requiring better credit records from protected classes. Mortgage denials in the prime mortgage 

market force would-be minority homebuyers to the subprime market, where predatory lending 

practices are more common. Redlining can occur in the provision of property insurance.

Discrimination in the rental market also is a major problem. The Housing Discrimination Studies 

showed that landlords frequently discriminate against minorities by denying that units are 

available, by charging higher rents or security deposits, or by unfairly imposing other 

requirements. Measuring the level of discrimination requires periodic nationally representative 

studies using paired testers. Since the share of fair housing complaints by persons with 

disabilities has risen recently, the Department will assess how best to measure discrimination 

against these individuals.

Means and Strategies 

Enforcement. HUD will toughen enforcement against discriminatory behavior by real estate 

agents, mortgage lenders and landlords. HUD will strive for more rapid responses to initial 

complaints of discrimination to increase the deterrent effect of fair housing enforcement and to 

encourage those who experience discrimination to file complaints. Increases in the number of 

cases referred to the Department of Justice for criminal prosecution will deter discrimination 

because of the more severe penalties that can result. The Department also will continue to fight 

discrimination on the basis of disability and familial status. In addition, HUD will continue 

monitoring the secondary mortgage market for practices that may discriminate or that may 

provide liquidity for predatory lending.

Education. HUD is conducting a study to assess the extent of public understanding of Fair 

Housing law and will address the weak points. Expanding awareness of the law will build greater 

consciousness of both rights and responsibilities under the law and will increase compliance 

among citizens for whom discrimination currently exists as the vestige of obsolete habits. 

Additionally, HUD’s Community Builders will participate in hundreds of events per year that 
Strategic Plan

42 U.S. Department of Housing and Urban Development

further fair housing goals including: speaking engagements, training sessions, private/public 

forums, media campaigns and the initiation of Best Practices Agreements with lenders and other 

housing industry groups. 

Accessible rental housing. HUD will address the issue of accessible rental housing for persons 

with disabilities with renewed attention. A baseline study of accessibility compliance among the 

newly-constructed multifamily developments that are responsible under the law will establish the 

foundation for initiatives to improve compliance. At the same time, HUD is undertaking a major 

education campaign to inform State and local officials about accessibility provisions of the 

amended Fair Housing Act. The Department also is assessing accessibility in the public and 

assisted multifamily housing stock as a component of the Real Estate Assessment Center’s 

physical inspections. 
HUD’s Strategic Goals

U.S. Department of Housing and Urban Development 43

Objective 2.2: Minorities and low-income people are not isolated 

geographically in America. 

Performance Measurement: Segregation of racial and ethnic minorities and low-income 

households will decline.

The isolation of America’s minorities and poor families in distressed neighborhoods has 

increased in recent decades. Long ago, many neighborhoods lost the amenities and conditions 

that sustain mixed-income and integrated communities. Such neighborhoods risk disinvestment 

when middle-income or non-minority families leave to protect their own interests and businesses 

have difficulty becoming reestablished. Neighborhoods with extreme poverty concentrations, 

defined as 40 percent or more of their population living with incomes below the poverty level, 

can have harmful influences on children who grow up there. 

HUD seeks to maximize the housing opportunities of low-income and minority households. 

Although many individuals may voluntarily choose communities in which their racial or ethnic 

group predominates, HUD still expects that progress in reducing discrimination and expanding 

economic opportunities will reduce such segregation and geographic isolation of low-income 

households. This goal will be measured with data from the decennial Census and the new 

American Community Survey.

Means and Strategies 

Redevelopment. Public housing has been both a cause and a victim of concentrated poverty and 

concentrations of minorities in American cities. The high-rise public housing developments 

constructed in the 1960s—often situated in blighted neighborhoods by local political forces—

were ill-suited for families with children. The result often was entire neighborhoods of severely 

disadvantaged families. HUD is reversing decades of ill-conceived policy and practice by 

redeveloping distressed public housing and neighborhoods into mixed-income communities 

through the HOPE VI program. 

Public housing. HUD also has taken a great step toward ensuring that households with diverse 

incomes reside in every general-occupancy public housing development through a regulation 

published in FY 2000. Over time this rule will eliminate concentrations of the poorest families in 

particular housing developments.

Tenant-based rental assistance. One of HUD’s best tools for dispersing concentrations of 

poverty and promoting integration is to encourage households assisted with the tenant-based 

Section 8 program, especially families with children, to use their vouchers to move to 

neighborhoods outside areas of concentrated poverty.

Revitalization. HUD also will help revitalize distressed neighborhoods to make them attractive 

to middle-income families and to create employment opportunities for the unemployed. The 

Community Development Block Grant and HOME Investment Partnerships programs allow 
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44 U.S. Department of Housing and Urban Development

communities to identify the needs of low- and moderate-income families and use funds flexibly 

to meet those needs. 
HUD’s Strategic Goals

U.S. Department of Housing and Urban Development 45

Objective 2.3: Disparities in homeownership rates are reduced among groups 

defined by race, ethnicity and disability status.

Performance Measurement: The minority homeownership rate equals or exceeds 67.5 

percent of the non-minority homeownership rate. 

Homeownership in the United States has many corollary benefits such as asset accumulation, tax 

advantages, neighborhood stability and stronger school systems. Homeownership has even been 

linked to improved outcomes for children in terms of school achievement, dropout rates and 

other dimensions. 

Although different demographic groups may have different preferences for homeownership 

compared with rental housing, closing the gap in homeownership rates among these groups in 

many ways demonstrates that America is providing equal opportunity. At the end of FY 1999, the 

homeownership rate of racial and ethnic minorities was 65.2 percent of the rate for non-Hispanic 

whites. HUD’s goal—to increase the ratio to 67.5 percent by the end of 2006—is consistent with 

a significant reduction in the gap between minority and white homeownership rates for similarly 

situated households. 

We also are working to increase homeownership for persons with disabilities. HUD will develop 

and report on a measure of homeownership rates for this group in future Annual Performance 

Plans. 

Means and Strategies 

Fair lending. One of HUD’s primary means for increasing the homeownership rates of 

minorities is to ensure equal access to mortgage lending. HUD enforces fair lending law through 

FHEO. HUD also regulates the government-sponsored enterprises, Fannie Mae and Freddie Mac, 

and continually monitors their programs and practices to ensure consistency with fair lending 

requirements. Under the authority of the Federal Housing Enterprises Safety and Soundness Act, 

HUD seeks to ensure that the GSEs’ underwriting guidelines, including their automated 

underwriting systems for determining creditworthiness, treat minorities and other protected 

classes fairly. These guidelines and systems have an enormous impact on the availability of 

credit for all mortgage applicants. 

Targeted efforts. HUD also aims to increase the share of FHA single-family mortgage 

endorsements that go to minority homebuyers. Along with comparable goals for first-time 

homebuyers and central-city homebuyers—both disproportionately minority groups—this 

initiative ensures that FHA mortgage insurance reduces borrowing costs for minority homebuyers 

as well as non-minorities. By increasing Ginnie Mae activities for targeted efforts, HUD will 

make more capital available for underserved areas. Two programs promote minority 

homeownership by explicitly serving Native American communities where severe housing 

shortages continue—Indian Housing Block Grants and the Section 184 Indian Home Loan 

program. A variety of other HUD programs that benefit urban or low- and moderate-income 
Strategic Plan

46 U.S. Department of Housing and Urban Development

homeowners likewise contribute to increases in minority homeownership. These programs 

include HOME, CDBG, and Section 8 homeownership vouchers. 

Education. HUD makes special efforts to provide reliable and uniformly available information 

about the requirements and the promise of homeownership. Homeownership fairs have proven to 

be a valuable tool to increase understanding of the homebuying process and to motivate saving 

for down-payments.

Pursuant to a Memorandum of Understanding, HUD and the National Association of Realtors 

(NAR) developed a cultural diversity certification program for real estate professionals that 

reflects the letter and spirit of the Fair Housing Act and the President’s One America initiative. 

To qualify for this training, real estate professionals must be free from fair housing violations and 

complaints. Upon completion of the one-day training course and committing to specified 

principles of business conduct, the certified real estate professional will be permitted by NAR to 

use the “One America” mark and logo on a non-exclusive basis. Recertification and continued 

use of the One America mark and logo requires remaining free of fair housing violations and 

refresher training every two years.
HUD’s Strategic Goals

U.S. Department of Housing and Urban Development 47

Strategic Goal 3:

Promote Housing Stability, Self-Sufficiency and Asset 

Development of Families and Individuals

There are many who have not found a foothold on the path to the American dream. HUD 

administers a menu of programs that can help people move from poverty to self-sufficiency. 

This section describes HUD’s strategy to promote housing stability, self-sufficiency, asset 

development, and independence for homeless families and individuals, poor and 

disadvantaged households, the elderly and persons with disabilities.

OVERVIEW

The lack of stable, affordable housing undermines the health of families and communities. It 

slows progress towards self-sufficiency, hinders the educational achievement of children, and 

reduces the effectiveness of treatment and services for persons with disabilities. It can also lead 

to homelessness. 

HUD’s efforts to promote housing stability, self-sufficiency and asset development by families 

and individuals predate recent changes resulting from welfare reform and reach beyond the 

welfare population to assist the working poor. Our particular role in welfare reform stems from 

the significant overlap of families served by welfare and those served by our programs. In 1999, 

31 percent of families with children in HUD’s public and assisted housing programs also 

received Temporary Assistance for Needy Families (TANF). And in 1997, about one quarter of 

TANF recipients received housing assistance. 

For many families, progress towards self-sufficiency is dependent on finding reliable 

employment that pays enough to cover their expenses. Such families face obstacles including 

lack of affordable and available child care, lack of adequate transportation to job sites and 

inadequate skills for available job opportunities. For persons with disabilities, progress towards 

self-sufficiency can be made by finding an adequately designed home. For some, who may never 

earn enough to cover their expenses, or who have retired and live on a fixed income, progress 

towards self-sufficiency can be achieved through housing opportunities and supportive services 

that maximize independence. 

MEANS AND STRATEGIES

Promoting self-sufficiency is a substantial task that involves several Federal agencies. The 

Department of Health and Human Services (HHS) provides benefits and services including cash 

assistance, child care and health care to needy families. The Department of Labor provides job 

training to improve people’s employability. HUD complements these agencies by providing 

families and individuals with stable, affordable housing and by leveraging our relationships with 

housing providers and community development agencies to promote self-sufficiency. 
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48 U.S. Department of Housing and Urban Development

HUD contributes to self-sufficiency efforts by providing more than four million households with 

stable, affordable rental housing. HUD also has developed special programs to help families 

make the transition from welfare to work. For example, HUD provides special Welfare-to-Work 

vouchers targeted to individuals who are moving from welfare to permanent employment. The 

flexibility of housing vouchers allows recipients to move closer to job opportunities, and the 

program provides critical supportive services. HUD also will continue the Family SelfSufficiency program, which provides case management, supportive services, and an opportunity 

for asset accumulation for thousands of voucher and public housing families.

In recent years there has been increasing recognition of the importance of asset building to help 

families move out of poverty, to provide financial stability in the event of an emergency, and to 

overcome disparities in wealth between racial and ethnic groups. In addition to the Family SelfSufficiency program, HUD has other programs that help families build assets. CDBG and HOME 

funds are used by some community-based organizations to create Individual Development 

Account (IDA) programs that teach financial literacy as families build assets. IDAs are matched 

savings accounts that allow low-income families to accumulate assets for home ownership, a 

small business or education. Also, through the Section 8 Homeownership Voucher Program, 

participants can purchase homes and use their Section 8 vouchers for mortgage payments.

Capitalizing on our relationships with providers and community based organizations, HUD 

invests in the human capital of public and assisted housing residents as well as residents of lowincome neighborhoods through a wide range of programs:

• HUD’s Neighborhood Networks initiative facilitates the development of computer and 

community service centers located in public and assisted housing developments. HUD 

subsidized housing thus provides portals for low-income persons to cross the digital divide.

• The Youthbuild program trains youth in construction trades and helps them obtain GEDs.

• The Resident Opportunity and Self-Sufficiency program provides residents of public housing 

and Section 8 voucher holders with education, skills training, micro-enterprise and small 

business development support, and social services. 

• Empowerment Zones and Enterprise Communities develop job training and placement 

programs, and coordinate them with their job creation efforts.

HUD establishes strategic partnerships to provide a variety of services to assist low-income 

persons, especially residents of public and assisted housing, to move closer to self-sufficiency.

• Through the HOPE VI private sector initiative, HUD connects national employers seeking 

workers with public housing agencies and their residents. Employers then provide training 

and jobs for PHA residents.

• Through the Welfare-to-Work voucher program and through a cooperative agreement with 

HHS, HUD has created and further strengthened partnerships between public housing 

agencies, TANF and Welfare-to-Work agencies.

• By requiring agencies that receive HUD funds to give low-income residents priority access to 

job opportunities created through these funds, HUD provides economic opportunities for 
HUD’s Strategic Goals

U.S. Department of Housing and Urban Development 49

low- and very-low-income persons. This requirement is known as “Section 3.”

• Through our partnership with the national non-profit Communities in Schools, HUD seeks to 

prevent at-risk youth from dropping out of school, and to involve them in job training and 

community development activities.

• HUD’s participation in the design of the Department of Labor (DOL) Welfare-to-Work 

program has resulted in many housing authorities receiving competitive DOL grants 

individually or as part of local consortia.

• HUD is working with DOL and other Federal, State and local organizations to integrate 

HUD’s self-sufficiency programs with those of other agencies through local One Stop 

Employment Centers authorized in the Workforce Investment Act.

• HUD’s partnership with Goodwill Industries International provides state-of-the-art training, 

which leads to career-ladder jobs for public housing and other community residents. 

HUD also strives to support self-sufficiency and independent living among low-income families 

with special needs, including the elderly and persons with disabilities and their families. 

• The Department’s funding for assisted living facilities and service coordinators enhances 

independence among the elderly. 

