A Promise Being Fulfilled

The Transformation of America’s Public 

Housing

July 2000

A Report to the President by

Andrew Cuomo

Secretary of Housing and Urban Development

Harold Lucas

Assistant Secretary for Public and Indian Housing
Prepared under the supervision of

Rod Solomon

Deputy Assistant Secretary for Policy, Program and Legislative Initiatives

Prepared by Johnson, Bassin & Shaw, Inc.,

under Contract #C-OPC-18430

Connie Campos

Don Ball

Laura Pennycuff
Major Galloway
President William Jefferson Clinton

The White House

Mr. President:

It is with great pleasure that I present you with A Promise Being Fulfilled: The 

Transformation of America’s Public Housing. This new report documents your Administration’s 

achievements: transforming public housing into a place where low-income families can thrive, and reestablishing both the public housing and housing choice voucher programs as broadly supported, 

essential elements of America’s safety net. 

The promise of the public housing system in 2000 is the same as it was when it began in 1937—

providing a safe and decent home, a healthy environment to raise children, and opportunities for a better 

way of life. While most public housing is a great success, sadly, a small percentage did not live up to 

that promise. Large high-rises and barracks-type housing in cities like Chicago, Dallas, Baltimore, and 

New Orleans became havens of crime, drug use, poverty, and despair. Through misguided federal 

policies and local actions, public housing residents were isolated and denied opportunities to succeed. 

Even worse, some local public housing authorities compounded these problems through mismanagement 

and neglect.

Over the past seven years, we have worked hard to solve those problems. We collaborated 

with Congress, local public housing agencies, residents, and communities – and the result has been longterm solutions that are renewing the promise of public housing across the nation. 

Under your leadership, we have:

• Reinvented HUD to make it more efficient and better able to promote excellence in housing 

management and oversight.

• Replaced the worst public housing projects with mixed-income scattered site or townhouse 

communities, and where appropriate, used housing vouchers to give residents a chance to 

live anywhere in the community.

• Turned around the worst-performing housing authorities by enforcing the rules to eliminate 

sustained management failures, and helping poor performers identify problems, assess basic 

housing conditions and take timely preventative action.

• Made low-income communities safer by enforcing leases, toughening admissions, combating 

gun violence, and working with residents and local officials to decrease crime – particularly 

against seniors, young mothers, children, and people with disabilities. 

• Opened access to more opportunities for residents to achieve self-sufficiency and promoted 
deconcentration by income and race.

• Improved living conditions in Indian country and changed the Indian tribal housing delivery 

system to recognize the status of tribes as sovereign nations.

• Served many more of the 5 million families with severe housing needs by seeking and 

obtaining funds for additional housing vouchers.

Today, these actions are transforming the public housing system from a symbol of despair to 

one of hope. This is the goal you set for us, and we can say with pride that we are achieving it.

Sincerely,

[signature]

Andrew Cuomo
Dear Mr. Secretary:

As Assistant Secretary for Public and Indian Housing, I am honored that you have entrusted me 

with the stewardship of America’s public and Indian housing programs. The progress we have made 

under your leadership is clearly documented in our new report: A Promise Being Fulfilled: The 

Transformation of America’s Public Housing.

In many ways, I can view those contents from a unique perspective. In 1981, I began working 

at the Newark (New Jersey) Housing Authority, and I saw firsthand what failed public housing could do 

to the families that reside there and the communities where it’s located. From 1992 until I came to the 

Department of Housing and Urban Development in 1998, I was Executive Director of the Newark 

Housing Authority. During that time, the changes at HUD were invaluable to Newark’s success. The 

Newark Housing Authority went from being a troubled PHA to a high performer: we were able to 

improve critical systems, take action to demolish unsalvageable housing stock, and build new housing 

for low-income families. HUD helped us bring the agency into the 21st century. 

Throughout those years and with President Clinton’s strong support, key changes were made in 

the laws and regulations that govern HUD programs: HOPE VI was implemented, the one-for-one 

replacement rule was relaxed, and we were allowed to take tough but necessary actions to increase 

residents’ security. Since then, your innovative actions—including historic management reform and an 

emphasis on improving living conditions for low-income people—dramatically improved HUD public 

and Indian housing programs and created new opportunities for the families they serve.

