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THE ADMINISTRATION’S PROPOSAL TO 

REVITALIZE SEVERELY DISTRESSED PUBLIC 

AND ASSISTED HOUSING: THE 

CHOICE NEIGHBORHOODS INITIATIVE 

HEARING 

BEFORE THE

COMMITTEE ON FINANCIAL SERVICES 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

MARCH 17, 2010 

Printed for the use of the Committee on Financial Services 

Serial No. 111–113 

( 

(II) 

HOUSE COMMITTEE ON FINANCIAL SERVICES 

BARNEY FRANK, Massachusetts, Chairman 

PAUL E. KANJORSKI, Pennsylvania 

MAXINE WATERS, California 

CAROLYN B. MALONEY, New York 

LUIS V. GUTIERREZ, Illinois 

NYDIA M. VELA ́ ZQUEZ, New York 

MELVIN L. WATT, North Carolina 

GARY L. ACKERMAN, New York 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

DENNIS MOORE, Kansas 

MICHAEL E. CAPUANO, Massachusetts 

RUBE ́ N HINOJOSA, Texas 

WM. LACY CLAY, Missouri 

CAROLYN MCCARTHY, New York 

JOE BACA, California 

STEPHEN F. LYNCH, Massachusetts 

BRAD MILLER, North Carolina 

DAVID SCOTT, Georgia 

AL GREEN, Texas 

EMANUEL CLEAVER, Missouri 

MELISSA L. BEAN, Illinois 

GWEN MOORE, Wisconsin 

PAUL W. HODES, New Hampshire 

KEITH ELLISON, Minnesota 

RON KLEIN, Florida 

CHARLES A. WILSON, Ohio 

ED PERLMUTTER, Colorado 

JOE DONNELLY, Indiana 

BILL FOSTER, Illinois 

ANDRE ́ CARSON, Indiana 

JACKIE SPEIER, California 

TRAVIS CHILDERS, Mississippi 

WALT MINNICK, Idaho 

JOHN ADLER, New Jersey 

MARY JO KILROY, Ohio 

STEVE DRIEHAUS, Ohio 

SUZANNE KOSMAS, Florida 

ALAN GRAYSON, Florida 

JIM HIMES, Connecticut 

GARY PETERS, Michigan 

DAN MAFFEI, New York 

SPENCER BACHUS, Alabama 

MICHAEL N. CASTLE, Delaware 

PETER T. KING, New York 

EDWARD R. ROYCE, California 

FRANK D. LUCAS, Oklahoma 

RON PAUL, Texas 

DONALD A. MANZULLO, Illinois 

WALTER B. JONES, JR., North Carolina 

JUDY BIGGERT, Illinois 

GARY G. MILLER, California 

SHELLEY MOORE CAPITO, West Virginia 

JEB HENSARLING, Texas 

SCOTT GARRETT, New Jersey 

J. GRESHAM BARRETT, South Carolina 

JIM GERLACH, Pennsylvania 

RANDY NEUGEBAUER, Texas 

TOM PRICE, Georgia 

PATRICK T. MCHENRY, North Carolina 

JOHN CAMPBELL, California 

ADAM PUTNAM, Florida 

MICHELE BACHMANN, Minnesota 

KENNY MARCHANT, Texas 

THADDEUS G. McCOTTER, Michigan 

KEVIN McCARTHY, California 

BILL POSEY, Florida 

LYNN JENKINS, Kansas 

CHRISTOPHER LEE, New York 

ERIK PAULSEN, Minnesota 

LEONARD LANCE, New Jersey 

JEANNE M. ROSLANOWICK, Staff Director and Chief Counsel 

(III) 

C O N T E N T S 

Page 

Hearing held on: 

March 17, 2010 ................................................................................................. 1 

Appendix: 

March 17, 2010 ................................................................................................. 47 

WITNESSES 

WEDNESDAY, MARCH 17, 2010 

Cabrera, Hon. Orlando, former Assistant Secretary for Public and Indian 

Housing, U.S. Department of Housing and Urban Development, and CEO, 

National Community Renaissance ...................................................................... 20 

Crowley, Sheila, President, National Low Income Housing Coalition ................ 22 

Donovan, Hon. Shaun, Secretary, U.S. Department of Housing and Urban 

Development ......................................................................................................... 5 

Eldridge, Nancy Rockett, Executive Director, Cathedral Square Corporation, 

on behalf of the American Association of Homes and Services for the Aging 

(AAHSA) ............................................................................................................... 25 

Goetz, Edward G., Director, Center for Urban and Regional Affairs, University of Minnesota .................................................................................................. 23 

Khadduri, Jill, Principal Associate, Abt Associates Inc. ...................................... 27 

Ramirez, Saul N., Jr., Executive Director, National Association of Housing 

and Redevelopment Officials (NAHRO) ............................................................. 28 

Siglin, Kristin, Vice President and Senior Policy Advisor, Enterprise Community Partners ........................................................................................................ 30 

APPENDIX 

Prepared statements: 

Cabrera, Hon. Orlando ..................................................................................... 48 

Crowley, Sheila ................................................................................................. 52 

Donovan, Hon. Shaun ...................................................................................... 59 

Eldridge, Nancy Rockett .................................................................................. 67 

Goetz, Edward G. ............................................................................................. 75 

Khadduri, Jill .................................................................................................... 88 

Ramirez, Saul N., Jr. ........................................................................................ 95 

Siglin, Kristin ................................................................................................... 112 

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

Written statement of Dr. Deirdre A. Oakley, Associate Professor, Dr. Erin 

Ruel, Assistant Professor, and Dr. Lesley W. Reid, Associate Professor, 

Department of Sociology, Georgia State University .......................................... 121 

(1) 

THE ADMINISTRATION’S PROPOSAL TO 

REVITALIZE SEVERELY DISTRESSED PUBLIC 

AND ASSISTED HOUSING: THE 

CHOICE NEIGHBORHOODS INITIATIVE 

Wednesday, March 17, 2010 

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON FINANCIAL SERVICES, 

Washington, D.C. 

The committee met, pursuant to notice, at 10:06 a.m., in room 

2128, Rayburn House Office Building, Hon. Barney Frank [chairman of the committee] presiding. 

Members present: Representatives Frank, Waters, Watt, Moore 

of Kansas, Hinojosa, Clay, Baca, Scott, Green, Klein, Perlmutter, 

Donnelly, Carson, Adler; Bachus, Miller of California, Capito, 

Neugebauer, Marchant, Jenkins, and Paulsen. 

The CHAIRMAN. The hearing will come to order. We are here 

today on a very important initiative of the Obama Administration. 

The HOPE VI Program has been one that has frankly been protected on a bipartisan basis by Congress. The previous Administration tried to de-fund it. On both sides of the aisle here, there was 

strong support for keeping it going, but there is a recognition that 

there is room for significant improvement. I appreciate the fact 

that the Secretary has indicated in a statement that he is not going 

to be doing away with HOPE VI and that in fact more will go in 

the continuing HOPE VI issue as we work on this. 

The committee is glad to work with the Secretary. I would note 

with regard to the current fiscal year, obviously we did just get the 

legislation. We have had some indications here of what was coming. I should say I don’t think given particularly the pace of things 

in the Senate that we’re going to be able to get a whole new bill 

done by the end of the year, but I do intend for this committee in 

particular to have some significant input into this. And if this is 

ultimately going to be done in the Appropriations Committee, we 

will be insistent that the appropriators pay significant attention 

here. I would hope that we would have a markup here in the committee and be able to have our impact on the appropriators. 

With regard to the substance, I welcome the attention to public 

housing. We ought to be very clear that there are examples of public housing that should never have been built, that unfortunately 

are sometimes blamed on the victims, the people who live there. 

Nobody asked to live in 1,000-unit tower with no services in an isolated part of town. And it’s important that we humanize those both 

for the people who live there and for the impact this has on the 

2 

city and the surrounding neighborhoods. So we look towards cooperation. 

There were a couple of important points to myself and to the gentlewoman from California, the chairwoman of the Housing Subcommittee. One is that we do not want this to result in a net reduction in units available to lower-income people. I will go back to the 

previous years where I think one of the problems that we faced was 

a disrespect for rental housing and the view that the only acceptable way to provide housing for low-income people was to get them 

to be homeowners, leading to a significant overemphasis on that 

and to many people being put into homeownership who shouldn’t 

have been there, who couldn’t have afforded it, who weren’t able 

to manage it. And appropriate attention to rental units is very important. 

So one of the issues we have here is the matter of replacement. 

Now I understand those in the housing authority feel, well, what 

are we going to replace it with? It is my hope that we will have 

things with which they can replace it, including, and I want to 

make it very clear as I just did to the Secretary privately, in my 

mind, funding the Low Income Housing Trust Fund is essential to 

our being able to do other things. That is the central piece. I can’t 

support destruction of existing units without a fund that will provide replacement of those units, and that is not now possible with 

the resources we have made available. So funding the housing 

trust fund, beginning now and going forward, is very important. 

Secondly, and I have this concern which I have also expressed to 

the Secretary, I understand that when you provide housing for people, you also want to provide them with a decent living environment, a good education, public safety, recreational space, and 

transportation, but not out of a HUD budget that’s already too limited. We have a HUD budget that is constrained. I agree with the 

comprehensive approach. I disagree strongly with the notion that 

these other services ought to be funded out of HUD. For example, 

transportation. Yes, adequate transportation is important. It can 

also be expensive. We have a transportation trust fund, and I—as 

well as others on this committee—will have some serious concerns 

about the funding coming from the HUD budget for programs that 

ought to be funded out of other budgets. 

Now fortuitously, the Appropriations Subcommittee that’s relevant here has both HUD and the Department of Transportation 

under it, and I intend to work closely with our colleague there, who 

has been very cooperative with us, so that if we’re going to be talking about funding here, the funding has to come from more than 

one source. Obviously, there are some incidental overlaps that are 

unavoidable. 

But I don’t see, in anything the Administration has sent me, requests that the Departments of Transportation, Health and Human 

Services, or Education provide some of their funds for housing. It 

seems to be a one-way street here. I understand there’s a need for 

some cooperation, but I will be very, very skeptical of efforts to deplete HUD funding, which is already, in my judgment, inadequate, 

not because of the Administration’s fault, but because of budgetary 

realities for other purposes. 

The gentleman from Alabama is recognized for 5 minutes. 

3 

Mr. BACHUS. Thank you, Mr. Chairman. Secretary Donovan, I 

welcome you to the committee to again testify about the Administration’s Choice Neighborhoods Initiative. I also appreciate your 

willingness to work with both sides of the aisle. On more than one 

occasion, you have proposed constructive changes to HUD programs. Having said that, I do have some concerns about HUD’s 

programs, and I want to express those. Many of my concerns date 

back obviously before your tenure as Secretary. 

But first of all, let me talk about the Choice Neighborhoods Initiative. It is a newly constructed government funding grant program, and it’s designed to replace the existing HOPE VI Program. 

Like HOPE VI, Choice Neighborhoods’ stated goal is to transform 

neighborhoods of extreme poverty into sustainable mixed-income 

neighborhoods. And I believe that Choice Neighborhoods, at least 

in my opinion, is an improvement over HOPE VI, and I want to 

acknowledge that. At the same time, it does continue a program, 

HOPE VI, that some say has reached its stated purpose. So before 

we continue a program, and I acknowledge that this proposal is an 

improvement in my mind, we need to consider whether we just extend it at all, particularly in light of an unsustainable Federal 

budget deficit and a multi-trillion-dollar national debt. 

One particular concern about HUD in general is that it has not 

done enough to stretch taxpayers’ current housing investments and 

must address significant questions surrounding the accuracy of 

HUD’s budget offset projections. Just last week, the CBO found 

that FHA and Ginnie Mae receipts would be $4.4 billion less than 

the Administration’s $6.9 billion projection. As you know, HUD is 

claiming that the $6.9 billion was to offset the $48.5 billion HUD 

budget, reducing the HUD budget to $41.5 billion. Before we consider additional spending projects of any kind, HUD, along with 

other Executive Branch agencies, should be required to justify current programs and their budget allocations. The FY2011 budget requests an additional $250 million for Choice Neighborhoods on top 

of the $65 million Congress provided in HUD’s FY2010 budget. Yet, 

the Choice Neighborhoods Initiative has yet to be authorized. 

Mr. Chairman, during the presidential campaign of 2008, President Obama committed to performing a top-down review of every 

government agency and program. HUD for some time has been notorious for slow spend-out rates in many of its programs and large 

unspent balances sitting in HUD accounts. How can we be assured 

that this new government program will be any more effective than 

HOPE VI when there are already millions of dollars sitting in an 

account waiting for some action or decision? Before we do create a 

new government-run program, even if it’s better than the one it 

hopes to replace, a better course of action might be to perform the 

top-down review that the President promised in order to identify 

the types of reforms necessary to ensure HUD programs are administered in a cost-effective, efficient way. 

In closing, Secretary Donovan, thank you again for being here to 

testify on Choice Neighborhoods and for sharing your views. And 

I do think this proposal is a constructive proposal, but I think that 

the Administration should address funding issues, specifically the 

shortfall created by the lower-than-expected FHA and Ginnie Mae 

receipts. I yield back the balance of my time. 

4 

The CHAIRMAN. If the gentleman would yield me 30 seconds for 

an agreement with him. He talked about this not having been authorized. In fact, I think on behalf of both sides, I fought very hard 

against an effort by some of the appropriators, with the Administration’s support at first, but they responded well, to fund this 

without the authorization. And ultimately, some money was put in 

at the insistence of the Senate, but less than expected, and our 

House colleagues respected it, and it is my intention that at the 

very least, we will have a markup in this committee before anything goes further. So I just wanted to express my— 

Mr. BACHUS. Right. And then that would address some of my 

concerns. 

The CHAIRMAN. Yes. And, you know, I think frankly, if we work 

something out that probably would represent the House position, 

if the Senate committee wants to yield itself to the appropriators. 

Mr. BACHUS. Right. 

The CHAIRMAN. We’re not in charge of them. 

Mr. BACHUS. Thank you. 

The CHAIRMAN. The gentleman from Indiana wanted a minute. 

Mr. DONNELLY. Thank you, Mr. Chairman. I just want to thank 

the Secretary for coming here today and for your housing efforts 

that you have made on our behalf and to thank you for your interest and assistance in the manufactured housing markets I represent, that help provide affordable housing, and your assistance 

has been greatly appreciated. Thank you very much for being here 

today. 

The CHAIRMAN. The gentlewoman from West Virginia is recognized for 3 minutes. 

Mrs. CAPITO. Thank you, Mr. Chairman. I would like to thank 

the chairman for holding this hearing, and I would like to welcome 

Secretary Donovan back to the committee. Mr. Secretary, I’m certainly intrigued by many of the provisions included in the Choice 

Neighborhoods proposal, and I look forward to hearing your testimony today and learning more about it. 

The Choice Neighborhoods Initiative would replace the HOPE VI 

Program with a grant-funded program to revitalize neighborhoods 

characterized by extreme poverty into sustainable mixed-income 

neighborhoods. This program is designed to address the direct 

housing needs of the neighborhood and make available services to 

improve employment, educational opportunities, and public transportation, among other services. 

Given our current budget and deficit issue, it is imperative that 

we begin to take a fresh look at how best to resolve the capital 

needs of our aging affordable housing stock. I like the idea of expanding the pool of players that can participate to those in the private, nonprofit, and government sector. This proposal has the ability to help us address some of our preservation issues, and I look 

forward to learning more about this program and working with you 

and the chairman. 

