United States Government Accountability Office

GAO Testimony 

Before the Subcommittee on Housing, 

Transportation, and Community 

Development, Committee on Banking, 

Housing, and Urban Affairs, U.S. Senate

PUBLIC HOUSING 

Information on the 

Financing, Oversight, and 

Effects of the HOPE VI 

Program 

Statement of David G. Wood, Director 

Financial Markets and Community Investment 

For Release on Delivery

Expected at 2:00 p.m. EDT

Wednesday, June 20, 2007 

 

GAO-07-1025T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

June 20, 2007

PUBLIC HOUSING

Information on Financing, Oversight, and 

Highlights of GAO-07-1025T, a testimony Effects of the HOPE VI Program 

to the Subcommittee on Housing, 

Transportation, and Community 

Development, Committee on Banking, 

Housing, and Urban Affairs, U.S. Senate 

Since fiscal year 1992, the

Department of Housing and Urban 

Development (HUD) has awarded 

more than $6 billion in HOPE VI 

program grants to public housing 

authorities to revitalize severely

distressed public housing and 

provide supportive services to

residents. HUD has encouraged

housing authorities to use their 

HOPE VI grants to attract, or

leverage, funding from other

sources, including other federal,

state, local, and private-sector 

sources. Projects funded with 

public and private funds are known 

as mixed-finance projects.

This testimony is based primarily

on three reports that GAO issued

between November 2002 and 

November 2003, focusing on (1) the 

financing of HOPE VI projects,

including the amounts of funds 

leveraged from non-HOPE VI

sources; (2) HUD’s oversight and

administration of the program; and 

(3) the program’s effects on public 

housing residents and

neighborhoods surrounding HOPE 

VI sites. As requested, the 

statement summarizes the key

findings from these reports, the 

recommendations GAO made to

HUD for improving HOPE VI 

program management, and HUD’s 

actions in response to the 

recommendations. 

In its November 2002 report, GAO found that housing authorities expected 

to leverage—for each HOPE VI dollar received—$1.85 in funds from other 

sources, and that the authorities projected generally increasing amounts of 

leveraged funds. GAO also found that even with the general increase in 

projected leveraging, 79 percent of the budgeted funds in mixed-finance 

projects that HUD had approved through fiscal year 2001 came from federal 

sources. GAO recommended that HUD provide the Congress with annual 

reports on the HOPE VI program, as required by statute, and provide data on 

the amounts and sources of funding used at HOPE VI sites. HUD has 

submitted these reports to Congress since fiscal year 2002. According to the

2006 report, HOPE VI grantees have cumulatively leveraged, from the 

program’s inception through the second quarter of fiscal year 2006, $1.28 for 

every HOPE VI grant dollar expended.

In its May 2003 report, GAO found that HUD’s oversight of the HOPE VI 

program had been inconsistent for several reasons, including a shortage of 

grant managers and field office staff and confusion about the role of field 

offices. A lack of enforcement policies also hampered oversight; for 

example, HUD had no policy regarding when to declare a grantee in default 

of the grant agreement or apply sanctions. GAO made several

recommendations designed to improve HUD’s management of the program. 

HUD concurred with these recommendations and has taken actions in 

response, including publishing guidance outlining the oversight 

responsibility of field offices and notifying grantees that they would be in 

default of their grant agreement if they fail to meet key deadlines.