Thank you again for the enormous opportunity to assist you and our communities in this critical 

and exciting transformation. 

Very truly yours,

(signature)

Harold Lucas

Assistant Secretary
Chapter 1:

Transformation

This report tells a remarkable story: how the public housing system, unjustly but widely considered a 

colossal failure several years ago, is being turned around. The need for public housing has never been 

the issue. Even today, with a booming economy and record rates of homeownership, 30 million 

Americans still live below the poverty level. More than 7 million Americans still rely on welfare for 

assistance in meeting their basic needs. And more than 5 million American households still are homeless, 

live in substandard housing, or pay 50 percent or more of their income for rental housing.

Some public housing in the U.S. had been on the decline long before the inauguration of the Clinton 

administration. The very image of public housing has been one of deteriorating buildings and 

crime-ridden neighborhoods. Although a small percentage of all public housing, the crumbling buildings 

of Robert Taylor Homes in Chicago and Desire in New Orleans provided a highly visible symbol of 

what was wrong with public housing over the years. Public housing problems also festered for years in 

large, visible cities like our Nation’s capital, Detroit, Philadelphia, and Baltimore. As Secretary Andrew 

Cuomo said, “When the Federal Government embarked on a large-scale effort to provide clean and 

decent housing for low-income Americans 50 years ago, we could not imagine how that dream would 

turn into what is too often a nightmare.”

Robert Taylor Homes and Desire never were an accurate portrayal of public housing. Most public 

housing in the United States is in small garden apartments for families or high-rises for seniors, and 

HUD’s evaluation system designated only a small percentage of public housing authorities (PHAs) as 

troubled. The program has been a great success. Nevertheless, the perception of public housing and 

HUD was so bad that, despite the obvious need for housing assistance to serve additional families, 

Congress provided none from fiscal years (FY) 1994 to 1999. The House of Representatives passed 

legislation to repeal the public housing law and start over, and several in Congress called for the 

elimination of HUD.

Pull quote:

“Public housing should be a part of the community, not apart from the community.”

—Harold Lucas, Assistant Secretary, Office of Public and Indian Housing

There was no question that a dramatic turnaround was needed. Such a turnaround would have to be 

fundamental, multifaceted, and able to attract broad support. The following chapters discuss the basic 

elements HUD undertook, in consultation and cooperation with Congress, PHAs, public housing 

residents and local communities: 

Transforming HUD to restore credibility: HUD reorganized its staff, programs, and management to 

improve program delivery; identify, enable, and require better local performance; and restore the public 

trust. These steps included consolidating duplicative programs and applications into more manageable 

numbers; creating specialized centers to handle specialized functions, like the Grant Management, 
Special Applications, and Section 8 Financial Management Centers; separating enforcement from 

technical assistance duties for field staff; and having one administrative entity to assess rental housing for 

all HUD programs.

Transforming Public Housing Stock: HUD articulated and is now implementing a 

strategy for demolishing and replacing the small percentage of severely distressed public housing 

developments. This has included working with Congress to repeal the one-for-one replacement rule so 

that PHAs have more flexibility in the replacement housing process; implementing HOPE VI to provide 

large-scale funding for revitalizing or replacing deteriorating housing and creating more livable 

communities; providing the option of mixed financing so that PHAs can leverage private funds to offer 

public housing in deconcentrated settings; providing specific replacement housing resources; and 

providing more flexibility in the use of Section 8 vouchers and capital funds for replacement of obsolete 

buildings. These initiatives are changing the delivery of housing assistance and the face of entire cities. 

HUD also has taken action to assure the more timely and effective commitment of capital funds to 

preserve the housing stock that is not severely distressed.

Transforming Public Housing Management: To assure that PHAs pay the needed attention to 

basic housing conditions and strive for management excellence, HUD revamped oversight, management 

evaluation, and enforcement where necessary. The elements include creating the Public Housing 

Assessment System (PHAS), an evaluation system that for the first time includes independent property 

inspections, comprehensive financial assessments, and direct input from residents; providing more 

flexibility for good managers, and financial and other incentives for excellent performance; working with 

Congress to consolidate duplicative programs—including the critical Section 8 certificate and voucher 

programs—and replace competitive programs with formulas; establishing Troubled Authority Recovery 

Centers (TARCs) to provide concentrated technical assistance to troubled PHAs; and proposing and 

now implementing a statutory mandate that PHA management be removed if the PHA remains troubled 

for 2 years.