While I know we’re here today to discuss the Choice Neighborhoods proposal, I couldn’t pass up the opportunity to raise the 

issues on the future of FHA. As you know, last week I introduced 

H.R. 4811, the FHA Safety and Soundness and Taxpayer ProtecVerDate Nov 24 2008 18:31 Jul 22, 2010 Jkt 056777 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 K:\DOCS\56777.TXT TERRIE
5 

tion Act of 2010, which included the majority of the proposals that 

you have requested. 

First, does the Administration plan to have legislation introduced 

on their behalf? And second, when the Secretary presented the 

2011 budget for HUD, $6.9 billion was estimated for receipts from 

Ginnie Mae and FHA, and recently, as you know, the CBO presented their own estimates, which were much lower than the $6.9 

billion predicted by HUD. The $4.4 billion gap between CBO’s 

numbers and those of HUD—and I raised these with the Commissioner last week—raise serious concern about the ability of HUD 

to begin new initiatives like Choice Neighborhoods. 

Lastly, the HOPE VI Program has traditionally benefitted large 

urban centers like New York, Chicago, and Los Angeles, although 

I think we did have a HOPE VI project in Wheeling, West Virginia. 

And since the creation of the program, my home State has received 

the one grant for the Wheeling Housing Authority. If the Choice 

Neighborhoods Initiative is truly an improvement over HOPE VI, 

then it should work towards ending the disparity of public housing 

revitalization between the urban and rural communities. The affordable housing challenges faced in rural America are different 

from those in urban communities. However, they are no less important and by no means no less difficult. 

I look forward to further discussions with Secretary Donovan on 

this issue and welcome the witnesses here today. Thank you. 

The CHAIRMAN. The gentleman from Texas is recognized for 1 

minute, and then I think we’ll be ready to hear from the witnesses. 

Mr. GREEN. Thank you, Mr. Chairman, and I thank you, Mr. Secretary, for your appearance today. A brief comment about a program that we have bipartisan support for. As you know, Congressman Miller and I have been working on sell assisted downpayment. 

And I just want to thank you for continuing to work with us. We 

have not arrived at a final decision, but we’re still working on the 

project. I also want to let you know that while I am eager to hear 

what you have to say on the Choice Neighborhoods Initiative, I 

have another hearing that they asked me to attend, so I’ll be in 

and out. I do look forward to reading your testimony as well as reviewing the transcript. Thank you very much, and I yield back the 

balance of my time. 

The CHAIRMAN. Well, if the gentleman would yield. He is 

unfailingly courteous, and I understand him saying this, but I will 

tell him it is my experience that no Cabinet official has ever minded a Member not asking him a question. 

[laughter] 

The CHAIRMAN. Mr. Secretary? 

STATEMENT OF THE HONORABLE SHAUN DONOVAN, SECRETARY, U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 

Secretary DONOVAN. Thank you, Chairman Frank, Ranking 

Members Bachus and Capito, and members of the committee, and 

I also want to say thank you to Chairwoman Waters for all of her 

leadership on housing issues and her work on this particular proposal as well and feedback. I welcome this opportunity to discuss 

our new proposed Choice Neighborhoods legislation and the HOPE 

6 

VI Program, the history and promise of which we seek to build on 

today. 

Mr. Chairman, the HOPE VI Program has become one of our 

country’s most powerful weapons to fight concentrated poverty and 

rebuild distressed housing. As you know, these problems are deeply 

interconnected. Neighborhoods of concentrated poverty are typically 

marked by high crime and unemployment rates, health disparities, 

struggling schools, and faltering civic institutions, making distressed public and assisted housing developments in these neighborhoods a significant barrier to access to opportunity for poor families. 

HOPE VI made the Federal Government a partner to local housing authorities and communities, emphasizing mixed-income communities, leveraged financing, and incorporating supportive services. At its best, HOPE VI changed the world outside the development gates: reducing neighborhood poverty, crime, and unemployment; increasing income and property values; and spurring investment, business growth, and jobs. Indeed, over time, HOPE VI 

transformed from a housing program into a process of learning 

from best practices, encouraging all the participants and stakeholders in a neighborhood to invest in the most catalytic and meaningful neighborhood impacts. It is that foundation, Mr. Chairman, 

that we seek to build upon today with Choice Neighborhoods. 

Choice Neighborhoods builds on HOPE VI’s successes. It enshrines the lessons that we have learned, and it gives communities 

more tools to tackle their interconnected needs. By expanding the 

HOPE VI tool kit to allow for the redevelopment of private and federally assisted properties alongside public housing, Choice Neighborhoods will bring disinvested properties that had no tool for redevelopment under the HOPE VI umbrella. 

Let me explain why it’s needed. Fifteen years ago, the media 

spotlight briefly focused on the nightmarish conditions in one 

Washington, D.C., neighborhood’s large distressed housing developments: Frederick Douglass; Stanton Dwellings; Parkside Terrace; 

and Wheeler Terrace. Washington Highlands presented a worstcase scenario for HUD, because two separate and distinct HUD 

programs were contributing to deterioration of the neighborhood. 

Thanks to HOPE VI, the community could redevelop the public 

housing properties, and it secured other financing to build a new 

community center and an elementary school. But the two other 

housing developments in Washington Highlands were out of reach, 

simply because they were subsidized by different programs at 

HUD. 

Mr. Chairman, the media didn’t make the distinction between 

public housing and project-based Section 8. The residents didn’t 

make the distinction. Gangs and drug dealers certainly didn’t make 

the distinction. And thankfully, the community leaders who were 

fighting to turn their neighborhood around didn’t make the distinction either. The only one to make the distinction was HUD. 

Back in 1994, an internal reported noted that HUD had, ‘‘no 

ready mechanism to deal with the problem of high concentrations 

of distressed public and assisted housing in a single neighborhood 

of concentrated poverty.’’ Today, we do. It’s called Choice Neighborhoods. Choice Neighborhoods allows the HOPE VI tools housing auVerDate Nov 24 2008 18:31 Jul 22, 2010 Jkt 056777 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 K:\DOCS\56777.TXT TERRIE
7 

thorities use to remake public housing to be available for assisted 

and other blighted housing, housing that HOPE VI wasn’t allowed 

to touch in Washington Highlands. 

HOPE VI taught us that absent a more comprehensive approach, 

housing interventions are often insufficient to improve the lives of 

poor families. That’s why Choice Neighborhoods will provide funding flexibility for health and other service coordination, job supports and work incentives for adults, and to connect resident children to quality educational opportunities. 

Take, for example, the Murphy Park development in Chairwoman Waters’ hometown of St. Louis, in which the developer not 

only raised an additional $5 million from private and philanthropic 

interests to modernize the troubled school, Jefferson Elementary, it 

also worked closely with residents and the school board to hire a 

new principal with a new curriculum and a new focus on technology and after-school programs. 

In the years following Murphy Park’s completion, unemployment 

surrounding the development fell by 35 percent. Median household 

income rose more than 4 times as fast as the City as a whole. And 

Jefferson Elementary became one of the most in-demand schools in 

the community. In Choice Neighborhoods, we challenge communities to take this approach to scale. Of course, different communities are at different levels of preparedness for this kind of undertaking. That’s why Choice Neighborhoods also dedicates a portion 

of the overall allocation for planning grants. These grants ensure 

communities that aren’t yet fully able to undertake a successful 

neighborhood revitalization can start down that path. Residents 

should never be penalized simply because they live in communities 

that are not yet able to build and execute a strong transformational 

plan. 

We have learned other lessons as well. We learned from HOPE 

VI that even though it was possible to replace the entirety of units 

being redeveloped either in the neighborhood or elsewhere in the 

community, in some tight housing markets, desperately needed affordable homes were lost through demolition. That is why our proposed Choice Neighborhoods legislation includes a strengthened 

one-for-one replacement requirement in which demolished or disposed-of units must be replaced by hard units. Vouchers may serve 

as replacement units only in very limited cases where there is an 

adequate supply of affordable rental housing in areas of low poverty. 

We learned in HOPE VI that some households have been unfairly screened out of new developments, treated as little more than 

the sum of their FICO scores, precluded from returning to the new 

mixed-income communities. That’s why with this legislation we will 

protect the right of least compliant residents to return to the redeveloped housing, while also ensuring that those who choose to move 

with a voucher benefit as well. 

HOPE VI has changed the face of public housing in America, and 

we have heard from communities across the country that they need 

those same successful tools to remake the other federally assisted 

housing that prevents their neighborhoods from turning the corner. 

Of the over 325,000 units of HUD public and assisted housing by 

early estimates that might be eligible for Choice Neighborhoods, 

8 

more than three-quarters are public housing, but all need the tools 

that Choice Neighborhoods provides. 

I believe that when you choose a home, you don’t just choose a 

home. You also choose transportation to work, schools for your children, and public safety. You choose a community and the choices 

available in that community. I’m committed to helping America’s 

most distressed neighborhoods tackle their toughest challenges, 

from crime and disinvestment to the lack of educational and economic opportunity, to housing decay, be it public housing, Section 

8 or other kinds of distressed housings. Because if a century of 

housing policy has taught us anything, it’s that if there isn’t equal 

access to safe, affordable housing in neighborhoods of choice, there 

isn’t equal opportunity. 

And if 17 years of HOPE VI has taught us anything, it’s that 

building communities in a more integrated and inclusive way isn’t 

separate from advancing social and economic justice and the promise of America; it’s absolutely essential to it. It’s inseparable from 

the idea that in America, our children’s hopes and our dreams 

should never be limited by where they live. Ensuring they never 

are is the goal of Choice Neighborhoods, indeed of all the work we 

do together. 

And with that, I would love to take any questions you may have. 

[The prepared statement of Secretary Donovan can be found on 

page 59 of the appendix.] 

The CHAIRMAN. Mr. Secretary, thank you, and we appreciate the 

chance to meet with you. The one-for-one replacement is very important. It doesn’t obviously have to be on-site, although I must 

say, given the resistance to new sites, a certain amount of that will 

happen. But the one-for-one replacement is very important. The 

Federal Government should not at this point be in the business of 

diminishing the stock of affordable rental housing. And of course, 

we look forward to working with you, and you have been very helpful. 

In a related matter, this is largely public housing, we have a separate piece of legislation dealing with the preservation of assisted 

housing built with private, publicly-subsidized funds, and that also 

is an area where we will try to preserve units. And the third piece 

of that is, as I said, new construction, and in particular the Low 

Income Housing Trust Fund, which I think will be essential to 

making the one-for-one replacement work. It’s inappropriate for us 

to impose on housing authorities a requirement that they produce 

housing and not provide the funding. 

I also want to welcome the way this is done procedurally, because as you say here, reading the written statement, your intention would be, if everything worked well, that you would continue 

the HOPE VI process, so we don’t stop the HOPE VI process, correct? And then assuming we can work this out, you would look to 

funding two or three applicants under the new program in early 

2011. So for Fiscal Year 2010, which begins in October, this would 

be starting on a smaller basis. I think that’s in part responsive to 

what the ranking member said, and I appreciate that. 

It will be my intention, and I have spoken to the chair of the subcommittee, who is of course very involved in this, and mentioned 

it to the ranking member of the full committee, to have a markup 

9 

in this committee. The chances of getting something through by the 

end of the year, I’m not sure what they are, and they’re not in our 

control. But I do think at least a committee markup would be important. 

So then let me get to the specifics. One of the concerns I had was 

that how we implement the one-for-one is important, and I appreciate we’re getting I think some good common ground here. We’re 

not insisting on one-for-one on-site, obviously, and hard units, not 

just vouchers because they take away from what we have. Secondly, although project-based vouchers, vouchers that are helpful 

in construction obviously meet that definition. And I should say, incidentally, as you know, I welcome your decision to simplify the 

various forms of vouchers, etc. I think that is way too complicated 

and allows people to game the system. 

There was a concern that some of the housing projects that 

should get some help might be too much in need of help to get 

helped, and the fact you’re continuing HOPE VI, and we will be 

working on other things I know you have talked about, our agreement to do other things, well, I will say the House did in the bill. 

We passed on infrastructure, as you know, made some money available for repair and operation, repair and maintenance of public 

housing. We want to do that. 

So the last point, though, the one that may be somewhat contentious, is the funding. And I agree that these things need to be done 

together. I disagree that we should be allowing any substantial 

part of these funds from the HUD budget to be used for non-housing factors. There are very important issues. But again, this is 

going to help some housing projects and not others. And I do think 

that people who live in a dilapidated housing project somewhere 

else that doesn’t meet the criteria for this or isn’t selected for a variety of reasons shouldn’t see money potentially available to fixing 

up their building going for transportation or other improvements 

elsewhere. 

So for this to work, it seems to me there needs to be a combined 

effort. So the question is, is there an interagency group here? Are 

you meeting with other Cabinet officials? I would hope that the 

Secretary of Education, the Secretary of Health and Human Services, and the Secretary of Transportation, at the least, would be involved and that there would be an agreement that there would be 

a joint funding request. Is that in the works? 

Secretary DONOVAN. We have been working very closely with a 

set of other agencies, the Department of Education, the Department of Transportation, and the Department of Justice to ensure 

that there are other funding sources that we can access and that 

they’re coordinated. And we’re working through the details on how 

NOFA processes might be connected through this, including with 

Promise Neighborhoods, which is an initiative at the Department 

of Education, to invest in the most underperforming schools. 

Let me just say generally, I agree strongly with you not only that 

we need to coordinate at the Federal level, but that we will be requiring significant investment at the local level for those other 

types of purposes. I do want to be clear, though, that there are two 

points where I think it’s important, and HOPE VI has shown this 

very successfully, that making sure that the way that the housing 

10 

investments are structured supports, whether it’s opportunities for 

job creation in the neighborhood, things like the way we set our 

rent policies and others that encourage work and self-sufficiency, 

there are a range of things connected to social services and supports that are very important, and that has been true of HOPE VI. 

There has been significant flexibility to support those. 

The CHAIRMAN. There’s no debate about that. The question is, 

are other funds being used for other programs? 

Secretary DONOVAN. The other point I would make is that we do, 

when we are comprehensively remaking a community, a public 

housing community in HOPE VI, we do support the outside space, 

the redevelopment of the outside space within that development. 

That includes small parks or other types of things that are part of 

that redevelopment. It’s important that continue. And that there be 

connections and opportunities for other spaces. For example, we 

have made a number of changes to the bill due to feedback from 

you and other members of the committee, to try to place specific 

limits, but we want to avoid the kind of siloed separation that 

would, for example, stop us, and I have seen examples of this in 

my work prior to coming to HUD, where a local government wants 

to put a school building or a school within the building that contains the housing as well. And overly strict rules stop us from even 

being able to contribute to the walls or the columns that support 

the building. So we need to make sure— 

The CHAIRMAN. That’s not, however, what we’re worried about. 

Secretary DONOVAN. —that the coordination— 

The CHAIRMAN. I understand, but— 

Secretary DONOVAN. —works effectively so we don’t put 

unneeded barriers in the way. 

The CHAIRMAN. I’m going to give myself 10 more seconds, and 

then I’m going to leave, but there’s nothing stopping the Education 

Department from contributing as well. So I am worried that this 

is too one-sided as it comes forward, and that was what the Senate 

seemed to me to be doing. We agree in concept, but there has to 

be a wash on the money. 