In its November 2003 report, GAO found that most of the almost 49,000 

residents that had been relocated as of June 2003 had moved to other public 

or subsidized housing; small percentages had been evicted, moved without 

giving notice, or vacated for other reasons. Grantees expected that about 

half of the original residents would return to the revitalized sites. Limited 

HUD data and information obtained during GAO’s site visits suggested that 

the grantee-provided community and supportive services had yielded some 

positive outcomes, such as job training and homeownership. Finally, GAO’s 

analysis of Census and other data showed that neighborhoods surrounding 

20 HOPE VI sites (awarded grants in 1996) experienced improvements in 

several indicators used by researchers to measure neighborhood change, 

such as educational attainment levels, average household income, and 

percentage of people in poverty. However, for a number of reasons, GAO 

could not determine the extent to which the HOPE VI program was 

responsible for the changes.

www.gao.gov/cgi-bin/getrpt?GAO-07-1025T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact David G. Wood 

at (202) 512-8678 or woodd@gao.gov. 
Mr. Chairman and Members of the Subcommittee: 

I appreciate the opportunity to be here today as the Subcommittee 

considers legislation to reauthorize the HOPE VI program. In 1992, 

Congress established the Urban Revitalization Demonstration Program, 

commonly known as HOPE VI, administered by the Department of 

Housing and Urban Development (HUD). Under this program, HUD 

competitively awards grants for revitalizing distressed public housing—

through rehabilitation or demolition and construction of new, mixedincome developments—and for improving the lives of public housing 

residents through supportive services such as child care and job training. 

By providing funds for a combination of capital improvements and 

community and supportive services, the program seeks not only to 

improve the living environment for public housing residents, but also to 

help improve surrounding neighborhoods and decrease the concentration 

of very low-income families. 

Since fiscal year 1992, HUD has awarded more than $6 billion in HOPE VI 

grants to public housing authorities. Grant agreements, which serve as 

contracts between HUD and the grantees, specify the activities that the 

housing authorities must complete and key deadlines they must meet. To 

increase the number of affordable housing units developed at HOPE VI 

sites, HUD has encouraged housing authorities to use their HOPE VI 

grants to attract, or leverage, funding from other sources, including other 

federal, state, local, and private-sector sources. Projects funded with a 

combination of public and private funds are known as mixed-finance 

projects. HUD also has encouraged housing authorities to leverage 

additional funds for supportive services. 

My testimony is based primarily on a series of three reports concerning the 

program that we issued between November 2002 and November 2003.1

These reports focused on (1) the financing of HOPE VI projects, including 

the amounts of funds leveraged from non-HOPE VI sources, (2) HUD’s 

oversight and administration of the program, and (3) the program’s effects 

on public housing residents and neighborhoods surrounding HOPE VI 

 1

The three reports are Public Housing: HOPE VI Leveraging Has Increased, but HUD Has 

Not Met Annual Reporting Requirement, GAO-03-91 (Washington, D.C.: Nov. 15, 2002); 

Public Housing: HUD’s Oversight of HOPE VI Sites Needs to Be More Consistent, 

GAO-03-555 (Washington, D.C.: May 30, 2003); and Public Housing: HOPE VI Resident 

Issues and Changes in Neighborhoods Surrounding Grant Sites, GAO-04-109 

(Washington, D.C.: Nov. 21, 2003). 

Page 1 GAO-07-1025T 
sites. As you requested, my statement summarizes the key findings from 

our work, the recommendations we made to HUD for improving HOPE VI 

program management, and HUD’s actions in response to the 

recommendations. 

In Brief: 