Transforming Safety and Security in Public and Assisted Housing: The One Strike and You’re 

Out initiative encourages PHAs to take screening and lease enforcement actions necessary to keep 

criminals out of public housing, and these efforts are being extended to the voucher program. Public 

Housing Drug Elimination Program (PHDEP) funds are now allocated by formula rather than 

competition to provide PHAs with a reliable source of funding for crime prevention activities that can 

leverage other funds, and PHAs are using these funds in innovative ways. Linkages are encouraged—

and in some instances required—with law enforcement agencies to assure that public housing residents 

receive the protection to which they are entitled. President Clinton initiated focused efforts to address 

the tragedy of gun violence in these communities, and Secretary Cuomo led negotiations that resulted in 

an agreement with one of the Nation’s largest gun manufacturers to increase gun safety and responsible 

marketing. 

Transforming Resident Self-Sufficiency and Reducing Isolation: Moving beyond just bricks and 

mortar, the transformation complements welfare reform and aims squarely at deconcentrating poverty in 

public housing. Rather than becoming service providers themselves, PHAs must seek cooperative 
agreements with welfare agencies and other local organizations to provide more opportunities and 

services that help public housing families succeed. New rent policies, such as the earned income 

disallowance, are friendlier to working families and more consistent with welfare reform. A new Section 

8 Welfare-to-Work voucher program makes it easier for low-income families to move closer to 

employment and support services areas. HUD programs such as Resident Opportunity and Self 

Sufficiency (ROSS) and HOPE VI provide resources with which to leverage critical supportive services 

funds. The Public Housing Reform Act and HUD regulations mandate that PHAs pursue 

deconcentration in their admissions policies, so that developments are not segregated by income, and 

racial concentrations are addressed.

Transforming Native American Programs: HUD worked with Congress to pass the Native 

American Housing Assistance and Self-Determination Act of 1996 (NAHASDA). NAHASDA 

recognizes Indian tribes’ status as sovereign nations and creates a flexible block grant assistance 

program to provide funds directly to Indian tribes and Alaska Native Villages for housing, 

self-sufficiency, and safety activities. HUD has put in place the necessary monitoring and technical 

assistance system, and Congress has provided essential increased funding. 

These reforms have been both administrative and statutory. Even though HUD and Congress could not 

agree on public housing legislation for several years, HUD began to institute reforms. In 1997, Secretary 

Cuomo announced the 2020 Management Reform Plan, which restructured HUD’s operations and 

included fundamental initiatives such as the physical inspection of public housing. In 1998, after six years 

of effort and with evident progress in public housing—a result of HUD, its housing authority partners, 

and elected officials working together—Congress and the President agreed upon the Quality Housing 

and Work Responsibility Act of 1998, also known as the Public Housing Reform Act (PHRA). PHRA 

is the largest overhaul of the public housing and voucher programs in the programs’ history. Together, 

Management 2020 and PHRA set a framework for lasting public housing reform.

The reforms are the engine of a sweeping transformation in public housing. HUD and its partners have 

worked not only to change the image of public housing, but also to change the public housing system 

itself. The following chapters show how far we have come, and the great potential of these reforms.
Chapter 2:

Framework for Transformation—

HUD Management Reform and the Public Housing 

Reform Act

Although public housing is largely a local program, managed by PHAs, federal oversight and 

appropriations are crucial. HUD oversees and regulates public housing programs, and funding is 

authorized and appropriated by Congress. Thus, successful transformation of public housing depends 

both on a well-functioning HUD that can guide the reforms with the confidence of Congress, and on 

agreed-upon laws that will promote reforms. These two elements have come to fruition through the 

HUD 2020 Management Reform Plan of 1997 and the Public Housing Reform Act of 1998. 