The gentlewoman— 

Secretary DONOVAN. And we have proposed some limits in response to your comments. We would be happy to talk to you further 

about the specifics around those— 

The CHAIRMAN. Yes, and we’ll be happy to write some of them, 

too. The gentlewoman from West Virginia. 

Mrs. CAPITO. Thank you, Mr. Chairman. Mr. Secretary, if I could 

ask you about one of the things I mentioned in my opening statement, and that is the dichotomy between urban and rural areas, 

and how you think this new Choice Neighborhoods Initiative would 

address rural areas and needs. I know there has to be a certain 

amount of density, but if you could just talk a little bit about that. 

Secretary DONOVAN. Absolutely. And I think this is a very important point in a couple of different areas. First of all, we have, and 

I personally have seen the incredible despair that exists in some 

rural communities in assisted housing. To be specific, some of the 

very first HUD developments I worked on early in my career were 

in communities like Idabel, Oklahoma, or Bunkie, Louisiana, where 

HUD assisted properties were the single most important source of 

11 

issues in that neighborhood that needed to be overcome, and yet 

there has been no tool available to those properties. 

Many of those properties, I would add, are supported not just by 

HUD, by also by the Department of Agriculture through a range 

of their programs as well. And because there has been no comprehensive redevelopment tool, that has stood in the way of benefits coming to rural areas where often assisted housing is the most 

significant source of affordable housing in those communities rather than public housing. So I do think the expansion that we’re proposing here has a real benefit to rural communities. 

A second thing I would say is we want to make sure that the way 

that we define neighborhood in this proposal is not so constrained 

that it wouldn’t apply in rural areas. And we have tried to do that 

in the legislation. For example, sometimes HUD has defined a census tract or a very narrow definition of neighborhood that doesn’t 

make sense for rural communities, and we want to work with the 

committee. We have tried to leave enough flexibility to make sure 

that we’re defining neighborhoods in a way that rural communities 

would be eligible and would be benefitted, whether it’s a community in West Virginia, the Colonias in Texas, or in other States, 

those are very important definitions that will allow the community, 

this bill to work well in rural communities. 

The last thing I would say is that one of the very important things we proposed and that we will begin to do with the $65 million in 2010 is to provide planning grants for communities. We 

have some rural communities that today are not in a position to 

win HOPE VI grants, and I think one of the reasons why some 

rural communities have been excluded is because they have not 

been able to pull together the resources to plan effectively and to 

win the competition. Having planning grants would give those communities a real benefit in terms of being able to support their planning efforts, to then come in and be able to compete and win in 

Choice Neighborhoods. So that’s an important element of how we’re 

targeting rural communities as well. 

Mrs. CAPITO. And I think that makes a lot of sense. The other 

aspect of this, and you touched on it with the chairman, is the job 

creation aspect. If you’re going to create Choice Neighborhoods, if 

there are no jobs to sustain the folks who are living there and to 

maintain a certain lifestyle or eventually move out of those neighborhoods, it’s doomed to failure. I think that’s sort of what you alluded to in your opening statement. 

So I think that’s going to be a real challenge. In the rural areas, 

that’s obviously more of a challenge just because of the lack of diversity in the economy. But I think it’s something that probably 

will be considered. 

Let me ask you, the other thing—one of the things, the PHAs are 

the only ones available for HOPE VI, but in this particular legislation or idea you open it up to include government entities, nonprofits, and for-profits. How do you think allowing competitors in 

that will improve this program? 

Secretary DONOVAN. Well, to be very clear, currently, housing authorities have formed very strong partnerships with for-profits and 

nonprofits in HOPE VI. And so I don’t want to imply that there 

haven’t been a range of other partners involved. Specifically beVerDate Nov 24 2008 18:31 Jul 22, 2010 Jkt 056777 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 K:\DOCS\56777.TXT TERRIE
12 

cause assisted housing is owned by either nonprofit or for-profit 

owners, there will be cases if assisted housing is the main focus of 

a redevelopment plan, that you might have a nonprofit or a forprofit that would be the lead applicant in this case rather than 

being part of a team with a housing authority. So it was important 

for us to provide some more flexibility in terms of who the lead applicant could be compared to HOPE VI. 

But I do want to come back and emphasize, based on our estimates, we believe that an overwhelming share, a very large share 

of Choice Neighborhoods grants would go still to PHAs because 

roughly three-quarters of the most distressed housing by an initial 

review that we have done is a public housing, and the 25 percent 

that’s assisted housing, much of it is in neighborhood, about 30 percent, where you have both troubled public housing and assisted 

housing. So our expectation is in the large majority of cases, we 

would still have PHAs as the lead applicants for this. 

Mrs. CAPITO. All right. Thank you. 

Ms. WATERS. [presiding] Thank you very much. I’m going to recognize myself for 5 minutes. 

Welcome, Mr. Secretary. 

Secretary DONOVAN. It is good to be with you again. 

Ms. WATERS. We’re delighted to see you. You have been talking 

about this Choice Neighborhoods Initiative ad nauseam, and so it 

is time for all of the members to have a thorough understanding 

of what Choice Neighborhoods is and how it works. I have talked 

with you extensively about it, and I think that Chairman Frank 

started with a line of questioning that speaks to our concerns and 

our need to understand it even better, of course. 

We understand, and you’re absolutely correct, many of us appreciated some of the HOPE VI projects, not all of them, and we’re 

worried about one-for-one replacement, as you know, and we’re 

worried about continuing resources for public housing. Many of 

them have not received much in the way of capital investments to 

upgrade them or to maintain them properly. And we also are concerned, as he started to talk about, whether or not you have, or are 

developing, the kinds of relationships even with these demonstration projects with Transportation, with Education, and with other 

entities who will come with their own resources, working with you 

to develop these Choice Neighborhoods. 

So that’s kind of three questions in one. Could you respond to 

that? 

Secretary DONOVAN. Sure. Let me first of all say that I am enormously committed, as you are, and as the President is, to ensuring 

the preservation of our public housing. That’s why we included $4 

billion with you in the Recovery Act for capital for public housing, 

and I strongly believe that we need to do more, and we are doing 

more to ensure the preservation of public housing more broadly. 

That’s one of the reasons we felt strongly the need to strengthen 

the one-for-one replacement, and we have already begun to respond 

to some input from you and your staff, as well as other members 

of the committee, of ensuring we get that language right, ensuring 

that if the replacement housing can’t be built on-site, that it is 

within a close distance to the site, and so we have made some 

changes in the language based on that. 

13 

I also want to be very clear that we are proposing a replacement 

of the units as extremely low-income units, that they have to have, 

whether it’s as public housing or, I think as you have done in your 

own HOPE VI reauthorization bill, project-based vouchers, which 

have the same income criteria and are available and make units 

affordable to the very lowest-income families. That’s a critical part 

of the one-for-one replacement as well. And I want to echo the 

chairman’s comments that ensuring there are resources for building extremely low-income units through the National Housing 

Trust Fund is also a critical piece. That’s why we proposed it in 

our budget. That’s why we continue to push to ensure that there 

is funding available for the trust fund. 

The last thing I would say on one-for-one is we have tried to define a very narrow group of cases where there could be vouchers 

as replacement housing only in communities, and we believe they 

will be a very small percentage, only in communities where there 

has been significant success in using vouchers in neighborhoods 

that are neighborhood of opportunity. And so I think that’s very 

important as well. All of this, I think, enshrines some of the lessons 

that you have been very vocal about in places where HOPE VI has 

not provided adequate replacement housing within those communities. 

With that, let me also say, and echo some of the comments I 

made earlier with Chairman Frank, we have been working very 

closely with other agencies, particularly the Departments of Transportation, Education, and Justice around aligning funding streams, 

and we will have expectations that in the applications there are 

other resources brought from the local level on the transportation 

front and in other areas that will support the housing investments. 

And we have tried to put some reasonable limits on any funding 

that could be allocated for whatever crossover happens between the 

housing and transportation or other pieces, but look forward to 

having any further conversations about input you may have on how 

we structure those limits in the bill. 

Ms. WATERS. I want to thank you, Mr. Secretary. My time is up, 

and I’m going to ask Mr. Neugebauer to take his 5 minutes. 

Mr. NEUGEBAUER. Thank you, Madam Chairwoman. Mr. Secretary, this Choice Neighborhoods Initiative is modeled after HOPE 

VI, but would actually broaden HOPE VI, I think you testified, by 

offering competitive grants to revitalize really distressed neighborhoods, not limited necessarily to public housing. 

So how is this different, and what does this do, for example, for 

programs like CDBG and tax credit housing and other HUD programs? How is this going to be different? 

Secretary DONOVAN. I would distinguish it from tax credits or 

some of the other capital funding that might be available, for example, through the National Housing Trust Fund, as first of all 

larger-scale investments that also have somewhat more flexibility 

in their uses than say a tax credit would or any other traditional 

capital funding program that’s available for these communities. 

And that flexibility I talked about earlier, the connection to job creation and services to other kinds of amenities in the community 

that might be, for example, open space, etc. So it has somewhat 

more flexibility there. 

14 

I would distinguish it from CDBG or some of our other programs, 

again, first of all, in that it’s a highly-targeted, larger-scale investment. It’s available competitively. And that it has a more targeted 

use relative to CDBG, for example, to the capital construction and 

rebuilding of communities. CDBG has not been used widely for 

those kind of uses. It tends to go towards infrastructure, towards 

housing maintenance or other kinds of uses that are much more 

flexible. So it sits, in terms of its flexibility, I would say it sits 

somewhere between traditional capital programs and something, 

and it’s much broader like CDBG, but by being targeted, larger 

scale and competitive, it allows for a much more extensive neighborhood transformation than CDBG would. 

Mr. NEUGEBAUER. Mr. Secretary, as you’re aware, we’re projecting with the President’s budget to have a deficit of somewhere 

in the neighborhood of $1.5 to $1.7 trillion, and that means that 

for every dollar we spend, we’re going to borrow 40 cents. And I 

guess the question is, one, is this the time to be expanding programs when we don’t have the money? And two, Mr. Secretary, 

have you looked through HUD to see if you think this is a greater 

priority than some of the other programs, have you looked within 

your own budget to see if you can find the resources for this program? 

Secretary DONOVAN. We had some very difficult choices that we 

did make in our budget proposal this year, and we have prioritized 

this over other investments or funding that we could make. And 

there’s a list of other programs that we have had to take some 

painful cuts on for this budget year. And so, yes, my answer is we 

have prioritized this over other investments that we could make. 

The other point that I would make, and I have seen this very directly from my own work at the local level, is that these kind of 

investments in the long run lead to a whole range of benefits and 

in fact lower costs for communities. The impacts on crime, on property values, and a range of other areas in communities of concentrated poverty that we’re focused on here have enormous 

human costs but also financial costs on those communities. 

We did extensive rebuilding, for example, in neighborhoods like 

the South Bronx where we were able to show that capital investments in the most distressed housing actually paid for themselves 

by increases in values in surrounding properties. And so I believe 

that this is not just about making difficult choices within the HUD 

budget, which we have done, but also how catalytic are these investments in terms of producing long-term savings and new revenues in those communities by the investments. And I believe that’s 

why this Choice Neighborhoods Initiative is a good investment of 

taxpayer dollars. 

Mr. NEUGEBAUER. I want to shift gears. 

Ms. WATERS. Thank you. Mr. Watt, for 5 minutes. 

Mr. WATT. Thank you, Madam Chairwoman. Mr. Secretary, 

you’re going to have to forgive me if I express reservations publicly 

that I have expressed to you privately about this whole concept. 

You may not recall, but early in your tenure you were still like 

a deer in the headlights, so a lot of things were coming at you, but 

I expressed some reservations about this whole concept at that 

time. And I want to try to express them to you publicly again, beVerDate Nov 24 2008 18:31 Jul 22, 2010 Jkt 056777 PO 00000 Frm 00018 Fmt 6633 Sfmt 6633 K:\DOCS\56777.TXT TERRIE
15 

cause I don’t see the input that I gave you at that time reflected 

in the language of the proposed bill that you have sent over. 

I walked into the middle of HOPE VI in 1993 when I was first 

elected, and we have had a number of HOPE VI projects in my congressional district, the first one of which transformed a whole section of Charlotte in a very positive way, but at the expense of people who were dislocated, and so I want to reemphasize my strong 

commitment to one-for-one replacement. I’m glad that you all are 

addressing that. But what I see has happened over the years is at 

that time, the maximum HOPE VI grant was either $55 or $60 

million. It then went to $40 million. It then went to $30 million. 

It then went to $20 million, and I think now it’s at $15 million, the 

maximum you could get under HOPE VI, and all the while that we 

were shrinking the pot of money to do this HOPE VI revitalization, 

we were expanding the scope of what we wanted the HOPE VI revitalization to do, and this seems to me to be yet another expansion. 

First, I want to second the emotions that have been expressed by 

the Chair. Unless there’s some money coming for all of these innovative things out of somebody else’s budget, I don’t know how 

you’re going to do this. Second, it is clear to me that what works 

in some communities is not going to work in some southern communities because just looking at the language that you have proposed on page 6 of the bill, one of the things you say is, ‘‘partnering 

with local educators and engaging’’—these are eligible activities— 

‘‘partnering with local educators and engaging in local community 

planning to help increase access to place-based programs that combine a continuum of effective community services, including comprehensive education reform.’’ We can spend a bunch of money on 

comprehensive education reform, and if you do it place-based, it 

will be the most segregated education that we have in the south. 

When you talk about community-based education in my community, it is a nonstarter, because that means segregated housing, because the housing patterns will always be segregated. You can’t get 

White people to move to one side of the community, I don’t care 

what you do, I don’t care how you revitalize that community, they 

are not coming, right? And unless you have some kind of education 

system in place, this is not going to work. It might work in Baltimore. I told Senator Mikulski that. Fine. It might work in Los Angeles, but in Charlotte, North Carolina, you’re not going to make 

education a significant part of this because all you’re doing is furthering the arguments of those who would like to have community 

schools, which means in my community, segregated schools going 

back to the 1960’s. And so we have to figure out a way to address 

this. And this language doesn’t address it. So, you know— 

Ms. WATERS. Mr. Watt, do you want the Secretary to respond to 

that? 

Mr. WATT. Okay. Yes. 

Ms. WATERS. Your time is up. Let’s let him respond to that. 

Secretary DONOVAN. Congressman, thank you for a very important question, and I’m glad you raised it because I want to clarify. 

The language that you are reading from is an eligible use, and we 

have taken into account some of the concerns that I heard from you 

earlier on. 

16 

We obviously need to spend a little more time talking through 

what is intended there, because in our view, what is important is 

not that it has to be place-based, that if in communities you are 

talking about, that a better strategy is to ensure access to educational opportunities that may not be place-based, not only is that 

allowable, but we would encourage that. 

We want to make sure that there is a comprehensive thinking 

about these issues for that neighborhood, but it does not mean that 

it has to be a community-based school or a physical rebuilding on 

that development site. I want to be very clear about that. What we 

were intending was eligible rather than required. 

Ms. WATERS. Thank you, Mr. Secretary. 

Mr. Marchant? 

Mr. MARCHANT. Thank you, Madam Chairwoman. 

Mr. Secretary, in the area I live in, Dallas, the greater metropolitan Dallas area, for the last 20 years, our Federal judges have basically ordered that all of our public housing basically be taken to the 

ground, and all of the residents given Section 8 vouchers and dispersed into the community. So would you envision—how would this 

kind of a program to allow an existing public housing project to rebuild instead follow this court order? 