• In our November 2002 report, which examined the extent to which 

housing authorities had leveraged HOPE VI funds with other sources of 

financing, we found that for revitalization grants awarded since the 

program’s inception through fiscal year 2001, housing authorities expected

to leverage—for each HOPE VI dollar received—$1.85 in funds from other 

sources, and that the authorities projected generally increasing amounts of 

leveraged funds. However, HUD considered the level of leveraging to be 

somewhat higher, because it treated as “leveraged” other public housing 

funds that the housing authorities would have received even in the 

absence of their HOPE VI grants. Our analysis of mixed-finance projects 

HUD had approved through fiscal year 2001 indicated that 79 percent of 

the budgeted funds came from federal sources. This was a higher 

proportion than HUD data indicated, because HUD did not treat funds that

grantees received through low-income housing tax credits as federal 

funds—even though the credits represent forgone federal income and are 

therefore a cost to the federal government. Finally, our analysis also 

showed that although the majority of funds budgeted overall for 

supportive serves were HOPE VI funds, the amount of non-HOPE VI funds 

budgeted for supportive services had increased dramatically since the 

program’s inception. We recommended that HUD provide the Congress 

with annual reports on the HOPE VI program, as it was required by statute 

to do, and to include in the reports the amounts and sources of funding 

used at HOPE VI sites. The first such report that HUD submitted to 

Congress was for fiscal year 2002. Based on data reported in HUD’s 2006 

annual report, HOPE VI grantees have cumulatively leveraged, from the 

program’s inception through the second quarter of fiscal year 2006, $1.28 

for every HOPE VI grant dollar expended. 

• In our May 2003 report, which examined several issues concerning HUD’s 

management of the program, we found that the department’s oversight had 

been inconsistent for several reasons, including limited numbers of grant 

managers and field office staff, and confusion about the role of field 

offices; however, in response to our recommendations, HUD has taken 

steps designed to address these problems. We found a number of instances 

of limited oversight; for example, by the end of 2002, HUD field offices had 

not conducted any of the required annual reviews for 8 out of 20 grants 

awarded 6 years earlier. According to field office managers, the reviews 

Page 2 GAO-07-1025T 
had not been performed either because they lacked staff or because the 

offices did not understand their role in HOPE VI oversight. We also found 

that the status of work at HOPE VI sites varied, with construction 

completed at less than 10 percent of the 165 sites that had received 

revitalization grants through fiscal year 2001; that many grantees had 

missed deadlines specified in their grant agreements; and that HUD lacked 

clear enforcement policies to deal with such grantees. We made several 

recommendations designed to improve HUD’s management of the 

program. HUD concurred with these recommendations and has taken 

actions in response, including publishing guidance on the oversight 

responsibility of field offices and notifying grantees that they would be in 

default of their grant agreement should key deadlines not be met. Because 

we have not examined HUD’s oversight of the program since the 2003 

report, we do not know the extent to which HUD’s actions have corrected 

the problems we identified. 

• In our November 2003 report, which focused on resident issues and 

changes in the neighborhoods surrounding HOPE VI sites, we found that 

public housing residents at HOPE VI sites had been affected in varying 

ways by the program, and that the neighborhoods surrounding the HOPE 

VI sites we examined had generally experienced improvements in 

indicators such as education, income, and housing, although we could not 

determine the extent to which HOPE VI contributed to the changes.2

 Most

of the almost 49,000 residents that had been relocated as of June 30, 2003, 

had moved to other public housing or subsidized housing, and that small 

percentages had been evicted, moved without giving notice, or vacated for 

other reasons. At the time of our study, the grantees expected that about 

half of the original residents would return to the revitalized sites. The 

grantees had involved the public housing residents of HOPE VI sites in 

project plans to varying degrees. They had also provided a variety of 

community and supportive services to residents, and limited HUD data 

and information obtained during our site visits suggested that these had 

yielded at least some positive outcomes; for example, 31 of 49 participants

in a Housing Authority of Pittsburgh health worker training program had 

obtained employment. Finally, according to our analysis of census and 

other data, the neighborhoods in which 20 HOPE VI sites (1996 grantees) 

are located had experienced improvements in a number of indicators used 

 2

In examining neighborhood effects, we included only the projects that received grants in

1996. These were the first awarded after HUD allowed revitalization to be funded with a 

combination of public and private funds, which has become the HOPE VI model; further, 

because program effects can occur over time, focusing on the earlier projects may have 

increased the chances of detecting any such effects. 

Page 3 GAO-07-1025T 
by researchers to measure neighborhood change, such as educational 

attainment levels, average household income, and percentage of people in 

poverty. However, for a number of reasons, we could not determine the 

extent to which the HOPE VI program was responsible for the changes. 