• The Housing Opportunities for Persons With AIDS (HOPWA) program provides housing 

and supportive services to low-income people living with HIV/AIDS and their families.

• The Section 811 housing program provides grants supporting persons with disabilities.

Because domestic violence is a significant impediment to self-sufficiency and housing stability, 

public housing agencies are encouraged to give a preference in admission to victims of domestic 

violence. HUD also makes housing vouchers portable so that voucher holders can move far away 

from abusive partners. 

The Continuum of Care planning process for HUD’s homeless assistance grants encourages 

communities to develop coordinated networks of services for homeless people. The program 

requires significant leverage of HUD funding to ensure community support and to increase the 

total resources available for combating homelessness. Communities also are encouraged to use 

flexible block grant funding from the Community Development Block Grants and HOME 

programs, as well as mainstream funding from other Federal and non-Federal sources.

Program Enhancements 

• HUD is working to extend the continuum of care model to serve the elderly. This model will 

ensure that communities provide a broad range of services that enhance the independence of 

seniors.

• The Department will establish Intergenerational Learning Centers to ensure that seniors 

remain connected to the mainstream of our communities. These centers will allow seniors to 

use their skills, knowledge and energy to provide affordable child care.

• HUD is planning to target new housing vouchers to homeless families and individuals who 
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50 U.S. Department of Housing and Urban Development

are ready to make the transition to permanent housing. 

• In response to the Supreme Court’s ruling in Olmstead v. L.C., the department will lead a 

public-private partnership called “Access Housing 2000.” The partnership will help 

approximately 2,000 persons with disabilities move from institutions to community living by 

providing affordable housing and support systems. 

• HUD will intensify homeownership efforts for persons with disabilities by encouraging FHAapproved mortgagees to use increased flexibility when underwriting loan applications from 

individuals with disabilities.

• As part of a government-wide effort to eliminate barriers to employment for persons with 

disabilities, HUD has issued guidance that allows certain income to be disregarded when 

calculating rent for HUD-assisted persons with disabilities.

Program Evaluations

The Department’s focus on self-sufficiency and asset development has increased, in part, because 

of lessons learned from welfare reform and program evaluations. In addition, the continuum of 

care approach to homelessness is a function of a broader understanding of how and why families 

and individuals become homeless. Substantial recent research supports this goal:

• An evaluation of the HOPE for Elderly Independence Demonstration (HOPE IV) showed that 

service coordination for frail elderly persons improves their satisfaction with life (Evaluation 

of the Hope for Elderly Independence Program, 1999).

• A 1999 study of the long-term effects of housing assistance on self-sufficiency showed that 

after controlling for family characteristics—and contrary to popular perceptions—public and 

assisted housing had modest positive effects on the success of adults who had lived there as 

teens (The Long Term Effects of Housing Assistance on Self-Sufficiency, 2000).

• A broad study of homelessness, including programs and the people they serve, was completed 

in 1999. This Interagency Council on the Homeless study increased our understanding of 

homelessness in America in the latter half of the 1990s and confirmed that homelessness is 

associated with a broad range of problems that require coordinated programs and partnerships 

(Homelessness: Programs and the People They Serve, 1999). 

• HUD has an ongoing study assessing the Moving To Opportunity (MTO) demonstration, 

which gives families vouchers and counseling to move from highly concentrated areas of 

poverty with Section 8 assistance (Moving to Opportunity for Fair Housing Demonstration 

Program, 1999).

• In 1997, an independent longitudinal evaluation of the Gateway Transitional Families 

Program—which provided public housing residents with case management, froze rents, and 

gave access to self-sufficiency services and the opportunity to purchase a home—showed that 

although attrition was high, graduates moderately improved employment rates and earnings 

(From Dependency to Self-Sufficiency: An Appraisal of the Gateway Transitional Families 

Program, 1999). The Gateway program and evaluation have implications for Family SelfSufficiency and other self-sufficiency programs (Gateway Housing Program: Report to 

Congress, 1997).
HUD’s Strategic Goals

U.S. Department of Housing and Urban Development 51

• Through our Bridges to Work demonstration program, HUD is working with the Department 

of Transportation to evaluate the impact of providing transportation to jobs for families 

leaving welfare. Bridges to Work is a four-year demonstration program that links low-income 

work-ready central city residents with suburban jobs, transportation, child care and other 

supportive services (Evaluation of Bridges to Work, currently underway).

• An evaluation of HUD’s Shelter Plus Care Program demonstrated the difficulties of moving 

homeless people from the street directly into permanent housing and informed the 

development of the Continuum of Care approach (National Evaluation of the Shelter Plus 

Care Program, 1997).

• A 1998 study of the impacts of welfare reform on public housing demonstrated the broad 

range of fiscal impacts that PHAs and HUD could face as welfare time limits become 

effective in states and communities with varying welfare policies (Welfare Reform Impacts 

on the Public Housing Program: A Preliminary Forecast, 1998).

• A study of welfare reform by the Manpower Development Research Corporation (MDRC) 

suggested that housing subsidies can be helpful in advancing welfare reform objectives. 

Welfare reform was found to have a larger effect on employment and earnings among 

families receiving housing subsidies than among other families in the study. Housing is 

critical both as a stabilizing force and to reduce rent burdens for these families.

• Through two demonstration programs, Jobs Plus and the Neighborhood Jobs Initiative (NJI), 

MDRC is exploring the feasibility of dramatically increasing employment rates in public 

housing developments or in a distressed inner-city community. The Jobs Plus demonstration 

is scheduled for completion in 2003 (Mobilizing Public Housing Communities for Work: 

Origins and Early Accomplishments of the Jobs-Plus Demonstration, 1999). 

• The Office of Policy Development and Research (PD&R) has initiated a multi-site 

evaluation—using a rigorous experimental design—of the effects of Welfare to Work 

housing assistance on the earnings, employment, and welfare receipt of families who are 

receiving, have recently received, or would be eligible to receive TANF.

• A study of the impacts of supportive housing in Denver showed that contrary to common 

perceptions, supportive housing has neutral or positive effects on property values, crime and 

quality of life. The supportive housing included group homes, larger institutions and 

apartment-based housing for resident clients, including persons with physical or 

developmental disabilities or mental illness (Impacts of Supportive Housing on 

Neighborhoods and Neighbors, 2000).

• The first phase of an evaluation of the Family Self-Sufficiency program is examining FSS 

programs conducted by 50 public housing agencies and is studying experiences of current 

participants. Phase II of the evaluation will follow a sample of new participants for up to five 

years to assess long-term effects of the program.

External Factors

Macro forces such as unemployment and wage levels and housing market conditions affect the 

likelihood that households will be homeless or will be able to make progress towards self-
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52 U.S. Department of Housing and Urban Development

sufficiency. If the overall supply of affordable housing continues to decrease, the risk of 

homelessness might increase dramatically for many families, especially in tight housing markets. 

An economic downturn and rise in unemployment levels would place many more households at 

risk of losing their housing and reduce opportunities for self-sufficiency. These effects could be 

worse for households who are prohibited by welfare time limits from receiving additional 

assistance. On the other hand, continued economic growth and tightening labor markets should 

make self-sufficiency more attainable and stabilize the incomes and housing status of lowincome households. 

Local governments and service providers have substantial discretion in their use of homeless 

assistance and other Federal and local funding. For example, they operate TANF-funded 

programs that promote self-sufficiency, Medicaid programs that provide assistance for persons 

with disabilities, foster care programs that care for young people as they transition to adulthood, 

and education programs that prepare people for the workforce. Their decisions and ability to 

effectively deliver services will have a significant impact on homelessness, self-sufficiency, and 

the housing opportunities of the elderly and persons with disabilities.

Finally, many individual or household factors affect housing stability and the ability to be selfsufficient including domestic violence, substance abuse, disabilities and education levels.
HUD’s Strategic Goals

U.S. Department of Housing and Urban Development 53

STRATEGIC OBJECTIVES

Objective 3.1: Homeless families and individuals achieve housing stability. 

Performance Measurement: The number of persons who have successfully moved from 

HUD transitional housing to permanent housing increases by 125 percent.

The ultimate objective of homeless assistance is to help homeless families and individuals 

achieve housing stability and an appropriate level of self-sufficiency. The needs of homeless 

persons vary; some need extensive and ongoing supportive services while others need only 

affordable housing with minimal services. Where it once was viewed exclusively as an urban 

problem, research suggests that homelessness is a prevalent problem in rural areas as well. 

Working together through the Continuum of Care program design, HUD and local homeless 

assistance providers helped approximately 295,000 people make the transition to permanent 

housing by 2000. HUD and our partners will apply lessons learned during the early years of the 

Continuum of Care to serve homeless persons more effectively and to achieve greater success in 

establishing housing stability for more people. The goal is to more than double the cumulative 

population moved to permanent housing to 660,000 by the end of 2006. 

In addition, HUD will study ways to measure changes in the incidence of homelessness over 

time. HUD will also regularly assess the success or failure of homeless assistance programs.

Means and Strategies

Continuum of Care. Through the Continuum of Care process, local service providers in a 

community combine their efforts and submit a single consolidated application, explaining and 

ranking their needs. Local providers coordinate efforts to provide homeless individuals and 

families with a full range of services. Permanent housing—a critical strategy for reducing 

homelessness—is supported through the Continuum’s Supportive Housing, Shelter Plus Care, 

and Single Room Occupancy programs. This Continuum of Care model was recognized by the 

Ford Foundation and Harvard University through an “Innovations in Government” award. 

Housing assistance. HUD works to prevent homelessness through a number of housing 

assistance and housing development programs, which aid low-income families through rental 

subsidies. Some public housing agencies or private owners have preferences for admitting 

homeless applicants to public housing and to Section 8 project-based and voucher programs. 

Other HUD housing programs that fight homelessness include the HOME program and new FHA 

developments linked with the Low-Income Housing Tax Credit. When families who are 

homeless are ready to move to permanent housing they may have difficulty finding available, 

affordable housing to meet their individual needs. Therefore, HUD has sought new Section 8 

housing vouchers for those families and individuals who are ready to make the transition to 

permanent housing. 
Strategic Plan

54 U.S. Department of Housing and Urban Development

Technical assistance. HUD will assist communities in developing their Continuums of Care and 

in delivering other homeless assistance by providing technical assistance in areas such as 

supportive housing, job training and mental health services. 

Emergency shelter. The Department will continue to provide grants to communities to develop 

and maintain their emergency shelter networks. Emergency shelters can be the entry point for 

individuals and families into the Continuum of Care system. Also, through the Emergency 

Shelter Grant program, jurisdictions can use up to 30 percent of their grant for homelessness 

prevention activities such as mortgage payments, security deposits on apartments, or short-term 

rental assistance due to a sudden loss of income.

Interagency cooperation. Because the needs of homeless people can be so complex, HUD will 

continue to coordinate our services with other Federal agencies. Through the Interagency Council 

on the Homeless and other cooperative efforts, we are working to ensure that homeless people 

have access to medical care, mental health services, substance abuse treatment, and other needed 

services.
HUD’s Strategic Goals

U.S. Department of Housing and Urban Development 55

Objective 3.2: Poor and disadvantaged families and individuals become selfsufficient and develop assets.

Performance Measurement: The annual percentage growth in earnings of families in 

public and assisted housing increases.

Self-sufficiency and asset accumulation increase the economic health of communities and 

provide ongoing opportunities for personal growth. Welfare reform has brought major changes 

and reduced caseloads for welfare agencies, but many families have not experienced increases in 

their overall income. Becoming self-sufficient requires stable housing, high quality job 

opportunities, and adequate training and supportive services. HUD has a variety of tools 

available to help families achieve financial independence — not just gaining income, but 

building assets as well. Accumulated assets provide a cushion in case of an unexpected 

emergency and allow families to make investments in themselves and their communities. This 

indicator will use household data from the Multifamily Tenant Characteristics System to track 

income changes of households who remain assisted over 12-month intervals. Data will be 

adjusted for inflation, and the average change in the 2005-2006 period will be compared with a 

baseline reflecting the early years of welfare reform.

Means and Strategies

Incentives for earning income. HUD will help newly employed families save more of their 

earnings by disregarding all of their increased income for 12 months and 50 percent of their 

increased income for an additional 12 months when setting public housing rents.

Mobility. One challenge to self-sufficiency is that jobs are located a long distance from the 

people that need them. HUD will continue to support flexibility in our housing programs so 

families can live closer to job opportunities. We also will partner with other entities, such as the 

Department of Transportation, to find innovative solutions to the geographic mismatch. 

Supportive services. HUD will provide and encourage the use of supportive services to help 

individuals find quality jobs, especially residents of public and assisted housing. These services 

will include education, skills training, resident management activities, micro-enterprises, small 

business development, child care, transportation, and social support services. Community 

Builders will assist in this effort by facilitating partnerships between businesses, community 

organizations, universities and individuals. 

Developing assets. HUD will support asset development by low-income families by encouraging 

PHAs to expand self-sufficiency efforts such as the Family Self-Sufficiency program, which 

provides a major asset-building tool in the form of escrow accounts. HUD also will encourage 

the use of Individual Development Accounts for public and assisted housing residents. Through 

Section 8 homeownership vouchers, PHAs can support homeownership for low-income families.
Strategic Plan

56 U.S. Department of Housing and Urban Development

Objective 3.3: The elderly and persons with disabilities achieve maximum 

independence.

Performance Measurement: The number of affordable assisted-living units HUD 

supports, through FHA insurance, conversion of multifamily properties or Section 8 

vouchers increases. 

This new strategic objective reflects the Department’s continued emphasis on the needs of the 

growing population of elderly Americans, as well as HUD’s clear commitment to support the 

needs of persons with disabilities and their families to live independently. For these two groups, 

the term “self-sufficiency” reflects not just financial independence, but independent and assisted 

living. The key challenge of serving these constituencies is ensuring a full spectrum of housing 

and supportive services that meet their diverse needs. Currently, there are many gaps.