Secretary DONOVAN. Based on what I know about the legal decision that you are talking about, I don’t believe that it would be inconsistent with this. I don’t believe that the requirement is that 

every single unit be demolished and that everything be replaced by 

vouchers. I do think it requires locational mobility options for residents who are different. I would be happy to follow up with you 

more specifically on that. 

But I don’t believe, to speak more broadly, that we need to, or 

we should choose, between ensuring real choice of existing communities being rebuilt in ways that they can be sustainable and long 

term and providing mobility options for residents. And in fact, 

should residents choose that mobility is a better option for them, 

we want to make sure that they are supported in making those decisions with mobility counseling and other tools that have proven 

to be effective in the Dallas case. But I don’t think that means we 

can’t or we shouldn’t focus on rebuilding the neighborhoods themselves in ways that they can be sustainable long term. 

I look forward to following up on the specifics with you. 

Mr. MARCHANT. Something else I would request that you follow 

up with me on, on Sunday morning, I opened the newspaper, the 

Dallas Morning News, and the front-page article was about an 

apartment complex that had received over $1 million of stimulus 

money through HUD, and this same apartment complex was embroiled in a—and still is in a lawsuit with the City of Dallas where 

the City of Dallas had basically deemed the apartments to be 

unlivable. 

And at the same time the City of Dallas is pursuing the owner 

to try to get the owner to bring the apartments up to a livable 

standard—and the average rent in these apartments is $25 to $50 

a month, so it is largely subsidized—at the same time that was 

happening, HUD was writing checks to this same developer—his 

name is Campos, and there was a two page article in the Dallas 

Morning News last Sunday about it—without any regard at all to 

17 

working with the City of Dallas to make sure those funds were put 

into upgrading the livability of the project. In fact, those funds 

went into paying the bills, the electric bills, and just the general 

maintenance of the project. 

So my concern is that there be a close coordination between the 

regional HUD offices and the developers and those that own these 

properties so that there is not this kind of tension that exists between HUD and the cities, and that this money is really going to 

improve the livability of these units. 

Secretary DONOVAN. I couldn’t agree more about the need to ensure the decent, safe housing that those residents deserve. 

Just to be very clear, the money that you are talking about is 

part of a project-based Section 8 contract that goes to support the 

rent payments of the residents. So this is not money that provides 

any redevelopment or profit to the owner, these are Section 8 payments to the residents of that development to allow them to pay 

their rent. We are working very closely with the city at this point. 

It is always a difficult decision—it is a decision I have made a 

number of times in my career—to withdraw funding completely 

from a project-based Section 8 contract, which means that every 

one of those residents would be forced to move. And so we are 

working to try to avoid evictions of residents, while at the same 

time ensuring that the owner lives up to his or her responsibilities, 

and that is a difficult tension at times. 

But rest assured that we are very focused on this development 

and we will do everything that we can to ensure that the owner 

lives up to his responsibilities in terms of running that development safely. 

Mr. MARCHANT. Thank you, Mr. Secretary. 

Ms. WATERS. Thank you very much. 

Mr. Secretary, you referred to my former hometown of St. Louis, 

Missouri, and I want you to know that my cousin does not like you 

referring to me and St. Louis, because that is where he is. 

Mr. Clay? 

Mr. CLAY. Thank you so much, Madam Chairwoman. 

Mr. Secretary, you mentioned Murphy Park in the district that 

I represent, and I don’t know if the Chair was born there. I was 

born there too, so that is my hometown too. 

Secretary DONOVAN. I was hoping you would show up. It is one 

of the reasons I wanted to make sure we mentioned Murphy Park, 

because it has been such a success. 

Mr. CLAY. I know that you will be in St. Louis next month, so 

I want to invite you to go and look at a new development that is 

planned that is on the board to develop over 1,500 acres in the 

urban core in an area that once housed Pruitt-Igoe. Pruitt-Igoe, you 

know, was imploded in 1973, and there has been no major investment in this portion of my district in over 50 years, so I would love 

to have you come out while you are there for a conference and we 

can talk further about it. 

Secretary DONOVAN. I have already been briefed on the plan, met 

with many of the people working on it, and I have to say I have 

been very impressed by the work that they are doing. 

Mr. CLAY. I am too, and I am very supportive. 

18 

Let me ask about your Choice Neighborhoods proposal. St. Louis 

has embraced charter schools. The parents and the students have 

kind of migrated towards charters. And I was just wondering, 

under Choice Neighborhoods, will HUD embrace charters also, and 

could they be included as a part of the Choice Neighborhoods Initiative? 

Secretary DONOVAN. Two points I would make on that, and this 

goes back to the conversation I was having with Congressman 

Watt. We want to be very clear that we are not prescribing to local 

communities, whether it is a rural community or other types of 

communities, where the answer may be very different depending 

on the place. In communities where charter schools are the right 

answer, we would look forward to coordinating very closely with 

them. 

The amount of funding we would provide—I think in no case 

would we be able to completely build a charter school with this 

funding, but we would look forward to coordinating and ensuring, 

for example, that within the same structure with the housing if a 

charter school was going to be built, that we were able to support 

the construction of that building in other ways that we might link 

together with charter school development. We would certainly look 

forward to that. 

Mr. CLAY. Okay, thank you for that. 

Share with the committee your vision of urban gardens located 

within urban food deserts. What do you envision as far as how the 

Choice Neighborhoods program could assist that in communities? 

Secretary DONOVAN. As you well know, in so many of the communities that Choice Neighborhoods would be focused on, the lack 

of access to fresh food is a major problem. High rates of obesity, 

asthma, diabetes, other—particularly among young people is a very 

disturbing trend. It is the reason why the First Lady has been so 

focused on this issue more broadly. We have been working very 

closely with her office on this issue of food deserts, and particularly 

access to fresh food in these communities. 

I could certainly envision—and again, we look forward to locallybased plans that work for those communities. But I could certainly 

imagine, and have worked on this directly in my own work prior 

to coming to HUD, where community gardens could be incorporated, whether it is on the roof of a development, within the open 

space in a development. That is something we would certainly want 

to encourage, and it is one of the reasons why felt it was important 

to have some flexibility in terms of the funding available through— 

Mr. CLAY. I don’t mean to cut you off, but do you know that there 

is also a job creation component of it and economic activity that 

goes along with this? 

Secretary DONOVAN. Absolutely. In fact, in St. Louis, there is a 

big focus in the redevelopment plan that you talked about on food 

as a main driver of the economy and of jobs, so that is another example. 

Mr. CLAY. Really quickly, give us an example of community assets central to the sustainability of the neighborhood. What do you 

mean by that in your— 

Secretary DONOVAN. I think there have been great examples in 

HOPE VI. For example, in Charlotte, in Boston where there may 

19 

be a university or a community college that is located nearby, there 

may be relatively good access through transportation or transit to 

the central business district and there have been strong connections made with employers nearby, that is what we mean by assets. How do you ensure that this isn’t just about the bricks and 

mortar, but that we are ensuring opportunity for the residents. 

Mr. CLAY. Thank you Mr. Secretary. I look forward to you coming to St. Louis. 

Secretary DONOVAN. I look forward to it as well. 

Ms. WATERS. Mr. Moore? 

Mr. MOORE OF KANSAS. Thank you, Madam Chairwoman. 

Mr. Secretary, I don’t know if you have had a chance to review 

Ms. Eldridge’s testimony, who will be testifying on the second 

panel, but I thought she made some good points in reminding us 

to keep seniors in mind as we consider this proposal. 

For example, on page 6 of her testimony, she says, ‘‘Neighborhoods where there are concentrations of seniors should be specifically identified as eligible neighborhoods. Neighborhoods where 

seniors are living, often without health or supportive services, are 

more likely to overwhelm the emergency response teams and hospitals as they cycle in and out of hospital emergency rooms and are 

every bit as distressed as neighborhoods with poor schools or high 

crime rates.’’ 

Do you have any response or any thoughts about her statement, 

and how can we ensure we are keeping seniors in mind as this 

committee considers the neighborhoods proposal? 

Secretary DONOVAN. I think this is another great example of why 

having some flexibility around services and the physical redevelopment of the property is so important, and let me give you an example why. One of the most powerful tools that we have had in assisted housing and in public housing is providing service coordinators where a senior, particularly as they become increasingly frail, 

needs assistance in link up to—whether it is medical assistance, 

even things as simple as finding a way to get to a local supermarket to ensure they get their food, or a meals program that 

might be able to be brought to the development itself. 

And so the provision that we have for flexibility around service 

funding in this bill and that has really been an example in HOPE 

VI, I think, is very critical on the seniors front. 

Mr. MOORE OF KANSAS. Thank you, sir, and I think we have to 

go vote now. At least, I have to. Thank you. Thank you, Madam 

Chairwoman. 

Ms. WATERS. Thank you very much. 

Mr. Secretary, we have to go and take a couple of votes. I know 

that Mr. Perlmutter and Mr. Hinojosa had questions they would 

like to ask. I am going to ask them to do it in writing or to call 

you directly and talk with you about their concerns. Mr. Hinojosa, 

we are going to have to let the Secretary go while we take these 

votes. 

Thank you very much for coming today. We appreciate it. 

Secretary DONOVAN. It is great to be with you. 

Ms. WATERS. This committee is in recess. We will come back and 

take the second panel. 

[recess] 

20 

Ms. WATERS. The committee will come to order, please. I am 

going to ask our second panel to come forward. 

Today, for our second panel, we have: the Honorable Orlando 

Cabrera, former Assistant Secretary for Public and Indian Housing, 

U.S. Department of Housing and Urban Development, and CEO of 

National Community Renaissance; Ms. Sheila Crowley, president 

and CEO, National Low Income Housing Coalition; Mr. Edward 

Goetz, director, Center for Urban and Regional Affairs, University 

of Minnesota; Ms. Nancy Rockett Eldridge, executive director, Cathedral Square Corporation, on behalf of the American Association 

of Homes and Services for the Aging; Ms. Jill Khadduri, principal 

associate, Abt Associates; Mr. Saul Ramirez, executive director, National Association of Housing and Redevelopment Officials; and Ms. 

Kristin Siglin, vice president and senior policy advisor, Enterprise 

Community Partners. 

Without objection, your written statements will be made a part 

of the record. 

Thank you. We will begin with the Honorable Orlando Cabrera. 

STATEMENT OF THE HONORABLE ORLANDO CABRERA, 

FORMER ASSISTANT SECRETARY FOR PUBLIC AND INDIAN 

HOUSING, U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, AND CEO, NATIONAL COMMUNITY RENAISSANCE 

Mr. CABRERA. Thank you, Madam Chairwoman, and members of 

the committee. My name is Orlando J. Cabrera, notwithstanding 

the sign. And it is really a funny story. In 1984, the Wall Street 

Journal made my name Orlando Cabrera, and to this day I receive 

junk mail to that effect. 

I am chief executive officer of National Community Renaissance, 

and I am the former Secretary for Public and Indian Housing at 

HUD. Thank you for inviting me to testify before the committee regarding the Administration’s proposal to revitalize severely distressed public and assisted housing, and more specifically the 

Choice Neighborhoods Initiative. 

From a policy perspective, the Choice Neighborhoods Initiative is 

a worthy evolutionary step forward for the HOPE VI Program, provided it focuses on addressing and overcoming HOPE VI’s significant shortcomings, and further focuses on encouraging local decision-making input over Federal concerns. Choice Neighborhoods is 

an initiative that allows the full spectrum of housing providers— 

nonprofits, for profits, local governments, and community development corporations—in addition to public housing authorities to improve public housing. 

With the exception of HOPE VI units, many public housing units 

are now over 70 years old, and not any newer than 30 years old. 

HOPE VI was designed to address the rehabilitation of public housing units, but has struggled to be consistently efficient. 

HOPE VI has succeeded best when allocated to public housing 

authorities that are located in States where the workable Low Income Housing Tax Credit and private activity bond allocation systems, and with support of local governments. HOPE VI objectives 

have been challenged when they are located in local jurisdictions 

with a limited capacity and burdened by policy expectations that 

21 

delay the building or rehabilitation of units. Choice Neighborhoods 

should focus on encouraging the allocation of resources to competitors that demonstrate that they can build what they represented 

they would build within the timeframe that they committed. 

The similarities between HOPE VI and Choice Neighborhoods 

are set forth in my written statement, and given time constraints, 

I thought it worthwhile to focus on the differences between the programs. The most important differences between HOPE VI and 

Choice Neighborhoods are the community-based focus of the grants, 

the expansion of the nature of the potential competitor beyond public housing authorities, and the added focus on assisted housing. 

The expansion into the realm of addressing communities and not 

just development is a goal that some on this committee have long 

sought from the HOPE VI Program. It is an important difference 

that will help communities and not just developments. Doubtlessly, 

it will be worrisome to some stakeholders that Choice Neighborhoods proposes to be open to competitors in addition to public housing authorities. 

It should not be. Allowing competitors to rehabilitate assisted 

housing units will better preserve affordable units over time for our 

Nation’s communities and will allow for greater innovation within 

the program itself, provided that the focus is readiness to proceed 

and efficacy of process. Adding a competitive layer to Choice Neighborhoods has the potential of making the program still more efficient and better assures that the program addresses the utilization 

shortcomings of HOPE VI. 

Choice Neighborhoods would be improved by incorporating the 

idea that readiness to proceed—shovel readiness—is central to the 

initiative. Choice Neighborhood’s allocations should primarily help 

the construction of developments by encouraging the thoughtfully 

quick and focused over the unfocused and unready, and by encouraging accountability. 

Invariably, every effort such as Choice Neighborhoods seeks to 

accomplish large, laudable objectives, and winds up serving the 

country less well if it loses focus on that which is important. Expanding coordination to other agencies on a Federal layer implies 

an added level of review, and that kind of cross-agency involvement 

will likely add time to the development timeline, which adds risk 

to both the program and the development. From a development 

perspective, not to speak of what one can safely presume are many 

State and local perspectives, short of an existing successful model, 

adding such a layer of cross-agency coordination gives one considerable pause. 

In closing, I would offer that this Congress would achieve a great 

deal by simply focusing on facilitating the largely private sector financing of the construction and preservation of affordable units in 

an economical and efficient way using the Choice Neighborhoods 

initiative, which for the taxpayer would be a significant achievement in and of itself. Certainly, the Choice Neighborhoods Initiative improves the HOPE VI Program’s step in that direction. 

Again, thank you for inviting me to testify regarding Choice 

Neighborhoods. As always, I will happily answer any questions you 

may have. 

22 

[The prepared statement of Mr. Cabrera can be found on page 48 

of the appendix.] 

Ms. WATERS. Thank you. 

Ms. Sheila Crowley? 

STATEMENT OF SHEILA CROWLEY, PRESIDENT, NATIONAL 

LOW INCOME HOUSING COALITION 

Ms. CROWLEY. Good morning, Chairwoman Waters. Thank you 

very much for the opportunity to testify today on the Administration’s proposed Choice Neighborhoods Initiative. 

The Choice Neighborhoods Initiative is offered by the Obama Administration as the next generation of intervention with severely 

distressed public and assisted housing as described as building on 

the success of HOPE VI. As you know very well, the National Low 

Income Housing Coalition and others have been highly critical of 

HOPE VI, and thus we approach this proposal with some skepticism. 

HOPE VI is widely praised for its transformation of many distressed public housing projects and the creation of well-designed 

homes and attractive communities, but it also caused massive displacement. The disruption of a citizen’s home that occurs when a 

move is not freely chosen is one of the most serious actions a government can take. 