In 1992 the National Commission on Severely Distressed Public Housing 

(the Commission) reported that approximately 86,000, or 6 percent, of the 

nation’s public housing units were severely distressed—characterized by 

physical deterioration and uninhabitable living conditions, high levels of 

poverty, inadequate and fragmented services, institutional abandonment, 

and location in neighborhoods often as blighted as the public housing sites 

themselves. In response to the Commission’s report, Congress established 

the Urban Revitalization Demonstration Program, more commonly known 

as HOPE VI, at HUD. The program awards grants to public housing 

authorities (PHA). The grants can fund, among other things, the 

demolition of distressed public housing, capital costs of major 

rehabilitation, new construction, and other physical improvements, and 

community and supportive service programs for residents, including those 

relocated as a result of revitalization efforts. Beginning in 1996 with the 

adoption of the Mixed-Finance Rule, PHAs were allowed to use public 

housing funds designated for capital improvements, including HOPE VI 

funds, to leverage other public and private investment to develop public 

housing units. Public funding can come from federal, state, and local 

sources. For example, HUD itself provides capital funding to housing 

agencies to help cover the costs of major repair and modernization of 

units. Private sources can include mortgage financing and financial or inkind contributions from nonprofit organizations.

HUD’s requirements for HOPE VI revitalization grants are laid out in each 

fiscal year’s notice of funding availability (NOFA) and grant agreement. 

NOFAs announce the availability of funds and contain application 

requirements, threshold requirements, rating factors, and the application

selection process. Grant agreements, which change each fiscal year, are 

executed between each grantee and HUD and specify the activities, key 

deadlines, and documentation that grantees must meet or complete. 

NOFAs and grant agreements also contain guidance on resident 

involvement in the HOPE VI process. HUD encourages grantees to 

communicate, consult, and collaborate with affected residents and the 

broader community, but allows grantees the final decision-making 

authority. Grant applications are screened to determine whether they meet

the eligibility and threshold requirements in the NOFA. A review panel 

(which may include the Deputy Assistant Secretary for Public Housing 

Background 

Page 4 GAO-07-1025T 
Investments, the Assistant Secretary for Public and Indian Housing, and 

other senior HUD staff) recommends the most highly rated applications 

for selection, subject to the amount available for funding. 

HUD’s Office of Public Housing Investments, housed in the Office of 

Public and Indian Housing, manages the HOPE VI program. Grant 

managers within the Office of Public Housing Investments are primarily 

responsible for overseeing HOPE VI grants. They approve changes to the 

revitalization plan and coordinate the review of the community and 

supportive services plan that each grantee submits.3

 In addition, grant 

managers track the status of grants by analyzing data on the following key 

activities: relocation of original residents, demolition of distressed units, 

new construction or rehabilitation, reoccupancy by some original 

residents, and occupancy of completed units. Public and Indian Housing 

staff located in HUD field offices also play a role in overseeing HOPE VI 

grants, including coordinating and reviewing construction inspections. 

Beginning in fiscal year 1999, HUD began to encourage HOPE VI 

revitalization grant applicants to form partnerships with local universities 

to evaluate the impact of their proposed HOPE VI revitalization plans.4

In 2003, Congress reauthorized the HOPE VI program and required us to 

report on the extent to which public housing for the elderly and nonelderly persons with disabilities was severely distressed. We subsequently 

reported that available data on the physical and social conditions of public 

housing are insufficient to precisely determine the extent to which 

developments occupied primarily by elderly persons and non-elderly 

persons with disabilities are severely distressed.5

 Using HUD’s data on 

public housing developments—buildings or groups of buildings—-and 

their tenants, we identified 3,537 developments primarily occupied by 

 3

The revitalization plan includes the grantee’s HOPE VI application, budgets, a community 

and supportive services plan, a relocation plan, and any supplemental submissions that 

HUD requests following its review of the HOPE VI application or as a result of a visit to the 

site. The community and supportive services plan contains a description of the supportive 

services that will be provided to residents, proposed steps and schedules for establishing 

arrangements with service providers, plans for actively involving residents in planning and

implementing supportive services, and a system for monitoring and tracking the 

performance of the supportive services programs as well as resident progress. 

