U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

50–320 2009

S. HRG. 110–918 

REAUTHORIZATION OF THE HOPE VI PROGRAM 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

HOUSING, TRANSPORTATION, AND COMMUNITY 

DEVELOPMENT 

OF THE

COMMITTEE ON 

BANKING, HOUSING, AND URBAN AFFAIRS 

UNITED STATES SENATE 

ONE HUNDRED TENTH CONGRESS 

FIRST SESSION 

ON 

THE HOPE VI IMPROVEMENT AND REAUTHORIZATION ACT OF 2007 

WEDNESDAY, JUNE 20, 2007 

Printed for the use of the Committee on Banking, Housing, and Urban Affairs 

( 

Available at: http://www.access.gpo.gov/congress/senate/senate05sh.html 


smartinez on DSKB9S0YB1PROD with HEARING
(II) 

COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS 

CHRISTOPHER J. DODD, Connecticut, Chairman 

TIM JOHNSON, South Dakota 

JACK REED, Rhode Island 

CHARLES E. SCHUMER, New York 

EVAN BAYH, Indiana 

THOMAS R. CARPER, Delaware 

ROBERT MENENDEZ, New Jersey 

DANIEL K. AKAKA, Hawaii 

SHERROD BROWN, Ohio 

ROBERT P. CASEY, Pennsylvania 

JON TESTER, Montana 

RICHARD C. SHELBY, Alabama 

ROBERT F. BENNETT, Utah 

WAYNE ALLARD, Colorado 

MICHAEL B. ENZI, Wyoming 

CHUCK HAGEL, Nebraska 

JIM BUNNING, Kentucky 

MIKE CRAPO, Idaho 

JOHN E. SUNUNU, New Hampshire 

ELIZABETH DOLE, North Carolina 

MEL MARTINEZ, Florida 

SHAWN MAHER, Staff Director 

WILLIAM D. DUHNKE, Republican Staff Director and Counsel 

JENNIFER FOGEL-BUBLICK, Counsel 

MARK A. CALABRIA, Republican Senior Professional Staff Member 

JOSEPH R. KOLINSKI, Chief Clerk and Computer Systems Administrator 

GEORGE WHITTLE, Editor 

SUBCOMMITTEE ON HOUSING, TRANSPORTATION, AND COMMUNITY DEVELOPMENT

CHARLES E. SCHUMER, New York, Chairman 

MIKE CRAPO, Idaho, Ranking Member 

DANIEL K. AKAKA, Hawaii 

ROBERT P. CASEY, Pennsylvania 

JACK REED, Rhode Island 

THOMAS R. CARPER, Delaware 

SHERROD BROWN, Ohio 

JON TESTER, Montana 

ROBERT MENENDEZ, New Jersey 

ELIZABETH DOLE, North Carolina 

MEL MARTINEZ, Florida 

WAYNE ALLARD, Colorado 

MICHAEL B. ENZI, Wyoming 

CHUCK HAGEL, Nebraska 

JOHN E. SUNUNU, New Hampshire 

CARMENCITA N. WHONDER, Staff Director 

GREGG A. RICHARD, Republican Staff Director 


smartinez on DSKB9S0YB1PROD with HEARING
(III) 

C O N T E N T S 

WEDNESDAY, JUNE 20, 2007 

Page 

Opening statement of Chairman Schumer ............................................................ 6 

Opening statements, comments, or prepared statements of: 

Senator Dole ...................................................................................................... 5 

Senator Crapo ................................................................................................... 6 

Senator Allard ................................................................................................... 7 

Senator Martinez 

Prepared statement ................................................................................... 34 

WITNESSES 

Barbara Mikulski, U.S. Senator from Maryland ................................................... 1 

Orlando J. Cabrera, Assistant Secretary for Public and Indian Housing, Department of Housing and Urban Development .................................................. 8 

Prepared statement .......................................................................................... 35 

Dave Wood, Director of Financial Markets and Community Investment, Government Accountability Office ............................................................................. 20 

Prepared statement .......................................................................................... 45 

Richard Baron, Chairman and Chief Executive Officer, McCormack, Baron, 

and Salazar ........................................................................................................... 21 

Prepared statement .......................................................................................... 61 

Sue Popkin, Ph.D., Principal Research Associate, Metropolitan Housing and 

Communities Policy Center, Urban Institute .................................................... 22 

Prepared statement .......................................................................................... 64 

Charles Elsesser, Jr., Member of the Board of Directors, National Low Income 

Housing Coalition ................................................................................................. 24 

Prepared statement .......................................................................................... 87 

Sandra Henriquez, Administrator and Chief Executive Officer, Boston Housing Authority ........................................................................................................ 25 

Prepared statement .......................................................................................... 100 


smartinez on DSKB9S0YB1PROD with HEARING

smartinez on DSKB9S0YB1PROD with HEARING
(1) 

REAUTHORIZATION OF THE HOPE VI 

PROGRAM 

WEDNESDAY, JUNE 20, 2007 

U.S. SENATE, SUBCOMMITTEE ON HOUSING, TRANSPORTATION, AND

COMMUNITY DEVELOPMENT, COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS, Washington, DC. 

The subcommittee met at 2:10 p.m., in room SD–538, Dirksen 

Senate Office Building, Senator Charles E. Schumer (Chairman of 

the Subcommittee) presiding. 

Chairman SCHUMER. I will call the hearing to order, and because 

Senator Mikulski has been waiting and because I was late, I would 

like to make up the lost time for her, and we will do our opening 

statements, if that is OK with the Committee, after we hear from 

our first witness, who has been such an active and strong leader 

in the HOPE VI Program. 

STATEMENT OF BARBARA MIKULSKI, U.S. SENATOR FROM 

MARYLAND 

Senator MIKULSKI. Mr. Chairman, knowing how compelling and 

charismatic both you and Senator Crapo are, I am happy to listen, 

but I accept the professional courtesy. I think I will be treated to 

the charisma and compelling later on. 

But, in all seriousness—— 

Chairman SCHUMER. We are still trying to find our charisma. 

Right, Mike? 

Senator CRAPO. Right. 

Senator MIKULSKI. In all seriousness, though, Mr. Chairman and 

Senator Crapo, I really want to thank you for holding this hearing 

on the reauthorization of HOPE VI. The bill that we want to 

present to you today, Senate bill 829, has been the result of serious 

work on the part of a task force well versed in the issues of HOPE 

VI, and truly the preparation of the bill has been done on a bipartisan basis. We have worked very closely with Senator Jack Reed 

and also with Senator Martinez himself, where we worked with 

him hands on in his capacity as Secretary of HUD and now on this 

Committee. 

Mr. Chairman, we are here today because we want to present to 

you what we think a modern HOPE VI bill should be and also to 

have a sense of urgency that this is the right time to pass it because of the compelling need in the community and the strong bipartisan support in both the U.S. Senate as well as in the House 

of Representatives. 


smartinez on DSKB9S0YB1PROD with HEARING
2 

Mr. Chairman and colleagues, HOPE VI has been one of the 

most important Federal programs created for HUD for the revitalization of communities, lowering the concentration of poverty, and 

creating a self-help, self-sufficiency momentum for people who have 

lived in public housing. HOPE VI has offered real opportunity for 

public housing residents and new hope for the communities around 

the public housing. 

I created this program in 1992. At that time Jack Kemp was Secretary of HUD, and he was full of a lot of innovative ideas. One 

of the things that he wanted to do was to sell public housing to the 

poor, like Maggie Thatcher was doing in England. But the difference was public housing in the United States at that time was 

very distressed and very dilapidated. I knew that the poor did not 

want to buy 100,000 units of public housing where we, the Federal 

Government, was one of the biggest slum landlords. Why should we 

sell the slums to those least able to transform it? But we wanted 

to have new thinking and new ideas, and working with Dr. Art 

Naparstek and the Commission on Distressed Housing, we came up 

with the idea of HOPE VI. 

No. 1, tear down the highrises, and the whole point of tearing 

down the highrises was to lower the concentration of poverty, 

which in and of itself created zip codes of poverty and other social 

pathology—crime, low graduation rates, high rates of illegitimacy. 

By reducing that, we also knew that what we wanted to do was 

change not only the physical architecture but create a new social 

architecture, moving people to self-sufficiency. We knew that public 

housing should not be a way of life but a way to a better life. So 

that was the whole thought—new surroundings related to mixed 

income and then, No. 2, the processes involved would also move to 

self-sufficiency. 

It has been a tremendous success. There have been lessons 

learned, problems not anticipated, but we are ready to move on. 

What our legislation does is not only reauthorize but it reforms 

public housing, it refreshes it, and it reinvigorates it. If this legislation is passed, it will be better for the taxpayer, we will get more 

out of it; and it will be better for the beneficiaries because they will 

have more to work with. 

This legislation codifies best practices from the programs that 

really work, and it corrects those issues that we identified are really problems. It is what we need to do to empower communities and 

the hard-working people who live in it. 

Just a quick look at what this program has already meant. Since 

HOPE VI was created, 63,000 old units have been demolished. But 

that is not the real story. What has been the real story is the 

transformation of communities, the transformation in the lives of 

people, and the transformation of communities around it. Secretary/Senator Martinez also helped keep this program going during very dark times. 

Now, later on you are going to be hearing from Urban Institute. 

They have been the keeper of the data base. When we created this 

program, we wanted to gather data to make sure we were on the 

right track, and we wanted to make sure it was done outside of 

Government so that we could have an independent evaluation. So 


smartinez on DSKB9S0YB1PROD with HEARING
3 

if you want to have really the hard data, they are going to be the 

group that will also be able to tell you that. 

But as we looked ahead, we really wanted to talk about the practitioners who really knew what worked and what did not. That is 

why we asked Ms. Renee Glover, the Executive Director of the Atlanta Housing Authority, and Eleanor Bacon to pull together a task 

force. Ms. Glover by all accounts is one of the national leaders in 

how to make best use of HOPE VI, and Eleanor Bacon was the pioneering director of HOPE VI at HUD. This was the finest 30 HOPE 

VI minds that we could put together. 

So, Mr. Chairman, in a nutshell, though, what does the new revitalized, reinvigorated HOPE VI do? First of all, we wanted to continue to end the concentration of the poor in distressed neighborhoods. No. 3, we know that the best way to do that is to create 

mixed-income communities. But housing is not enough. One of the 

most important lessons learned was school system, school system, 

school system. That is what attracts the middle class to live in a 

mixed-income unit, and that is also the turbo motor to move the 

poor ahead. 

We do not try to reform entire school systems. We leave that to 

mayors and school boards. What we do say is that if you want the 

HOPE VI money, you have to make sure that the school in that 

neighborhood is also in the process of transforming itself so it can 

transform the life of the children. So we encourage that HOPE VI 

grant recipients be in partnerships with the local school superintendent to make sure school transformation is underway. 

The second thing is we want to make sure that mayors are involved, that this is not just a bucket of free Federal bucks for them 

to do real estate development. This is not a bill for the developers. 

We are into the development of human capital, not for Federal 

funds to go to developers. We want the developers because they 

bring private sector know-how, but it has got to be tied to a mayor 

so that we get that comprehensive social service effort to move people to self-sufficiency. 

We do also provide adequate support services because the emphasis is self-sufficiency for the adults, education for the children, 

transformation of lives, as well as the physical attributes. We feel 

that those are some of the great building blocks of this program. 

We hope to change these older neighborhoods. 

We think that what we have for you is lessons learned on the 

issues of relocation, the issues of time delays and dragging it out. 

There are a lot of aspects here that require reform, one of which 

is the issue of relocation, the right to return, as well as wise use 

of dollars, making sure that a mayor is involved along with the developer. 