In the history of the United States, it is poor people and people 

of color who have disproportionately been subjected to forced relocation. Involuntary relocation, even with the best of intentions, 

must be approached with extreme caution, and the first principle 

should always be to do no harm. 

As of September 30, 2008, 72,265 public housing families have 

been displaced by HOPE VI. Some of them were able to move to 

better homes and better communities. Others moved to homes and 

neighborhoods that were no better than or even worse than the 

ones that they vacated, and what happened to their many residents 

remains unknown today. As of September 30, 2008, only 17,382 

displaced families had returned to revitalized HOPE VI communities, a return rate of just 24 percent. 

The residents whose circumstances did not improve and may 

even be worse tend to be those with the most serious and complex 

problems, including old age, physical and mental illness, and educational and employment deficiencies. Even those moved to better 

neighborhoods still struggled to earn enough to be able to sustain 

their new homes. 

HOPE VI also reduced the number of homes that the lowest-income people can afford, contributing to the serious shortage of such 

homes in our country. For every 100 extremely low-income renter 

households today, there are just 37 rental homes that are affordable and available to them. These households pay precariously high 

portions of their income for their homes; 71 percent of extremely 

low-income renter households spend over half of their income for 

their housing. 

Under your leadership, Ms. Waters, the House passed H.R. 3524, 

the HOPE VI Improvement and Reauthorization Act of 2008. This 

bill provided far-reaching reforms to HOPE VI, including mandating evidence of severe distress, one-for-one replacement, resiVerDate Nov 24 2008 18:31 Jul 22, 2010 Jkt 056777 PO 00000 Frm 00026 Fmt 6633 Sfmt 6633 K:\DOCS\56777.TXT TERRIE
23 

dent right to return, resident involvement in services, and relocation services. In considering the proposed Choice Neighborhoods 

legislation, we urge the committee to make it as strong on these 

core issues as you did in H.R. 3524. 

The principal difference between Choice Neighborhoods and 

HOPE VI is that Choice Neighborhoods is not restricted to public 

housing redevelopment and can encompass other federally assisted 

housing and unassisted housing in the target neighborhood. Given 

the requirement that the potential Choice Neighborhoods be in 

proximity to high-functioning institutions and services, these are 

neighborhoods that are likely to be on the cusp of gentrification, 

which Choice Neighborhoods investment could fuel unless safeguards are included to preserve the homes and the affordability of 

the lowest-income unassisted households who are in these neighborhoods. 

The draft Choice Neighborhoods legislation asserts that one-forone replacement of public and assisted housing is required, but 

with a very large loophole. Half of the hard units could be demolished and not replaced. Instead, residents would be given community tenant-based vouchers if the community met certain criteria. 

We think that if a community indeed has excess housing stock, 

then grant funds should be used to maximize the energy efficiency 

and long-term sustainability of these homes, and use project-based 

vouchers in order to assure affordability to the lowest-income 

households. 

Choice Neighborhoods can provide a range of services to residents to advance their social, physical, and economic well-being. 

This is particularly important for the most vulnerable residents 

who have the potential to be displaced. Therefore, high quality, intensive case management services are required and these really 

should be a requirement of the grantee, not have it be dependent 

upon their ability to perhaps leverage scarce service resources that 

are already in the community. Therefore, grant funds that could be 

spent on services should not be limited to 15 percent. The amount 

going to services in each grant should be based on real cost based 

on the real needs of the residents who will be affected. 

Merits of Choice Neighborhoods notwithstanding— 

Thank you very much. 

[The prepared statement of Ms. Crowley can be found on page 52 

of the appendix.] 

Ms. WATERS. Thank you. 

Next, we will hear from Edward Goetz. 

STATEMENT OF EDWARD G. GOETZ, DIRECTOR, CENTER FOR 

URBAN AND REGIONAL AFFAIRS, UNIVERSITY OF MINNESOTA 

Mr. GOETZ. Thank you very much, Madam Chairwoman, and 

members of the committee. 

Choice Neighborhoods is based on the considerable success of 

HOPE VI in transforming neighborhoods. These successes, however, have come at some expense to the very low-income families 

who have been living in public housing, and at some cost to the Nation’s long-term ability to address the housing needs of the poor. 

Any attempt to expand HOPE VI to other forms of federally assisted housing should incorporate not only elements that will repVerDate Nov 24 2008 18:31 Jul 22, 2010 Jkt 056777 PO 00000 Frm 00027 Fmt 6633 Sfmt 6633 K:\DOCS\56777.TXT TERRIE
24 

licate the impressive neighborhood changes generated by HOPE VI, 

but also features that preserve assisted housing and protect the 

families currently living in those communities. 

Some of the lessons of HOPE VI have been incorporated into 

Choice Neighborhoods. Most of these, however, are related to the 

factors that make successful transformations of neighborhoods 

more likely. In other respects, the proposal discounts many of the 

lessons from HOPE VI, especially those lessons related to the experience of low-income families. Let me list a few that in my opinion 

are not adequately reflected in the Choice Neighborhoods proposal. 

First, not all families living in housing targeted by HOPE VI 

wished to move. When asked, more than half of residents typically 

responded that they would have preferred to remain in the public 

housing communities. For many residents, the favored solution to 

the conditions they lived in was to improve the community, not 

tear it down and force their own displacement. This is likely to be 

true for residents of communities targeted by Choice Neighborhoods, yet there is nothing in the program that speaks to minimizing displacement and demolition, nor of shaping the redevelopment plan according to the wishes and interests of residents. 

Second, displaced families tend not to relocate to other neighborhoods of choice, as optimistically envisioned by HOPE VI and the 

drafters of this bill. Instead, they typically relocate to other racially 

segregated neighborhoods with poverty rates above the average for 

the city and well above the average for their metropolitan areas. 

Third, only a small portion of original residents ever make it 

back to the redevelopment site. So few return, in fact, that it 

makes little sense to think of the redevelopment itself as one of the 

benefits for original residents. And though this proposal guarantees 

the return of all lease compliant who want to return, there is a potential conflict between that and the mixed-income objectives of the 

program, which almost inevitably result in a reduction in assisted 

units on site. 

Fourth, the HOPE VI Program was authorized after a national 

commission documented the extent of severely distressed public 

housing in the United States. The commission recommended a program of rehabilitation and modernization. HOPE VI as implemented, however, went well beyond the commission’s vision in two 

ways: first, it very quickly morphed into a program of demolition 

and redevelopment instead of rehab and modernization; and second, it reached far beyond the number of units originally estimated 

to be severely distressed. The Program ignored examples of successful transformative public housing rehabilitation, and in too 

many cases demolished projects that were regarded by their tenants as well-functioning communities. 

Fifth, the potential for Choice Neighborhoods to repeat this pattern in which functioning communities are unnecessarily eliminated in favor of a demolition approach that is calculated to 

produce the greatest amount of neighborhood change is, I believe, 

great. This is especially so since there has been no effort parallel 

to that undertaken by the national commission to document the 

number of distressed units of assisted housing that require the redevelopment model called for in this proposal. Therefore, Choice 

Neighborhoods risks repeating the HOPE VI mistake of reducing 

25 

the stock of federally assisted low-cost housing. This, despite the 

fact that the need for such housing remains acute. The standards 

for establishing when vouchers are appropriate as a replacement 

are not particularly high in this proposal. 

Sixth, it is time to reassess the assumption that being displaced 

from their federally assisted housing is somehow good for very lowincome families. There have been no self-sufficiency, employment, 

or income benefits to the families displaced by public housing 

transformation. In fact, there is some evidence that displacement 

and the move to voucher housing disrupts employment and induces 

greater levels of economic insecurity. 

Families displaced by HOPE VI suffer disruptions in their support of social ties that they use to make ends meet, and the little 

evidence that exists on the operation of mixed-income communities 

indicates that the main advantage of life in such a community from 

the standpoint of a very low-income family is the improved property management that generally accompanies the presence of middle income families. All of these point to an emphasis on phased 

redevelopment, the construction of replacement housing before 

demolition occurs, provisions that are not currently in the proposed 

bill. 

In short, the program seems to be an attempt to replicate the 

positive neighborhood impacts of HOPE VI without incorporating 

meaningful provisions to protect or enhance the well-being of the 

very low-income families affected. 

Thank you. 

[The prepared statement of Mr. Goetz can be found on page 75 

of the appendix.] 

Ms. WATERS. Thank you very much, Mr. Goetz. 

Ms. Nancy Rockett Eldridge? 

STATEMENT OF NANCY ROCKETT ELDRIDGE, EXECUTIVE DIRECTOR, CATHEDRAL SQUARE CORPORATION, ON BEHALF 

OF THE AMERICAN ASSOCIATION OF HOMES AND SERVICES 

FOR THE AGING (AAHSA) 

Ms. ELDRIDGE. Good morning, Chairwoman Waters, and members of the committee. My name is Nancy Rockett Eldridge, and 

I’m the director of Vermont’s Cathedral Square Corporation. Although I come from a very rural State, I remember vividly my 

years as a Vista volunteer in the Los Angeles area serving very 

low-income individuals. That was a long time ago, but I won’t forget the needs of urban residents. 

I’m very pleased to be here today representing the American Association of Homes and Services for the Aging. AAHSA serves 

about 2 million people every single day, and includes about 5,700 

member organizations that provide adult daycare, senior affordable 

housing, assisted living, nursing homes, and continuing care retirement communities. We are not experts on HOPE VI because HOPE 

VI was not available to many of the senior affordable housing programs. 

I am here today to talk about Choice Neighborhoods and how we 

hope it will respond to the fastest growing sector of all of our 

neighbors, the elderly. For the past decade, Cathedral Square has 

been testing every single type of housing model you can imagine 

26 

to try to ensure that seniors can remain in our housing. We have 

tried HUD assisted living, we have tried co-location with adult day 

programs, housing-based wellness clinics, mixed-financing tax credit, and HUD 202 deals, and we have concluded that none of these 

individual models offers a comprehensive solution because none of 

these approaches on their own ensure that seniors can remain in 

our affordable housing as their mental health and healthcare needs 

grow significantly. 

Since Choice Neighborhoods is intended to be a 20-year solution, 

we believe it should implement strategies that anticipate a neighborhood’s demographic changes over that 20-year period, that anticipate the technologies that could transform communities for both 

youth and the elderly, and prepare for the budget environment that 

is likely to shape public education for children, health care for seniors, and the tax base for municipalities. 

Medicaid and Medicare money must be a part of Choice Neighborhoods—20 years from now, the elderly population is expected to 

double. We believe that the unmet healthcare needs of residents in 

senior housing is the biggest threat to the preservation of public 

and assisted housing. The level of unmet need is very troubling 

today. The need is invisible, and it is a cause of many unintended 

consequences with serious budget ramifications at the State and 

national level. 

We believe that the only way the needs of seniors will be met is 

through service networks developed at the neighborhood level, networks that are fully integrated with the neighborhood’s employment strategies and education reforms. We call our approach 

SASH, Seniors Aging Safely at Home. AAHSA believes that Choice 

Neighborhoods should and could provide opportunities to advance 

aging in place strategies like SASH, but this does require that we 

change the way services are delivered, and that we move away 

from funding silos and look at how HUD resources matched with 

Medicaid and Medicare dollars can bend the cost curve in health 

care and long-term care spending while extending the value of 

HUD dollars invested in housing preservation. 

In many of our communities, as Representative Moore highlighted, there are concentrations of seniors whose demand for city 

and health services is an indicator of economic distress in much the 

say way as crime, joblessness, and poor education can be indicators 

of distress. Demand on emergency services is growing in direct proportion to aging in place. Care coordination at home can reduce 

that burden on cities, and multi-family housing can be the hub for 

providing that coordination throughout a neighborhood. 

In closing, as proposed, CNI fails to recognize the significant 

needs of the elderly, a shortcoming of HOPE VI that we should not 

repeat. We offer several recommendations. Please remember seniors in the Choice Neighborhoods program, remember rural areas, 

make sure housing is always one of the key partners in applications for CNI, and please don’t lose ground on the existence of 

available public and assisted housing. 

Thank you very much. 

[The prepared statement of Ms. Eldridge can be found on page 

67 of the appendix.] 

Ms. WATERS. Thank you very much. 

27 

Dr. Jill Khadduri? 

STATEMENT OF JILL KHADDURI, PRINCIPAL ASSOCIATE, ABT 

ASSOCIATES INC. 

Ms. KHADDURI. Thank you, Chairwoman Waters, and members of 

the committee, for giving me the opportunity to testify on the 

Obama Administration’s Choice Neighborhood’s proposal. 

As a principal associate at Abt Associates, a national policy research firm, I have studied places that have made school improvements a key part of neighborhood change, including Atlanta, St. 

Louis, St. Paul, Philadelphia, and Baltimore. These studies have 

been sponsored by the Ford Foundation, HUD, and most recently, 

by Enterprise Community Partners. 

The Choice Neighborhood’s proposal has many strengths. First, 

its vision for neighborhood change recognizes that good housing 

without access to quality education and jobs will not break the 

cycle of poverty. Second, it insists that the neighborhoods selected 

for intensive Federal investment either already have assets, such 

as proximity to jobs and access to transportation, or demonstrate 

a serious commitment to building those assets. Third, it insists on 

effective relocation assistance for people who must move during the 

redevelopment process, and on a right to return for lease compliant 

tenants. 

The committee should consider the Choice Neighborhoods proposal in the context of another Obama Administration proposal, the 

transformation of rental assistance or TRA. Over time, the TRA 

could bring public housing out of isolation and break down concentrated poverty in a much broader set of locations than those 

that may be funded by Choice Neighborhoods. 

The Focus of the Choice Neighborhoods proposal on educational 

opportunity correctly recognizes that a major contributor to the 

cycle of poverty is the poor quality of the schools available to children who live in high poverty neighborhoods. However, the legislative proposal distributed last week could be improved in several 

ways. The Choice Neighborhoods proposal should insist on the creation of high quality schools, whether traditional public schools or 

charter schools, within the neighborhood where the housing is to 

be revitalized, not inside or outside of the neighborhood, as the legislative proposal now states. 

Mr. Watt, I have thought about your eloquent remarks on this 

point. What worries me about the outside the neighborhood option 

is that open enrollment programs and magnet schools may not 

present a real opportunity for parents who live in the neighborhood 

to get their kids into high-quality schools. Even if they are able to 

enroll their kids in schools outside the neighborhood that are good 

quality schools, the pressures of work, the pressures of parenting 

may be such that low-income families simply can’t choose those options. They really need neighborhood schools. And the emphasis 

should be on early childhood and K through 6. For some reason, 

that emphasis was dropped in the most recent version of the proposal. 

The selection criteria for Choice Neighborhoods grants should 

favor applications from strong collaboratives that include institutions with a long-term stake in the neighborhood and end with poVerDate Nov 24 2008 18:31 Jul 22, 2010 Jkt 056777 PO 00000 Frm 00031 Fmt 6633 Sfmt 6633 K:\DOCS\56777.TXT TERRIE
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litical clout, for example, community-based foundations, universities, hospitals, and locally-based corporations. This collaboration 

is needed to bring resources to the school, to support the school’s 

principal, and to make sure that the school improvement is sustained through changes of leadership at the school or district level. 

Having a meeting or two with the school system and demonstrating 

input from a broad range of stakeholders simply won’t do it. 