4

GAO-04-109. 

5

Public Housing: Distressed Conditions in Developments for the Elderly and Persons

with Disabilities and Strategies Used for Improvement, GAO-06-163 (Washington, D.C.: 

December 9, 2005) 

Page 5 GAO-07-1025T 
elderly residents and non-elderly persons with disabilities. Data from HUD 

and other sources indicated that 76 (2 percent) of these 3,537

developments were potentially severely distressed. 

According to our analysis of HUD data for our November 2002 report, 

housing authorities expected to leverage an additional $1.85 in funds from 

other sources for every dollar received in HOPE VI revitalization grants 

awarded since the program’s inception through fiscal year 2001.6

 However, 

HUD considered the amount of leveraging to be slightly higher because it 

treated as “leveraged” both (1) HOPE VI grant funds competitively 

awarded for the demolition of public housing units and (2) other public 

housing capital funds that the housing authorities would receive even in 

the absence of the revitalization grants. Even when public housing funds 

were excluded from leveraged funds, our analysis of HUD data showed 

that projected leveraging had increased; for example, 1993 grantees 

expected to leverage an additional $0.58 for every HOPE VI grant dollar 

(excluding public housing funds), while 2001 grantees expected to 

leverage an additional $2.63 from other sources (excluding public housing 

funds). But, our analysis of HUD data through fiscal year 2001 also 

indicated that 79 percent of funds that PHAs had budgeted came from 

federal sources, when low-income housing tax credit funding was 

included. Finally, our analysis showed that although the majority of funds 

budgeted overall for supportive services were HOPE VI funds, the amount 

of non-HOPE VI funds budgeted for supportive services increased 

dramatically since the program’s inception. Specifically, while 22 percent 

of the total funds that fiscal year 1997 grantees budgeted for supportive 

services were leveraged funds, 59 percent of the total that fiscal year 2001 

grantees budgeted were leveraged funds. 

Although HUD had been required to report leveraging and cost 

information to the Congress annually since 1998, it had not done so at the 

time of our 2002 report. As required by law, this annual report is to include 

the cost of public housing units revitalized under the program and the 

amount and type of financial assistance provided under and in conjunction

with the program. We recommended that the Secretary of Housing and 

Urban Development provide these annual reports to Congress and include 

Grantees Had 

Projected A General 

Increase in Leveraged 

Funds, Primarily 

From Federal Sources 

 6

GAO-03-91. To determine the extent to which grantees had leveraged federal and 

nonfederal funds, we analyzed data from HUD’s HOPE VI reporting system on grants

awarded. This data primarily consisted of budgeted or projected funds. 

Page 6 GAO-07-1025T 
in these annual reports, among other things, information on the amounts 

and sources of funding used at HOPE VI sites, including equity raised from 

low-income housing tax credits, and the total cost of developing public 

housing units at HOPE VI sites, including the costs of items subject to 

HUD’s development cost limits and those not subject.7

In response to this recommendation, HUD issued annual reports to 

Congress for fiscal years 2002 through 2006 that include information on 

the amounts and sources of funding used at HOPE VI sites. In each of 

these reports, HUD included the amount of funds leveraged from lowincome housing tax credits in its data on non-federal funds.8

 Based on data 

reported in the 2006 annual report, since the program’s inception HOPE VI 

grantees have cumulatively leveraged $1.28 per HOPE VI grant dollar 

expended.

9

 Currently, we have work underway examining, among other 

things, how and the extent to which leveraging occurs in several federal 

programs, including the HOPE VI program. 