Again, Mr. Chairman, I want to say that I have done a lot of 

things in the Congress, and when I look at what are some of my 

proudest accomplishments, HOPE VI has been one. And the reason 

I say that, it is not about what I did. What I did was help create 

a Federal framework. Then all who did it—the executive branch 

making sure that it was administered properly, but it was the ingenuity and resourcefulness of local government, responsible developers, and the grit of the poor themselves—the grit of the poor 

themselves—that have made this a success. Now it is time to look 


smartinez on DSKB9S0YB1PROD with HEARING
4 

at it, refresh it, reform it, face the problems, but I think we owe 

it to the poor and we owe it to the taxpayer to pass this legislation. 

I will be happy to answer any questions you have. 

Chairman SCHUMER. Thank you, Senator Mikulski. First I want 

to thank you for your leadership. You created this program, but 

you have also followed it almost day to day to make sure that it 

is a success, and your recommendations and the recommendations 

of your task force will be really taken very seriously and are going 

to be part of the legislation that we hope to move out of this Committee. So thank you. 

Senator MIKULSKI. Well, Mr. Chairman, I want to thank you and 

your staff and Secretary Martinez and Senator Reed. They have 

really been outstanding. My staff and I also express that. 

You know, when we work together, we can really do it right, and 

we have worked together. 

Chairman SCHUMER. Thank you, and we will work with you to 

continue to do that. Thank you, Senator Mikulski. 

Senator MARTINEZ. Mr. Chairman, if I may just say a word? 

Chairman SCHUMER. Please. 

Senator MARTINEZ. I just wanted to thank the Senator for her 

comments and particularly as directed to me. But I just wanted to 

tell you it has been a real pleasure working with you. I know how 

passionate you are about this program. You are, it is often said, the 

‘‘Mother of HOPE VI,’’ and I believe that is appropriately so. You 

have really done so much not just for the—I thought that the 

words you said were perfect, not only the physical architecture but 

the social architecture. And people do not always understand that, 

because as we see a miserable 10-story high-rise go down and 

something new and more attractive rebuilt, what people may sometimes not understand is what a difference it makes in the lives of 

people that are touched by both of these architectures. And so you 

have been wise enough to lead us in that direction, and I just 

wanted to thank you for your passion and your continued involvement in this issue. 

Chairman SCHUMER. Thank you. 

Senator Reed. 

Senator REED. Can I simply commend the Senator for her vision 

and her leadership and her unflinching support for this great program, and I associate myself with your comments and Secretary/ 

Senator Martinez’s comments. 

Thank you, Mr. Chairman. 

Chairman SCHUMER. Thank you. 

Thank you so much, Senator Mikulski, for this and all the things 

that you do. And the record will show that all of us, if the rules 

had allowed, would have applauded, would have joined the sole 

person in the back of the room applauding. But we do not allow 

that around here. 

[Laughter.] 

For those who came in later, we went right to Senator Mikulski 

so she could get on with her busy schedule. Senator Dole has a— 

I know the Judiciary Committee has judicial nominees, and she is 

introducing some. So if the Committee does not mind, we will let 

Senator Dole make the first opening statement and we will not 

make any of our ours. 


smartinez on DSKB9S0YB1PROD with HEARING
5 

STATEMENT OF SENATOR ELIZABETH DOLE 

Senator DOLE. Thank you. Thank you very much, Mr. Chairman 

and Ranking Member Crapo, for holding this very important hearing regarding the HOPE VI Program, and I am just so pleased to 

cosponsor Senator Mikulski’s bill, the HOPE VI Improvement and 

Reauthorization Act of 2007, which would extend HOPE VI to fiscal 

year 2016 and add education and relocation-related benefits to the 

program. 

As many on this Committee have seen firsthand, the HOPE VI 

Program provides grant funding to local housing authorities to renovate or demolish and replace existing public housing, as we have 

heard, and transform it into new mixed-income housing. This program has been credited with eliminating some of the most dangerous and dilapidated neighborhoods in my home State of North 

Carolina, thus providing safer environments for families and creating positive ripple effects throughout the community. 

For example, a study of eight HOPE VI sites nationwide by the 

Housing Research Foundation found that in communities surrounding recent HOPE VI developments, per capita incomes were 

up, neighborhood unemployment rates were down; and compared to 

the overall city, commercial and residential lending increased faster and crime rates declined more sharply. 

Since the program’s inception, North Carolina has received more than $300 million in HOPE VI grant funding, more than all but six 

States. And as a result, we are home to a number of very successful developments. For example, last August I was privileged to attend the opening of Willow Oaks in Greensboro. With the help of 

a $26 million HOPE VI grant from HUD, this thriving, safe community has risen up from a site once overwhelmed by poverty and 

ridden with crime, and this grant was leveraged into $100 million 

in private investment. 

In addition to affordable, safe housing, Willow Oaks offers residents job training, counseling, child care, and other critical services. The people living here not only have keys to a home, they 

have keys to a better quality of life and a brighter future. 

Piedmont Courts in Charlotte and Capital Park in Raleigh are 

also shining examples of thriving HOPE VI developments that I 

have toured. The year before Capital Park was torn down, the onsite police station received more than 1,500 calls, including two reports of officer-related shootings. Remarkably, in the year after 

Capital Park was built, there were just two calls to the police—one 

to report a break-in, the other to turn in a man stealing out of unlocked cars. 

The innovative thinking that has made North Carolina’s HOPE 

VI developments such resounding successes should be replicated by 

housing authorities elsewhere, both in my home State and across 

the Nation, and this Committee must do its part to ensure this program continues to flourish. 

The HOPE VI Program also provides the opportunity for residents to get on track to becoming homeowners. For example, many 

developments provide financial planning workshops that stress savings for downpayments and unexpected costs. I simply cannot say 

enough about the positive effects of homeownership. Parents who 

own their own home provide more stable environments for their 


smartinez on DSKB9S0YB1PROD with HEARING
6 

children. These children do better in school. They become more involved in the community. These families are able to build wealth, 

many for the first time, thereby helping secure funds for retirement 

and for higher education. Families who own their own homes also 

are more likely to spend the money necessary to properly maintain 

those homes. These positive results, again, extend throughout the 

community and the economy. 

Homeownership in this country is at record levels, and we should 

continue to focus our efforts on raising it even higher, especially 

minority homeownership. 

So, again, Mr. Chairman, I thank you for holding this hearing for 

a program that is very near and dear to my heart, and that is because it is making a difference to so many people in North Carolina 

and across the Nation. 

Thank you very much. 

Chairman SCHUMER. Well, thank you, Senator Dole, and I very 

much appreciate your remarks. 

OPENING STATEMENT OF CHAIRMAN CHARLES E. SCHUMER 

Chairman SCHUMER. Now, I am going to ask unanimous consent 

put my remarks in the record, because I know we want to get on 

to the witnesses, and Senator Mikulski and Senator Dole have 

summed up much of what I would say. I just do want to say that 

in New York HOPE VI has been the same success it has been in 

other places across the country. We have six HOPE VI projects— 

in Albany, in Niagara Falls, in Buffalo, in Utica, in Yonkers, and 

in New York City. They have been extremely successful doing just 

what HOPE VI is intended to do, which is, A, provide a much better physical environment, but even more important, a much better 

social environment where we have a mixture of all different kinds 

of people. And that is why I think Senator Mikulski’s legislation— 

I know Senator Reed, Senator Martinez, and everyone here who 

has provided such leadership here—really important. 

I call on Senator Crapo. 

STATEMENT OF SENATOR MIKE CRAPO 

Senator CRAPO. Well, thank you very much, Chairman Schumer, 

and I will do the same and just make brief remarks. 

This is probably the first opportunity I have had to publicly in 

one of our hearings tell you how glad I am to be able to work with 

you on this Subcommittee. I continue to appreciate the work that 

we have done together with Senator Reed, Senator Allard, and the 

other Members of the Subcommittee, who have given such great 

leadership in the past. 

Truly, the remarks that have already been made by Senator Mikulski and Senator Dole and yourself, Mr. Chairman, have laid out 

the important goals we have for strong public housing programs. 

And my objective here today will be to see if we can continue to 

extend that. 

I think everybody knows that there are those who contend that 

there are some inefficiencies, or some improvements that can certainly be made in the approach that the HOPE VI Program has, 

and my focus today is going to be to learn about those suggestions 

and see if there are ways, as Senator Mikulski said, that we can 


smartinez on DSKB9S0YB1PROD with HEARING
7 

reform and revise but continue to move forward aggressively to 

make the maximum use of the dollars we have available for supporting and strengthening public housing. 

Chairman SCHUMER. I would also ask unanimous consent that 

Senator Martinez’s full statement be put in the record. 

Senator Reed. 

Senator REED. Thank you for convening the hearing. And once 

again, I think we all are saluting, very appropriately, Senator Mikulski for her leadership. 

Thank you, Mr. Chairman. 

Chairman SCHUMER. Thank you, and thank you for your leadership as Chair of this Committee and your advocacy for HOPE VI 

as well. I know you have worked with Senator Mikulski closely on 

this issue. 

Senator Allard. 

STATEMENT OF SENATOR WAYNE ALLARD 

Senator ALLARD. Mr. Chairman, I have a short statement I 

would like to make. It brings in a little different perspective than 

what everybody else has been commenting on. And I appreciate the 

opportunity to participate in the hearing on HOPE VI programs. 

In 1992, the National Commission on Severely Distressed Public 

Housing estimated that 86,000 federally subsidized public housing 

units were severely distressed and subjecting the families residing 

in them to extreme poverty and intolerable conditions. The HOPE 

VI Program was created to demolish these units, later expanded to 

a total of 100,000, transforming them into mixed-income communities by 2003. 

The program was also designed to contribute to the improvement 

of the surrounding neighborhood, provide housing that will avoid or 

decrease the concentration of very low-income families, and create 

opportunities for residents to achieve self-sufficiency. And it is hard 

to argue with these goals. However, goals alone do not create a 

good Federal Government program. 

To define success, we must examine outcomes. Unfortunately, 

the HOPE VI Program does not have such a good track record on 

the outcomes side. Of the $5.8 billion in grants awarded, more than 

$1.4 billion remains unspent. Many guarantees have significant 

delays. 

We must also consider the costs, especially the opportunity costs, 

when evaluating the success of HOPE VI. According to the General 

Accounting Office, the HOPE VI Program costs significantly more 

per family than other Federal housing assistance programs. While 

the HOPE VI goals are laudable, how many more families could 

have been provided decent, safe, sanitary, and affordable housing 

had the same taxpayer dollars been devoted to other programs? 

These, along with a number of other factors, have led the administration to give the HOPE VI program a rating of ‘‘ineffective’’ 

under the PART Program. This is where they measure outcomes. 

And what does ‘‘ineffective’’ mean? According to the administration, 

programs receiving this rating are not using their tax dollars effectively. Ineffective programs have been unable to achieve results 

due to a lack of clarity regarding the program’s purpose or goals, 

poor management, or some other significant weakness. A program 


smartinez on DSKB9S0YB1PROD with HEARING
8 

meeting this description does not sound like the best way to assist 

low-income people to me. 

I recognize that HOPE VI projects have been completed on time, 

on budget, and would be considered successful in meeting the program goals. We perhaps ought to spend some time in looking at 

those successful projects, and I congratulate those cities and housing authorities for their work. 

Unfortunately, the success of a few projects is not sufficient justification to extend an inefficient program in its current form. Today’s hearing will be an opportunity for this Subcommittee to examine both the successes and shortcomings of the HOPE VI Program, and this information will be helpful, I am sure, as we move 

forward, and I look forward to the witnesses’ testimony. 

Thank you, Mr. Chairman. 

Chairman SCHUMER. Thank you, Senator Allard. 

Now let me ask our second witness to come forward, and he is 

Orlando Cabrera. He is the Assistant Secretary of Public and Indian Housing at the Department of Housing and Urban Development. Mr. Cabrera has held his position since 2005, and prior to 

that he had various positions with the Florida Housing Finance 

Corporation, including its Vice Chairman, Chairman, and Executive Director. 