HUD Management Reform

By the early 1990s, the reputation of HUD was in a shambles. Some in Congress were threatening not 

just to cut funding, but to eliminate the Department. As Senator Christopher “Kit” Bond (Chairman of 

the Subcommittee on Veteran Affairs, HUD, and Independent Agencies) stated to Secretary Cuomo in 

1996, “To be blunt, Mr. Secretary, we challenge you to make the necessary administrative, 

management, and financial reforms that will justify Congress’ continued support of the agency.” The 

public’s impression was not much better: large, dilapidated high-rises in many cities were the symbol of 

HUD’s inability to support safe and decent housing.

There was no doubt that the Department faced a wide range of internal management and operational 

challenges. Among the challenges was overseeing a large array of programs—many duplicative—that all 

had different rules, deadlines, and application processes. HUD Field Office staff were expected to 

perform the potentially conflicting functions of both technical assistance and enforcement. Field Office 

staff duties also included financial processing and handling special applications, such as demolition 

applications, that sometimes led to different interpretations of regulations from office to office. HUD’s 

outdated and non-integrated information technology could not provide critical financial and performance 

data in an accurate and timely manner, and there was no effective system to comprehensively assess the 

physical and financial condition of HUD’s housing portfolio. 

Sweeping structural and systemic changes have been undertaken to manage HUD’s programs and 

people more efficiently and responsibly. HUD’s 2020 Management Reform Plan, introduced in 1997 by 

Secretary Cuomo, is an important initiative of Vice President Al Gore’s Reinventing Government 

Campaign. These innovations are resulting in more effective and efficient program management, 

improved service delivery, and streamlined oversight and monitoring activities. All of these results have 

been achieved despite a decrease in HUD staff during the 1990s by nearly 50 percent.

HUD’s general management reforms include the following:

• Consolidating programs to make them more manageable and eliminating unnecessary 
duplication;

• Consolidating and streamlining application processes from many different applications into one 

under the Super Notice of Fund Availability (SuperNOFA); 

• Consolidating specialized processing functions in processing centers, allowing field staff to focus 

on important customer service functions;

• Separating HUD’s outreach and enforcement into two functions, allowing different staff to focus 

on linkages to the community and restoring the public’s trust in HUD’s programs;

• Creating the Real Estate Assessment Center (REAC) to assess the physical state of public and 

assisted housing; and 

• Creating an Enforcement Center to take necessary legal actions.

To ensure that the reforms are taking place, HUD 2020 introduced management oversight initiatives 

such as the Annual Performance Plan, which sets specific goals for HUD’s offices to accomplish each 

year, and the Business Operating Plan, which sets national performance goals for all the Field Offices to 

meet. 

Pull quote:

“HUD 2020 goes farther and does more than any other management reform plan, not only in the history 

of HUD but in the recent history of the Federal government.”

—Vice President Al Gore

Consolidating Operations. HUD’s Office of Public and Indian Housing (PIH), for example, has been 

a leader in the consolidation of operations to promote efficiency and effectiveness. First, HUD 

consolidated its Section 8 financial operations monitoring in the newly created Section 8 Financial 

Management Center (FMC). FMC executes all financial management activities for approximately 3 

million assisted housing units, covering both vouchers and project-based contracts. This work 

previously was handled by 81 Field Offices. FMC will help HUD keep control over a system that 

allowed such a buildup of Section 8 reserves that HUD had to recapture over $7 billion several years 

ago. PIH also set up two Troubled Agency Recovery Centers (TARCs) to assist troubled PHAs plan 

and implement management improvement strategies, centralizing assistance that previously had been 

provided by the Field Offices.

PIH, like other divisions of HUD, consolidated routine functions previously handled by field staff at new, 

more efficient “back office” processing centers. This follows the example of many banks and other 

businesses. The PIH Grants Management Center was created to streamline grant-processing 

operations, training specialized staff to review and process applications so that HUD program staff can 

focus their efforts on monitoring program performance. In a similar vein, the PIH Special Applications 

Center reviews regulatory applications for approval, including homeownership conversion programs, 

demolition and disposition, and designation of developments for occupancy by elderly or disabled 

families. Focusing application processing in one place creates more uniform interpretation of the 

regulations as well. For example, instead of demolition applications being sent to Field Offices, where in 

prior years they had been received only occasionally and were subject to interpretation of the rules by 
each office, they are now sent to the Special Applications Center where they are processed in a 

consistent and timely manner. These changes are making the public housing system work better, despite 

the downsizing of HUD.