The Choice Neighborhoods legislation should recognize that 

schools will need resources beyond the standard allocation of public 

school operating funds, for teacher training, for curriculum improvement, for programming beyond the basic curriculum, and for 

early childhood programs. The selection criteria in the current proposal has some leveraging language, but the emphasis is on housing resources. I would like to see requirements for leveraging State 

funds for school capital improvement and on other Federal resources, such as race to the top funds and the $4 billion made 

available for the recovery act for turning around low performing 

schools. 

The Choice Neighborhoods legislation should provide for an explicit role for education experts in the grantee selection process, 

probably a formal role for the U.S. Department of Education, and 

school quality should also be a key criterion in the definition of acceptable locations for replacement housing outside of the Choice 

Neighborhood. 

And finally, a comment that comes from my background as a researcher, the annual report requirement in the legislation asks 

HUD to report prematurely on the impact of grants on target 

neighborhoods. Instead, HUD should be required to document how 

grantees have demonstrated the neighborhood’s potential for longterm viability and the activities that will build on that potential. 

Thank you once again, Madam Chairwoman. I have provided the 

committee with a more detailed version of this statement, and ask 

that you include it in the hearing record. 

[The prepared statement of Ms. Khadduri can be found on page 

88 of the appendix.] 

Ms. WATERS. Thank you very much. 

Mr. Ramirez? 

STATEMENT OF SAUL N. RAMIREZ, JR., EXECUTIVE DIRECTOR, 

NATIONAL ASSOCIATION OF HOUSING AND REDEVELOPMENT OFFICIALS (NAHRO) 

Mr. RAMIREZ. Thank you very much, Madam Chairwoman, and 

distinguished members of the committee. 

I represent the National Association of Housing Redevelopment 

Officials, with over 25 individual housing authority community development departments and redevelopment agencies throughout 

the country. We serve and manage approximately 1.1 million units 

of public housing and over 2 million tenant-based Section 8 vouchers and other assisted housing, and serve over 6 million citizens 

throughout our great Nation. 

We bring some general words of support for the Choice Neighborhoods Initiative that the Administration has proposed, but also 

some notes of concern. We applaud the Department’s commitment 

to develop a comprehensive approach to achieving the transVerDate Nov 24 2008 18:31 Jul 22, 2010 Jkt 056777 PO 00000 Frm 00032 Fmt 6633 Sfmt 6633 K:\DOCS\56777.TXT TERRIE
29 

formation of neighborhoods with extreme poverty into sustainable 

mixed-income communities. While ambitious in some respects, 

NAHRO does believe that this is a laudable policy and one that 

aligns closely with our mission to create affordable housing and 

quality communities. 

Our support of broad-based objectives of this proposed initiative 

notwithstanding, we do have several overarching concerns. First, 

we have serious concerns about the absence of secured funding for 

public housing agencies as provided under the current HOPE VI 

Program. We note that the most recent CNI legislative proposal 

does not reserve a single dollar in funding for proposed projects 

that include public housing as the lead applicant, nor does it explicitly require that public housing authorities be involved in the development of applications for funding, despite HUD’s own acknowledgment that three-quarters of the distressed properties that would 

be impacted by this program are public housing. 

Second, having served as the Deputy Secretary for the Department for several years, I can tell you firsthand that where a program resides matters, and this particular program has yet to have 

that clarity within its proposal. It would be preferable that this 

program be administered where the most would be served, and we 

believe that would be the Public Housing Office, but yet that has 

not been there. The confusion created with this additional uncertainty over where the program will reside will create the inability 

to adequately target the resources towards addressing the needs of 

those severely distressed public housing inventories that everyone 

has talked about. 

Third, the significantly broadened scope of the proposed program 

in terms of eligible applicants and expected outcomes is likely to 

support only a handful of grant awards given the recommended 

Fiscal Year 2011 appropriation request of $250 million. As proposed, grantees would be involved in undertakings that are certainly resource intensive and include a great deal of promotion of 

economic self-sufficiency of residents and the creation of jobs 

around mass transit, education, and other programs, and as such, 

other Federal agencies have not stepped up with their own resources to make this truly a comprehensive neighborhood initiative 

that would change in a way that could have some dramatic impacts. 

Programmatic complexities, in combination with the limited 

availability of funding, does not bode well for completing the remaining work of HOPE VI, a program more narrowly targeted to 

revitalizing severely distressed public housing. Absent assurances 

that our other Federal agencies would immediately contribute significant financial resources to this new approach, we think it is 

premature at this time to fully endorse this initiative. 

With these thoughts in mind, we strongly recommend that funding for the Choice Neighborhoods Initiative at the currently proposed levels for Fiscal Year 2011 not occur unless or until authorizing legislation is considered and acted upon by Congress and 

signed into law. These steps should be taken with ongoing input 

from relevant stakeholders. 

We also believe Congress should wait for the $65 million that it 

has already set aside for the demonstration of Choice NeighborVerDate Nov 24 2008 18:31 Jul 22, 2010 Jkt 056777 PO 00000 Frm 00033 Fmt 6633 Sfmt 6633 K:\DOCS\56777.TXT TERRIE
30 

hoods under the Fiscal Year 2010 budget to be awarded and implemented, and by doing so, allow Congress and the Department to effectively assess the new data and information about program outcomes that are expected, and would arguably be in a better position 

to chart a responsible course forward with respect to dealing with 

severely distressed properties. 

We also feel that because of the inadequate vetting that has occurred, the most prudent approach at this time would be to: one, 

issue the NOFA and undertake the appropriate demonstration program that has been proposed; two, publish and execute the 2010 

HOPE VI NOFA and move expeditiously with a proven program; 

and three, provide continued funding for the current HOPE VI Program in Fiscal Year 2011 as we continue to ultimately include the 

review of this proposal. 

And with that, I conclude my testimony, and thank you Madam 

Chairwoman. 

[The prepared statement of Mr. Ramirez can be found on page 

95 of the appendix.] 

Ms. WATERS. Thank you very much. 

Ms. Kristin Siglin? 

STATEMENT OF KRISTIN SIGLIN, VICE PRESIDENT AND SENIOR POLICY ADVISOR, ENTERPRISE COMMUNITY PARTNERS 

Ms. SIGLIN. Thank you very much, Chairwoman Waters. Thank 

you for this opportunity to testify about the Administration’s 

Choice Neighborhoods Initiative. 

Ms. WATERS. Could you bring the microphone a little bit closer 

to you, please? 

Ms. SIGLIN. There we go. Better? 

Ms. WATERS. Yes. 

Ms. SIGLIN. Enterprise is a national nonprofit. For more than 25 years, Enterprise has invested over $10 billion to create more than 

270,000 affordable homes and strengthen hundreds of communities 

across the country. We commend you for holding this hearing on 

the Choice Neighborhoods Initiative and encourage you to pass the 

legislation to authorize the Administration’s proposal, with some 

changes and improvements. 

The feature of Choice Neighborhoods that is most critical for us 

is the explicit linkage between revitalized affordable housing and 

improvements to the schools that the children who live in the housing will attend. Enterprise has 15 years of experience working in 

a holistic way in a very low-income neighborhood in west Baltimore 

called Sandtown. Our work in Sandtown gives us some useful experience to comment on the proposed Choice Neighborhoods Initiative, which envisions a similar linking of affordable housing development to school improvement— 

[Interruption to proceedings.] 

Ms. SIGLIN. Sorry about that. 

Okay, then maybe I should stop reading. 

Enterprise had 15 years of experience working in a holistic way 

in west Baltimore, and we linked improvements to the affordable 

housing in the neighborhood with improvements to two local elementary schools, and my written statement goes into more details 

on what we did. We then followed this program work on the ground 

31 

in Baltimore up with a research initiative in which we hired Abt 

Associates to write reports on and look into whether other community developers had the same experience that we had, that the 

community development work was strengthened by giving families 

a reason to live in the neighborhood, because they were happy with 

the school that their children attended. And we ended up calling 

it the model school-centered community revitalization. 

Thus, we were quite pleased to see the Choice Neighborhoods 

come forth as a means of fostering more comprehensive community 

revitalization projects in distressed neighborhoods across the Nation. It builds on the HOPE VI Program, as other witnesses have 

noted, but it differs from it in a couple ways. There is a broader 

universe of projects eligible for renovation. It has an explicit link 

to school improvement strategies—that is also new. And finally, the 

ambitions for the program are more broad than HOPE VI is. It is 

not just to revitalize the distressed housing, but to transform 

neighborhoods of extreme poverty into mixed-income neighborhoods 

of long-term viability. 

There are four ways we would like to see the legislation improved. The first was discussed somewhat on the first panel with 

the HUD Secretary, that it seems important that other Cabinet Departments come forward with resources for this work so that 

HUD’s scarce money that is needed for affordable housing doesn’t 

get bled into other activities. 

So there are two ways that we would like to see the Department 

of Education participate. One is that education experts should be 

reviewing the applications for Choice Neighborhoods to make sure 

that the school reform components are credible. The second thing 

is that—I was heartened to hear the Secretary talk about his work 

with the Department of Education because the notice of funding 

availability for Choice Neighborhoods should also include funding 

for school improvement, and the Department of Education should 

come forward with that money. 

A second point I would like to make where the legislation could 

be improved is that the selection criteria need to be more specific, 

that you really want partnerships with a longstanding interest in 

the neighborhood to win these grants. You don’t want people who 

just have one or two meetings with local officials. You really want 

to look for these projects to be driven by people with a longstanding 

interest in the neighborhood. A third point, I think, is that the 

green building standard in the legislation should be stronger. We 

suggest that you use Enterprise’s Green Communities Criteria. 

And then last, the draft legislation allows for the funding to be 

used for an evaluation, but doesn’t require HUD to do an evaluation of this program, and we think that would be an important improvement as well. 

Thank you very much. 

[The prepared statement of Ms. Siglin can be found on page 112 

of the appendix.] 

Ms. WATERS. Thank you very much. I appreciate the testimony 

from all of the panelists today, and I am going to recognize myself 

for 5 minutes. 

32 

I have to tell you—and I’m sorry that the Secretary could not be 

present to hear this panel—the more I hear about your concerns, 

the less I like Choice Neighborhoods. 

I guess I’m going to go to Mr. Goetz because I found your testimony extremely compelling. You made several references to the 

possible problems of the Choice Neighborhoods proposal. I am worried about public housing. Without trying to assign motives to the 

Administration or anybody else, does this look like a plan to get rid 

of public housing to you, Mr. Goetz? 

Mr. GOETZ. Without ascribing motives, it will—the HOPE VI 

Program, which is the track record we have to look at, has resulted 

in a significant diminishment of public housing in the United 

States. Public housing demolition has also been pursued outside 

the confines of HOPE VI. And I am concerned that the expansion 

of the HOPE VI model to non-public housing forms of federally assisted housing will have that same kind of impact in terms of reducing the stock of federally assisted housing. 

Ms. WATERS. Ms. Crowley, I think you and perhaps Mr. Goetz 

also referred to where these residents who lived in public housing 

who were displaced or relocated in HOPE VI projects, where they 

ended up. And I think what I heard here today was that they 

didn’t necessarily end up in better neighborhoods, they seemed to 

have gravitated to poor neighborhoods, and that the housing they 

ended up with was not as good as where they came from, or there 

were no resources there. Would you reiterate your thinking about 

what happens to displaced residents from public housing—or relocated? 

Ms. CROWLEY. One of the things that is important to know is 

that we really don’t have a lot of—we don’t have complete documentation about what happened to most people who were displaced 

by HOPE VI. And so what we have is some research that has been 

done in particular sites, and that research is varying in quality and 

has different kinds of results. But I guess the one that is looked 

at most often is the panel study done by the Urban Institute. 

And by the people who were able to move with vouchers and 

move to new communities, there has generally been some gain in 

terms of living in safer communities and higher quality housing, 

but no serious gains in terms of improvement of their economic 

well-being, and in fact, there is evidence that they had a much 

harder time sustaining those homes because their expenses were 

higher. 

The thing that is very compelling to look at is that there is a 

very large contingent of people who were in the HOPE VI project 

studied by the Urban Institute panel study who were what they 

call ‘‘hard to house.’’ It is not a term I like. I think anybody knows 

how to be housed. But their circumstances made them hard to conform to the expectations of the new program. 

Those were the people who were the poorest, the ones with multiple problems, large families, the people who had grandparents 

taking care of children, things like that. So that was a sizable 

group of people, and it ranged from 30 to 70 percent of that population. That population is no better off now as a result of HOPE 

VI than they were, and they may in fact be worse off. 

33 

And then there is a whole group of people that we have no idea 

what happened to them. 

Ms. WATERS. I want to get this in before my time is up. We have 

had some members of this committee talk about Section 8 housing 

vouchers that have been given in communities where they are not 

wanted. We have had even an attempt to legislate to stop the proliferation of Section 8 housing in certain communities. And it appears that on the one hand, with Choice Neighborhoods, they are 

talking about Section 8 vouchers to provide housing for those who 

may have lived in public housing, or to expand opportunities in privately owned housing, yet we know there are many neighborhoods 

who not only fight against Section 8 tenants being in their neighborhood, but they will rise up against some effort to expand the opportunity for these residents to come into their neighborhoods, and 

fight proposals like these. 

Who would like to tell me that you have some answer to where 

to develop Section 8 housing in other neighborhoods, 25, 30 miles 

out and more from the neighborhoods that they have come from, 

and if it is possible, how do they maintain their community contacts that they had before? In poor neighborhoods, people rely on 

each other. They exchange babysitting, they borrow money from 

each other, they help go see about kids in school for each other. 

How is this done if they are moved out to other neighborhoods, and 

some where they are not really wanted, and they don’t have those 

kinds of relationships? Mr. Goetz? 

Mr. GOETZ. Well actually, in Minneapolis, pursuant to a Hollman 

v. Cisneros consent decree, there was a partnership of suburban 

HRAs and PHAs and foundation forces that got together and actually did build several hundred units of subsidized housing in the 

suburbs. It took many years, but it got done. 

The problem was that almost none of the displaced families from 

the Minneapolis projects that were torn down ever occupied those 

units. That is, they were marketed to those families, and after a 

few months of not being able to move families out to those units, 

then each of the suburbs was allowed to use its waiting list to fill 

the units. So it was a long, arduous task. The units got built over 

many years, but it did not serve the dispersal or de-concentration 

purposes of the lawsuit and the consent decree. 

Ms. WATERS. Thank you very much. 

We have been joined by Mr. Miller. I would like to recognize you 

for 5 minutes. 

Mr. MILLER OF CALIFORNIA. Thank you, Madam Chairwoman. 

Ms. WATERS. Thank you. 

Mr. MILLER OF CALIFORNIA. You and I both have enjoyed a relationship dealing with Section 8 and HOPE VI, and I’m kind of enjoying the difference in the discussion on the panel. 

In my district, you would not think there was a need for Section 

8 housing and affordable housing, but there is. In fact, I just attended a grand opening a few weeks ago, Maxine, in a city. When 

you drove by the facility—and it was just an extension of a facility 

they have—you would never know it was affordable housing. You 

would never know the people living there were on vouchers. They 

have a community center—in fact, this group has one in every facility they have. They have swimming pools, open space. Cities are 

34 

behind it. These are affluent cities that you would not expect to see 

public housing in. But this is a nonprofit. 

And when I looked at the rents that they are charging these people, I scratched my head wondering how they did it. But there are 

people in there on Section 8 vouchers in a community you would 

not think would have affordable housing, and I think that is something that is new. I have seen a lot of public housing facilities that 

are horrible. You drive by them, and you can look and say, ‘‘That 

is public housing.’’ Why would we relegate people to that? And I 

support Section 8 and HOPE VI as you do, but I think we need to 

be creative in this marketplace and say what are the private sector 

and the nonprofits doing out there that government is not doing? 