Mr. Cabrera, your entire statement will be read into the record, 

and you may proceed. You have about 5 minutes. 

STATEMENT OF ORLANDO J. CABRERA, ASSISTANT SECRETARY FOR PUBLIC AND INDIAN HOUSING, DEPARTMENT 

OF HOUSING AND URBAN DEVELOPMENT 

Mr. CABRERA. Thank you, Mr. Chairman, Senator Crapo, and 

Members of the Committee. My name is Orlando Cabrera, for the 

record, and I am Assistant Secretary for Public and Indian Housing 

at the Department of Housing and Urban Development. Thank you 

for inviting HUD to present its views on issues relating to the 

HOPE VI Program. 

Our written statement sets forth many of our thoughts on HOPE 

VI. This oral statement will focus on our hope for HOPE VI. 

No HOPE VI deal gets done simply on its own as a Federal 

grant. Many other levels of financing need to be brought into the 

HOPE VI transaction for that transaction to work and produce 

housing. We believe that HOPE VI is hard enough to use and, if 

the program would be reauthorized by Congress, that the path to 

its greater success is greater simplicity and not additional complexity. 

For example, many States struggled in their policy decision on 

how to treat HOPE VI deals because the complexity of HOPE VI 

deals prolonged the development process, causing the low-income 

housing tax credit to go stale, if you will, thereby hurting States 

in two ways. 

First is lost opportunity; namely, HOPE VI transactions historically demand a lot of tax credits, and so other low-income housing 

tax credit units were not constructed because the tax credit was 

committed to the HOPE VI transaction. 

And, second, often, and particularly early on, the HOPE VI Program applicant was a PHA with scant or no development experiVerDate Nov 24 2008 01:54 Dec 12, 2009 Jkt 050320 PO 00000 Frm 00012 Fmt 6633 Sfmt 6602 E:\HR\OC\A320.XXX A320

smartinez on DSKB9S0YB1PROD with HEARING
9 

ence, meaning that the allocation would go in—I am sorry, would 

go on or underutilized because of capacity issues. 

The good news is that the second prong has been remedied in 

many instances. PHAs have become better applicants and have become better economic partners and, therefore, better developers. 

Unfortunately, the first prong has not progressed much. One reason for that is that HOPE VI deals are very complex. As was previously noted, no HOPE VI deal can be funded on its own. One 

thought we would suggest in the process of your consideration of 

HOPE VI legislation is that simplicity, wherever possible, be the 

mantra and to remember that every time something outside of a 

housing context is added to a HOPE VI deal, that deal’s viability 

decreases because its costs are increasing. 

We would suggest that encouraging certain policy prerogatives 

would make sense, but that such policy prerogatives be accompanied by answering the following questions: 

If the prerogative is added, will it make a HOPE VI transaction 

less viable because it has added costs? Has adding the policy prerogative made the HOPE VI transaction less competitive when it 

is postured for competition for tax credits, private activity bonds, 

and/or if one would want to delve this far down, other State subsidies that might be available in a discrete State? 

This is what we suggest would help the viability of HOPE VI. My 

written statement sets forth many of the issues that have hampered HOPE VI. If and when Congress acts to reauthorize HOPE 

VI, we believe the approach proffered in this testimony would add 

value to the program and, accordingly, offer it respectfully. 

Thank you once again for your invitation to testify before the 

Committee. I would be happy to answer any questions that you 

might have. 

Chairman SCHUMER. Thank you, Mr. Secretary, and we will 

begin the rounds. We will allow 5 minutes to each of us. 

My first question is a very simple one. Do you agree that HOPE 

VI is not just about bricks and mortar but also about rebuilding 

communities and fostering self-sufficiency? 

Mr. CABRERA. I think HOPE VI is primarily about bricks and 

mortar, and when it is not about bricks and mortar, it is very hard 

to do a HOPE VI deal. The more you move away from bricks and 

mortar, the more likely that you are going to be in that group of 

deals that is in the 70 percent or so that have not yet been completed. 

Chairman SCHUMER. Let me ask a second question. The Urban 

Institute and others have estimated that there is still a significant 

stock of severely distressed housing. Has HUD done a comprehensive inventory of the public housing stock? And has HUD determined that there are no severely distressed buildings? 

Mr. CABRERA. I do not think HUD would ever determine that 

there were no severely distressed buildings. The last study that 

was done was in 1997. Recently, as part of our appropriation package, we have put in as a first priority a study or a revisiting of the 

study that was done in 1997. 

Chairman SCHUMER. And what percentage of buildings then 

were regarded as severely distressed in 1997? 


smartinez on DSKB9S0YB1PROD with HEARING
10 

Mr. CABRERA. Mr. Chairman, I do not recall, but I am happy to 

answer that in a subsequent inquiry. 

Now, as I understand it from your testimony, the HOPE VI Program has exceeded HUD’s goals on almost every count—relocation, 

construction, and completed units. Is that correct? 

Mr. CABRERA. In the last fiscal year, in the last fiscal period for 

assessment. 

Chairman SCHUMER. OK. So here is my question. Why then has 

the administration proposed to terminate and rescind HOPE VI 

funds, first? And, second, what is HUD’s plan for revitalizing the 

remaining distressed units across the country? 

Mr. CABRERA. There are a variety of ways to address distressed 

units. It is not just HOPE VI. HOPE VI as an engine has had— 

I call it a ‘‘Dickensian record’’: very good, a lot of very bad, very 

little in between. And the reason is because it is very difficult to 

use, and so what you have is the capital fund. You have access to 

low-income tax credits. You have private activity bonds. You have 

State programs in many States that have programs that would 

help rehabilitate and build new units. 

So the issue in most cases when you are dealing with the asset 

of affordable housing, which is a much broader spectrum, is to essentially use the full menu of what is out there. 

Now, HOPE VI as a component of that is in some cases very 

good. I think I can point to some very real successes in some very 

important areas of the country. But I can point to a lot of places 

where there has not been success and there has been a very real 

problem. 

Chairman SCHUMER. But does it not make sense then to build on 

the successes and change the program? I have just been informed 

there is a backlog of $18 billion in capital needs in terms of public 

housing. 

Mr. CABRERA. I think that is the Urban Institute number. 

Chairman SCHUMER. I believe it is, yes. You do not want HOPE 

VI. What specific programs replace it? Much of our public housing 

was built in the 1940s, 1950s, 1960s. That is true in my city where 

over 600,000 people live in public housing. You are saying do not 

do HOPE VI, which many of us believe the track record is better 

than the one that you have reported on. But does HUD have a plan 

to deal with this distressed housing? 

Mr. CABRERA. I think in most cases most PHAs would say there 

might be a better and more broad application with more simpler 

rules in other programs than there is in HOPE VI. So if you were 

to use, for example, the capital fund, you do not have the restrictions in many cases that you have in HOPE VI. HOPE VI is a competitive grant. There are limits to what you can do with HOPE VI. 

It never works well on its own. It needs a lot of different subsidy, 

and, on average, it takes about 71⁄4 years to build. 

When you try to develop product using the low-income housing 

tax credit, just by way of example, I do not have a de facto average, 

but just from my own experience, I can say that that average 

would run between 2 and 3 years to build. So the issue becomes 

one of trying to either make HOPE VI more workable in the sense 

of trying to develop units so that the spectrum works better, or I 

believe that the position would be yes, that we have to revisit this. 


smartinez on DSKB9S0YB1PROD with HEARING
11 

When you have 65—actually, I think now it is 74 grant applications that have been completed out of 237, it says something about 

the efficacy of the program. 

So I cannot argue with the successes, and I have not. In fact, I 

have lauded them. But I have to really look at the whole program. 

Chairman SCHUMER. I would just make two points here, because 

my time is expiring. 

First, HOPE VI was not intended to be sort of a stand-alone program. It was intended to need other help. It was intended to bring 

a public-private mixture. It was intended to bring in private funds 

to help, and it has done that. I can speak for the places in New 

York. It has done that. So to say it cannot do it on its own sort 

of is against both the concept and reality of HOPE VI. 

And, second, I would say this: At least my view—and I know 

Senator Mikulski’s and Senator Reed’s view, who are not here—is 

that HOPE VI has been far more successful than you are willing 

to give it credit for. 

But with that, let me call on Senator Crapo. 

Senator CRAPO. Well, thank you very much, Mr. Chairman. 

Secretary Cabrera, the question I have is, as you have indicated 

and as Senator Allard has indicated in his comments, there are 

some studies and some analyses and some concerns about the costeffectiveness of the HOPE VI Program and whether the Federal 

dollars we are committing there are really achieving their purposes. 

I do not think anybody on the Committee would disagree that we 

want to have the most robust and dynamic and effective public 

housing program that we can possibly develop and that we want 

the best use out of our housing tax dollars. 

So the question I have for you is this: Assuming that there will 

be Federal housing dollars coming, do you believe that the HOPE 

VI Program can be reformed, that the issues and the concerns that 

have been raised with it are those that can be fixed so that we can 

build on its strengths and literally improve it to the point where 

it can receive the accolades from all quarters that we would hope 

that it can? Or do you believe that we should simply move these 

Federal dollars into other Federal programs for housing? 

Mr. CABRERA. I think that either is an option. I really believe 

that is an issue for this body. But I will answer both. 

Senator CRAPO. OK. 

Mr. CABRERA. If one were to reform it, the way that I think we 

would suggest that it be reformed would be to address its ability 

to be used quickly with other subsidy. So that, for example, when 

I was Executive Director of Florida Housing, it was very difficult 

to include HOPE VI as a line item in a set-aside or a preference 

because we knew it was a black hole of tax credits. The tax credits 

in a huge amount would go in and may or may not be used, and 

if they were used, they would be used way later than everything 

else, which meant, as I noted in my oral statement, a huge opportunity cost in terms of other units that have to come online. So if 

there were a way to address that, I would say yes, that would be 

one way. 

The other side of that, the latter half of your question, would be 

if you were to take that money and give it to housing authorities 


smartinez on DSKB9S0YB1PROD with HEARING
12 

and say you can leverage this in the context of capital funds because capital funds can essentially be securitized, and they are 

securitized through what is equivalent of a Garvey, and they go out 

and they borrow money prospectively, you can actually leverage the 

money in much the same way. 

Now, I know that in the current legislation the objective is to 

have a 2:1 leverage on HOPE VI, but just by way of illustration, 

most leveraging, when you deal with low-income housing tax credit 

deals or private activity bond deals, is far in excess of 2:1. In most 

cases—certainly in the case of the State of Florida—the ratio is 

more like 6:1. And so the issue is—and, incidentally, Florida is not 

alone. Some other States are actually more successful than Florida 

in terms of leveraging. 

So the issue is both efficacy of use and actual production of units. 

That would be where I would focus the matter. I hope that is responsive. 

Senator CRAPO. Yes, it was very responsive. In the context of 

your answer to the first part of the question, in terms of making 

the program, if it were to be retained but improved, making it more 

effective and I think you said make the benefits of the program 

more easily used at the front end of projects. Is that basically 

the—— 

Mr. CABRERA. Readiness to proceed in the context of HOPE VI 

is critical. If you have an applicant that is not ready to proceed, 

it is not a worthwhile endeavor to try to give them a grant, which 

at one point was very common in this program. 

Senator CRAPO. So how would we solve that just structurally 

with the HOPE VI Program? What kinds of specific changes could 

be made to accomplish that? 

Mr. CABRERA. A lot of that has already been done in a regulatory 

way, which predates me. I had nothing to do with it. It happened 

roughly in 2002, and a lot of that had to do with things that you 

would otherwise look at in a development context. The first one 

that comes to mind is simple site control. You know, do you have 

site control? Where that might not have been something that was 

examined before, the readiness, not just the site control. So that 

would be one. 