In addition to these processing centers, HUD has made better use of its PIH staff by establishing “hub” offices and 

program centers throughout the country. By reorganizing PIH’s operations into the management centers, new hubs, 

and program centers, HUD ensures that the Field Office staff concentrate on providing more services and technical 

assistance to those PHAs with the greatest need. As discussed in Chapter 4, these steps in PIH are being 

undertaken in conjunction with reforms that consolidate programs, reduce the number of funding competitions, and 

provide for a better management evaluation and enforcement structure that relies less on the information of individual 

field staff. 

Interfacing with the Public. In the past, HUD staff were tasked with conflicting mandates to provide 

technical assistance and perform regulatory functions, creating a “good cop-bad cop” impression. With 

these conflicting duties, it was difficult for field staff to perform either function well. Under HUD 2020, 

different personnel were assigned the functions of community outreach and direct customer service to 

the public, and ensuring program compliance with rules and regulations. 

The outreach function is enhanced by the establishment of Storefront Offices—one-stop service centers 

to improve the connection between HUD and the public. The first Storefront Office opened in 

Washington, DC in May 1998. Nine new Storefronts have opened across the country since then, and 

six more are to be opened during FY 2000. In addition to being staffed by knowledgeable HUD staff, 

the Storefront Office also offers state-of-the-art technology to provide information to the public in the 

easiest, most user-friendly way possible. A touch-screen kiosk is located outside the Storefront Office 

to provide around-the-clock service. All of these changes are to make HUD more responsive and 

accessible to the public.

Pull quote:

“By developing the Community Builder and Public Trust Officer positions, which focus on community 

outreach and on compliance monitoring, respectively, HUD has created a more efficient organizational 

structure. With staff collaborating in a more focused and defined manner, it makes for a more effective 

and responsive HUD. We have used this model in Austin to reorganize our own housing office.”

—Mayor Kirk Watson, Austin, Texas 

Public Housing Reform Act

The legislating of housing program rules traditionally has been a bipartisan activity. Yet, saddled by the 

poor reputation of HUD and public housing, the legislative process in the mid-1990s was marked by 

frustration and failure. A comprehensive housing bill passed the House of Representatives, but died in 

the Senate in late 1994. Both the House of Representatives and the Senate passed comprehensive 

housing bills in 1996, but a conference never occurred and the bill failed.

In 1995, some reforms were agreed upon as part of the appropriations process that could allow the 

public housing transformation to begin. These mostly included deregulation steps such as suspension of 

the one-for-one public housing replacement requirement and additional flexibility for PHAs to adopt rent 
policies that do not penalize working families. In addition, during this period the Congress began to 

appropriate substantial funding for HOPE VI, a comprehensive revitalization program for severely 

distressed public housing sites. The statutory authority for the reforms, however, was limited and 

piecemeal. There were still basic disagreements in Washington, DC, regarding more comprehensive 

legislation. Because the reforms were legislated only on a year-to-year basis, many PHAs did not move 

forward with the reforms.

In 1997, the Administration put forward its Public Housing Management Reform Act to articulate its 

legislative position exactly. That Act reflected a developing consensus that public housing could be 

reformed along the lines HUD had suggested: demolish and replace the worst public housing, take 

strong measures to bring about upgraded HUD and PHA management, reduce crime, and support 

increased resident self-sufficiency. That Act also included basic safeguards Secretary Cuomo insisted on 

to ensure that public housing and vouchers would continue to fulfill their historic mission of providing 

housing that is affordable to and reserved substantially for those in great need (questions debated 

intensively in Congress), and that poverty deconcentration and income mixing efforts would be pursued 

evenhandedly. At the same time, local actions around the country under the HOPE VI program, the 

appropriations act reforms, and the President’s One Strike and You’re Out policy clearly were 

beginning to change public housing for the better.