While most older Americans live in quality housing that is within their means and located in 

neighborhoods that they like, millions of elderly people live in housing that is in poor condition, 

costs too much, or fails to accommodate their physical disabilities. Some of them do not have 

access to the supportive services that can make the difference between continuing to live 

independently and being forced to live in institutional housing. The Department will work to help 

older people age in place—in familiar settings, close to the support of family and friends—and to 

support the development of elderly independent living facilities.

The housing situations of many persons with disabilities are likewise unacceptable. Based on 

estimates from the American Housing Survey, between 1.1 and 1.4 million households with 

non-elderly adults with disabilities have worst case housing needs. Improving the affordability, 

accessibility and physical characteristics of the Nation’s housing stock will increase selfsufficiency among Americans with disabilities.

The performance measurement for this goal reflects the Department’s ongoing concerted efforts 

to make the benefits of assisted living available to low-income elderly families and individuals. 

Additional annual measurements supporting other types of housing for the elderly and persons 

with disabilities will be developed in HUD’s Annual Performance Plans. 

Means and Strategies

Affordable housing. Through the Section 202 Supportive Housing for the Elderly program, and 

in conjunction with non-profits, HUD provides grants for a variety of housing needs, including:

• Creating housing tailored to the unique needs of seniors,

• Providing rental assistance through project rental assistance contracts,

• Converting existing elderly housing into assisted living facilities. 

Increasing affordable housing for persons with disabilities dovetails with our fair housing efforts. 

By educating officials who issue building permits and by inspecting properties, HUD promotes 

accessibility in the private housing market. To supplement this mechanism, the Department will 
HUD’s Strategic Goals

U.S. Department of Housing and Urban Development 57

provide Section 811 grants to construct facilities and to support rental assistance tailored to the 

needs of persons with disabilities.

In addition, HUD is proposing an expanded insurance program to encourage banks and 

developers, who currently are only familiar with the higher-income assisted living market, to 

develop assisted living facilities affordable to lower-income elderly persons.

Helping seniors remain in their homes. Nearly one million elderly homeowners have serious 

home rehabilitation and modification needs. By expanding the reverse mortgage program’s 

outreach and the Healthy Homes Initiative, the Department will provide seniors with information 

on how they can convert their home equity into cash and use the funds to make physical 

improvements to their homes. 

Coordinated services. Because many seniors and persons with disabilities need a variety of 

supportive services, coordination is vital. HUD-funded service coordinators will help the elderly 

and persons with disabilities live more independently by identifying and helping obtain needed 

services. Furthermore, the Department will better integrate housing assistance with Medicaid 

funding, in part by allowing housing vouchers to pay for the rent in assisted living facilities.

Independent living. To support independent living for elderly families, the Department issued 

policy guidance specifying that Section 8 vouchers may now be used in assisted living facilities.

HUD’s Strategic Goals

U.S. Department of Housing and Urban Development 59

Strategic Goal 4:

Improve Community Quality of Life

and Economic Vitality

Pockets of poverty continue to have devastating effects on the social and economic fabric of 

communities across the country. This section describes HUD’s strategy to help struggling 

communities create and maintain viable job markets, reinvigorate distressed areas and make 

neighborhoods more livable. 

OVERVIEW

In 2000, the unemployment rate is lower than it has been in 30 years. Employment rates have 

increased for both women and minorities. But concentrations of poverty and joblessness continue 

to have devastating effects on the social and economic fabric of communities across the country. 

A key to reviving these markets is expanding access to private equity investment in businesses 

and industries that serve these communities. The Nation’s economic challenges are not confined 

to the cities and suburbs in metropolitan areas. Many rural communities are struggling as well—

especially in Appalachia, the Mississippi Delta, Indian country, and the borderland colonias. 

Even in this era of unprecedented national prosperity, many of these areas have alarmingly high 

unemployment and poverty rates.

The goal of improving communities is core to HUD’s mission, and the Department contributes to 

this goal in a variety of ways, including: creating and supporting economic opportunities, funding 

public infrastructure costs, promoting sensible growth planning, and providing safe and 

affordable housing. 

Many of HUD’s programs help create communities of opportunity. Grants administered by the 

Office of Community Planning and Development will continue to provide many of the tools and 

resources that localities need to improve quality of life and economic vitality in poorer 

neighborhoods. HUD’s work on the Administration’s New Markets Initiative will support the 

interagency effort to stimulate greater private sector participation in economically distressed 

areas.

14

Promoting economic competitiveness in the 21st century while making communities more 

livable is a cross-cutting challenge requiring the participation of many Federal agencies, State 

and local governments, community groups and the private sector. HUD will complement the 

efforts of our partners by attracting private capital for economic development to underserved 

 

14 The New Markets Initiative is a multi-agency effort, proposed by the President, that will bring investment to urban 

and rural areas that have not participated in the Nation's recent economic expansion. More information about these 

areas can be found in HUD's report: Now is the Time: Places Left Behind in the New Economy.
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60 U.S. Department of Housing and Urban Development

neighborhoods and by targeting housing and infrastructure improvement resources to these 

communities. 

Broad, sustainable economic prosperity requires not just growing, but growing smarter. Smarter 

planning for growth will reduce disparities between cities and suburbs and will increase job 

growth and accessibility. HUD’s housing programs also support this objective by increasing the 

quality of housing in distressed neighborhoods and by reducing concentrations of poverty.

MEANS AND STRATEGIES

HUD focuses economic development grants and loan guarantees on distressed areas in order to 

stimulate much larger investments in job creation from the private, non-profit, and public sectors. 

• CDBG grants—HUD’s largest source of community and economic development funding—

provide much-needed resources for poorer, slow-growing, distressed areas. Within these 

areas, low- and moderate-income residents are the primary beneficiaries of CDBG funds. 

• The Department also supports economic development in low-income areas. 

– The Section 108 loan guarantee program provides local governments with a source of 

financing for economic development, housing rehabilitation and other large scale physical 

development projects.

– The Empowerment Zone/Enterprise Communities program supports self-sustaining longterm economic development in distressed communities in partnership with private, 

public, and non-profit entities. 

– The Brownfields Economic Development Initiative supports redevelopment efforts on 

brownfield sites where either perceived or actual environmental threats are known to 

exist. 

– The Rural Housing and Economic Development Program builds capacity at the State and 

local levels for rural housing and economic development and supports innovative housing 

and economic activities in rural areas. The program provides direct grants and supports a 

clearinghouse that receives and disseminates information on rural issues.

– The Self-Help Homeownership Opportunity Program (SHOP), funded by HUD, supports 

land and infrastructure costs for the low-income housing program run by the Housing 

Assistance Council. These costs are the most difficult items for local non-profit 

organizations to finance. Permanent financing for most SHOP homes comes from the 

Rural Housing Service’s Sec. 502 homeownership loan program.

– The Section 242 program provides mortgage insurance for hospitals, helping urgently 

needed facilities obtain affordable financing for construction, modernization and 

expansion projects that establish and support them as community anchors and major 

employers. 

• The Consolidated Planning process enables communities to identify the neediest areas and 

target Federal grants and local resources for priority needs. 
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• Through the Youthbuild program, the Department provides education, employment training 

and work opportunities to economically disadvantaged young adults.

• HUD’s Community Builders work with communities, non-profits, and businesses to develop 

partnerships and increase local capacity to address community needs. In particular, they are 

working with grantees across the country to develop better approaches to job and workforce 

development. 

• Community Builders and other HUD staff bring together grantees and local businesses 

through mailings, conferences, the Internet, trade association meetings and other outreach 

efforts. These collaborations strengthen the connections within communities and build the 

capacity of local businesses, including many minority- and women-owned businesses, to 

create jobs. 

• The Department actively encourages minority- and women-owned small businesses, often 

located in distressed areas, to apply for HUD contracts. 

• HUD’s partnerships with colleges and universities help them apply their human, intellectual, 

and institutional resources to the challenge of revitalizing distressed communities.

• In cooperation with national veteran service organizations and other Federal agencies, HUD 

established the Veteran Resource Center (HUDVET) to help military veterans participate in 

the planning, delivery and utilization of community-based programs and services.

To ensure that more housing capital is available in certain communities, HUD establishes 

suitable underserved area goals for the GSEs—Fannie Mae and Freddie Mac—and actively 

encourages the use of FHA and Ginnie Mae resources in poorer neighborhoods.

To better serve rural communities, the Department has established the Rural Housing and 

Economic Development program to create jobs, spark economic development, and build and 

improve housing in rural communities. In addition, where HUD defines underserved areas for the 

purpose of targeting single-family and multifamily housing resources, the definition includes 

distressed rural areas. HUD also has developed the Native Economic Development Guidance and 

Empowerment (Native eDGE) website to promote economic development in tribal areas.

HUD has become more actively involved in building safer communities in recent years. 

Initiatives have included: the Public Housing Drug Elimination Grant program; efforts to 

demolish and/or modernize public housing; the Officer Next Door program; the Gun Buyback 

initiative; and enforcing the “one strike-you’re out” policy that supports screening applicants and 

evicting assisted housing residents who commit crimes or sell drugs.

Program Enhancements

As part of the New Markets Initiative, HUD has designed America’s Private Investment 

Companies (APIC) to increase private investment in high-poverty areas. Working with the 

Treasury Department on tax incentives and with the Small Business Administration on small 

business financing, HUD will operate the APIC program. HUD brings our expertise in largescale development—particularly development that links job creation with other important 

elements of community development.
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62 U.S. Department of Housing and Urban Development

Through designation of a third round of Empowerment Zones (EZs) and Enterprise Communities 

(ECs) and through support to current EZ/ECs, HUD will create jobs and business opportunities 

for residents of economically distressed parts of urban and rural America.

The Department created the Community Empowerment Fund Pilot as a financing vehicle to 

demonstrate how to increase the market for the Section 108 Loan Guarantee Program by 

streamlining the processing of loan requests, reducing the loan servicing burden, and using 

private sector underwriting and loan pricing.

The Department will encourage and support community development and economic 

revitalization efforts in the Mississippi Delta Region as part of the President’s Mississippi Delta 

Initiative.

HUD’s Center for Community and Interfaith Partnerships is designed to help faith-based housing 

and community development programs in impoverished communities succeed in creating more 

affordable housing, jobs and economic opportunity for Americans in need. 

The Department is participating in the “One Million Homes” initiative, a partnership with the 

National Association of Homebuilders and the U.S. Conference of Mayors. This collaboration, 

which supports in-fill development and combats urban sprawl, will promote the construction of 

an additional one million housing units in urban areas across the Nation by 2010. 

Economic growth in distressed areas should benefit the residents of those neighborhoods. In the 

many communities where growth results in tight housing markets, HUD has revised our Fair 

Market Rent policy so that more housing is affordable to families with Section 8 housing 

vouchers. The Department also will encourage Section 8 voucher holders to purchase homes with 

their vouchers. These homeowners will have a greater stake in improving their neighborhoods, 

and they will increase their assets through rising real estate values.

Program Evaluations

In 1997, the President directed HUD to report annually on the social and economic vitality of 

America’s cities. The Administration also launched its New Markets Initiative, which further 

challenged HUD to assess places left behind in the new economy and opportunities for new 

economic markets in America. The Department also has studied the broader impact of HUD 

funds in America’s communities:

• The State of the Cities 2000 report identified four megaforces that are shaping the future of 

the Nation’s cities and presented findings showing their impact. The first is the new hightech, global economy, which has been a driver of recent economic expansion in the United 

States. New technologies in information and telecommunications—coupled with greater 

productivity—have produced record economic gains along with new opportunities and risks 

for the Nation’s cities and suburbs. A second factor is the new demography that is reshaping 

cities. Major demographic shifts under way will have significant economic, social, and 

political implications for both cities and suburbs. The Nation is rapidly becoming more 

ethnically diverse, and at the same time our elderly population is growing dramatically. A 

third megaforce is the new housing challenge that threatens housing affordability. With the 
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U.S. Department of Housing and Urban Development 63

strong economy have come higher rents and housing prices, in some markets affecting all 

income groups in both cities and suburbs. Finally, the fourth is the powerful trend of 

continued decentralization—the continuing shift of jobs and people to the metropolitan 

edge—that is threatening the stability of existing communities and the development of new 

livable, sustainable communities. 

• Several recent HUD reports document the needs of communities that have yet to participate 

in the economic expansion (Now is the Time: Places Left Behind in the New Economy

(1999); Now is the Time: Places Left Behind in the New Economy Northeast Edition (1999); 

Places Left Behind in Rural America, forthcoming). Another report examined the 

undeveloped economic potential of these communities and informed the Administration’s 

policy initiatives to meet these needs (New Markets: The Untapped Buying Power in 

America’s Inner Cities, 1999).

• An evaluation of HUD’s economic development programs is underway, with estimated 

completion in 2001.

• A long-term evaluation of the Empowerment Zone/Enterprise Community program is 

underway. The study is assessing EZ achievements and changes in economic activity using 

comparison sites, and includes case studies of 18 EC sites. A report is expected in 2000.

• An evaluation of the Community Development Block Grant (CDBG) program completed in 

1995 concluded that CDBG has made an important contribution to city community 

development, including demonstrated successes in achieving local neighborhood stabilization 

and revitalization objectives. The promise shown by strategic local efforts concerning 

specific neighborhoods has led HUD to develop performance measures regarding 

Neighborhood Revitalization Strategy Areas (Federal Funds, Local Choices: An Evaluation 

of the Community Development Block Grant Program, 1995).

• The first phase of a long-term evaluation of the HOPE VI redevelopment program for 

distressed public housing documented that before the program began baseline conditions in 

surrounding neighborhoods were almost as severe as those in the public housing 

developments (An Historical and Baseline Assessment of HOPE VI, 1996). Interim case 

studies of completed HOPE VI sites will be available in 2000.

• A 1996 report concerning case studies of how local officials, police, and residents 

implemented the concept of “defensible space” to reduce crime in urban areas has informed 

HOPE VI redevelopment of distressed public housing neighborhoods (Creating Defensible 

Space, 1996).