But beyond that, I mean, you know, 2 weeks ago I testified in 

front of Ways and Means, and the subject upon which I am about 

to speak is not properly in front of this Committee. It is properly 

in front of Senate Finance. But, you know, a big issue in HOPE VI 

is mixed income, and a big impediment is dealing with the—it is 

a tax issue dealing with net cash-flows that come out of naming 

certain units one thing—namely, ‘‘low-income housing tax credit 

units’’—and other units ‘‘market units.’’ And so if there were a 

mechanism to allow an indicia of interest that is different for the 

private sector units, the market units, than those that are subsidized with a low-income housing tax credit, that would be a big 

help for HOPE VI. It would encourage quicker and better investment. Currently, that is not permitted. 

Senator CRAPO. All right. Thank you. I see my time has expired. 

Chairman SCHUMER. Senator Menendez. 

Senator MENENDEZ. Well, thank you, Mr. Chairman. I appreciate 

you and the Ranking Member calling this hearing. 


smartinez on DSKB9S0YB1PROD with HEARING
13 

You know, Mr. Secretary, we have a different experience in New 

Jersey on HOPE VI. The reality is that it is an ambitious program 

to start off with because it is not just about changing housing, although that is clearly a fundamental part of it. It is also about 

transforming communities. It is about transforming lives. It is 

about economic empowerment. It is about a whole host of other 

things. 

Now, when I got to Newark and see Archbishop Walsh Homes 

and see the transformation of that, I say to myself, ‘‘Those people’s 

lives have been transformed dramatically,’’ in which they are no 

longer warehoused, as we used to do in public housing, but they 

live in communities, in places they can really call home—‘‘home,’’ 

a place where we are brought to when we are born, a place where 

we are nurtured during the growth of our lives, a place where we 

share good and bad times, a place where, in fact, most of our life 

takes the center of. And those people’s lives have been transformed 

rather dramatically, and the ripple effect on the economic side as 

well has been very important not only for those who lived in what 

was Archbishop Walsh Homes but across the spectrum. 

In Elizabeth, in the Elizabethport section, one of the most incredibly run-down sections of the city of Elizabeth, again, transformation. Transformation has taken place. 

So I do not quite understand—you know, I read your testimony, 

and I hear what you say here. I have been watching it from my 

office while I had somebody there. I am trying to understand. You 

know, I get the sense of it is either great or it is lousy. You know, 

you have had a series of things in your written testimony that you 

cite successes on. And at the same time, I hear your testimony and 

it is rather negative. So in my mind, our experience is quite different. 

Now, I do not know whether that is the experience across the 

country, but we have clearly made dramatic impact as a result of 

HOPE VI in communities like Newark, the State’s largest city; in 

a community like Elizabeth, the State’s third largest city, with people who largely were warehoused and forgotten by HUD. And their 

lives have been transformed, and the ripple effects economically in 

those neighborhoods have also been seen far beyond HOPE VI 

money. 

So I have a different vision of it, and let me just ask you, your 

testimony indicates that you would not like to see congressionally 

imposed sanctions on HOPE VI grantees if they do not meet certain deadlines and benchmarks, but you would leave that discretion to impose the sanctions to the Secretary. Has HUD sanctioned 

HOPE VI grantees, to your knowledge? 

Mr. CABRERA. No. There are limits to our ability to sanction anybody as that legislation is currently drafted. 

Senator MENENDEZ. Now, you have also said in your testimony 

that one-for-one replacement of public housing is not feasible because of the costs. And, in fact, you indicate that HOPE VI would 

cost 33 percent more if it included one-for-one replacement. 

Has the Department requested additional funding needed to ensure that there is no loss of affordable housing? 

Mr. CABRERA. I think there is a distinction, Senator, between 

public housing and affordable housing. One of the things that—I 


smartinez on DSKB9S0YB1PROD with HEARING
14 

have spoken on HOPE VI often, beyond testimony, and I would just 

note for the record that my comments are not so much negative, 

they are critical. And a lot of people have been critical. I do not 

think that that is unique to HUD. And I think that the reason is 

because the outcomes which you have mentioned are absolutely so 

in those places where it succeeded, but the problem is that there 

is a lack of those outcomes in those places where nothing has occurred. 

So I have been in—let us see. In the case of the $1.4 billion, 

which is down $1 billion from the date that I was confirmed by this 

panel, have $500 million that was granted prior to 2001, and in 

most of those cases dirt has not even been broken. 

So I struggle with that, and I also struggle with the idea that 

somehow this should be a one-to-one ratio of public housing. I do 

not think anybody would have—I think it is a much easier thing 

to discuss a one-to-one ratio of affordable housing. 

Senator MENENDEZ. Well, Mr. Secretary, let me tell you what I 

struggle with. What I struggle with is an administration that says 

let us zero out HOPE VI and have no new iteration of it. What I 

struggle with is a budget that undermines public housing the way 

it is today in a variety of ways. What I struggle with is a lack of 

affordable housing elements in States like my own that have such 

a high cost of housing. 

So, you know, I do not hear a positive program being promoted 

by this administration to achieve both the public housing goals and 

the affordable housing goals. And I think that the reauthorization 

of HOPE VI is critically important to communities like those that 

have been transformed in my home State. And I have a much different opinion of it, but I see my time is up, and I appreciate the 

Chair’s indulgence. 

Chairman SCHUMER. Thank you, Senator Menendez. 

I want to thank Senator Menendez. He is going to take over the 

chair in a few minutes because I have some prior scheduled thing 

that I must go to. 

Senator Allard. 

Senator ALLARD. Mr. Chairman, thank you very much. 

As the former Chairman on this Committee, we worked hard 

with the administration to put in place a lot of affordable housing 

programs, working with Senator Reed as a partner in that effort. 

One is the American Downpayment Dream Act or Dream Downpayment Act—I forget what that was. It provided an opportunity 

for people to get into homes and actually have homeownership. And 

our feeling was that they took good care of their real estate and 

it made them better members of the community. And on the Committee, it is difficult, I think, to be critical of a program when it 

has such laudable goals. But I do think that we need to look at it 

carefully, and the General Accounting Office is an objective observer. They look at programs throughout the whole spectrum of 

the Government. Some of them they give a sterling report. Some 

of them they rate as effective. Some they rate as ineffective. And 

some they rate as no results demonstrated because the heads of 

those programs do not do anything to even try and create any accountability as to how taxpayer dollars are being spent. 


smartinez on DSKB9S0YB1PROD with HEARING
15 

So I applaud you for looking at this in a critical manner, and to 

me, your testimony means a lot because you have had to work with 

these programs personally, and you can speak from a point of personal experience, and that means a lot to me. 

Mr. CABRERA. Thank you. 

Senator ALLARD. Let me ask you, how much grant money remains unspent on the HOPE VI Program? 

Mr. CABRERA. $1.4 billion. 

Senator ALLARD. OK. And how does this percentage—— 

Mr. CABRERA. Approximately, Senator. 

Senator ALLARD. OK, yes. And how does this percentage compare 

to other HUD-assisted housing programs? 

Mr. CABRERA. It is difficult to compare simply because of the way 

that the grants are undertaken, but the comparison would be with 

the gross number, and the gross number of HOPE VI grants is $5.8 

billion. So the $1.4 billion is significant. Now, that is down from $2.4 billion a year and a half ago, so we 

have made some real progress. 

Senator ALLARD. And I know that the HUD agency at one time 

was considered at risk by the same evaluation that we value here. 

Now it is characterized as a successful program, and I know that 

you have looked hard at some of these programs. And I appreciate 

your willingness to do that. 

Why do you think grantees are so behind schedule in this program compared with other HUD programs? 

Mr. CABRERA. I think for that generation of grants that occurred 

roughly between the time they were signed in 1994 and 2001, there 

were essentially two big issues. 

One of them was that the readiness to proceed was not assured, 

and so the grant was undertaken and that was it. And the grant 

agreement is what rules this relationship. So unlike other areas of 

HUD, HUD has very few regulatory abilities with HOPE VI outside of the legal relationship of the grant agreement. 

The second thing is capacity, so that for decades, public health 

authorities were very much pure and pristine property managers. 

That is what they did. Public housing authorities were not developers, and to this day, development is most cases for public housing authorities is a new experience. It is still being worked out. 

Those that have been successful I think have really come along on 

the curve of becoming better developers. Those that I have in mind 

are Atlanta. You will hear—I believe you will hear from Renee 

Glover later today, I think, or Seattle, King County, Cambridge, 

there are very specific places where development is an intensive relationship. In those places where it is not, where it is something 

else, that is where the struggle has—Chicago is another. That is 

where the struggle has really been tough. 

Senator ALLARD. Now, if money from the HOPE VI Program 

were to be redirected into other HUD-assisted housing programs, 

do you believe that more low-income families would be assisted, or 

fewer? And if you could quantify that, I think that might be helpful? 

Mr. CABRERA. I do not think that it is a question of being more 

or fewer assisted families, although when you do take HOPE VI or 

anything else that has to do with reconstructing units that are 


smartinez on DSKB9S0YB1PROD with HEARING
16 

going to be affordable units, you will generate a voucher. That 

voucher will house another family. So that will create more voucher 

holders by definition. 

What I think it will do is create a more stable platform for development than HOPE VI is, on the one hand. On the other hand, it 

would need—the one thing I do have to say about when HOPE VI 

is used and used well, it is that it really does work well when it 

either is trying to address a very acute problem—i.e., demolition— 

or when it is trying to deal with a very narrow scope—demolition 

plus the development of multi-family units or even homeownership. 

It has worked well in certain areas, those areas that I noted earlier. So that is really the balance that has to be struck. 

Senator ALLARD. Mr. Chairman, are you having another round of 

questions? 

Senator MENENDEZ [presiding]. Yes. 

Mr. Secretary, I just have one other area I want to cover with 

you. This suggestion by the Department that we can leverage public housing capital funds to meet our challenges, the $8 billion that 

is floating out there that I think is pretty well recognized as being 

an infrastructure challenge in public housing, how is it that we are 

going to supposedly—and that is another reason we do not necessarily need to continue on HOPE VI. 

How are we going to do that when, if you look at the fiscal year 

2008 request versus the fiscal year 2007 enacted, is a 17 percent 

cut? 

Mr. CABRERA. The capacity to leverage is different than the actual appropriation. 

Senator MENENDEZ. Well, without the appropriations, capacity 

means nothing. 

Mr. CABRERA. The appropriation has not disappeared, Mr. Chairman. I believe that the appropriation is still there. It has to lower. 

But it is still a $2 billion appropriation. 

And it is not the case that this is not already happening. This 

has been happening for the last—I believe the last 4 years, where 

public housing authorities can leverage the capital fund. The question is trying to create a better liquidity for the public housing authority to act more flexibly. 

The issue, the issue that most public housing authorities face 

when it comes to HOPE VI or development more generally is the 

inflexibility that currently exists in the rubric of law. That is really 

what is happening. 

And so if you give them the ability to develop, they will use it. 

The good thing, I mean in some cases—I am trying to remember— 

one of the reasons I think that Atlanta has succeeded so well is Atlanta is something called an MTW jurisdiction. So it has even more 

flexibility. And so if they can work out their own numbers and if 

they can have the flexibility to deal with a product that they have 

to produce, they generally succeed in that. It is when it becomes 

narrowed that it becomes more difficult. 

Senator MENENDEZ. Mr. Secretary, let me just tell you, I trust 

people who have the experience of doing this day in and day out, 

who are on the front lines, who have been doing it for quite some 

period of time and are some of the greatest innovators. Because of 

necessity, they innovate. 


smartinez on DSKB9S0YB1PROD with HEARING
17 

I have to be honest with you, I have not met one housing authority director, large or small, in the State of New Jersey who has told 

me that between asset management and the asset-based test that 

the Department is pursuing, or that flexibility in terms of operating funds is going to do anything when they, in fact, still have 

a global economic challenge of how much they have to do in terms 

of capital needs of their project. 