Our May 2003 report found that a variety of factors diminished HUD’s 

ability to oversee HOPE VI grants.10 In particular, the limited numbers of 

grant managers, a shortage of field office staff, and confusion about the 

role of field offices had diminished the agency’s ability to oversee HOPE VI 

grants. Our site visits showed that HUD field staff was not systematically 

performing required annual reviews. For example, for revitalization grants 

awarded in 1996, some never received an annual review and no grant had

had an annual review performed each year since the grant award. From 

our interviews with field office managers, we determined that there were 

two reasons why annual reviews were not performed. First, many of the 

field office managers we interviewed stated that they simply did not have

HUD’s Oversight of 

Projects and 

Enforcement of 

Program 

Requirements Had 

Been Inconsistent 

 7

Pursuant to the Quality Housing and Work Responsibility Act of 1998, HUD’s total 

development cost policy limits the amount of public housing funds—including HOPE VI 

funds—that housing authorities may spend to construct a public housing unit. This per-unit 

limit does not apply to funds leveraged from other sources. 

8

In 2002 HUD reported the amount of funds budgeted for grants. For the annual reports 

covering fiscal years 2003 through 2006, HUD reported the amounts of funds expended for

grants. 

9

U.S. Department of Housing and Urban Development, 2006 Annual Report to Congress on

HOPE VI, (Washington, D.C.: January 2007). Data based on funds expended as of the 

second quarter of fiscal year 2006. Total HOPE VI grant dollars expended include 

revitalization and demolition grants. 

10GAO-03-555. 

Page 7 GAO-07-1025T 
enough staff to get more involved in overseeing HOPE VI grants. Second, 

some field offices did not seem to understand their role in HOPE VI 

oversight. For instance, one office thought that the annual reviews were 

primarily the responsibility of the grant managers. Others stated that they 

had not performed the reviews because construction had not yet started at 

the sites in their jurisdiction or because they did not think they had the 

authority to monitor grants. 

As a result of our findings, we recommended that HUD clarify the role of 

HUD field offices in HOPE VI oversight and ensure that the offices 

conducted required annual reviews. In response to this recommendation, 

HUD published new guidance in March 2004 that clarified the role of HUD 

field offices in HOPE VI oversight and the annual review requirements. 

According to the guidance, HUD field office responsibilities include 

conducting an annual risk assessment, which should consider such factors 

as missed deadlines and adverse publicity and should be used to 

determine whether an on-site review should be conducted and which 

areas of the HOPE VI grant should be reviewed. The published guidance 

included a risk assessment form and sample monitoring review reports. 

While HUD’s action was responsive to our recommendation, we have not 

examined the extent to which it has corrected the problems we identified

in our 2003 report. 

Our 2003 report also noted that the status of work at HOPE VI sites varied,

and that the majority of grantees had missed one or more of three major 

deadlines specified in their grant agreements: the submission of a 

revitalization plan to HUD, the submission of a community and supportive 

services plan to HUD, and completion of construction. We made 

recommendations to HUD designed to ensure better compliance with 

grant agreements. More specifically:

• Of the 165 sites that received revitalization grants through fiscal year 2001, 

15 had completed construction at the time of our review.11 Overall, at least 

some units had been constructed at 99 of the 165 sites, and 47 percent of 

all HOPE VI funds had been expended. In general, we found that the more 

recently awarded grants were progressing more quickly than earlier 

grants. For example, fiscal year 1993 grantees had taken an average of 31

months to start construction. In contrast, the fiscal year 2000 grantees 

started construction an average of 10 months after their grant agreement 

 11GAO-03-555. 

Page 8 GAO-07-1025T 
was executed.12 HUD cited several reasons that may explain this

improvement, such as later grantees having more capacity than the earlier 

grantees, the applications submitted in later years being more fully 

developed to satisfy NOFA criteria, and HUD placing greater emphasis on

reporting and accountability. 