• A study of third-party lending activities under the CDBG, EDI and Section 108 programs is 

being undertaken. The research will provide valuable information on the number of 

communities that engage in third-party lending and the types of economic development that 

result from such activities.

• A study of State brownfield initiatives found that more than 90 percent of States have some 

form of voluntary cleanup program (VCP). Case studies of three VCPs indicated that variable 

cleanup standards help redevelopment of contaminated sites and have real economic value to 

investors. Additional subsidies may be needed for contaminated sites in economically 
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64 U.S. Department of Housing and Urban Development

depressed areas (Assessment of State Brownfield Initiatives, 2000).

External Factors

A number of national, regional or local conditions have the potential to affect the achievement of 

HUD’s objectives under this goal. 

• There are sizable mismatches between the number of low-skilled jobs and the number of 

people looking for those jobs. 

• A rapidly changing global economy has made it challenging for Americans to compete when 

capital is highly mobile, markets for goods and services are widely dispersed, and wages for 

low-skilled employment are much lower in many locations abroad. 

• Job development is complicated by large concentrations of poor residents. School systems 

attempt to provide the education and job skills essential for their students but have fewer 

resources as tax bases decline and capital maintenance costs increase. 

• Rural communities face additional challenges because of the changing structure of the 

farming industry, underinvestment, weak infrastructure, limited services, and small number 

of community institutions. Rural labor forces are more narrowly based and more 

geographically dispersed.

CDBG, HUD’s primary source of community and economic development funding, is provided as 

a block grant to States and large cities and counties. While HUD can encourage certain uses of 

funds, and while funds are targeted to low- and moderate-income residents as the primary 

beneficiaries, each jurisdiction makes its own decisions about how to use CDBG funds. 

Therefore HUD’s direct impact on specific and measurable results under this objective is less 

predictable. Neighborhood quality and disparities between neighborhoods are also directly 

affected by State and local decisions regarding whether, and if so, how to address growth issues. 
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U.S. Department of Housing and Urban Development 65

STRATEGIC OBJECTIVES

Objective 4.1: The number, quality, and accessibility of jobs increase in 

urban and rural communities.

Performance Measurement: Average private sector job growth in central cities is higher 

than average labor force growth in central cities.

Higher employment levels in higher wage jobs benefit the entire community. Every working 

adult is better able to provide for his or her family, gain self-esteem, offer a positive role model 

for the next generation, purchase and maintain a home, invest in the community, and support 

local merchants. Moreover, strong and diverse local economies, regardless of location, are better 

able to handle the shocks and challenges of a changing global marketplace. 

Throughout the 1980s, private sector job growth in central cities just matched labor force growth 

in central cities, providing little relief for concentrated unemployment and poverty. During the 

current economic expansion, private sector job growth in cities-spurred by CDBG- and Section 

108-financed downtown redevelopment and by the efforts of Empowerment Zones and 

Enterprise Communities-has been nearly twice the average rate of labor force growth.

HUD initiatives, together with those of DOL and HHS, are aimed at increasing the skills and job 

readiness of the unemployed and encouraging the growth of employment opportunities, 

especially in cities. State of the Cities 2000 shows that cities still have substantially higher 

unemployment rates than suburbs. To ensure that cities remain job centers and continue to 

provide accessible jobs for low-income residents, HUD intends to keep the three-year average 

ratio of private sector job growth in central cities to labor force growth in central cities in excess 

of 100 percent.

Performance Measurement: The average ratio of central city to suburban poverty rates 

decreases. 

Historically, low-income households have been concentrated in central cities. Median household 

incomes of central cities are thus substantially lower than suburban median household incomes. 

HUD anticipates continued economic growth in suburban communities, but by targeting our 

community and economic development funding to distressed areas, we expect even greater 

economic improvement in central cities. In 1999, the central city poverty rate was more than 

twice as high as the suburban poverty rate. The average ratio was about 209 percent. The 

Department’s goal is to reduce this number to less than 200 percent by 2006.

Means and Strategies

Community development programs. CDBG is the cornerstone of the Department’s community 

development programs. Other HUD programs critical to this objective are the Section 108 

Economic Development Loan Guarantee program, Empowerment Zones/ Enterprise 
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66 U.S. Department of Housing and Urban Development

Communities, the new Rural Housing and Economic Development program, the Community 

Empowerment Fund, and America’s Private Investment Companies.

Education and outreach. Because so many of the funding decisions for HUD’s community and 

economic development programs are made by grantees, a significant amount of HUD’s influence 

at the local level comes through education, outreach and encouragement, and by recognizing and 

disseminating Best Practices. Community Builders are at the forefront of this endeavor, 

facilitating discussions between our partners and encouraging strategies that target certain 

geographic areas, create jobs and develop the workforce. 

Planning tools. Through HUD’s Consolidated Planning process, communities across the Nation 

are able to assess and address their housing and community development needs in a coordinated 

and efficient fashion. HUD will continue to support local planning strategies through our updated 

Community 2020 mapping software, as well as by making model growth planning statutes

available through the Growing Smart legislative handbook.
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U.S. Department of Housing and Urban Development 67

Objective 4.2: Economic conditions in distressed communities improve. 

Performance Measurement: The share of all households located in neighborhoods with 

extreme poverty decreases.

Neighborhoods with extreme poverty are defined as having a poverty rate of 40 percent or higher. 

HUD programs affect the number of households living in these neighborhoods in two ways. The 

Department strives to disperse poverty concentrations by promoting housing choice for 

extremely-low-income families and by encouraging middle-income families to live in urban areas 

through such programs as the Brownfields Economic Development, New Markets and “One 

Million Homes” initiatives. Second, HUD helps family incomes grow beyond poverty levels 

through self-sufficiency and job development efforts and job creation. In 1990, about one in 

every 25 Americans lived in an extreme poverty neighborhood. The 2000 Census will 

demonstrate whether that number has improved during the 1990s. Beginning in 2008, HUD will 

have sufficient data at the census-tract level from the American Community Survey to track this 

number at more frequent intervals for 2005 and beyond. 

Performance Measurement: The number of central cities that are doubly burdened with 

high unemployment and either a significant population loss or high poverty is reduced 20 

percent.

In State of the Cities 2000, HUD determined that 67 cities—one in eight—are “doubly burdened” 

according to HUD’s index of distress. The nation is making progress, as one in seven cities was 

doubly burdened a year earlier. The Department’s goal is to continue to reduce the number of 

doubly burdened cities by 20 percent, to 54 cities, by 2006. The criteria for this measure are that 

unemployment rates are 50 percent higher than the national average, combined with either a 

population loss of 5 percent since 1980 or poverty rates of 20 percent or higher. HUD will update 

the measure to use data from the 1990 and 2000 Census and the American Community Survey so 

that it remains a valid measure of progress.

Means and Strategies

Outreach and planning. Through the Consolidated Planning Process communities have 

opportunities to target funding to low-income neighborhoods and to support increased 

homeownership efforts. HUD encourages communities to use program incentives and 

comprehensive planning to implement geographically targeted strategies.

Homeownership efforts. To ensure that more capital for home mortgages is available in certain 

communities, HUD establishes underserved area goals for the Government-Sponsored 

Enterprises—Fannie Mae and Freddie Mac. HUD also actively encourages the use of FHA and 

Ginnie Mae resources in poorer neighborhoods. A significant amount of HOME funds are also 

targeted for homeownership.

Targeted initiatives. Geographically targeted efforts to reduce disparities between 

neighborhoods include Enterprise Zone/Empowerment Community designations, HOPE VI 

public housing revitalization, the Brownfields Economic Development Initiative, and New 
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68 U.S. Department of Housing and Urban Development

Markets initiatives, including APIC and the Mississippi Delta Initiative. In addition, through the 

Moving to Opportunity program and other means, HUD helps low-income participants in the 

housing voucher program gain access to lower-poverty neighborhoods.
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U.S. Department of Housing and Urban Development 69

Objective 4.3: Communities become more livable.

Performance Measurement: Among low- and moderate-income residents, the share 

with a good opinion of their neighborhood increases for cities, suburbs, and nonmetropolitan areas.

The best judges of the quality of a neighborhood are the residents themselves. Neighborhood 

satisfaction of low- and moderate-income residents (incomes less than 80 percent of median) is 

especially significant because HUD’s programs generally target this group. This performance 

goal is intended to capture aspects of community quality that are hard to measure such as the 

adequacy of roads, neighborhood cleanliness and safety, and convenience of needed services. For 

the purposes of this measure, a good opinion of neighborhood is defined as a response of 7-10 on 

a 10-point scale assessing “overall opinion of neighborhood.” This measure will use data from 

the American Housing Survey.

Performance Measurement: Residents of public housing are more satisfied with their 

safety.

Many factors that affect crime levels are beyond HUD’s control, but HUD does seek to reduce 

crime levels in particular communities by enforcing safety standards and responsible resident 

behavior in HUD-assisted housing, demolishing vacant HUD-assisted structures that cannot be 

salvaged as safe and livable dwellings, and promoting community-based crime prevention in 

partnership with local, State and Federal actors. The most direct impacts of HUD’s crimefighting efforts in the next six years will occur in and around public housing developments, 

particularly in those that receive Public Housing Drug Elimination Program (PHDEP) grants. 

The Department’s community and economic development programs also support crime reduction 

indirectly by creating communities where employment opportunities, quality retail 

establishments and good housing combine to create strong neighborhoods. This goal will be 

measured using surveys of public housing tenants. The first tenant survey showed that on average 

70.9 percent were satisfied or very satisfied with safety in their units, buildings and parking 

areas, and the Department intends to increase this level significantly by 2006.

Means and Strategies

Community development. HUD provides flexible block grants to communities to meet locally 

defined needs including economic development, infrastructure, and housing. Through the 

Consolidated Planning process, members of the community can help determine how funding is 

used. HUD also is redefining Revitalization Areas to promote homeownership with FHA-held 

homes—providing them to teachers, police officers and non-profit organizations at discounts of 

30-50 percent—if they are located in low-income, high-default or low-homeownership areas.

Fighting drugs and crime. HUD directly supports this objective through the Public Housing 

Drug Elimination Program, the Officer Next Door Program, the Gun Buyback initiative, and by 

enforcing the “one strike—you’re out” policy. PHDEP provides grants to housing authorities and 

resident management councils for initiatives to reduce crime and criminal drug use. Typical 
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70 U.S. Department of Housing and Urban Development

grants fund security personnel, physical investments promoting security, and drug treatment and 

other services at selected housing developments. HUD requires PHDEP grantees to establish 

goals and track performance, including resident satisfaction with neighborhood security. HUD 

also promotes “defensible” space principles in HOPE VI developments to give public housing 

residents more control over public activity around their buildings.

Coordination with Department of Justice. HUD has several interagency agreements with the 

Department of Justice. Examples include an agreement with the National Institute of Justice to 

evaluate drug elimination strategies; an agreement with DARE (Drug Abuse Resistance 

Education) to provide training and technical assistance for teens in public housing developments; 

and an agreement that provides public housing agencies access to data from the National Crime 

Information Center.

Removing blight. Blighted and distressed neighborhoods create an environment that supports 

lawlessness. HUD addresses blighted conditions by funding demolition and revitalization of the 

worst public housing developments, by supporting the redevelopment of brownfields, and by 

encouraging the focused use of CDBG funds for physical upgrades of neighborhoods.
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Strategic Goal 5:

Ensure Public Trust in HUD

HUD’s stewardship of billions of Federal dollars must continually earn the confidence of 

Congress and the public. HUD has just completed a fundamental overhaul to build 

performance, customer service, and accountability into every part of our operations. This 

section describes our plans to deliver results to customers, to lead the national discussion of 

housing and community development policy, and to prevent fraud, waste, and abuse in HUD 

program activities.

OVERVIEW

For the Department to achieve our mission, we must continually demonstrate the organizational 

competence and capacity to deliver effective and responsive programs and services to the public. 

HUD’s stewardship of billions of taxpayers’ dollars must be credible and earn the confidence of 

Congress and the public.

The HUD 2020 Management Reform Plan fundamentally overhauled HUD’s programs and 

operations to make them more efficient and responsive. The 2020 reforms built a foundation to 

ensure that tax dollars are used properly and effectively, that programs accomplish what they 

promise, and that HUD will do more with less and do it better. The plan’s reforms were designed 

to help communities thrive by making HUD’s resources more easily accessible and by giving 

people the tools they need to succeed as individuals and communities.

HUD also is continuing to better focus research efforts on timely and relevant policy issues and 

evaluations of HUD programs that support performance management under the Government 

Performance and Results Act (GPRA).

MEANS AND STRATEGIES

HUD is proud of the progress made in the past four years towards becoming a high-performing 

agency. The Department has adopted a businesslike structure to better achieve our public 

purposes—to better support our partners and better serve our customers. The new structure has 

defined a clear mission divided into identifiable functions for each separate business line. It has 

centralized some operations to realize economies of scale, while decentralizing newly enhanced 

customer assistance functions to improve service delivery and innovation. It makes better use of 

technological advances to improve efficiency in both front-line service delivery and back-office 

processing centers, while simultaneously making information on HUD’s programs and resources 

available to partners and the public through the Internet and other technology. In addition, we 

have ensured that field staff are involved in strategic planning and performance management by 

establishing internal annual Business and Operating Plans directly linked to the Annual 

Performance Plan (APP) for each field and headquarters office.
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72 U.S. Department of Housing and Urban Development

In the context of this business structure, HUD will:

• Support accomplishment of HUD’s Annual Performance Plan by helping all HUD managers 

shape business and operating plans that achieve results for customers and local communities.

• Expand our customer service and empower our partners by building more storefront offices, 

installing electronic kiosks and sharing best practices for housing and community 

development across the country.

• Through the provision of technical assistance, work with partners to improve operations, 

ensure proper use of funds, and strengthen program performance reporting.

• Rate the quality of single-family housing appraisers and remove poorly performing appraisers 

from the FHA appraisal registry.

• Regularly inspect the physical quality of all public and assisted housing developments to 

ensure that they meet Departmental standards.