Flexibility, ultimately, the common sense is if I have X billions 

of dollars in need and I only have so much money, flexibility does 

not help me meet my overall challenge. It may let me triage but 

it does not ultimately do very much in terms of helping me meet 

my challenge. 

Mr. CABRERA. Mr. Chairman, I think most who are doing development would tell you that the flexibility is something that they 

would welcome. I guess the spectrum of PHAs that I deal with, 

which is 4,200 of them, I would say the vast majority of them 

would say that that flexibility is extremely important to them. And 

trying to develop legislation in the context of HOPE VI or anything 

else that gives them the flexibility to act in a more nimble way 

than they have historically is, I think, something that they would 

welcome. 

Certainly the stakeholder groups that represent them would 

probably agree with that. They have stated that publicly. 

Senator MENENDEZ. But at the end of the day, dollars are dollars. And if I only have X dollars, I can have all the flexibility to 

try to leverage but I can only leverage so much. And so the core 

question is if you have a 17 percent cut, then I have lost at least, 

for starters, 17 percent of my leverage ability. 

Mr. CABRERA. I do not think you have lost 17 percent of it. I 

think there is a component of it which is the capital grant which 

is not a 17 percent cut. I cannot remember what the number is off 

the top of my head—— 

Senator MENENDEZ. Everything is hunky-dory is what you are 

telling me? 

Mr. CABRERA. No, I think what I am trying to say is—— 

Senator MENENDEZ. Is there anything that the Department 

needs to do and the Congress needs to do that it is not doing to 

try to make sure that people in this country are more protected in 

public housing, that they have a greater quality in public housing 

than they have today? 

Mr. CABRERA. Mr. Chairman, I think anything that can be done 

with respect to development that would allow PHAs to act more 

flexibly would be great. I just hope at the end of the day—— 

Senator MENENDEZ. So flexibility is the only thing we need? 

Mr. CABRERA. I do not think it is the only thing but I think it 

would certainly help. 

Senator MENENDEZ. Do we need any more resources? 

Mr. CABRERA. Mr. Chairman, I think that we have proposed the 

budgets that we have proposed and we have had much testimony 

on that. I am here to discuss basically HOPE VI legislation. So at 

the end of the day—— 

Senator MENENDEZ. HOPE VI is also about providing resource at 

the end of the day, reauthorizing it and then providing extra resources. 


smartinez on DSKB9S0YB1PROD with HEARING
18 

Mr. CABRERA. I understand that, Mr. Chairman. 

Senator MENENDEZ. You are against that. 

Mr. CABRERA. But it is also about the actual legislation itself. 

Senator MENENDEZ. But you are against that? 

Mr. CABRERA. Against what? 

Senator MENENDEZ. You are against reauthorization of HOPE 

VI; is that correct? 

Mr. CABRERA. The Administration’s position is that it is against 

reauthorization of HOPE VI. And I thought I was being asked if 

it were reauthorized what would be the things that might help. 

And I think that is what I am trying to answer. 

Senator MENENDEZ. Senator Allard. 

Senator ALLARD. Mr. Chairman, if I might continue with the line 

of questioning that I had. Has the HOPE VI program accomplished 

its original purpose of demolishing the 100,000 most severely distressed public housing units? 

Mr. CABRERA. It has. 

Senator ALLARD. So the proponents—and now the proponents of 

the program point to current need. Do you believe those units meet 

the same standard of severely distressed as the original 100,000 

identified by the Commission? 

Mr. CABRERA. That is a very difficult answer to give you, Senator, or give everybody. The reason is because every PHA is different. So the needs of Chicago, when they address the issues of 

Cabrini Green or Robert Taylor Homes, is different than say the 

needs of Waveland, Mississippi which has a whole different product. Or for that matter, the needs of Miami, Florida which produced a completely different kind of public housing unit. 

Senator ALLARD. The point I am trying to get to is is there a 

shifting definition of distress? 

Mr. CABRERA. I do not know. I do not believe that there is so 

much a shifting definition of distressed as a real need to revisit the 

1997 study. 

Senator ALLARD. Do you believe that the job will ever be done in 

the eyes of some? 

Mr. CABRERA. It, cannot. It is real estate. You will never get to 

a point where you will not be addressing some form of distressed 

housing. Housing is an asset. The asset becomes obsolete, either 

functionally because it is bricks and mortar or actually because of 

technology. That is just a question of time. 

Senator ALLARD. Do you believe that a flexible funding approach 

would better address the needs of both tenants and housing authorities? 

Mr. CABRERA. Absolutely. I think if you deal with the greater 

flexibility within the context of the legislation, the issue is how well 

does that particular subsidy marry with other subsidies that it is 

absolutely required to have in order for a development to succeed? 

That is the biggest issue. 

Senator ALLARD. So you are saying that it would better make 

sense to allow the housing authority to determine when to demolish and rebuild public housing? 

Mr. CABRERA. A lot of that is already done, Senator. 

Senator ALLARD. And when to give tenant vouchers. I was kind 

of surprised when I first came on the Banking Committee. We had 


smartinez on DSKB9S0YB1PROD with HEARING
19 

a vote here on vouchers and I have always been a strong supporter 

of vouchers. All the Democrats of here voted for vouchers and all 

of my Republican colleagues voted against it. So it is interesting 

but I do think it is a way of approaching flexibility. 

Are there other ways to best accomplish the goal of providing decent, safe, sanitary, and affordable housing? 

Mr. CABRERA. I think the best way to do it is to provide people 

in public housing authorities with a full spate of tools that they 

need to address the needs in their particular communities and give 

them the flexibility to do it. 

Senator ALLARD. Mr. Chairman, I have completed my role of 

questioning. Thank you for your courtesy. 

Senator MENENDEZ. Thank you, Senator. 

Thank you, Mr. Secretary, for your testimony. We appreciate it. 

Mr. CABRERA. Thank you, Mr. Chairman. 

Senator MENENDEZ. Let me call up our next panel. Our last 

panel has five witnesses. As the Secretary departs, I would ask 

David Wood, a Director in the Financial Markets and Community 

Investment Program at the Government Accountability Office to 

come forward. He is also responsible for leading GAO audits and 

evaluations concerning a range of Federal housing and financial 

issues, policies, and programs. 

Also Mr. Mr. Richard Baron, who is one of the Nation’s most successful developers of inner city mixed income communities. He is 

co-founder, chairman and chief executive officer of McCormick, 

Baron and Salazar, Inc., MBS in St. Louis, Missouri, a for-profit 

firm that specializes in the development of economically integrated 

urban neighborhoods. 

Dr. Susan Popkin, who is the principal research associate in the 

Metropolitan Housing and Communities Policy Center at the 

Urban Institute. She has co-authored or authored research papers 

while at the Urban Institute on public and assisted housing, including one on the HOPE VI program. 

Charles Elsesser, Jr. is an attorney with the Florida Legal Services and also serves as a member of the Board of Directors of the 

National Low Income Housing Coalition. He has more than 30 

years experience advocating on behalf of low income tenants and 

homeowners and recently has been active in assisting public housing resident organizations attempting to gain input and influence 

in the HOPE VI process. 

Sandra Brooks Henriquez is the administrator and chief executive officer of the Boston Housing Authority, a position she has 

held since April 1996. During her tenure Ms. Henriquez has overseen two HOPE VI revitalization projects. 

Let me thank all of our witnesses for taking time out of their 

busy schedules to come here to testify before the Subcommittee. 

And let me say we look forward to hearing from you, to engage in 

a lively discussion. 

With that let me start off with Mr. Wood and work our way down 

the panel. Mr. Wood. 

Your full statement will be included in the record and we ask 

you to summarize approximately 3 minutes or so. 


smartinez on DSKB9S0YB1PROD with HEARING
20 

STATEMENT OF DAVE WOOD, DIRECTOR OF FINANCIAL MARKETS AND COMMUNITY INVESTMENT, GOVERNMENT ACCOUNTABILITY OFFICE 

Mr. WOOD. Thank you, Mr. Chairman, for inviting me today. 

My statement is based primarily on a series of three reports 

issued between November 2002 and November 2003. In those reports, we examined three broad topics: the financing of HOPE VI 

projects, including the amounts of funds leveraged from other 

sources; HUD’s oversight and management of the program; and the 

program’s effects on residents and surrounding neighborhoods. 

While the work is now somewhat dated, the topics remain pertinent. 

Regarding financing, we found that among projects that received 

grants through 2001, grantees expected to leverage for each HOPE 

VI dollar about $1.85 cents from other courses. The majority of the 

funds were expected to come from Federal sources. For example, 

among the 85 projects for which detailed information was available 

at that time, 79 percent of all budgeted funds were from Federal 

sources including 27 percent from Federal low income housing tax 

credits. 

We recommended that HUD prepare annual reports to the Congress, as it was required by law to do, showing HOPE VI project 

financing sources and amounts. HUD began issuing those reports 

in 2002 and has continued to do so. 

Regarding the management of the program, we found that HUD’s 

oversight had been inconsistent due to several factors, including 

limited numbers of grant managers and field office staff, confusion 

about the role of field offices in project oversight, and lack of a 

clear enforcement policy regarding grantees who missed deadlines. 

And at that time the majorities of grantees had missed one or more 

deadlines in their grant agreements. 

In response to our recommendations HUD, among other things, 

published new guidance for its field offices, continued its policy of 

taking housing authorities’ performance on existing grants into account whenever they applied for a new one, and notified grantees 

of the conditions that HUD would consider a default of grant agreements. 

Because we have not examined HUD’s oversight of the program 

since the 2003 report, we do not know the extent to which HUD’s 

actions have corrected the problems we identified. 

Finally, regarding the program’s effects, we found that about half 

of the 49,000 former residents that had been relocated were expected to return to rebuilt HOPE VI sites. The supportive services 

they had been provided, such as job training and home ownership 

counseling, appear to have yielded some benefits and neighborhoods surrounding selected projects we reviewed had experienced 

improvements according to measures such as education, income, 

and housing conditions. 

However, for both the effects of the supportive services on residents and of the program generally on neighborhoods, we were unable to determine the extent to which HOPE VI alone was responsible. 

Mr. Chairman, that concludes my prepared statement. I will be 

glad to take questions. 


smartinez on DSKB9S0YB1PROD with HEARING
21 

Senator MENENDEZ. Thank you, Mr. Wood. 

Mr. Baron. 

STATEMENT OF RICHARD BARON, CHAIRMAN AND CHIEF 

EXECUTIVE OFFICER, MCCORMACK, BARON, AND SALAZAR 

Mr. BARON. Mr. Chairman, ranking member Crapo, and other 

members, I am here today to testify in support of the reauthorization. 

My firm has been involved in developing mixed income communities since the late 1970’s. I started my career as a legal services 

attorney in St. Louis working with public housing. I spent a great 

deal of time working, as a matter of fact, with Bob Rigby in Jersey 

City, and you were actually at the groundbreaking of a small 

HOPE VI we did there. 

We began our conversations with former HUD Secretary 

Cisneros about transforming what were then the regs on HOPE VI 

to allow for mixed finance because I was convinced that the ability 

to leverage funds and to involve other public agencies, particularly 

state housing finance agencies which had not been involved whatsoever in financing low-income housing, only tax credit affordable 

housing, and the potential which is borne out in many of the communities where we have worked now. We have done 19 HOPE VI 

projects, 40 phases, almost 10,000 units ourselves. We have enlisted the support of local philanthropies which have not been mentioned here today and have been an enormous source of support for 

the work that has been going on in terms of the human capital development as part of the HOPE VI program. 

I think that the important part about these developments that 

has been mentioned by many of your remarks already has been the 

secondary and tertiary benefits of stabilizing areas of cities which 

have been severely distressed, high crime, poor schools with other 

kinds of investment that has followed now because these areas 

have been literally cleaned up, so to speak. Home ownership has 

happened. We have seen it over and over again. 