To further improve its selection of HOPE VI grantees, we recommended 

that HUD continue to include past performance as an eligibility 

requirement in each year’s NOFA—that is, to take into account how 

housing authorities had performed under any previous HOPE VI grant 

agreements. In response to this recommendation, HUD stated in its fiscal 

year 2004 NOFA that a HOPE VI application would not be rated or ranked, 

and would be ineligible for funding, if the applicant had an existing HOPE 

VI revitalization grant and (1) development was delinquent due to actions 

or inactions that were not beyond the control of the grantee and (2) the 

grantee was not making substantial progress towards eliminating the 

delinquency. According to the fiscal year 2006 NOFA, the ratings of 

applicants that received HOPE VI grants between 1993 and 2003 can be

lowered for failure to achieve adequate progress. 

• For at least 70 percent of the grants awarded through fiscal year 1999, 

grantees had not submitted their revitalization plans or community and 

supportive services plans to HUD on time.13 Moreover, the large majority 

of grantees had also missed their construction deadlines; in the case of 9 

grants, no units had been constructed as of the end of December 2002. 

HUD had taken some steps to encourage adherence to its deadlines; for 

example, HUD began requiring applicants to provide a certification stating 

that they had either procured a developer for the first phase of 

development, or that they would act as their own developer.

However, HUD did not have an official enforcement policy to deal with 

grantees that missed deadlines. As a result, we recommended that HUD 

develop a formal, written enforcement policy to hold public housing 

 12At the time of our analysis, 9 of the fiscal year 2000 grantees had not started construction. 

As a result, we could not be sure that the fiscal year 2000 grantees, as a whole, had moved 

faster than earlier grantees. Until these grantees start construction, we cannot be sure that

the fiscal years 1999 and 2000 grantees, as a whole, have moved faster than earlier 

grantees. 

13We omitted from our analysis 5 fiscal year 1995 grants that were awarded during a second

round of funding because each grantee signed a grant agreement with HUD that contained 

unique deadlines specific to that grant. The revitalization plan deadlines for the fiscal years 

2000 and 2001 grants had not yet passed at the time of our study. 

Page 9 GAO-07-1025T 
authorities accountable for the status of their grants. HUD agreed with this 

recommendation, and in December, 2003 notified several grantees that 

they were nearing deadlines and that failure to meet these deadlines could 

result in HUD placing the grant in default. According to the 2006 NOFA, 

HUD may withdraw funds from grantees that have not proceeded within a 

reasonable timeframe, as outlined in their program schedule. 

In our November 2003 report, we found that most residents at HOPE VI 

sites had been relocated to other public housing, or other subsidized 

housing, and that grantees expected that about half of the original 

residents would return to the revitalized sites.14 In our examination of sites 

that had received HOPE VI grants in 1996, we found that the housing 

authorities had involved public housing residents in the planning and 

implementation process to varying degrees. Further, HUD data and 

information obtained during our site visits suggested that the supportive 

services provided public housing residents yielded at least some positive 

outcomes. Finally, according to our analysis of census and other data, the 

neighborhoods in which 1996 HOPE VI sites are located had generally 

experienced positive improvements in educational attainment levels, 

average household income, and percentage of people in poverty, although

we were unable to determine the extent to which the HOPE VI program 

contributed to these changes. 

According to HUD data, approximately 50 percent of the almost 49,000 

residents that had been relocated as of June 30, 2003, had been relocated

to other public housing; about 31 percent had used vouchers to rent 

housing in the private market; approximately 6 percent had been evicted;

and about 14 percent had moved without giving notice or vacated for other 

reasons. However, because HUD did not require grantees to report the 

location of original residents until 2000, grantees had lost track of some 

original residents. Although grantees, overall, expected that 46 percent of

all the residents that occupied the original sites would return to the 

revitalized sites, the percentage varied greatly from site to site. A variety of

factors may have affected the expected return rates, such as the numbers 

and types of units to be built at the revitalized site and the criteria used to

select the occupants of the new public housing units. 