• Rate the performance of Independent Public Accountants that perform financial audits of 

PHAs and assisted multifamily properties, and debar accountants that perform poorly.

• Assess the financial condition of 3,200 PHAs and 20,500 multifamily developments.

• Conduct computerized matching for 2.35 million households to identify individuals with 

potential unreported income and excess rental assistance.

• Evaluate troubled multifamily properties in serious or chronic noncompliance; debar, suspend 

or impose monetary penalties upon individuals in noncompliance; refer criminal cases of

fraud or noncompliance to the Office of the Inspector General and civil cases to the 

Department of Justice.

• Train employees and improve equipment and information systems for higher productivity.

• Conduct regular surveys of employees, partners, and customers and use results to enhance 

programs and management. 

• Increase the effectiveness of local Consolidated Plans in promoting high standards of 

performance by community partners.

• Increase citizen access to information on HUD programs and their local implementation, both 

through citizen participation in the Consolidated Planning process and through electronic 

means, such as Community 2020 mapping software and HUD’s award-winning World Wide 

Web home page.

• Execute a performance-based appraisal process for all managers and executives that links 

performance objectives and standards to strategic goals and objectives.

• Continue to ensure that contracts for services are timely, cost-effective and successful by 

utilizing performance and outcome based contracting.

Program Evaluations

HUD was one of many Federal agencies and departments that were surveyed in the National 

Partnership for Reinventing Government Survey in 1998 and again in 1999. 
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U.S. Department of Housing and Urban Development 73

HUD’s overall results were very favorable, particularly in three areas:

• Employees have electronic access to information needed to do their work; 

• Service goals aimed at meeting customer expectations are in place;

• Supervisors and team leaders understand and support the family and personal responsibilities 

of employees. 

The NPR survey also identified some areas of concern, citing shortcomings with respect to 

whether:

• Corrective actions are taken when employees do not meet performance standards; 

• Employees are clear about how “good performance” is defined in their organization; 

• Travel regulations have been simplified; 

• Reinvention has been made a priority by the organization.

In 1999, HUD arranged to have CDBG partners surveyed as part of the American Customer 

Satisfaction Index (ACSI), a national study of customer satisfaction with the quality of goods and 

services provided by both public and private sectors. For HUD’s survey, senior officials, such as 

mayors, of communities receiving block grants were asked about four major factors that drive 

customer satisfaction: perceived quality, customer expectations, customer complaints, and 

grantee trust. Their responses showed an overall 69 percent satisfaction rate, which compares 

favorably with the national benchmark for both public and private sector organizations. 

In 1994, the General Accounting Office designated HUD as a high risk agency because of serious 

management problems resulting from long-standing deficiencies in internal controls, information 

and financial management systems, organizational structure and staffing. In 1997, the Secretary 

initiated the 2020 Management Reform Plan to eliminate these deficiencies by fundamentally 

overhauling the culture and program operations of the Department. In subsequent reports GAO 

recognized the credible progress HUD made in addressing these deficiencies. During 2000, the 

key elements of the Management Reform Plan were fully implemented, establishing a solid 

foundation for transforming HUD into a high-performing agency. HUD’s Annual Performance 

Plans and other documents explain corrective actions in detail.

In 1999, the National Academy of Public Administration (NAPA) released a report about HUD’s 

implementation of the Government Performance and Results Act. NAPA recognized HUD’s 

substantial progress and suggested several areas for improvement, including improvements in 

data quality and greater emphasis on outcome measurement. Subsequent versions of the Annual 

Performance Plan show substantial improvement along the lines of the NAPA suggestions.
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74 U.S. Department of Housing and Urban Development

STRATEGIC OBJECTIVES

Objective 5.1: HUD and HUD’s partners effectively deliver results to 

customers.

To achieve results that matter for the American people, as identified in our first four strategic 

goals, HUD also must achieve excellence in our program management and internal operations. 

Our efforts to date, as well as planned efforts, significantly reduce HUD’s exposure to fraud, 

waste and abuse. We have made tremendous advances in addressing our significant management 

challenges by supporting our mission through our organization, resource management, staff 

deployment and development, information systems and technology, and relationships with 

partners. Through the HUD 2020 Management Reforms, which were initiated in June 1997, the 

Department has made considerable progress in modernizing financial and data systems; creating 

new oversight capability and an enforcement authority to restore public trust; refocusing and 

retraining HUD’s workforce; establishing performance-based systems for programs, operations 

and employees; and replacing the top-down bureaucracy with a new customer-friendly structure. 

While the reforms outlined in HUD 2020 are substantially complete, the Department’s 

commitment to improving our management is continuous. We remain committed to both new 

and proven strategies that will empower our workforce, improve our data, and satisfy our 

customers. 

Means and Strategies

Workforce empowerment and efficiency. The implementation of management reform has 

changed HUD’s organization and culture, moving the focus from process to customer-driven 

results. An empowered workforce is the most essential element for effective management and 

positive outcomes for customers. HUD’s strategies for empowering employees are multi-faceted, 

including the use of internal management systems to communicate and support HUD’s strategic 

direction; staff recruitment and development to build strategic skills; and provision of needed 

tools and technology.

The Department’s internal management systems for planning and performance management 

establish the context and direction for empowered action. The Business and Operating Plan 

system engages all offices in defining how their organizations will shape operations and goals, so 

the Department both serves customers in local conditions and achieves Annual Performance Plan 

commitments. The systems also provide structures that support successful implementation:

• Internal Service Agreements to support collaboration in achieving those results;

• Internal communication about progress through reports on HUD’s intranet, internal 

broadcasts of monthly top-leadership meetings and other means; 

• Recognition and rewards for all senior managers that are based on performance measures 

supporting the Strategic Objectives in this plan; 

• Oversight and technical assistance for the field’s program delivery.
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During implementation of HUD 2020 Management Reform, the Department’s staff recruitment 

and development programs sought an infusion of new employees and enhancement of existing 

staff skills to further HUD’s core strategies of building communities and ensuring the public 

trust. With HUD 2020 operations now in place, the Department has focused on recruitment and 

development and succession planning, in recognition of the high percentage of staff in key 

professions who will be eligible to retire within five years. Both recruitment and development 

focus on strategically important knowledge and skills, and in both areas we have expanded and 

modernized our approaches. For example, we have cast a much wider net in recruiting through 

commercial and web-based means, with a continuing commitment to ensuring a diverse 

workforce. We have modernized our training methods by using our internal website and our 

internal satellite broadcasting system. HUD also is implementing a Resource Estimation and 

Allocation Process in November, 2000, to ensure that staff resources align efficiently with our 

strategic objectives. 

Major tools that support employee empowerment are identified and funded through HUD’s 

Information Technology Investment Planning System, which OMB has promoted as a model for 

Federal agencies. Continuing enhancements to our processes for improving our systems and our 

technology are discussed below. 

Employee satisfaction directly affects the quality of work and productivity. To support continued 

empowerment that serves customers, we will use periodic employee surveys conducted by third 

parties to ensure that staff are satisfied, that they know who their customers are and what their 

mission and goals are, and that they have the authority, skills, tools and internal relationships to 

do their jobs with excellence.

Financial management systems. HUD’s Financial Systems Integration (FSI) Project will be 

fully completed by the end of November 2000, establishing HUDCAPS as the Department’s core 

standard general ledger system, in full compliance with Joint Financial Management 

Improvement Program requirements. HUD has already addressed the issues that led to a 

disclaimer of an audit opinion on the Department’s fiscal year 1999 financial statements, which 

was largely due to inadequate controls over major systems conversion activity that occurred in 

FY 1999. The Office of Inspector General will validate these corrective and improvement 

actions as part of its FY 2000 financial statement audit work. HUD also purchased a commercialoff-the-shelf (COTS) software package that has been licensed to enable HUD to carry out current 

plans to modernize Ginnie Mae’s subsidiary ledger system and to provide FHA with a new 

subsidiary ledger system that addresses existing non-conformances in financial management 

systems. The Office of the Chief Financial Officer has also developed a “vision” for possible use 

of that COTS package for the next generation financial management system structure for the 

Department. Further plans and requirements for the development of that vision will be pursued 

in FY 2001.

eGovernment. This HUD-wide initiative is seeking to fundamentally transform business 

processes and models to better serve customers and business partners while reducing costs.

• HUD is implementing an eGovernment strategy that builds on the success of our Internet site, 

intranet, and current eCommerce initiatives. The strategy provides a road map for HUD in 
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76 U.S. Department of Housing and Urban Development

our future use of Internet technology to better serve citizens, transact with business partners, 

and empower our workforce. The eGovernment Strategy will also address means to combat 

the digital divide and encourage the growth of eCommerce in all quarters of our Nation.

• The eGovernment Strategy includes plans to implement the Government Paperwork 

Elimination Act, which mandates Federal agencies to provide an option for paper based 

transactions. 

Data quality. Because of data integrity issues, as identified by oversight agency audits and 

Congressional Reports, HUD’s Chief Information Officer (CIO) is launching an enterprise-wide 

initiative, the Data Quality Improvement Program (DQIP). The CIO has partnered with the Chief 

Financial Officer to address HUD’s data integrity concerns through the DQIP. To achieve 

Departmental data quality improvement, participation from all HUD program and support offices 

is critical. The DQIP objectives are to:

• Manage HUD’s data as a strategic business resource that is essential to mission success;

• Support HUD’s goal of ensuring Public Trust by providing accurate, complete, consistent, 

timely, and valid data;

• Remove HUD from the oversight audit “High Risk” list and meet Congressional expectations 

to report quality and credible information across the Department;

• Develop policies, procedures, guidelines and measurement criteria to improve data quality 

management across HUD;

• Develop and implement Data Quality Plans to assess and improve data quality of HUD’s 

mission-critical data systems;

• Perform system certification of all mission-critical data systems;

• Monitor and evaluate the Data Quality Management Process to assess data quality progress.

Enterprise architecture for information systems. The CIO is developing a comprehensive 

Enterprise Architecture (EA). An EA is a strategic base of information assets that defines 

business needs, the information necessary to support these business needs, the technologies 

necessary to conduct business activities, and transitional processes for implementing new 

technologies in response to changing business needs.

• HUD’s EA initiative supports the Department’s Information Technology (IT) Capital 

Investment Plan as well as the technical infrastructure, business strategy, and Management 

Reform Plan. The EA program will meet HUD strategic, IT Capital Investment, and program 

mission objectives by providing the HUD-wide definition of HUD’s current business and 

technology architecture baseline and how they should be targeted for the future. The EA 

project will enable executive management to make well informed decisions in the selection, 

management and evaluation of IT assets by providing benefit and impact analysis. 

• The completed EA will guide short- and long-term systems development. The current 

initiative will transition the EA from design to practical application. By establishing 

architecture management policies, standards and procedures, this project will facilitate 

appropriate application of technology to achieve the Department’s business goals and 2020 
HUD’s Strategic Goals

U.S. Department of Housing and Urban Development 77

Management Reform initiatives. 

• The EA also will be used to measure performance against goals expressed in the Annual 

Performance Plan (APP). 

Configuration Management. Configuration Management (CM) is the ongoing process of 

identifying and managing changes to work products throughout the life cycles of information 

systems development and maintenance. HUD implementation of standard Department-wide CM 

practices will result in software integrity by: maintaining accurate inventory; providing 

traceability; ensuring changes are coordinated; and ensuring releases are planned and 

coordinated. The CIO is coordinating the effort to:

• Move all IT systems under automated CM tools;

• Enforce the principles of a central Change Management Control Board;

• Move toward the Capability Maturity Model practices defined by the Systems Engineering 

Institute of Carnegie-Mellon University.

Enterprise Security Program. HUD relies heavily upon automated information systems, 

networks, and the Internet to carry out our mission. HUD senior management officials recognize 

that adequate security measures and safeguards for information resources are critical factors for 

providing effective and efficient delivery to customers. The Chief Information Officer has 

formulated a comprehensive strategic plan and approach for HUD’s Enterprise Security Program. 

The plan addresses the infrastructure, framework, and resources necessary to provide adequate 

security measures and safeguards to protect our information resources from unauthorized access, 

use, modification, and disclosure. The plan will include goals, objectives, functions, resources, 

tasks, milestones, and responsibilities.

Process improvement. To create and operate programs that are fully responsive to client needs, 

while also reflecting the standards of quality that the American public deserves and requires, 

HUD is transforming through Management Reform. Process Improvement and Business Process 

Reengineering (BPR) are key elements of this reform. Proper application of BPR techniques will 

permit quantum leaps in Department performance by aligning people, business processes and 

technology with HUD’s strategic goals. Through the efforts of a BPR Team, process 

reengineering will achieve goals of redefining and streamlining processes; organizing, motivating 

and empowering HUD’s people; and capitalizing on advances in technology. 

Strengthening partnerships. Strong, effective partnerships are essential for achieving HUD’s 

mission because of the structure of our programs and the complexity of housing and community 

development issues. HUD’s strategy for strengthening partnerships is necessarily two-pronged, 

reflecting the Department’s dual core strategies of empowering people and communities and 

ensuring the public trust. On the one hand, we are committed to building relationships with 

partners throughout the country so that we can understand their perspectives and collaborate to 

achieve results. On the other hand, we have the fiduciary responsibility of overseeing our longterm partners to ensure high standards and quality service. These partners include housing 
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78 U.S. Department of Housing and Urban Development

agencies, FHA-approved lenders, community grantees and other organizations for which 

Congress has given HUD oversight responsibilities. 

To continually enhance HUD’s ability to understand customer and stakeholder needs and 

opportunities and to collaborate on results that will serve American communities and citizens, 

the Department is committed to both local and national partnerships. For example:

• The introduction to this Strategic Plan explains the extensive and wide-ranging consultations 

that HUD has undertaken to enhance our performance partnerships with State and local 

governments and with for-profit and non-profit organizations. 

• Those partnerships are integral to our program management as well as to our strategic 

planning. For example, we regularly consult with program partners in order to shape HUD 

policies and regulations. 