We do not find the complexity to be particularly difficult. We 

have been dealing in layered financing for years. And when I suggested to former HUD Secretary Cisneros that HUD was simply 

not leveraging its funds and that there was a way to use Federal 

dollars to catalyze private investment, that that was something 

that really ought to happen and, indeed, has happened. 

The kind of infusion of local dollars from cities in supporting the 

restructuring of streets and roads and utilities systems to allow 

new development to occur in many of these areas that had been 

blighted for decades, as well as local philanthropies who have come 

in to support human capital programs, who have supported reforming local schools, job training efforts that we have seen across the 

country, the program has been an extraordinary success. 

In my 40 years, very frankly, dealing with all of the range of 

Federal housing programs, I have not found any that has worked 

more effectively than the HOPE VI program. 

To the extent that there are issues related to the management 

of it by local housing authorities and local communities that are 

not ready to really do it, I think sanctioning is a very easy thing 

to do. I mean, if people apply for grants and they are not really 


smartinez on DSKB9S0YB1PROD with HEARING
22 

ready and the dollars need to be moved, then the Department 

ought to have the flexibility to move it to communities that are prepared to go forward. We have that same problem with tax credits 

and we have a 2-year placed in service rule as part of that program. And everybody who is in the development business that does 

low income housing with tax credits understands what that means. 

I do not see any problem at all in writing that into the law if 

that is an issue because they cannot move the money. There are 

some communities that simply are not going to be prepared to undertake it and they can hire consultants and they can bring others 

that have the expertise to do it. 

But I mean what I find extraordinary is the baby with the 

bathwater syndrome, when all of us have seen in city after city 

after city, with Republican mayors, Democratic mayors, extraordinary successes that have outstripped any of our expectations in 

terms of what the program could deliver. 

And certainly the community and supportive services aspect of it, 

in terms of the human capital aspects of these developments, is 

just critical. And it has been very important. We have learned a 

lot about it and we continue to learn. 

I am now down working in New Orleans with one of those sites. 

And the Department has told us that we cannot use any of the capital dollars for community and supportive services, as we can in the 

other HOPE VI programs. I am just mystified by that kind of approach when we have seen so much good that has come out of this. 

I am sure there are plenty of agencies that have not done as well 

as others. But it does not mean that we ought to scuttle the program. 

Essentially, some of these issues on replacement housing I would 

be glad to deal with in the questioning. 

Thank you, Mr. Chairman. 

Senator MENENDEZ. Thank you. Dr. Popkin. 

STATEMENT OF SUE POPKIN, Ph.D., PRINCIPAL RESEARCH ASSOCIATE, METROPOLITAN HOUSING AND COMMUNITIES 

POLICY CENTER, URBAN INSTITUTE 

Ms. POPKIN. Thank you, Mr. Chairman and members of the Committee. 

I am going to speak today based on findings from the Urban Institute’s HOPE VI Panel Study. This research, which was started 

with support from Senator Mikulski, is the only national study of 

outcomes for HOPE VI families and addresses basic questions 

about where residents move and how HOPE VI affects their overall 

well-being. 

First, most of the residents in our study have not yet moved 

back. The largest number, about 43 percent, have received housing 

choice vouchers. Another third are in traditional public housing developments, some still in their original development, and only 5 

percent are living in the new mixed income communities. These 

sites are not yet complete and the number of returning residents 

will likely increase but there are fewer public housing units for 

them to return to and some sites have imposed screening criteria 

that excludes some former residents. 


smartinez on DSKB9S0YB1PROD with HEARING
23 

On the positive side, many residents who have moved on are 

satisifed with their new housing and are not interested in returning. 

Voucher movers and those in mixed income communities are living in better housing and safer neighborhoods. There is no question 

that the enormous improvement in safety and the reduction in fear 

of crime has been the biggest benefit for most movers and has very 

important implications for their quality of life. 

Children who have moved to these safer neighborhoods are also 

doing better in important ways. However, those who have been left 

behind in traditional public housing, especially teenage girls, are 

struggling and are increasingly likely to be involved in delinquent 

behavior. 

While residents who have moved with vouchers are doing well 

overall, many are having trouble making ends meet and are struggling to pay their utilities. 

Poor health is an extremely serious problem for these residents 

and probably the most important finding from the study. They suffer conditions like hypertension, diabetes, and depression at rates 

more than twice the average for black women nationally. More 

than half of them have multiple serious health problems. And the 

death rate of HOPE VI residents far exceeds the national average 

for black women with the gap increasing dramatically at older 

ages. 

Residents’ health problems impede their ability to work. Because 

of these barriers, we found HOPE VI had no overall impact on employment. Addressing these health barriers could be seen as employment initiative in helping people become self-sufficient. 

HOPE VI did not increase homelessness. Less than 2 percent of 

these residents experienced homelessness at some point during the 

4 years that we tracked them. That is comparable to other public 

housing populations. 

And finally, HOPE VI is not a solution for the hard to house families coping with problems such as mental illness, severe physical 

illness, substance abuse, poor work histories, and criminal records. 

Housing authorities should offer meaningful relocation counseling 

to help residents make informed choices and should provide longterm support to help more families succeed in the private market 

or return to the new mixed income housing. 

Housing authorities should also provide effective case management and better supportive services for the most vulnerable residents: children, the elderly, and those with health problems both 

during and after relocation. 

In conclusion, HOPE VI has done much to improve the living 

conditions of many former residents but there are still tens of thousands of public housing units that are severely distressed. These 

findings clearly indicate the need to continue to fund the revitalization of the remaining stock of distressed public housing. 

Senator MENENDEZ. Mr. Elsesser. 


smartinez on DSKB9S0YB1PROD with HEARING
24 

STATEMENT OF CHARLES ELSESSER, JR., MEMBER OF THE 

BOARD OF DIRECTORS, NATIONAL LOW INCOME HOUSING 

COALITION 

Mr. ELSESSER. Thank you, Mr. Chairman. I would like to thank 

you and ranking member Crapo and other members of the Subcommittee for inviting me to testify today on this very important 

HUD program. 

My name is Charles Elsesser. I work for Florida Legal Services 

in Miami and I am here today representing the National Low Income Housing Coalition, on whose board I have served since 2004. 

The Coalition appreciates the Subcommittee’s deep attention to 

public housing and we believe in the preservation of public housing 

as a vital resource for the Nation’s very poorest families. We also 

believe deeply in the initial purpose of the HOPE VI program, that 

is improving the living environment of existing public housing residents. 

However, we believe that the existing HOPE VI program has 

failed to fulfill this purpose, and unfortunately Senate Bill 829 does 

not address our concerns. 

With the goal of working with the Subcommittee on improvements to the bill as it moves forward, I would like to review our 

most serious concerns with the HOPE VI program by describing 

how it impacted public housing residents in Miami. 

In 1999 Miami-Dade Housing Agency received a HOPE VI grant 

to redevelop the 850 unit Scott Carver Public Housing Low Rise 

Project in Miami. The plan proposed the demolition of all the existing units, replaced with only 80 units of traditional public housing, 

the remainder being some form of mixed income or ownership 

units. All these tenants were relocated by 2004, mostly through 

Section 8 vouchers. The housing was demolished and today the site 

is still virtually vacant. 

About a year ago, a community organization tried to locate the 

former residents, particularly those with vouchers. They learned 

that almost half were no longer listed by the PHA as receiving any 

type of housing assistance. So there was a massive outreach. The 

community organization found several hundred of these missing 

families and their stories were horrific. These were families that 

had lived in public housing for a long time without any problems 

and yet, in a few years after relocation, they had lost their vouchers and were often doubled up or living in shelters. 

Often the problems related not to the first move but to the second voucher move, forced by foreclosures, by failed HQS inspections 

or lease terminations. Many were unable to find that second apartment. They did not have the security deposit, potentially $2,000 for 

a new apartment. They could not find a suitable unit, or failed to 

comply with some unfamiliar Section 8 rule and they lost their 

vouchers. 

So instead of improving their lives, for many of these families in 

Miami, HOPE VI created homelessness. These problems are not 

unique to Miami but they are inherent in the structure of the current HOPE VI program. 

Based on these and similar experiences across the country our 

recommendations for reform would include the following: one is one 

for one replacement, that all public housing units demolished 


smartinez on DSKB9S0YB1PROD with HEARING
25 

should be replaced on a one for one basis with new public housing 

units. 

A right of return without the imposition of new reoccupancy requirements or new screening. 

And an intensified emphasis on relocation planning, the applicability of the Uniform Relocation Act, with particular attention to 

the hard to house and possibly even an emphasis on phased relocation, where people can move out of the units into newly completed 

units. 

Other issues are raised in our written testimony. 

If the HOPE VI program cannot be reformed, the Coalition would 

rather see the HOPE VI money directed to the Public Housing Capital Fund so at least we can preserve the housing that we have. 

Thank you again for inviting us to testify. I would be happy to 

answer any questions. 

Senator MENENDEZ. Thank you. Ms. Henriquez. 

STATEMENT OF SANDRA HENRIQUEZ, ADMINISTRATOR AND 

CHIEF EXECUTIVE OFFICER, BOSTON HOUSING AUTHORITY 

Ms. HENRIQUEZ. Mr. Chairman and ranking members, and members of the committee, thank you very much for this opportunity. 

My name is Sandra Henriquez and I operate the Boston Housing 

Authority in Massachusetts. 

The BHA serves a total of 10 percent of the city’s population, 5 

percent in its 12,000 public housing units with the remaining rental assistance through over 11,000 Section 8 housing choice vouchers. And we are the single largest landlord in the city of Boston 

and we are the single largest developer of affordable housing in the 

Commonwealth of Massachusetts. 

I am also the president of the Council of Large Public Housing 

Authorities, whose 60 members represent virtually every major 

metropolitan area in the country. 

On any given day we are the frontline practitioners. Our members are serving more than 1 million households and together we 

manage almost half of the Nation’s multibillion dollars public housing stock, as well as 30 percent of the Section 8 voucher program. 

And we are in the vanguard of housing providers and community 

developers. 

I am pleased here to testify on behalf of this reauthorization, and 

more specifically Senate Bill 829, and I commend Senator Mikulski 

and all of the sponsors for introducing this bill and showing such 

strong support for the program. 

HOPE VI has been used in the city of Boston. We have three 

such developments and we have even used the HOPE VI model to 

do a state assisted revitalization where we have acted as our own 

developer. This program appeals to urban, suburban, and rural and 

metropolitan communities as well as non-metropolitan communities 

and shows and enjoys the strong aisle-crossing bipartisan support. 

The $5.8 billion in HOPE VI grants awarded by HUD have leveraged an additional $12.1 billion in other public and private investments. And these are critical first-in seed money to let us have the 

regulatory flexibility and allow housing authorities to build firsttime partnership with private developers, city and State GovernVerDate Nov 24 2008 01:54 Dec 12, 2009 Jkt 050320 PO 00000 Frm 00029 Fmt 6633 Sfmt 6602 E:\HR\OC\A320.XXX A320

smartinez on DSKB9S0YB1PROD with HEARING
26 

ments, colleges, universities, school systems, all sorts of other partners, including in Boston the health care system. 

As a result, this new market has created really, I would say, the 

energy and the support of private investors and lenders who now 

view mixed income, mixed finance public housing as a good investment. 

In the city of Boston, are three HOPE VI’s have totaled $115 mil- lion and we have been able to raise an additional $293 million in 

non-HOPE VI funds to complete the redevelopment of these sites. 

For every $1 of HOPE VI, we have leveraged $2.55 in non-HOPE 

funds and we have developed a total of 1,130 affordable rental 

units. 108 of those are affordable homeownership units, which include 51 loan to purchaser transactions as part of our Maverick 

Landing and 181 market rate rental units, as well. 