When I drive by this facility—and I have several in my district, 

and Congressman Driehaus has some in his, and I have looked at 

some of his and some other districts, Joe Baca has some in his— 

in communities where I looked at, the regular rental units were inferior to the nonprofit’s units who were taking Section 8 vouchers. 

And I look at what little assistance they have received, and I think 

the bang for the buck we are getting for what little they received 

from the Federal Government is absolutely amazing. And when I 

know that these units are relegated to low-income people, those 

mainly on Section 8 and government assistance, because that was 

the mission they have, and it is— 

Mr. Cabrera, it is nice to see you wearing a different hat today, 

you are no longer with HUD. 

Mr. CABRERA. I know. No, it has been a while. 

Mr. MILLER OF CALIFORNIA. It has, and I know that you have 

long argued for one-to-one replacement requiring either the footprint of the development or the adjacent neighborhoods to continue 

to supply public housing, and is this a feasible approach for a CNI 

development, and what allowing housing stock of nonprofit housing 

developers to meet that goal in certain criteria? What would you 

think about that? 

Mr. CABRERA. What I have argued for is one-to-one replacement 

of affordable housing, and the reason is because of financing. If we 

are talking about—and I think that is what is being contemplated 

now, which is terrific. But one of the benefits of Choice Neighborhoods, I believe, is it looks outside the footprint of the legal description of the public housing development. 

So my thinking on Choice Neighborhoods is that it is something 

I believe this committee has contemplated before in discussion during one of my hearings, and I think it is actually a beneficial thing. 

It is not a perfect thing. In housing, we are relegated to understanding there is nothing we can do to conceivably be perfect. So 

that is why when you look at Choice Neighborhoods and compare 

it to HOPE VI, a huge benefit is that it goes beyond the footprint 

of just public housing. 

Mr. MILLER OF CALIFORNIA. In your previous life when you 

worked for HUD, you and I discussed HOPE VI. You always were 

a strong supporter of HOPE VI. Why do you support this concept 

more than you did HOPE VI originally? 

Mr. CABRERA. It’s not that I don’t support HOPE VI now. I do. 

Mr. MILLER OF CALIFORNIA. No, I didn’t say—but you support 

this new approach. 

35 

Mr. CABRERA. I appreciate that, Congressman, I’m sorry. What 

I mean to say is HOPE VI is something I believe is good for public 

housing authorities and important for public housing authorities. I 

think the Choice Neighborhoods Initiative is good because it expands the field of housing modality that needs improvement. So we 

have assisted housing all over this country that has or needs help 

as well. They tend to be around public housing units. You can’t just 

improve a public housing development and then expect the rest of 

the community around it to get better. Getting or having the ability 

to do it in a more subtle and nuanced way is more important. 

I think that the added idea of—through our Hope for Housing 

Foundation, which is something we are really proud of, we spend 

an awful lot of time with supportive services for people. This is 

what we do as our business model. We pay for it, we raise money 

for it, and it works well. 

And I think one of the things Choice Neighborhoods is saying, 

and I think a lot of the panelists are agreeing with, is that is an 

important thing to do. What is also important is to make sure that 

the pot comes from something other than housing. Housing is hard 

enough. If you start to diminish the housing pot, knowing what it 

takes to develop units, you will have a struggling development at 

best. So there has to be some care given to that. 

Mr. MILLER OF CALIFORNIA. Madam Chairwoman, Ms. Waters, I 

would—my time is up, but I know what a supporter you are of the 

concept of public housing, the people who need that type of assistance in an interim period. I would really like you to come to perhaps Joe Baca’s district, or my district, or David Driehaus’s district, and I would like you to see what the nonprofits have done for 

public housing in our communities. 

And I think you are going to find—I think you will be absolutely 

shocked and happy. When you drive by these facilities, you would 

never think that people living on Section 8 vouchers live there because they are that nice. The city councils love them, they work 

with them, the communities accept it. It is not any issue that is 

ever argued about at city council meetings about the neighborhoods 

becoming rougher, its being rundown. 

And I would like you to see what benefit there is in I think a 

new concept that we are seeing in this country that relies very little on government and more on the private sector. I think you 

would be greatly surprised. But I would like you to do that if you 

could, and I yield back the balance of my time. 

Ms. WATERS. Thank you very much. And without objection, I am 

going to proceed with two more rounds, just the two of you. I’m 

sure everybody here wants to ask a lot of questions. And so I would 

like to recognize myself for another 5 minutes, and take the first 

half of that to kind of respond a little bit to your invitation. 

Let me just say, Mr. Miller, I am not so concerned about whether 

or not there is public housing that looks better in one community 

perhaps than another community. This is what I’m— 

Mr. MILLER OF CALIFORNIA. I didn’t mean to imply that. I meant 

the quality of life. 

Ms. WATERS. I’m sure there is Section 8 housing that has been 

done very well. But what I’m concerned about in dealing with all 

the members is this. Well, first of all, I’m concerned that even with 

36 

HOPE VI—and I like some of HOPE VI—that there was displacement. I look at Atlanta, for example. There was displacement. And 

I keep asking, ‘‘Where are these people going? Where do they end 

up?’’ And I’m getting more and more information about where they 

end up. 

It is one thing to have HOPE VI or public housing where you can 

get rid of a lot of the potential problems or design it in ways that 

you think you will not have problems, reduce the number of units, 

and have what looks like market rate and mixed use, but where 

are those people going, where do they end up? I am concerned 

about that. 

Number two, I’m concerned about services. For example, we do 

have people who move out or get assistance in getting housing 

miles away from where they came from, and what happens is all 

over the United States, they don’t call their Representatives. They 

call in to the Congressional Black Caucus or the Latino Caucus. 

They call our office a lot. They call in from Georgia, they call us 

from Florida because, for some reason, many of their Representatives are not in tune to the needs of poor people. Some of these are 

poor pockets, and they relate more to the other parts of the district. 

I’m concerned about the lack of being connected to services and 

relationships and all of that. So I want to carry this out a little bit 

further— 

Mr. MILLER OF CALIFORNIA. Can I respond with my time? Those 

are excellent—I will even take you to Little Rock, Arkansas, where 

I was born in Arkansas, and I can show you the same thing there. 

I can show you in my district individuals who came from low-income communities that they considered rougher, more violent to 

areas in my district where they can find jobs, and they found the 

communities safe, services available to them, and living in a community that they didn’t think they would be able to live in on Section 8 vouchers. That is— 

Ms. WATERS. That is great, but what do you say to Mr. McCarthy, for example, who raised this issue of Section 8? I know Lancaster very well, and I know the mayor of Lancaster, and I know 

what they are saying. Not only is there questionable treatment of 

Section 8 tenants in that area—also we have Mr. Driehaus who 

raised that same question about—he says, ‘‘You are sending too 

many Section 8s in this economic meltdown that we have. We have 

investors who are buying property simply to put Section 8 people 

into them.’’ 

What do we say to them when we deal with this question of what 

happens and what we are doing with displaced and relocation? 

That is one of the political issues that I’m focused on. What do you 

say to them? ‘‘Come to my district and’’— 

Mr. MILLER OF CALIFORNIA. Can I respond? I would love to respond. I would like you to call the mayor of Rialto, call the mayor 

of San Dimas, call the mayor of Yorba Linda, and ask them what 

they think of Section 8 individuals coming to their communities. 

They are perfectly happy with it because they— 

Ms. WATERS. But they are not voting here. We have Mr. 

Driehaus and Mr. McCarthy who are sitting here considering what 

we are considering and saying to their caucus—to your caucus, 

37 

‘‘You have to help me. I can’t go home if this continues in my district.’’ And 9 times out of— 

Mr. MILLER OF CALIFORNIA. Who said that? 

Ms. WATERS. Were you here in the debate? 

Mr. MILLER OF CALIFORNIA. I was listening on TV. But I can’t 

speak for one person’s district. I can speak for three individual’s 

districts right now. 

Ms. WATERS. Yes, but what I’m saying is I appreciate that, and 

I do know Mr. Baca’s district quite well. I don’t know your district 

quite as well. But what I’m saying—I’m trying to bring the political 

reality of the question of whether or not displaced and relocated 

public housing tenants are wanted and whether or not they have 

access to the services, and whether or not your caucus will support 

the idea. 

Mr. MILLER OF CALIFORNIA. I can—I will use my time, because 

we only have 5 minutes apiece. 

I think if many of these communities saw what the nonprofit sector is doing in public housing and what they are providing for socalled—the stigma of people on Section 8, I think they would have 

a completely different attitude than they have today. But many of 

these communities have not seen what the private sector can do in 

providing housing to people who need it. 

And I think if more people took the time—and the reason I invited you—I would be happy to invite Mr. McCarthy out to our 

area and show him—to Mr. Baca’s district, to Mr. Driehaus’s district, and mine—and show him what the nonprofits are doing and 

the quality homes and lifestyle they are providing for people and 

how those people are integrating in the community and having the 

services they need and the requirements they expect in their life, 

and they are living on their own being able to get a job in a community that sometimes pays better wages and stuff, sometimes— 

not necessarily—has better schools. But they are in an area they 

feel that they are well accepted. 

I have seen no outcry at all from—and my office is right next 

to—probably 4 miles away from one of the facilities. I have zero 

complaints. I have no complaints from the city. In fact, the city 

council and the mayor have said quite the opposite. They are just 

happy to have them in the community because they are fulfilling 

a need the community has. 

And so I think the debate we are talking about today is healthy, 

and I think if we educated more of our colleagues on what is really 

occurring out there, specifically in the private sector on public 

housing, they would be shocked, and I think more supportive. 

I thank you for yielding me the time and—you guys, we don’t 

care about you. We are having a nice conversation up here. Maxine 

and I, we might differ on a few things, but we have a goal of trying 

to do what we can for those people who need a helping hand at a 

given point in their life. And we even disagree on the length of it, 

but we do agree on a portion there that we could have commonality, and I yield back and thank the chairwoman. 

Ms. WATERS. Thank you very much. And I’m appreciative of your 

comments and your observations, and of course I think all of us 

would like to see people have better opportunities, and I’m going 

to look forward to you to provide some leadership, and acquaint 

38 

your colleagues with—take them to your district, do a tour, and 

come back and let me know what happens. Thank you so very 

much. 

I thank you for remaining with us. Because we do not have a lot 

of members here, I get an opportunity to kind of close this out with 

the last 5 minutes of questions, without objections. 

Let me say to Enterprise, as a nonprofit, do you believe that you 

could take what appears to be the description of a community in 

this Choice Neighborhoods proposal—and I’m not so sure that I 

know what makes up an eligible community or neighborhood—it is 

just not clear to me what the criteria is to be eligible for a Choice 

Neighborhood, but I’m going to assume that all of you know. I don’t 

know. And we will continue to try to get the definition of that and 

the supporting documentation for that. 

But given what you know—what you think it is or what you 

know about it, are you saying that the government should allow 

you, or even a for-profit, to go into a whole community and make 

some determinations about what is to be preserved, what is to be 

re-developed, to bring in the supportive services on education, on 

transportation, to choose these neighborhoods? How does Enterprise see itself taking on this responsibility, and the government 

basically funding it and putting it in your hands? 

Ms. SIGLIN. I think that one of the pieces of the legislation that 

is most important for you to work on is figuring out this question 

of which communities are the best places to do this, because what 

is interesting about Choice Neighborhoods is that it is trying to use 

a real estate transaction to improve the affordable housing to leverage a broader program of community transformation. 

Enterprise wouldn’t promise you that we would do this in places 

all over the country, because you have to have—HUD, when they 

choose Choice Neighborhoods, you have to select—you want local 

partnerships where there has been a deep, longstanding process of 

community engagement, so stakeholders have been working together on a neighborhood. There are only a few places around the 

country where our program goes that deep. So when you are working on the legislation, one of the suggestions in my testimony is to 

work on that section with the selection criteria. 

And all of—work for Enterprise looking at school-centered community revitalization projects, the ones that had the kind of outcomes you want, where people weren’t displaced, where the residents had better housing and better schools, those were the results 

of stakeholders with deep roots in the neighborhood. So that would 

be a part of the bill I would particularly pay attention to. 

Ms. WATERS. Thank you very much. I was particularly taken this 

morning with the Secretary’s testimony on HOPE VI, how successful it was, how well it did, how it had support, and on and on and 

on. And I was thinking as I was going through some of the testimony and listening, if HOPE VI was so good, why don’t we just improve that? 

Why don’t we just take the problems that we saw with HOPE VI 

and correct them? Why don’t we make sure that there is not this 

kind of displacement? Why don’t we make sure that we are supplying the resources in the community since nobody is telling me 

where the money is going to come from for all of these additional 

39 

resources, etc. And if HOPE VI was that good, why don’t we just 

improve on HOPE VI? 

Does anyone want to respond to that? Yes, sir. 

Mr. RAMIREZ. We think that the HOPE VI model has flaws that 

are being addressed, and one of them was that when it was 

launched, it was launched to deal with some of the really most distressed public housing in our Nation as the catalyst for this program, with very little forethought as to what are the impacts that 

HOPE VI will have on the residents themselves. There has been 

a great deal of clarity around discussions that you have led that 

have brought us closer to better understanding how to deal with 

those dynamics. 

The reality of HOPE VI, though, is that for the last 8 years, the 

investment into HOPE VI has diminished by six or seven-fold of 

what used to go into HOPE VI, and it was never really given the 

kind of push to be able to expand it. But a lot of the improvements 

that the panel has spoken about and that have been highlighted by 

several members of this committee are actually public housing developments. 

And with all due respect to former Assistant Secretary Cabrera, 

the reality is that the biggest property footprint in the most distressed areas, but HUD’s own admission, are public housing properties. And why it is being removed and not considered in any way 

except to say go ahead and compete for these dollars with all these 

other entities without being a key player at the table in transforming your own property at the same time is really a question 

that needs to be answered. 

And so we kind of feel like, from our perspective, that the Department is out there celebrating the honoree and euthanizing 

them at the same time with this initiative is being proposed. If 

HOPE VI really is a step to a bigger transformation, then we 

should be taking what has been successful within HOPE VI, which 

is transforming the largest footprint of property in a development, 

a public asset that needs investment—because we all know that 

even Abt several years back said that there was already a $20 billion backlog in improvements for this $125 or $130 billion asset 

that we have in public housing as a nation. A study is being conducted again by Abt that is going to probably raise that number. 

And yet there is no money going into HOPE VI in the proposed 

2011 budget. The Capital Fund dollars have been reduced, and yes 

there was some money that went into public housing, but it was 

long overdue to a long laundry list of needs that were there. And 

so I think that the policy perspective that the Secretary brings 

around Choice Neighborhoods is the right one, but it is missing the 

target in as much that it has removed probably the most critical 

piece from being the central piece around that effort. 

Ms. WATERS. Mr. Goetz, you talked about a study, and I think 

you said it identified the distressed public housing units, and that 

you think that this study was then used to talk about more demolition than improvement, and that even as we look at this Choice 

Neighborhoods proposal, that a distinction is not being made between distressed public housing and public housing that could be 

invested in with capital improvements, etc. 

40 

Is that what you said about—first, about the study, and that perhaps it is not being used correctly? Maybe it is being used to move 

forward with a new initiative that does not necessarily take into 

consideration saving some of this public housing. 