• We have begun using surveys of customers and partners in order to gauge their satisfaction 

with HUD program policies and operations. This data will be a valuable resource for further 

partnership on improved HUD service.

• We have long-term partnerships with major national organizations such as the National 

Association of Home Builders, the Mortgage Bankers Association, the National Association 

of Housing and Redevelopment Officials, the Public Housing Authorities Directors 

Association, and the Council of Large Public Housing Authorities. Our routine 

communication with these organizations enhances all aspects of program operations, and 

often leads to specific partnership initiatives like National Homeownership Week.

• At the local level, a key responsibility of HUD’s Community Builders is to develop 

partnerships with a wide range of local organizations so that HUD’s local service delivery 

can benefit from their perspectives and support them in achieving results that matter within 

their communities.

• HUD’s annual Best Practices Conference, as well as other HUD-sponsored forums, promotes 

partnerships, elicits discussion and feedback about important issues, and provides an 

excellent opportunity to increase knowledge and networking within the national community 

that seeks to enhance housing and urban development.

• HUD has consolidated the offer of competitive grants through the SuperNOFA (Notice of 

Funding Availability), which streamlines program delivery and better connects our partners 

to the full array of programs and resources.

To uphold the public trust, we seek feedback from our ultimate customers (e.g., residents) and 

oversee the performance of our partners in delivering HUD programs. The Department consults 

with our partners in designing our oversight strategies. Such consultation helps develop methods 

that are efficient and informative, helps our partners in managing HUD programs and enhances 

HUD oversight of partner performance. We continue to seek ways to measure strategic and 

operational results with our partners, reflecting our joint accountability for program delivery. 

However, Congress and the American people rightly hold HUD accountable for our programs, 

and hence we also undertake compliance and monitoring initiatives (below).
HUD’s Strategic Goals

U.S. Department of Housing and Urban Development 79

Compliance and monitoring. The long-term and complex nature of HUD’s relationships with 

our partners necessitates extensive oversight to ensure high standards and quality service. As part 

of the 2020 Management Reform Plan, HUD established centers that are responsible for 

assessing HUD’s properties and enforcing standards. These are major efforts that are reducing 

and preventing fraud, waste and abuse.

• The Real Estate Assessment Center (REAC) provides timely, accurate and objective 

assessments of physical condition, financial soundness, management capability, and resident 

satisfaction in HUD’s real estate portfolio. It also facilitates verification of the income of 

public housing recipients to ensure that housing subsidies are properly paid, and assesses the 

quality of single family appraisals performed for new homebuyers.

• The Departmental Enforcement Center (DEC) addresses the problems of distressed 

multifamily properties that have failed physical and financial inspections and require 

corrective action by owners, lenders and management agents. The Center enforces 

administrative and regulatory business agreements by requiring the debarment or suspension 

of individuals in noncompliance in single-family and multifamily housing as well as other 

HUD programs. The DEC also imposes monetary penalties and provides support for HUD’s 

Mortgage Review Board. The DEC refers criminal cases to the Office of Inspector General 

and submits civil cases to the Department of Justice. The Center has returned $40 million in 

owner investments to disinvested properties, assessed settlement and recoveries of $36 

million and protected more than 63,000 families.

• The Troubled Agency Recovery Centers (TARCs) are dedicated to assisting public housing 

agencies in correcting major physical, financial and management deficiencies. HUD also has 

designated all employees with any monitoring or compliance functions Public Trust Officers, 

training them to conduct risk analyses, perform remote and on-site monitoring, validate data 

and conduct quality assurance reviews.

• Additional programmatic centers throughout the country continuously oversee partner-based 

program delivery activities and provide technical assistance to help our partners improve their 

operations.

Now that these major reforms are operational, the Department expects to see better physical, 

financial and managerial conditions in the Nation’s public and assisted housing and better 

oversight of HUD’s housing and community development programs. Specifically, we expect 

results in the following key areas over the next six years:

• Improved PHAS and SEMAP scores;15

• Fewer units of housing being managed by troubled public housing authorities;

 

15 The Public Housing Assessment System (PHAS) measures the physical condition, management operations, 

financial condition, and resident satisfaction of Public Housing. The Section Eight Management Assessment 

Program (SEMAP) rates housing authorities on several factors, including tenant selection, rent reasonableness, 

income determination, housing quality inspections and enforcement, expanding housing opportunities and 

deconcentration, and lease-up rates.
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80 U.S. Department of Housing and Urban Development

• More Consolidated Plans that include explicit and measurable outcomes;

• Fewer losses to the FHA fund because of reductions in fraudulent and predatory lending 

practices in vulnerable neighborhoods.

HUD’s relationship with our business partners has been highlighted throughout this plan. HUD

wants to objectively assess how well our relationship with our partners empowers them to deliver 

results for our customers. Therefore, HUD plans to survey partners periodically regarding their 

perceptions of the Department’s performance and use the results as an indicator of progress 

toward this strategic objective. 
HUD’s Strategic Goals

U.S. Department of Housing and Urban Development 81

Objective 5.2: HUD leads housing and urban research and policy 

development nationwide.

Research and Policy Development

In addition to HUD’s duty to manage programs responsibly, the Department pursues a broadbased research and policy development agenda. Research improves our ability to monitor 

programs, provides guidance for improving program efficacy and helps the Department respond 

to evolving opportunities as American communities grow and change. Research, monitoring and 

evaluation also support the Government Performance and Results Act by enabling the 

Department to report our successes, identify areas of concern, and better direct resources to the 

changing needs of America’s communities.

As part of our research agenda, HUD will: 

• Design, conduct, or oversee path-breaking research to expand the knowledge base and 

monitoring tools needed for improved policy and practice nationwide.

• Design GPRA measurements and establish and assess performance goals for all HUD 

programs, using information from program evaluations to demonstrate the linkage between 

resources, programs and results. 

• Work with HUD’s partners and outside experts to identify research priorities and with 

interagency groups to achieve consensus on housing and community and economic 

development issues.

• Monitor national and local housing, economic and demographic trends affecting housing and 

community and economic development policies and programs in urban, suburban and rural 

areas.

• Provide annual estimates of critical program parameters such as Fair Market Rents and 

median family incomes for all local areas and establish targeting criteria for households and 

geographic areas to direct program resources effectively. In addition to being used for HUD 

programs, these data are provided to other Federal agencies for use in their programs.

• Evaluate existing programs through both quick-turnaround studies and long-term systematic 

research to determine what works and what fails to work.

• Improve dissemination of relevant research and data to all interested audiences.

• Through the Best Practices initiative, identify organizations that are leaders in performing 

specific housing and community development functions. Best Practices establishes 

benchmarks for improvements in performance, quality and timeliness of service delivery, and 

promotes implementation and replication across the HUD community. Sharing Best Practice 

information establishes standards and makes processes more effective and efficient.

• Implement state-of-the-art knowledge management techniques to diffuse Best Practices 

information, by sponsoring a yearly symposium and by creating a centralized Web site and 

electronic library to house industry-specific information, techniques, tools and ideas. 

• Ensure that international experiences are considered when developing HUD policies and 
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82 U.S. Department of Housing and Urban Development

programs, and that other countries have access to lessons learned by HUD.
Resources, Interagency Partnerships and Program Evaluations

U.S. Department of Housing and Urban Development 83

 IV. RESOURCES, INTERAGENCY PARTNERSHIPS 

AND PROGRAM EVALUATIONS

This section provides in-depth background information on three key aspects of our 

implementation of this plan: resources, interagency partnerships, and program evaluations.

RESOURCES

The Department’s ability to achieve the targets set forth in this Strategic Plan depend on the level 

and allocation of budgetary and human resources. HUD strives to allocate resources efficiently 

by evaluating programs, consulting with stakeholders and measuring performance. 

As part of HUD’s Management 2020 Reform Plan, the Department has instituted a series of 

measures to increase accountability and performance. One such measure is the adoption of 

resource management methodology recommended by the National Academy of Public 

Administration. This new Resource Estimation and Allocation Process (REAP) will enable HUD 

to:

• Estimate resources for budget formulation, execution and analysis;

• Link resources to performance measures specified in the Annual Performance Plan under 

GPRA; 

• Validate and monitor actual resource utilization.

In FY 2001, HUD’s budget began integrating performance measures from the Annual 

Performance Plan. In FY 2002, the budget will be more integrated, and budget and staff 

resources will be divided by Strategic Goal. In the following years, HUD will further link our 

budget with the strategic planning and performance measurement processes. 

Staff allocation. The Department estimates that we will need a relatively constant level of 9,300 

staff over the next three years. The following resource allocation table shows the number of staff 

in each office’s major program areas and the estimated allocation of these staff to our five 

strategic goals. Most HUD staff will contribute to several strategic goals—for instance, almost 

every HUD employee will contribute to Goal 5, “Ensure public trust in HUD.” Consequently, the 

values in the table reflect the equivalent number of staff that will contribute to each goal. The 

Resource Estimation and Allocation Process described above will support more specific, accurate 

and strategic staff allocation.

Budget allocation. In FY 2000, Congress, the President, and the American people entrusted 

HUD with our largest budget in 10 years. For FY 2001, we have requested still additional 

resources to help meet the Nation’s housing and community development needs. We will use

these budgetary resources carefully to achieve our mission. The resource allocation table 

describes the relationship between the Department’s budget and strategic goals. Because budget 

authority varies from year to year, the values in the table are estimates of the percentage of the 
Strategic Plan

84 U.S. Department of Housing and Urban Development

total budget that support each goal. For reference, HUD’s total discretionary budget authority in 

FY 2000 was $26.2 billion.

Highlights. Based on our review of our current spending patterns and our projections of future 

needs, we estimate that:

• Reflecting the fact that housing is the Department’s first priority, almost 58 percent of HUD’s 

budget will go to increasing the availability of decent, safe and affordable housing in 

American communities. 

• Approximately 22 percent of HUD’s funding will go to communities as block grants to help 

meet a variety of locally-determined needs.

• Over 40 percent of staff will be allocated to increasing the availability of decent, safe and 

affordable housing in American communities.

• Approximately 29 percent of staff resources will be allocated to ensuring public trust in 

HUD. This includes monitoring grantee performance and their use of funds, ensuring that 

grantees comply with regulations, and identifying and eliminating waste, fraud and abuse.

Allocation of Budget and Staff Resources by Strategic Goal

Strategic Goals

Program

# of

Staff

% of 

Budget 

Increase the 

availability of 

decent, safe, 

and affordable 

housing in 

American 

communities 

Ensure equal 

opportunity in 

housing for all 

Americans

Promote 

housing 

stability, selfsufficiency

 and asset 

development 

of families and 

individuals

Improve 

community 

quality of life 

and economic 

vitality

Ensure public 

trust in HUD

Public And Indian Housing Staff Budget Staff Budget Staff Budget Staff Budget Staff Budget

Housing Certificate Fund 333 31.7% 40 19.0% 10 6.3% 40 4.8% 40 1.6% 203 -

Public Housing Capital Fund 181 8.9 32 6.2 10 1.4 10 0.4 33 0.9 96 -

Public Housing Operating 

Fund

352 9.7 57 7.3 10 - 5 0.5 57 1.9 223 -

HOPE VI 176 1.9 41 1.0 9 0.4 41 0.1 41 0.4 44 -

Indian Housing Block Grants 184 2.0 75 1.5 10 - 10 - 6 0.5 83 -

Indian Home Loan Fund 6 <0.1 5 <0.1 - - - - - <0.1 1 -

Drug Elimination Grants 163 1.0 9 - 10 - - - 143 1.0 1 -

Sub-Total 1,395 55.2 259 35.0 59 8.1 149 5.8 277 6.3 651 -
Resources, Interagency Partnerships and Program Evaluations

U.S. Department of Housing and Urban Development 85

Strategic Goals

Program

# of

Staff

% of 

Budget 

Increase the 

availability of 

decent, safe, 

and affordable 

housing in 

American 

communities 

Ensure equal 

opportunity in 

housing for all 

Americans

Promote 

housing 

stability, selfsufficiency

 and asset 

development 

of families and 

individuals

Improve 

community 

quality of life 

and economic 

vitality

Ensure public 

trust in HUD

Community Planning and Development Staff Budget Staff Budget Staff Budget Staff Budget Staff Budget

CDBG 324 14.8 34 4.4 11 1.5 23 3.0 46 5.9 210 -

HOME 98 5.0 27 4.0 3 0.5 - - 4 0.5 64 -

Homeless Assistance Grants 118 3.6 10 0.8 - - 31 2.8 - - 77 -

HOPWA 21 0.8 3 0.4 - - 4 0.4 - - 14 -

Urban Empowerment Zones 15 0.5 - - - - 3 0.2 3 0.3 9 -

Other CPD Programs 184 0.5 21 0.2 11 0.1 13 0.1 19 0.1 120 -

 Sub-Total 760 25.2 95 9.8 25 2.1 74 6.5 72 6.8 494 -

Housing Staff Budget Staff Budget Staff Budget Staff Budget Staff Budget

FHA –MMI/CHI 1,203 1.5 958 1.5 60 - - - 120 - 60 -

FHA –GI/SRI 1,208 1.4 962 1.4 60 - - - 121 - 60 -

Housing Certificate Fund 434 11.0 342 11.0 22 - - - 43 - 22 -

Housing For Special 

Populations

350 3.0 274 2.7 - - 18 0.3 35 - 18 -

Other Housing Programs 239 - - - - - - - 24 - 215 -

 Sub-Total 3,414 16.9 2,536 16.6 142 - 18 0.3 343 - 375 -

Fair Housing and Equal Opportunity Staff Budget Staff Budget Staff Budget Staff Budget Staff Budget