Revitalization efforts in Boston have had a profound effect on the 

surrounding neighborhoods. Prior to the Orchard Park HOPE VI 

program, 36 percent of the residents at that development were employed and 90 percent had incomes of less than $20,000. Since the 

onset of that program, household incomes have increased by 70 

percent and the average assessed property values in the surrounding neighborhood has increased by almost 32 percent and another $293 million has been invested in the neighborhood including 

main streets, revitalizing the economic corridor in that community, 

as well as bringing back office buildings, restaurants, new housing 

and new landscaping and transforming the streetscape in that 

neighborhood. 

Maverick Landing in East Boston was named the overall best development by the Affordable Housing Magazine in 2006 and was 

the recipient of the Massachusetts Governor’s Smart Growth 

Award in 2005. It combines renewable energy and innovative 

urban design. We are leading the market then in East Boston for 

other private developers to now decide to come in and look at what 

might be done in that community. 

We have linked the HOPE VI program with educational opportunities in a variety of forms, computer training classes, providing 

low and middle income high school youth access to college-based 

education and training in video production, fashion design, civil engineering, social activism. We are providing education and training 

for hundreds of frontline workers in health care and research. We 

link high school students with college opportunities. I mention this 

because schools is a significant feature of Senate Bill 829 and its 

linkage with educational reform. 

I appreciate and understand the sentiments which give rise to 

the provisions of this legislation on linkages to education, but I do 

think some of those provisions are too restrictive and we need to 

think about having flexibility to figure out what happens and 

what’s best in the local marketplace in a particular city, neighborhood and community. 

Perhaps a better way of approaching the retention of educational 

objectives in the legislation is to encourage those linkages and let 

us develop applications that look at that strategy and how we want 

to employ that. 

I contend that we will not fully know the benefits of the HOPE 

VI program unless and until we calculate things like the decreases 


smartinez on DSKB9S0YB1PROD with HEARING
27 

in health care due to healthier building materials, decreases in 

utility costs because of use of energy technologies in construction, 

decreases in pollution when redevelopment is also transit-oriented, 

and rising household incomes that allow for greater opportunities 

for families and children. Perhaps we will never be able to calculate the transformative impact HOPE VI has on the human potential. 

You have heard HUD, and I will talk about its disturbing approach—— 

Senator MENENDEZ. Ms. Henriquez, I gave you extra time because you represent all those large housing authorities, so I figured 

extra time for all of those large housing others. But if you can sum 

up and then we will get to some of your points in questions. 

Ms. HENRIQUEZ. In conclusion, I want to thank you for this opportunity and also to say that this is a program that needs to continue. There is much work to be done and we are on the ground 

doing this every day and will continue to use those funds in the 

best possible way to serve residents in public housing and the citizens in this Nation. 

Thank you. 

Senator MENENDEZ. Thank you. Thank you all for your testimony. 

Let me start off where I cut you off, because I knew I was going 

to ask you that so I figured we would do it. 

You heard the Assistant Secretary has a much different view 

than the one you just described. Where is it that you and your colleagues across the country who have experience with HOPE VI 

would disagree with the Administration on this? 

Ms. HENRIQUEZ. There are a number of points we would disagree. One is that the program needs to continue. it has done a lot 

of good work. And I would invite anyone to Atlanta, Chicago, Boston across the country to see the successes and to talk to the residents who are the beneficiaries of that. That is No. 1. So it is an 

issue of resource allocation needs to continue. 

I would also say that issues around flexibility are important but 

flexibility to the point that let us develop in our own locales. What 

works in Boston may not work in Atlanta and vice versa. What 

happens in Atlanta may not work in Chicago, per example. 

But if we are to, as housing authorities, really be major players 

in revitalizing both our public housing and the surrounding neighborhoods and communities, we need to do that in the context in 

which we operate. And we need the flexibility to do that. 

I would also say that while the Assistant Secretary talked about 

flexibility with the capital program, and indeed there is some ability to use capital funds to do revitalization and redevelopment, and 

we are doing some of that in the city of Boston, I would say that 

the continued decrease in funding allocations in the capital bond 

program—in the capital program, puts all of that flexibility at risk. 

In order to do a capital bond program with our money, we have 

had to get rated by Standard & Poor’s. We are working with Lehman Brothers as a consultant to put our program together. It needs 

HUD approval, which we fully expect to get later on in the summer. However, they have already raised a question, looking at what 

has been proposed in the Federal budget, as to can we really do 


smartinez on DSKB9S0YB1PROD with HEARING
28 

this deal because we will be getting less money than we normally 

would be getting if the funding goes through as proposed by the 

Administration. 

So our ability to do these deals with increased risk means we will 

have less money, it will have a greater cost, it will go less far than 

we anticipated. And so all of those things together really do put a 

damper on our ability to this program. 

Senator MENENDEZ. So flexibility without the appropriate resources at the end of the day is somewhat of a hollow promise? 

Ms. HENRIQUEZ. It is a very hollow promise. 

Senator MENENDEZ. Dr. Popkin, I appreciate your testimony, as 

well as the study that you came up with. We heard from Mr.—am 

I pronouncing your name—— 

Mr. ELSESSER. Elsesser. 

Senator MENENDEZ. Mr. Elsesser, I’m sorry—Mr. Elsesser, about 

some unfortunate stories of relocated families who lost assistance 

within a few years. But your research did not seem to have that 

breadth of scope. Maybe there are some. 

Ms. POPKIN. We have five sites in our study, so that is the average across five sites. Fortunately, Miami is an extremely awful site. 

We did have one of our five sites that was similar, where the rates 

of homelessness were much higher, where there were financial shenanigans at the housing authority. 

There is no question that implementation matters and that when 

there is that kind of situation the residents get harmed. 

The other four sites that we—— 

Senator MENENDEZ. That is not a programmatic issue, that 

is—— 

Ms. POPKIN. That was the housing authority. 

Senator MENENDEZ [continuing]. A question of implementation 

and oversight at the end of the day. 

Ms. POPKIN. I would say in our data that is what it looked like 

because we had four other sites that had their struggles, but they 

did not have anywhere near the same rate of homelessness. 

Senator MENENDEZ. Because I think I wrote down in your testimony you said generally speaking better housing, safer neighborhoods. 

Ms. POPKIN. Dramatically safer. The proportion of people reporting big problems with crime went from 90 percent at the beginning 

to 16 percent when we found them again for the people who have 

moved on. 

Now unfortunately, there are still about 16 percent of the residents who were still living in their original development and their 

situation is as bad or worse as it was at the outset. 

Senator MENENDEZ. Mr. Baron, we heard from Ms. Henriquez 

about the ripple effect of HOPE VI. Considering how many you 

have done, can you talk to us a little bit about that leveraging? 

Mr. BARON. Yes. Well, it has been extraordinary. It was precisely 

what I thought would happen when I made the suggestion to Secretary Cisneros that they change the regs to allow for mixed finance. And many cities have been shut down in areas that had 

very, very highly distressed public housing. We saw that when I 

was on the National Commission for Severely Distressed Public 


smartinez on DSKB9S0YB1PROD with HEARING
29 

Housing in the early 1990’s and why we recommended the HOPE 

VI program. 

It has taken the form of new retail and more homeownership and 

new opportunities for other investment. Boston is a terrific example, Atlanta. It has happened all around our sites. The kind of retail that serves low and moderate income families that had never 

been in these neighborhoods is coming in now. And some of us have 

been able to use new markets tax credits, another program to help 

again further enhance that kind of development. 

So I think at every level the developments we have been associated with and those that are all over the country now have seen 

these same dramatic results and it has been terrific in terms of 

community building and knitting new neighborhoods. 

Senator MENENDEZ. Thank you. Senator Crapo. 

Senator CRAPO. Thank you very much, Mr. Chairman. 

To all members of the panel, as I am listening to the testimony 

that has been presented today and the answers to some of the 

questions that have been asked, it seems to me there are two broad 

pieces to this question. 

Ms. Henriquez, you indicated one of the concerns you had with 

the Public Housing Capital Fund was the lack of ability to be confident in its funding levels. It seems to me that there is being 

raised by many a very real question of whether if HOPE VI is not 

reauthorized whether the funding that is allocated to HOPE VI will 

simply disappear. It would seem to me that a lot of people could 

be concerned that that would happen here in Congress and that 

that might be a strong reason for advocating for reauthorizing 

HOPE VI to keep a stream of money going to public housing. 

And I understand that. That is more of a budget issue, though, 

than a substance issue in terms of the housing program as I see 

it. 

The question I want to ask each of you to consider is this: I am 

not committed to or wedded to any particular program in terms of 

just wanting to insist that it continue or not continue. What I want 

to do is to figure out, assuming whatever level of budget authority 

we have and that we are going to give to public housing, assuming 

that if HOPE VI were not reauthorized that the dollars allocated 

to HOPE VI would be put into some other form of public housing, 

would we still want to reauthorize HOPE VI? Or would we then 

want to evaluate whether there are better ways to utilize those dollars? 

In other words, is this a budget issue? Or is it a programmatic 

issue? Anybody want to jump in on that? 

Mr. BARON. I would be glad to respond. I think it is both. I think 

the programmatic aspects of it are that it is targeted and it is focused. I think the leverage that has been described by various witnesses is the kind of thing that is not going to happen if you take 

$100 million and you park it, or $200 million, in a general budget 

for the Department. You will never see the kind of impacts that we 

have gotten out of targeted resources in HOPE VI. 

I mention again the private philanthropy. The fact is that local 

authorities, working in partnership with private sector firms or 

nonprofits and city government and private philanthropies have leveraged up these funds tremendously. And it would not have hapVerDate Nov 24 2008 01:54 Dec 12, 2009 Jkt 050320 PO 00000 Frm 00033 Fmt 6633 Sfmt 6602 E:\HR\OC\A320.XXX A320

smartinez on DSKB9S0YB1PROD with HEARING
30 

pened without the kind of imprimateur that HOPE VI has given. 

State housing finance agencies would have never gotten involved. 

Senator CRAPO. Mr. Elsesser, I assume from your testimony that 

you might feel that if the same dollars—whatever the dollar figure 

is—were put into the capital fund, that you would be able to get 

better result. Is that correct? 

Mr. ELSESSER. I believe it is a programmatic problem and I believe that if the HOPE VI is reformed to include the reforms that 

we are concerned with, which is one for one replacement, which is 

a right to return, which is an increased emphasis on the hard to 

house, then I think it is an effective program. 

Without that, I think it leads to the shrinkage of the public housing, of the public housing that is available for the poorest families. 

And I do not think that serves those clients well. 

Senator CRAPO. Mr. Wood, did you want to jump in on that? 

Mr. WOOD. I do not know—I think I would yield primarily to the 

practitioners that are at the table. But if I understand your question, you are basically saying if we have an extra dollar is it better 

to put it into the capital fund or to devote it to HOPE VI? 

That is a tough question to answer because they are really accomplishing, in my mind, somewhat different goals. HOPE VI is 

much broader because it has this, as someone referred to it, the social architecture aspect whereas the capital fund program basically 

is to maintain buildings and structures on an existing approach. 

Mr. BARON. Senator, could I just say the other aspect of this that 

is critical is the mixed income aspect of it and changing the economics of these communities. The issue with respect to one-to-one 

is that there is a tremendous need for low-income housing in communities like Miami, all over, St. Louis, other places where we 

work. 

The problem is that if you write in a one-to-one requirement in 

HOPE VI and you do not fund it, then it is an unfunded mandate. 

And what is going to happen locally is that authorities and all of 

us that are working together, legal services programs, resident organizations, are going to be shut down. And that is what happened 

when it was in the law before. 

So if one is going to go that way, there is plenty of ground to 

build low income housing with market and mixed income communities. You got to make sure you fund it. If you do not fund it, nothing is going to happen. And that is the box. 

Many of these sites are obsolete. A lot of them that were built 

with studio units to old standards back in the 1940’s and 1950’s. 

And to argue that a one-bedroom, 350-square-foot apartment in a 

site that was built in 1940 is holding up the development of threebedroom townhouses is a real important point to understand. 