About Half of Public 

Housing Residents 

Were Expected to 

Return to Revitalized 

Sites, while Evidence 

Suggested That 

Communities 

Surrounding Some 

HOPE VI Sites Had 

Improved 

Most Original Residents 

Were Relocated to Other 

Public Housing, and About 

Half Were Expected to 

Return to Revitalized 

HOPE VI Sites 

 14GAO-04-109. 

Page 10 GAO-07-1025T 
We found that the extent to which the 1996 grantees involved residents in 

the HOPE VI process varied.15 Although all of the 1996 grantees held 

meetings to inform residents about revitalization plans and solicit their 

input, some of them took additional steps to involve residents in the HOPE 

VI process. For example, in Tucson, Arizona, the housing authority waited 

until the residents had voted their approval before submitting the 

revitalization plan for the Connie Chambers site to the city council. In 

other cases, litigation or the threat of litigation ensured resident 

involvement. For instance, under a settlement agreement, the Chicago 

Housing Authority’s decisions regarding the revitalization of Henry Horner 

Homes were subject to the approval of the Horner Resident Committee. 

Overall, based on the information available at the time of our 2003 report, 

grantees had provided a variety of community and supportive services, 

including case management and direct services such as computer and job 

training programs. Grantees had also used funds set aside for community 

and supportive services to construct facilities where services were 

provided by other entities. Information we collected during our visits to 

the 1996 sites, as well as limited HUD data on all 165 grants awarded 

through fiscal year 2001, indicated that HOPE VI community and 

supportive services had achieved or contributed to positive outcomes. For 

example, 31 of 49 participants in a Housing Authority of Pittsburgh health

worker training program had obtained employment, while 114 former 

project residents in Louisville, Kentucky had enrolled in homeowner 

counseling and 34 had purchased a home. 

According to our analysis of census and other data, the neighborhoods in 

which 1996 HOPE VI sites are located generally have experienced 

improvements in a number of indicators used to measure neighborhood 

change, such as educational attainment levels, average housing values, and 

percentage of people in poverty. For example, our analysis showed that in

18 of 20 HOPE VI neighborhoods, the percentage of the population with a 

high school diploma increased, in 13 neighborhoods average housing 

values increased, and in 14 neighborhoods the poverty rate decreased 

between 1990 and 2000. For a number of reasons—such as relying on 1990 

and 2000 census data even though HOPE VI sites were at varying stages of 

completion—we could not determine the extent to which HOPE VI 

contributed to these changes. However, we found that several studies 

Among 1996 Grant Sites, 

Resident Involvement in 

the HOPE VI Process 

Varied, While Supportive 

Services Yielded Some 

Positive Outcomes 

1996 HOPE VI 

Communities Experienced 

Positive Changes 

 15GAO-04-109. 

Page 11 GAO-07-1025T 
conducted by universities and private institutions also showed that the 

neighborhoods in which HOPE VI sites are located had experienced 

positive changes in income, employment, community investment, and 

crime indicators. For example, one study found that per capita income in 

eight selected HOPE VI neighborhoods increased an average of 71 percent,

compared with 14.5 percent for the cities in which these sites are located,

between 1989 and 1999. 

We also observed that the HOPE VI program also may influence changes in

neighborhood indicators by demolishing older, distressed public housing 

alone. For example, in the 6 HOPE VI neighborhoods where the original 

public housing units were demolished, but no on-site units had been 

completed, measured educational attainment and income levels increased. 

Mr. Chairman, this concludes my prepared statement. I would be happy to

answer any questions at this time. 

For further information on this testimony, please contact David G. Wood

at (202) 512-8678. Individuals making key contributions to this testimony 

included Alison Gerry, John McGrail, Lisa Moore, Paul Schmidt, and Mijo 

Vodopic. 

Page 12 GAO-07-1025T 

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250350 
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