Fair Housing Assistance 30 0.1 - - 10 0.1 10 - 10 - - -

Fair Housing Initiatives 25 0.1 - - 8 0.1 9 - 8 - - -

Section 3 Program 25 - - - - - - - 25 - - -

Other FHEO Programs 570 - - - 470 - 20 - 10 - 70 -

 Sub-Total 650 0.2 - - 488 0.2 39 - 53 - 70 -

Ginnie Mae 72 <0.1 18 <0.1 18 - - - 18 - 18 -

Office of Healthy Homes and 

Lead Hazard Control

31 0.4 12 0.4 - - - - - - 11 -

Policy Development & 

Research

163 0.2 82 0.1 2 <0.1 25 <0.1 25 <0.1 29 0.1
Strategic Plan

86 U.S. Department of Housing and Urban Development

Strategic Goals

Program

# of

Staff

% of 

Budget 

Increase the 

availability of 

decent, safe, 

and affordable 

housing in 

American 

communities 

Ensure equal 

opportunity in 

housing for all 

Americans

Promote 

housing 

stability, selfsufficiency

 and asset 

development 

of families and 

individuals

Improve 

community 

quality of life 

and economic 

vitality

Ensure public 

trust in HUD

Supporting Organizations Staff Budget Staff Budget Staff Budget Staff Budget Staff Budget

Enforcement Center 215 - 107 - - - - - - - 108 -

Real Estate Assessment Center 280 - 140 - - - - - - - 140 -

Office of Multifamily Housing 

Assistance Restructuring

101 - 50 - - - - - - - 51 -

Community Builders/Field 

Management

933 - 233 - 233 - 233 - 234 - - -

Chief Financial Officer 220 - 44 - 11 - 22 - 22 - 121 -

Chief Procurement Officer 148 - - - - - - - - - 148 -

Chief Information Officer 6 - - - - - - - - - 6 -

General Counsel 349 - 76 - 46 - 60 - 16 - 151 -

Departmental Management 113 - 23 - 23 - 23 - 23 - 21 -

Departmental Equal 

Employment Opportunity

19 - - - - - - - - - 19 -

Administration 431 1.9 70 - 30 - 30 - 30 - 271 1.9

 Sub-Total 2,873 1.9 743 - 343 - 368 - 325 - 1,094 1.9

 Total 9,300 100.0 3,730 57.6 1,077 12.5 673 14.2 1,113 13.7 2,684 2.0

CROSS-CUTTING PROGRAMS AND INTERAGENCY PARTNERSHIPS

Partnerships with HUD’s fellow Federal agencies represent one of the most strategic 

opportunities for promoting high performance by the Federal government. While HUD has 

always interacted with other agencies, under GPRA we have renewed our commitment to 

identify crucial issues and work strategically with other agencies to develop solutions based on 

teamwork—with each agency contributing specific strengths. The Department works actively on 

a variety of interagency task forces and working groups and also identifies targeted areas where 

coordination with other Federal agencies on programs, data or research will enhance our 

effectiveness.

Through the Partnership for Advancing Technology In Housing (PATH), HUD is responsible 

for coordinating Federal agency activity to make housing more affordable, safer and more 

energy-efficient. HUD is working closely with the Departments of Energy (as co-head),
Resources, Interagency Partnerships and Program Evaluations

U.S. Department of Housing and Urban Development 87

Commerce, and Agriculture, as well as with the Department of Labor’s Occupational Safety 

and Health Administration, the Environmental Protection Agency (EPA), the National 

Science Foundation (NSF), and the Federal Emergency Management Administration

(FEMA) on advanced housing research projects, cooperative research and development 

agreements with industry, and Federal conferences. PATH leads efforts to increase and integrate 

Federal agency housing research and demonstration programs by ensuring that agency roles are 

well defined, and that agency research programs are responsive to the mainstream housing 

industry without duplicating efforts the industry should undertake itself. 

HUD’s Office of Rural Housing and Economic Development (RHED) works closely with the 

Department of Agriculture’s Rural Housing Service in the evaluation and selection of RHED 

grantees, and will consult with them in the development of a rural housing and economic 

development clearinghouse.

HUD works cooperatively with five other regulatory agencies that are required to collect data 

under the Home Mortgage Disclosure Act (HMDA). These agencies include the Office of Thrift 

Supervision, the Comptroller of the Currency (OCC), the Federal Reserve, the Federal 

Deposit Insurance Corporation and the National Credit Union Administration. HUD also 

confers regularly with the Department of the Treasury on issues related to the implementation 

of the Low-Income Housing Tax Credit.

HUD co-chairs, with the Centers for Disease Control and Prevention, the Interagency Task 

Force on Healthy Homes. Under the Healthy Homes initiative, HUD works closely with the 

Centers for Disease Control and Prevention, EPA, the National Institute of Environmental 

Health Sciences, the National Institute for Occupational Safety and Health, and the National 

Institute of Standards and Technology on ways to address multiple housing-related problems 

affecting the health of children. 

To reduce lead-based paint hazards, HUD coordinates with the President’s Task Force on 

Environmental Health and Safety Risks to Children, which includes the Centers for Disease 

Control and Prevention, Health Care Financing Administration, Environmental Protection 

Agency, National Institute of Health, Department of Justice, Consumer Product Safety 

Commission, Treasury, and many other agencies. Special cooperative activities involve the 

Environmental Protection Agency for implementation of the Residential Lead-Based Paint 

Hazard Reduction Act, the Centers for Disease Control for development of standards and 

reporting, and the Department of Justice for enforcement of lead-based paint rules.

HUD chairs the President’s Council on Fair Housing, an interagency group committed to 

promoting equal opportunity in mortgage lending, as well as the Interagency Task Force on 

Fair Lending, which coordinates enforcement of fair lending laws across the Federal 

Government. Through the Task Force, HUD and the Office of Federal Housing Enterprise 

Oversight (an independent office within HUD) work with the Departments of Justice and 

Treasury, Federal Deposit Insurance Corporation, Federal Housing Finance Board, 

Federal Reserve Board, Federal Trade Commission, National Credit Union 

Administration, Office of the Comptroller of the Currency and Office of Thrift Supervision

to reduce discrimination by lenders of all types. The Task Force provides guidance to lenders 
Strategic Plan

88 U.S. Department of Housing and Urban Development

consistent with the Fair Housing Act and the Equal Credit Opportunity Act and their 

implementing regulations, addressing issues such as the impact of credit scoring on fair lending 

and the effect of automated underwriting on the availability of mortgage credit to minorities.

The Department works cooperatively with Federal agencies to ensure compliance with civil 

rights laws in their housing programs: with the Department of Treasury for the Low-Income 

Housing Tax Credit program, and with the Department of Agriculture for rural housing.

With the Department of Treasury, HUD convened a task force to focus on the growing 

problem of predatory mortgage lending. Predatory lending practices—including excessive fees 

and interest rates, prepayment penalties and unnecessary refinancing—have saddled lowerincome, minority and elderly families with high debts that can cause these families to lose their 

homes. As part of the Task Force on Predatory Lending, HUD and Treasury conducted public 

hearings in five cities to gather information about abusive lending practices. This is the basis for 

regulatory and legislative recommendations to combat predatory lending issued in a newly 

released report titled Curbing Predatory Home Mortgage Lending.

HUD and the Department of Justice have strengthened an existing agreement to crack down on 

hate acts involving housing discrimination, to ensure prompt prosecution of housing-related hate 

violence or intimidation reported to the FBI and other Justice agencies, and to train HUD 

investigators to handle cases of housing-related violence and intimidation. 

The Department chairs the Interagency Council on the Homeless, which includes the 

Departments of Health and Human Services, Agriculture, Commerce, Education, Energy,

Justice, Labor, Defense, Interior and Transportation, as well as Veterans Affairs, the Social 

Security Administration, the Federal Emergency Management Agency, the Government 

Services Administration, and the Postmaster General. The Council, a working group of the 

White House Domestic Policy Council, coordinates Federal programs supporting homeless 

families and individuals.

In 2000 and 2001, HUD is joining with the Departments of Health and Human Services 

(HHS), Labor, and Agriculture to demonstrate how mainstream social services can better be 

tapped to serve the homeless. For example, HUD and HHS’s Health Care Financing 

Administration (HCFA) are working together to combine HUD housing resources with HCFA 

services, which will integrate homeless persons with severe mental disabilities or substance 

abuse problems into the community rather than place them in traditional group homes or other 

congregate living situations. These efforts may include using Section 8 vouchers to obtain a 

rental unit for a homeless person combined with home-based health care, mental health 

counseling and other services funded through HHS.

The Department also works with HHS to increase access to assisted living for low-income 

elderly households. HHS gave input on the program designs of two HUD initiatives: Section 8 

vouchers in assisted living and conversion of Section 202 units to assisted living. HHS issued 

guidance that allowed Medicaid payments to be used in conjunction with assisted living. HUD 

participates in HHS outreach to their field networks about these programs.
Resources, Interagency Partnerships and Program Evaluations

U.S. Department of Housing and Urban Development 89

HUD and the Federal Housing Finance Board signed a Memorandum of Understanding 

(MOU) that sets forth a policy for approving the use of Federal Home Loan Bank (FHLB) 

Affordable Housing Program funds for subordinate financing of Section 202 and Section 811 

projects for the elderly and persons with disabilities. The MOU streamlined the approval process 

and decreased the time that financing became available for these projects.

As part of the President’s National Homeownership Strategy, HUD serves as the lead agency to 

coordinate the National Partners for Homeownership. This group comprises 66 national partners 

working to cut the costs of homeownership, to remove barriers, to open markets and to expand 

opportunities for homeownership nationwide. Federal agency partners include the Departments 

of Agriculture, Energy, Treasury and Veterans Affairs.

HUD has been an active member of the Interdepartmental Task Force on HIV/AIDS, and through 

an Interagency Agreement with the Executive Office of the President, supports the White House 

Office of National AIDS Policy in coordinating policy development and public outreach on 

HIV/AIDS policy.

HUD is working with the Department of Veterans Affairs (VA) to identify VA local agency 

contacts so that homeless providers can better coordinate HUD housing assistance with VAprovided services to homeless veterans. Additionally, HUD, VA and DOL cooperatively 

reported to Congress regarding the quality and extent of services provided to homeless veterans. 

HUD and HHS are jointly offering training on how to develop Safe Havens for mentally ill 

homeless persons.

HUD is leading the “Access Housing 2000” initiative. This partnership with HHS and the 

National Program Office on Self-Determination, a project of the Robert Wood Johnson 

Foundation, will provide housing assistance for 2,000 persons with disabilities so they can move 

out of institutions and into community settings with supportive services. 

The Department works closely with a number of Federal agencies including DOL and HHS to 

ensure the successful implementation of welfare reform. Examples of these partnerships include 

the following:

• HUD is a member of the DOL Welfare-to-Work Policy Committee that is designing 

revisions to the Welfare-to-Work Grants program, required by new legislation. 

• HUD worked with HHS to develop guidance and a model cooperative agreement for public 

housing authorities and local welfare agencies, in order to help PHAs meet the requirements 

for such an agreement in the public housing reform legislation. 

• HUD has an interagency agreement with HHS to study the impact of HUD housing 

assistance on families leaving welfare. 

• HUD is a partner with the Small Business Administration (SBA) on programs that support 

former welfare recipients and ensure that public housing authorities work closely with small 

business agencies to provide job opportunities for PHA residents. 

• As part of the Presidential Task Force on Employment of Adults with Disabilities, HUD 
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proposed and designed a national pilot project implemented in 1999 to learn how Federallysupported service programs might better lead to employing adults with disabilities—

especially adults who are members of racial, ethnic and language minority communities. 

In a closely related issue, HUD participates on the interagency task force implementing the 

Workforce Investment Act with the Departments of Labor, Education, HHS and others. HUD’s 

emphasis is to establish public housing authorities as One-Stop Employment Centers, taking 

advantage of their proximity to needy families as well as their physical space and other resources.

HUD is participating in significant interagency coordination occurring through the White House 

National Economic Council to develop programs for the New Markets Initiative. Each agency 

brings to the table its own expertise in job creation. Treasury provides expertise in the impacts 

and effectiveness of tax incentives. SBA brings its expertise in business financing and the startup and expansion needs of small business. The Economic Development Administration (EDA) 

provides grant money to localities, primarily for planning and public works construction 

associated with economic development. HUD brings our expertise in large-scale development—

particularly development that links job creation with other important elements of community 

development. Proposals are developed so that they complement one another.

As part of the multi-agency Community Empowerment Board led by Vice President Gore, 

HUD has the lead on urban Empowerment Zones and Enterprise Communities. In this role HUD 

designates EZ/ECs, promotes participation in EZ/ECs by other agencies, and seeks funding 

preferences and waivers for other agency programs in EZ/ECs. 

HUD is part of the National Brownfields Partnership, which brings together resources from 

over 20 Federal agencies and non-governmental organizations to reclaim brownfields. HUD 

provides technical assistance to the participating communities and encourages the use of HUD 

programs. HUD works closely with the Environmental Protection Agency on brownfield 

redevelopment to help communities take a site from remediation to re-use. The Department 

recently signed a memorandum of understanding with the Army Corps of Engineers to utilize 

their skills in cost-benefit analysis, site planning and construction to lower the cost of 

brownfields redevelopment. 

HUD, with over 16 other Federal agencies, has signed the “Mississippi Delta Regional 

Initiative Interagency Memorandum of Understanding.” This MOU creates a framework for 

cooperation among the agencies on economic revitalization initiatives in the Delta region. 

HUD has a leading role in the Interagency Task Force on the Economic Development of the 

Southwest Border, which includes 15 other Federal agencies. The Task Force is evaluating the 

Border region’s problems and developing a coordinated Federal response that promotes 

sustainable economic development.

Working with a White House Task Force and the Department of Interior, HUD has led an 

interagency eCommerce initiative called Native eDGE. Unveiled by President Clinton, the 

Native eDGE website and toll free number gives tribes access to experienced economic 
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U.S. Department of Housing and Urban Development 91

development specialists, personalized research, dialogue among entrepreneurs, and coordination 

of federal agencies and their resources.

HUD and the U.S. Overseas Private Investment Corporation are cooperating to develop and 

test models for financing housing abroad.