So all I am suggesting, I have no problem with one-to-one ever, 

and never have. It is just that it is never funded. 

Senator CRAPO. I just want to follow up on that point and then 

I will be done with my questions. 

I think that I am focused on the issue that you are raising here, 

Mr. Baron and Mr. Elsesser, with my question with regard to the 

study that you are probably all familiar with done by Michael 

Brazley and John Gilderbloom with regard to the Park DuValle Revitalization Project in Louisville, Kentucky. 


smartinez on DSKB9S0YB1PROD with HEARING
31 

This study was reported in the American Journal of Economics 

and Sociology. And in the first paragraph of that study it concludes 

that HOPE VI tends to serve the needs of non-public housing tenants, 80 percent of whom are now residents of Park DuValle development and does not help the vast majority of residents who are 

displaced. 

That gets to your one-to-one issue and I think it gets to your 

mixed income issue, as well. 

Mr. WOOD. Right. 

Senator CRAPO. The study says, and I will just read the last 

paragraph. It says in conclusion, the research implies that Hope VI 

enhances the lives of only a small number of public housing residents that it impacts and that the non-public housing residents 

seem to occupy a large majority of the housing units. 

This study says a better way to spend the Federal money would 

have been to fund grassroots community nonprofits building more 

housing at a significantly lower cost and achieving the objective of 

building within established urban areas near good jobs, services 

and recreational opportunities. 

I bet I have generated some comment there. Go ahead, Mr. 

Elsesser. We will give everybody a chance. 

Mr. ELSESSER. Senator, if I may, without commenting on that 

specific study because I think that there are two questions that are 

separate. One is does the HOPE VI revitalize that community? 

Does it lead to office buildings, to markets, to other things in that 

community? 

The other is what happens to the people that were there? Those 

are two very separate questions and answerable different. 

In Miami, they failed both. But in some places they have done 

very well on the one. But I think that the question on the second 

as to who benefits and as to the benefit for the residents is a much 

more difficult question. And that is the thrust for the one for one 

and the right to return and the hard to house. 

Senator CRAPO. I know I am using up too much time, but Ms. 

Henriquez and Mr. Baron, just quickly. 

Ms. HENRIQUEZ. Thank you. If I might, the Boston experience is 

very different. First of all, one-for-one replacement, I have no place 

else to build except on the footprint of the development that I am 

now going to revitalize. 

Second of all, at the Boston Housing Authority redevelopment 

deals on HOPE VI, 75 to 78 percent of all of our units have come 

back as public housing units. So that we do not displace people. 

And if we are building less numbers of units back, we run a lottery, 

we very carefully work and have a basket of services of relocation 

and needs and programs around each specific family. So we have 

not lost people in that regard. So some of those kinds of one-forone replacements and those kinds of restrictions will make it much 

more difficult for us to operate in our community. 

Senator CRAPO. Thank you. Mr. Baron, and then I better turn it 

back. 

Ms. POPKIN. I actually was the one who was trying to pop in. 

Senator CRAPO. OK, Dr. Popkin. 

Ms. POPKIN. I had two responses. First of all, most of the people 

who have moved on have gotten vouchers and they are doing very 


smartinez on DSKB9S0YB1PROD with HEARING
32 

well. And they are not interested in returning. So their not coming 

back is not necessarily a bad outcome. I think we need to factor 

that in as well. 

I think the other issue you raised about whether we should just 

continue funding public housing is that about a third of the people 

in our study are still in traditional public housing. Many of them 

were relocated there, more of the hard to house families. And they 

are not doing well. And they are now all concentrated in these traditional public housing developments. And there are very few working families left, even worse than there were before. 

And it is only going to get worse. You are going to have more distressed public housing because of that situation. So I do not see 

that as a solution for the kinds of problems you get for concentrating poverty. If you just fund only that program, that is exactly 

what you are going to end up with. 

Senator CRAPO. Thank you. And thank you, Mr. Chairman, for 

your indulgence. 

Senator MENENDEZ. Thank you, Senator Crapo. 

Let me just go to one or two last questions and then we will let 

you go for the day. 

I think Mr. Baron hit it on the nail, it seems to me. And that 

is that if, at the end of the day, we zero out HOPE VI and we cut 

capital funds then the result, even in Mr. Elsesser’s desirable goal, 

just does not happen. And so that is the fundamental question. If 

you zero out HOPE VI and then you also have what we have, 

which is the cut in the capital funds, then you ultimately do not 

achieve any of these goals. 

I think the second thing that is important to recognize as we 

move forward in the debate over reauthorization is what Dr. Popkin just raised, which is that it is about housing for people. But it 

is also about quality of housing and life. If warehousing people for 

the sake of having a place is something that we are willing to accept as a society, I think that is wrong. We have gone to that experiment and it has not been a good one. 

Second, if concentration of poverty is something that we think is 

good, then I think we can continue with the lessons of the past 

versus changing them. 

In HOPE VI we had a very ambitious goal and maybe it is very 

ambitious and we should continue to be very ambitious. But we 

need to have the resources at the end of the day to meet that ambition, which is about providing decent quality affordable housing 

that people can truly call home in the context of a neighborhood, 

not a concentration of both poverty and warehousing of people. 

Second, and how do we create ripple effects in communities that 

can give those people access to opportunities? We talk about that 

the ripple effect on the economic side is for someone else. It seems 

to me that very often it can provide—at least my own personal experience in New Jersey—is it can provide opportunity for the very 

people in those communities, the citizens of that public housing 

who then were able to avail themselves of employment and break 

some of the cycle of poverty that existed and look at the training 

and look at the other aspects of this. 

So I think when we move forward in the debate we have to think 

about those elements as well. 


smartinez on DSKB9S0YB1PROD with HEARING
33 

The one thing I do want to ask Mr. Wood, it appears from your 

testimony that while some of these public housing authorities have 

not met deadlines and some others have had difficulties with 

HOPE VI, it seems to me that HUD itself has not been adequately 

overseeing and monitoring HOPE VI projects. 

As part of your review did you come up with a list of recommendations to ensure that HUD is adequately monitoring these 

grants? 

Mr. WOOD. We did and it is accurate that you are putting it in 

the past. And I would stress that these reports are about 3 years 

old. But at the time we certainly did find a number of weaknesses 

and made several recommendations which I alluded to in the opening statement and that are outlined in the written statement, basically clarify the guidance to their field staff in terms of what their 

responsibilities were for oversight, conducting required annual reviews of all of the projects that were in their jurisdictions. 

We also recommended that HUD continue its practice of taking 

past grantee performance—if a grantee already had one of the 

grants and was applying for another, that they look at the performance on the first one when making a decision as to whether to 

award another grant. HUD has continued to factor that into annual funding notices. 

Senator MENENDEZ. Thank you. 

With that, let me thank you all for your testimony. We appreciate all of your insights and we look forward to continuing to engage with you as we consider reauthorization. 

With that, the hearing is adjourned. 

[Whereupon, at 3:15 p.m., the hearing was adjourned.] 

[Prepared statements and additional material supplied for the 

record follow:] 


smartinez on DSKB9S0YB1PROD with HEARING
34 

PREPARED STATEMENT OF SENATOR MEL MARTINEZ 

Good Afternoon Chairman Schumer and Ranking Member Crapo. Thank you for 

holding this afternoon’s subcommittee hearing on a topic of utmost importance—reauthorization of the HOPE VI program. 

HOPE VI has been credited with eliminating and replacing some of the most dangerous and dilapidated public housing in the country. As a former Secretary of 

HUD, I know firsthand that this program works. HOPE VI provides funds to renovate or demolish existing public housing and replace it with mixed-income communities. The benefit is that we can take neighborhoods that have been underserved, 

underdeveloped, and left without the resources residents need and raise the living 

standards of their communities so that they thrive. 

I am pleased that Senator Mikulski is able to join us today to lend her expertise 

to this conversation. Since the early 1990’s, Senator Mikulski has championed the 

effort to preserve HOPE VI, and I am very glad to be joined with her on legislation 

that would reauthorize and improve the program. 

The legislation we have introduced builds on the past success of the program, affirms continuing need for the program, and makes several pragmatic adjustments 

based on the considerable experience that public housing agencies and their private 

sector partners have had in implementing HOPE VI for over a decade. 

I am confident that today’s hearing will highlight these points and reaffirm the 

need for Congress to act on this issue. I would like to thank my fellow committee 

members, Senators Dole, Reed, Schumer, Menendez, and Brown, for supporting this 

legislation. 

I would also like to extend a warm welcome to my good friend and fellow Floridian, HUD Assistant Secretary Orlando Cabrera, who will join us on the second 

panel. The Administration and I have not always seen eye to eye on this specific 

program, but I am glad that we will have the opportunity to openly discuss some 

of the concerns that have been raised and hopefully put many of them to rest. 

I know that we will continue to hear arguments from all sides as to what is the 

most effective way to fund public housing. I would like to stress that the HOPE VI 

program does so much more than just rebuild public housing stock; it revitalizes 

neighborhoods, makes investments in human capital, and forges sustainable communities. 

I would like to welcome our other witnesses—particularly Mr. Elsesser also a Floridian. I look forward to hearing from all of you and engaging in a discussion about 

the merits of a program that fosters community development and involvement. 

Thank you. 


smartinez on DSKB9S0YB1PROD with HEARING
35 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 98 here 50320A.001
36 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 99 here 50320A.002
37 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 100 here 50320A.003
38 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 101 here 50320A.004
39 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 102 here 50320A.005
40 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 103 here 50320A.006
41 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 104 here 50320A.007
42 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 105 here 50320A.008
43 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 106 here 50320A.009
44 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 107 here 50320A.010
45 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 108 here 50320A.011
46 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 109 here 50320A.012
47 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 110 here 50320A.013
48 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 111 here 50320A.014
49 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 112 here 50320A.015
50 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 113 here 50320A.016
51 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 114 here 50320A.017
52 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 115 here 50320A.018
53 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 116 here 50320A.019
54 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 117 here 50320A.020
55 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 118 here 50320A.021
56 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 119 here 50320A.022
57 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 120 here 50320A.023
58 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 121 here 50320A.024
59 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 122 here 50320A.025
60 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 123 here 50320A.026
61 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 124 here 50320A.027
62 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 125 here 50320A.028
63 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 126 here 50320A.029
64 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 127 here 50320A.030
65 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 128 here 50320A.031
66 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 129 here 50320A.032
67 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 130 here 50320A.033
68 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 131 here 50320A.034
69 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 132 here 50320A.035
70 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 133 here 50320A.036
71 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 134 here 50320A.037
72 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 135 here 50320A.038
73 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 136 here 50320A.039
74 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 137 here 50320A.040
75 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 138 here 50320A.041
76 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 139 here 50320A.042
77 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 140 here 50320A.043
78 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 141 here 50320A.044
79 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 142 here 50320A.045
80 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 143 here 50320A.046
81 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 144 here 50320A.047
82 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 145 here 50320A.048
83 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 146 here 50320A.049
84 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 147 here 50320A.050
85 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 148 here 50320A.051
86 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 149 here 50320A.052
87 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 150 here 50320A.053
88 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 151 here 50320A.054
89 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 152 here 50320A.055
90 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 153 here 50320A.056
91 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 154 here 50320A.057
92 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 155 here 50320A.058
93 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 156 here 50320A.059
94 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 157 here 50320A.060
95 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 158 here 50320A.061
96 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 159 here 50320A.062
97 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 160 here 50320A.063
98 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 161 here 50320A.064
99 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 162 here 50320A.065
100 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 163 here 50320A.066
101 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 164 here 50320A.067
102 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 165 here 50320A.068
103 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 166 here 50320A.069
104 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 167 here 50320A.070
105 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 168 here 50320A.071
106 


smartinez on DSKB9S0YB1PROD with HEARINGInsert graphic folio 169/200 here 50320A.072