Mr. GOETZ. Yes, I was referring to the National Commission on 

Severely Distressed Public Housing and their report in the early 

1990’s, which identified an estimated 86,000 unites of severely distressed public housing. And given, of course, that was an estimate—perhaps they were off a little bit—but of course HOPE VI 

has gone well beyond twice that amount in terms of the units that 

it has demolished and re-developed. 

And I think the notion of distressed public housing was then developed by HUD. There were some standards created for what constituted severely distressed housing, and my point was simply I 

don’t see a replication of that, a careful replication of that for other 

forms of federally assisted housing. And in the absence of that, it 

is not clear which units would be eligible for the kind of Choice 

Neighborhoods redevelopment. 

And my other point was that very early on in the implementation 

of HOPE VI, it became a demolition program, and that became the 

one solution to a whole range of problems that public housing developments were having around the country, and it strikes me that 

in many cases, that approach was inappropriate. 

Ms. WATERS. Thank you very much. 

Ms. Khadduri, I think you testified about education—some education research, and basically spoke to the role that having strong 

schools and all associated with that could help to make an initiative like this work. Do you feel that you know what Choice Neighborhoods is, what kinds of neighborhoods are going to be selected, 

and how this is all going to work, and where the resources are 

going to come from in order to make Choice Neighborhoods work 

in the way that it has been alluded to? Do you think you understand that? Have you—can you get your arms around this? 

Ms. KHADDURI. I think I begin to understand what it is. I certainly look forward to reading the NOFA that HUD puts out for 

how they are going to use the funds that have already been made 

available to Choice Neighborhoods, because I think that there really is a lot to be looked at in the details. Some of the things that 

Kris Siglin talked about, what kind of partnerships with strong 

commitments to the neighborhood are going to be required, some 

of the things that I talked about, about the leveraging requirements, and are the resources that are going to be needed for the 

investments other than in housing really going to come forward? 

And just how carefully and thoughtfully the selection process is 

going to occur. 

I see the principles here, and some of the principles I like a lot, 

like building on the assets that a neighborhood already has, like 

making this holistic community development that doesn’t just redevelop housing, that is not just about bricks and mortar. But I think 

this is very hard to do. Turning around a neighborhood is extremely difficult, re-developing the housing is difficult for reasons 

that have been talked about. Creating good schools in historically 

disadvantaged neighborhoods— 

41 

Ms. WATERS. I know how tough it is—if I may just intervene. I 

know how tough it is. I mean I understand how tough it is. What 

I’m really asking at this point is how much does each of you know 

about what is being proposed. When I say, ‘‘Can you get your arms 

around it,’’ I’m still trying to understand the selection criteria. I 

don’t want to have to learn later on after a process has begun that 

it didn’t have this in it, that didn’t make good sense, what were 

they talking about when they talked about the stakeholders already being organized and working, does that eliminate certain 

kinds of neighborhoods? 

These questions haven’t been answered, and I thought maybe 

some of you had looked at this and you understood it a little bit 

better than I do at this point. I appreciate your concerns and I appreciate your identification of what is needed, but I want to understand— 

Mr. Cabrera, what do you know about the definition of a Choice 

Neighborhood? How will that selection be made? What is the criteria, and what is meant by neighborhoods that have stakeholders 

with deep roots working in ways to transform the neighborhood already, and where are these resources? How do you get L.A. unified, 

for example, that is broke? 

With all these dollars in deficit, school districts are talking about 

going to 4-day school districts. They’re laying off teachers. Where 

are these resources coming from? Is this pie in the sky? Is this an 

intellectual kind of discussion that does not have any real basis in 

fact and reality based on what some of us know about communities? Do you know something we don’t know? 

Mr. CABRERA. No, I don’t think I know something that others 

don’t know. I think that it’s not pie in the sky. It’s extremely real. 

I think a good beginning point is to remember that neither HOPE 

VI or Choice Neighborhoods will finance by itself a single unit of 

housing. They always have to be used with something else, some 

other tool. Tax credits that come from the private sector in terms 

of funding, bonds, the same thing, something else has to come in 

to make something possible. 

The second thing is when HUD uses the term assisted housing, 

Madam Chairwoman, that has a technical term within HUD. There 

are some things that won’t be assisted housing, so current tax credit units, current units that were billed to private activity bonds by 

themselves are unlikely to be deemed assisted housing, whereas 

things like Section 202, which serves the elderly, will be. Section 

11—811, excuse me—which serves people with special needs will 

be. 221(d)(3), 221(d)(4). These are defined terms institutionally 

within HUD. I think the question is valid. I understand, but I 

think in my head, knowing the institution by virtue of Saul and I 

did for some time, that has a pretty defined parameter. As to the 

community, I think that one of the efforts here is not trying to 

take—not trying to make one place a panacea and not help the rest 

of the community. I think that’s the intent of Choice Neighborhoods. 

Ms. WATERS. Ms. Crowley, if I may, I’m thinking about a particular community that’s built along one of the main corridors in 

the greater Los Angeles area that leads to the airport. We have improved transportation with the green line or whatever it is that 

42 

goes from north to south. It’s centered right near several public 

housings projects in the greater Los Angeles area. You have stakeholders who have, you know, many of them have sacrificed many 

of their years trying to make the neighborhood stronger and better, 

but there’s a lot of dilapidated housing in the area where we have 

one, two, three, four big public housing projects, Nickerson Gardens, Jordan Downs, Imperial Courts, and Donzack Village. 

They’re all right there. We have some good features, like I said, the 

transportation corridor. We have a health center that’s there, 

United Health, United Health Center, etc., but there’s a lot of dilapidated housing around this area. 

So what do you do Enterprise, well before I go to Enterprise, I 

want to know do you go to get eminent domain, to tear down this 

housing and to improve the housing? Ms. Crowley first. What’s 

your thought about all of this? 

Ms. CROWLEY. I’m interested in your question about have we put 

our arms around this, and which I think we’ll get to the example 

that you just showed. When this proposal first came out, we had 

a very in-depth analysis of it led by our vice president for policy, 

Linda Couch. Many, many of our members came together and have 

studied this. There were numerous meetings and conference calls. 

We sent a lengthy letter to the Secretary with all of our concerns 

about the initial proposal, and then the most recent proposal just 

came out. Some of those concerns have been addressed in it, but 

most of them have not been. So we find it very vague. We think 

that there’s a lack of specificity in the proposal that would provide 

the kinds of protections and answers that we sought for a very long 

time in HOPE VI. And in fact, what I frequently said to the folks 

at HUD, is please start with Ms. Waters’ HOPE VI reauthorization 

bill, because that was hard fought to get to something that a wide 

variety of people could agree to. And so I don’t think we’re there 

yet at all. I do think that there is merit to the notion of saying that 

this is a—there’s a public housing project that we want to redevelop or there’s a project base Section 8 assisted housing that needs 

to be redeveloped, and what is it that we can do in order to make 

sure that we’re doing that in a holistic way by looking at the broader community. 

But the nuts and bolts of how you do that, how it is that you 

go to, you know, you look at a dilapidated house that is owned by 

somebody who has abandoned it and has not shown up for years, 

is the city going to— 

Ms. WATERS. I’m talking about dilapidated housing that people 

live in. 

Ms. CROWLEY. Or that people live in, and that is that maybe the 

homes that they own are is the proposal going to help them upgrade their homes, or is the idea to get rid of them and to move 

those folks out? We don’t have answers to that. 

Ms. WATERS. It’s a mixed bag, Ms. Crowley. We have people who 

own dilapidated housing who have not had the money to upgrade 

the house. We have not had the programs to really assist them in 

doing that. We have absentee landlords. But again, I’m describing 

a neighborhood that’s a mix of the good and the bad. 

Ms. CROWLEY. Right. 

43 

Ms. WATERS. We have this tremendously valuable public housing 

that’s the major footprints in the neighborhood. We have a transportation corridor that leads—goes east and west to the airport, 

and we have the north-south development of trains, etc. We have 

a lot of dilapidated housing. Is this a Choice Neighborhoods potential? What would you do with this, Ms. Siglin? 

Ms. SIGLIN. If it was owner-occupied housing that was dilapidated, if it was—Choice Neighborhoods funding, as I read the proposal, can be used on public or assisted housing, but the local government would have to use a funding like CDBG to improve owneroccupied housing. I don’t think that would be Choice Neighborhoods. You know, you’re right to be asking these questions about, 

to be comfortable voting for something, you should really know how 

it works. So a question I would encourage you to ask the HUD Secretary is, you know, this is—I share the worry about HUD’s scarce 

resources getting bled into other activities. I mean, absolutely, our 

experience has been that these initiatives work better when you 

can work more holistically, more comprehensively, but if you want 

to use Choice Neighborhoods to really deal with the problems in 

distressed neighborhoods, you have to get the Department of Education and HHS to come forward. So it was helpful you hear the 

Secretary talk this morning about a joint NOFA, and it would be 

useful to see the details on how that would work. 

Ms. CROWLEY. Ms. Waters, could I just—this is a point of, I think 

it’s important— 

Ms. WATERS. I yield to myself as much time as I need and will 

continue with the questions for another few minutes. Yes, go 

ahead. 

Ms. CROWLEY. Thank you. Our reading is that the Choice Neighborhoods money could be spent on housing other than public or assisted housing. 

Ms. WATERS. That’s exactly what my staff just whispered in my 

ear. 

Ms. CROWLEY. And in fact, it’s unclear whether or not—if you 

read the way the statute is written, you could actually, we think, 

go into a neighborhood that didn’t have public or assisted housing 

in it and start from scratch. So obviously, we just need a lot of 

work to get to understand this better. 

Ms. WATERS. All right. And I’m sorry, I had to cut you off, Mr. 

Cabrera. 

Mr. CABRERA. I just want to say— 

Ms. WATERS. As you were explaining— 

Mr. CABRERA. Jordan Downs would probably qualify for this. You 

asked the question earlier, would Jordan Downs qualify for Choice 

Neighborhoods? Yes, I think it would. 

Ms. WATERS. What would you do with the dilapidated housing 

around Jordan Downs? 

Mr. CABRERA. I think that HOPE VI is a harder mix for something like that than Choice Neighborhoods is. Choice Neighborhoods would help more than HOPE VI. You have a broader set of 

tools to deal with that neighborhood than you would with HOPE 

VI. 

Ms. WATERS. Jordan Downs is not a HOPE VI project. 

44 

Mr. CABRERA. No. Jordan Downs is a public housing development, and so therefore would qualify under either HOPE VI or 

Choice Neighborhoods. 

Ms. WATERS. And so if this was a Choice Neighborhoods selection, the privately owned housing around it could be the beneficiaries of Choice Neighborhoods funding to— 

Mr. CABRERA. Theoretically in a Choice Neighborhoods, yes. 

Ms. WATERS. —to buy those houses up, to relocate those people, 

to fix up their housing for what? 

Mr. CABRERA. This is legislation that right now is proviso language in a budget. I think that’s one of the things that people are 

struggling with. But conceptually, the way that I’m reading it, and 

it’s just one person’s opinion, sure, you can probably utilize these 

funds, if you were to be the winning competitor, to expand the footprint beyond the property description of Jordan Downs, yes. 

Ms. WATERS. And would a private or a nonprofit be given eminent domain authority in this proposal? 

Mr. CABRERA. I don’t know that a for-profit or nonprofit could 

ever be given eminent domain authority in any place in the country, notwithstanding Revco. I do think that in the case of Los Angeles, knowing Los Angeles, I doubt that would ever happen. I think 

that would have to be resident in whatever the State said it’s residential. It’s either HACLA or Los Angeles County development or 

the housing department, whomever it might be. But, you know, 

just thinking about Jordan Downs, you have already had two 

charettes. There are several more slated. I think that’s the kind of 

discussion that happens very much at a local level. It’s hard to 

solve beyond a local level, because those are intensely local concerns with whomever the developer might wind up being. It’s going 

to be HACLA and at least one, possibly others, and that’s where 

that conversation happens. 

Ms. WATERS. Thank you very much, and let me just say that it 

was mentioned that public housing in the coordination of additional 

resources to make this concept work, you could use like CDBG, and 

some of just won’t allow that to happen because CDBG is the last 

standing funding into poor communities for many of the programs 

that work for seniors and other kinds of efforts. And it’s not that 

much any more. So I guess my bottom line concern is still the big 

question, what is Choice Neighborhoods? How does it really work? 

What’s the criteria for choosing a Choice Neighborhood? How is 

that decision made? And I’m still trying to get my arms around it. 

With that, Mr. Ramirez, I’m going wrap up with you. 

Mr. RAMIREZ. I would just say that we have a great opportunity 

to answer all those questions and the demonstration money that 

has already been appropriated in 2010. There is a NOFA that will 

be coming out sometime during the course of this year. There will 

be plenty of opportunity to also bring to Congress a clearer understanding of what it means. I feel that at this particular moment 

in time, the biggest decision I know you’re wrestling with is that 

there are scarce resources, and other programs have suffered. The 

Ross program has been proposed for elimination. No Hope VI, capital funds are down for public housing, and there are others. And 

so as you deliberate through this process, we firmly believe that 

the Choice Neighborhoods Initiative does have great potential to 

45 

transform even a bigger part of neighborhood. We just need to give 

it time to mature, and we have given the department the resources 

to bring something back that can be better evaluated and acted 

upon. 

Ms. WATERS. So basically, you believe that the $65 million that 

has been agreed upon the Appropriations Committee should again 

forward as such and we learn from that what is the potential for 

a broader effort? 

Mr. RAMIREZ. We believe that by the Secretary’s own admission, 

it’s going to take a tremendous amount of investment in any neighborhood that goes under this program because of its comprehensive 

nature. It does open up a glide path for the Department with the 

existing $65 million that has been set aside for this program to either start with planning grants, to bring other agencies to the table 

with the resources that they need to come with at the same time, 

and produce a NOFA that brings the kind of results that would 

point to a more comprehensive and coordinated investment within 

the neighborhood. Absent that, we believe that there are dollars 

that are currently being invested that could be better invested in 

the sense that a more sensitive look at what the impacts are to 

residents be inserted into them, but that already are transforming, 

again by HUD’s own admission, three-quarters of these neighborhoods that they’re talking about in this initiative, which are public 

housing neighborhood. 

Ms. WATERS. Thank you very much. With that, we’re going to 

wrap this up. The only way that I’ll extend it for another minute 

or so is if there’s a thought that you simply cannot hold, any one 

of you, that you must share publicly at this moment. Yes, ma’am? 

Ms. ELDRIDGE. I just want to say that I hope Choice Neighborhoods prevents the displacement of seniors from any neighborhood 

that Choice Neighborhoods is in, and the only way to do that is to 

leverage Medicaid and Medicare dollars in the effort to upgrade the 

neighborhood. That is the only way. Thank you. 

Ms. WATERS. Thank you all very much. You have been very helpful in helping me to focus on some of the issues related to this initiative. And I will note that some of the members who participated 

today may have additional questions for this panel, which they 

may wish to submit in writing. So without objection, the hearing 

record will remain open for 30 days for members to submit written 

questions for these witnesses and to place their responses in the 

record. And with that, this panel is dismissed—oh, we do have 

something to submit before we adjourn. Without objection, the 

written statement of Dr. Deirdre Oakley, Assistant Professor, Georgia State University, will be made a part of the record. 

With that, this hearing is adjourned. Thank you very much. 

[Whereupon, at 1:20 p.m., the hearing was adjourned.] 

(47) 

A P P E N D I X 

March 17, 2010 

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