HUD participates in the interagency White House Task Force on Livable Communities, 

comprising Federal agencies that have missions and resources that affect the livability of 

American communities. The Task Force focuses on policies that promote sustainable growth, 

preserve open space, reduce congestion, improve schools, make neighborhoods safe and 

otherwise improve quality of life in distressed communities. HUD has helped create new 

legislative, administrative and budgetary proposals designed to help reduce disparities in quality 

of life among communities. HUD’s participation has dramatically improved policy coordination 

with other agencies, such as the Department of Transportation and the Environmental 

Protection Agency, whose policies have a significant, direct impact on community development. 

HUD also has helped ensure that the unique needs of older, distressed communities are explicitly 

addressed in new livability policy proposals from the Administration.

PROGRAM EVALUATIONS

Evaluation Strategies 

Program evaluations are retrospective studies of the implementation, operation, impacts and 

costs of public programs. Along with the earlier discussions of program evaluations under each 

Strategic Goal, this section describes HUD’s approach to program evaluation and research to 

support strategic planning and performance measurement under the Government Performance 

and Results Act.

Enhance performance measurement through existing research projects. HUD will issue task 

orders under existing research contracts to obtain independent research supporting 

recommendations for additional or improved performance indicators. These indicators will 

include key intermediate outcomes that should be tracked or specific management issues that 

should be monitored to ensure program success. The Department also will seek opportunities to 

use program evaluations to validate existing performance indicators and to verify the accuracy of 

administrative data or other data used for performance measurement. In this way, evaluations 

will support our efforts to build data quality into our information systems and to assess and use 

data responsibly.

Demonstrate causal links. HUD is undertaking program evaluations intended to demonstrate 

the nature and extent of the contributions that HUD programs make toward the outcomes that are 

assumed to result from our programs. Good performance management requires an understanding 

of the “logic chain” that links program inputs—including budgetary and staff resources—with 

program outputs or intermediate results, and then with final outcomes experienced by customers. 

This research is best conducted through careful experiments and program evaluations that control 

for many external factors that may cause spurious conclusions about program impact. Although 
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HUD has one of the smallest evaluation budgets among Federal agencies, we seek to use all 

available research opportunities to identify these logical connections.

Illuminate innovations by partners. The implementation studies conducted during program 

evaluations shed light on the variety of program implementation strategies that local actors may 

use. The flexibility provided by HUD’s block grant programs creates a natural laboratory that 

allows our partners to experiment independently and respond to local conditions. Implementation 

studies identify further research issues growing out of such decentralized innovation.

Develop data sources. HUD studies policy issues with the purpose of establishing baselines and 

methodologies for ongoing performance measures. Important policy issues often develop into 

core issues for performance management. One example of such an issue is the question of how 

much the general public knows about fair housing law, and whether lack of knowledge is a major 

contributor to housing discrimination. HUD’s early annual performance plans identified a 

performance indicator for this topic; a baseline measurement is now being developed using an 

independent survey.

Data Coordination and Dissemination

HUD’s Office of Policy Development and Research contracts with Aspen Systems to maintain a 

website that disseminates reports and data sets resulting from HUD research and that provides a 

centralized bibliography of independent research related to HUD programs and policy issues.16

Planned Evaluations

The Department is undertaking and plans to pursue research on a variety of housing and 

community development issues.

• Although the American Housing Survey (AHS) is not strictly an evaluation, it represents one 

of HUD’s greatest research commitments to assess trends in housing and community 

development needs. The Bureau of Census conducts the AHS for HUD on a national basis 

biennially (in odd years), and conducts surveys for approximately 40 metropolitan areas at 

staggered 4-year intervals. HUD makes extensive use of the AHS for performance 

management purposes because it is an excellent source of data regarding the outcomes of 

HUD’s programs. In 1997, the AHS survey methodology was improved by the application of 

computer-assisted telephone interviewing, and the timeliness and usefulness of the data 

should continue to improve.

• A 10-year evaluation of HOPE VI Investment Partnerships is ongoing, using surveys of 

managers, residents and neighbors of public housing developments, along with windshield 

surveys and other mixed methodology to determine program outcomes and contributing 

factors. Interim case studies of completed HOPE VI sites will be available in 2000.

• A companion study of HOPE VI is beginning in 2000. It tracks the long-term impacts of 

living in HOPE VI developments upon the self-sufficiency outcomes of the residents.

 

16 http://www.huduser.org
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• The Empowerment Zone/Enterprise Community program is being studied on a 5-year interim 

basis. The study is assessing EZ achievements and changes in economic activity using 

comparison sites, and includes case studies of 18 EC sites. Because the EZ/EC impacts are 

anticipated to develop over extended periods, the current study is designed to support 

replication 10 years after the program began.

• The Jobs Plus Demonstration, which compares the employment of public housing residents 

who receive substantial job development assistance with those who do not, is expected to be 

completed by 2004.

• Continued assessment of FHA’s single family mortgage programs includes studying 

neighborhood default determinants, evaluating loss mitigation efforts, and assessing 

underwriting of mortgage products such as the Home Equity Conversion Mortgage.

• The results of the Moving To Opportunity Demonstration are being evaluated over the long 

term through procurement of a 5-year follow-on evaluation.

• The Moving To Work Demonstration project will provide a long-term assessment of the 

effects of giving high-performing Public Housing Agencies substantial flexibility in 

administering their programs.

• In 2001, another major report on the ongoing evaluation of the Lead-Based Paint Hazard 

Control Grant program is expected to produce evidence of long-term effectiveness.

• As part of a Housing Discrimination Study, a series of fair housing audits (tests) is being 

conducted in each of a number of metropolitan areas. This study will provide national 

estimates of the level of discrimination against African Americans and Latinos, as well as 

metropolitan-level estimates; it also will provide an exploratory examination of 

discrimination against members of other ethnic and racial groups.

• The National Academy of Public Administration has been engaged to provide an assessment 

of alternative methods of evaluating the performance of public housing agencies and other 

providers of federally assisted housing. A final report is expected shortly.

• A number of research projects have focused on the question of what happens to residents of 

federally-subsidized development that lose their Federal funding, either because of conditions 

of the development or because of owner decisions to opt-out or pre-pay their mortgages. 

HUD plans another evaluation to determine the effect of expanded protection for such 

residents on tenant outcomes and satisfaction.

• An evaluation of the Community Outreach Partnership Centers Program, through which 

HUD has funded more than 100 partnerships since 1994, is expected to be completed in 

December 2000. It will include a detailed review of program records, 25 preliminary site 

visits, and eight detailed case studies of campus-community partnerships.

• Another planned study will explore the connections between housing need, local housing 

market conditions, the evolution of housing plans, and actual housing practice in up to eight 

metropolitan areas. The study also will analyze the Qualified Allocation Plans of all 50 states 

and the District of Columbia to determine how they are allocating low-income housing tax 

credits.
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Many current and ongoing evaluations have been designed to support valid estimates of changes 

over time. For example:

• The study of rent affordability and income eligibility of residents of HOME-assisted rental 

developments.

• The national survey of homeless assistance providers and clients, initially guided by the 

Interagency Council on the Homeless.

• The survey of HUD employees for assessing the effects of 2020 Management Reform.

• The Welfare-to-Work Voucher Demonstration could be expanded from the initial small 

sample of housing authorities to a nationally-representative sample.

• The current Housing Discrimination Study will provide a baseline against which progress in 

fighting discrimination could be measured. The expense of conducting a future study for that 

purpose, however, would be prohibitive without special funding.

HUD is using improvements in technology to collect detailed and timely program monitoring 

data; in some cases, these data will eliminate the need for periodic evaluations. This is being 

implemented through improved management information systems.

• Information about physical and financial conditions in the subsidized multifamily housing 

stock was formerly collected by evaluations, but now is available annually through 

information systems managed by the Real Estate Assessment Center.

• Section 8 voucher lease-up rates have been evaluated three times, but HUD is studying the 

potential to replace such studies with annual program data, which would support performance 

measures.
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APPENDIX: KEY LEGISLATION

The Department of Housing and Urban Development is the Executive Branch Agency, 

established by Congress, whose chief responsibility is the implementation and enforcement of 

Federal housing and community development statutes passed by Congress. Through the years, 

Congress has passed legislation that not only created the programs that HUD is responsible for 

administering, but also established HUD’s overall goals and mission. While there have been a 

multitude of programs established by Congress over the years, the goals and mission of the 

Department have generally focused on the need for innovative and comprehensive solutions to 

housing and community development problems, an emphasis on HUD’s service to disadvantaged 

individuals and distressed neighborhoods, and a reliance on partnerships as a means to achieve 

results. 

The following is a list of key legislation that has shaped HUD’s mission:

1934 National Housing Act: Created the Federal Housing Administration “to encourage improvements in 

housing standards and conditions (and) to provide a system of mutual mortgage insurance.”

1937 United States Housing Act of 1937: Created the public housing program.

1949 Housing Act of 1949: Established grant programs to assist State and local governments with 

community planning and urban renewal. It also established the national “...goal of a decent home and a 

suitable living environment for every American family.”

1959 Housing Act of 1959: Established the Section 202 Supportive Housing for the Elderly program and 

FHA Mortgage Insurance for Nursing Homes program.

1965 Department of Housing and Urban Development Act: Created the Department in order “...to 

achieve the best administration of the principal programs of the Federal Government which provide 

assistance for housing and for the development of the Nation’s communities, to assist the President in 

achieving maximum coordination of the various Federal activities which have a major effect upon urban 

community, suburban, or metropolitan development. . . and to provide for full and appropriate 

consideration, at the national level, of the needs and interests of the Nation’s communities and of the 

people who live and work in them.”

1968 Housing and Urban Development Act: Established rental and homeownership programs for lowerincome families and created, within HUD, the Government National Mortgage Association (Ginnie 

Mae).

1968 Civil Rights Act: Prohibited discrimination in housing and gave HUD responsibility for administering 

those provisions.

1974 Housing and Community Development Act of 1974: Created Community Development Block Grants 

for State and local governments “to promote the development of viable urban communities” and also 

established Section 8 rent subsidies for low-income families.

1983 Housing and Urban-Rural Recovery Act: Created the housing voucher program as an addition to 

Section 8 rent certificates and repealed authority to make new commitments under the Section 8 projectbased program.
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1987/88 Stewart B. McKinney Homeless Assistance Act and the Stewart B. McKinney Homeless 

Assistance Amendments Act of 1988: Created new programs to assist the homeless.

1988 Fair Housing Amendments Act: Expanded the scope of fair housing provisions of the 1968 Civil 

Rights Act and gave HUD additional enforcement responsibilities.

1988 Housing and Community Development Act of 1988: Made housing vouchers a permanent program; 

allowed sale of public housing to resident management corporations, giving residents the ability to 

manage and buy their developments; and authorized enterprise zones.

1988 Anti-Drug Abuse Act of 1988: Established the Public Housing Drug Elimination Program.

1989 Department of Housing and Urban Development Reform Act: Established over 50 legislative 

reforms to help ensure ethical, financial, and management integrity.

1990 National Affordable Housing Act of 1990 (a.k.a. Cranston-Gonzalez Act): Created programs to 

empower and help the most needy through a variety of economic incentives, low-income 

homeownership opportunities and other housing and economic development programs. Created the 

HOME, Housing for Persons With AIDS (HOPWA) and Shelter Plus Care programs. Also established 

the Section 811 Supportive Housing for Persons With Disabilities program and the HOPE programs.

1992 Housing and Community Development Act of 1992: Established the Youthbuild and Low Income 

Housing Preservation and Homeownership programs. Also created a comprehensive lead paint hazards 

reduction program and HUD risk-sharing programs with housing finance agencies and GSEs.

1992 Federal Housing Enterprises Financial Safety and Soundness Act: Strengthened HUD’s regulatory 

authority over Fannie Mae and Freddie Mac, the two housing government sponsored enterprises 

regulated by HUD to improve access to affordable housing to low-and moderate-income families. The 

Act established the framework by which HUD will set goals for these agencies, and expanded HUD’s 

fair housing responsibilities over them. In addition, the Act established an independent office within 

HUD to examine the safety and soundness of Fannie Mae and Freddie Mac. 

1994 Multifamily Housing Property Disposition Reform Act of 1994: Amended disposition requirements 

for Multifamily mortgages. Created the Economic Development Initiative program.

1996 Native American Housing and Self-Determination Act: Established a separate Indian housing and 

community development block grant.

1997 Multifamily Assisted Housing Reform and Affordability Act of 1997: Established the Mark-toMarket Program (M2M). Under this program, individual projects in HUD’s multifamily portfolio of 

insured Section 8 housing projects will be restructured by resetting rents to market levels and reducing 

mortgage debt, if necessary, to permit a positive cash flow.

1998 Quality Housing and Work Responsibility Act of 1998 (a.k.a. Public Housing Reform Act): Made 

significant changes in the public housing and Section 8 tenant-based programs. Substantially 

deregulated high-performing public housing authorities, decreased poverty concentrations in public 

housing and promoted mixed-income communities, ensured that a threshold share of units and housing 

vouchers remain available for the truly needy, and created incentives for residents to become selfsufficient.
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1998 VA-HUD Appropriations Act for Fiscal Year 1999: Increased FHA’s single-family loan limits, 

giving HUD the opportunity to provide more affordable mortgages to first-time, minority and centralcity homebuyers and substantially amended FHA Single Family Property Disposition requirements.

1999 Preserving Affordable Housing for Senior Citizens and Families into the 21st Century Act: 

Enables HUD to develop a broad range of housing options to meet the changing housing needs of senior 

citizens, and authorizes Mark-up-to-Market, which protects low-income renters by minimizing the 

number of owners that choose to “opt-out” of the project-based housing assistance program.

1999-

2000

VA-HUD Appropriations Acts: For FY 1999 Congress approved 50,000 new housing vouchers to 

help individuals and families with worst case housing needs and help families move from welfare to 

work. This was the first significant appropriation of new vouchers for the Department since FY 1994. 

For FY 2000, Congress approved 60,000 new vouchers, demonstrating renewed commitment to reduce 

the severe shortage of affordable housing.
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