Finally, in October 1998, with public housing transformation beginning around the Nation, Congress 

passed the Public Housing Reform Act (PHRA). PHRA contains versions of almost all of the 

Administration’s proposals, as well as many other reform measures. The Act also was part of the FY 

1999 appropriations act, which—at Secretary Cuomo’s insistence—also provided for 50,000 new 

Section 8 vouchers, ended a congressionally imposed delay on reissuing existing vouchers that became 

available, and increased Federal Housing Administration loan guarantee limits to allow thousands more 

Americans to become homeowners. Karen Thoreson, President of National Association of Housing and 

Redevelopment Officials and Director of the City of Tucson’s Community Services Department, saw 

the potential of the public housing reform legislation: “I urge both housing professionals and community 

development professionals to use PHRA as the venue to build stronger relationships, develop strategic 

approaches, and help one another to achieve mutual goals for the communities you serve.” 

HUD has moved ahead to implement PHRA’s provisions. Final rules have been issued on such key 

provisions as the merger of the Section 8 voucher and certificate programs, the PHA Plan, the Capital 

Fund and Drug Elimination Program formula allocations, and admission and occupancy rules. A PHA 

Plan electronic template has been developed, and important funding and regulatory processes have been 

merged with the PHA Plan process. HUD is continuing to consult with its partners in the industry and 

advocacy groups to complete these reforms. The basic provisions of PHRA are highlighted in the 

following summary.
Summary of the Quality Housing and Work Responsibility Act of 

1998

(Also known as the Public Housing Reform Act)

Protects Access to Housing Assistance for the Poorest Families

• Tenant-Based Section 8 (Vouchers). 75 percent of newly available vouchers at a PHA must 

go to families with incomes at or below 30 percent of area median income.

• Public Housing. 40 percent of newly available public housing units at a PHA generally must go 

to the families with income at or below 30 percent of area median income.

• Project-Based Section 8. 40 percent of newly available units in each project must go to 

families with income at or below 30 percent of area median income.

Reduces Concentrations of Poverty in Public Housing and 

Emphasizes Fair Housing

• Admissions Plan for Deconcentration. Each PHA must adopt an admissions plan to place 

relatively higher income families in lower income developments and lower income families in 

higher income developments.

• Fair Housing. Each PHA must affirmatively further fair housing in its program.

Raises Performance Standards for PHAs

• Mandatory Receivership. HUD must seek receivership within 2 years for troubled PHAs 

that do not improve enough to escape troubled status.

• Physical Conditions. The physical condition of a PHA’s housing becomes a performance 

indicator. A PHA must offer acceptable basic housing conditions to be rated a “standard” 

performer.

• Rewards Performance. The new Capital Fund formula is to contain an incentive for excellent 

performance. 

Supports Families Making the Transition from Welfare to Work

• Earned-Income Disregard. Prohibits a public housing family’s rent from being increased for 

one year, and limits rent increases for a second year, when a family member who was 

unemployed or on welfare gets a job.

• Rent Reform. Allows PHAs to adopt other rent incentives, such as ceiling rents and income 

disregards, to reward residents who increase their incomes and so that families do not pay more 

than market rate for their public housing unit.

• Welfare Reform. Provides that a family’s rent will not be decreased when its income goes 

down because of welfare agency sanctions.

• Supportive Services. Requires efforts to establish cooperative agreements between PHAs and 

local welfare agencies to target supportive services. Authorizes a supportive services program 

principally for public housing residents.
Transforms the Public Housing Stock

• HOPE VI. Authorizes the HOPE VI program through 2002. HOPE VI spurs the revitalization 

of the Nation’s most distressed public housing by providing for replacement of projects with 

lower-density, mixed-income projects that blend into the surrounding community.

• Demolition and Replacement. In addition to HOPE VI, the Capital Fund may be used to 

demolish obsolete public housing and replace it with better quality, smaller scale projects. The 

“one-for-one” replacement requirement, which historically prevented the demolition of even the 

worst projects, is repealed.

• Mixed-Finance Projects. PHAs may enter into agreements with private developers to 

combine public and private funds to develop mixed-income communities in which public housing 

units are part of projects with other affordable and market rate units.

• Mandatory Conversion. Requires PHAs to tear down the most unlivable, expensive projects 

and instead provide tenant-based vouchers.

Supports HUD Management Reform Efficiencies

• Deregulation and Streamlining. Reorganizes PHA reporting to emphasize one Annual Plan at 

the beginning of the fiscal year. Allows streamlined Plans for high-performers and small PHAs.

• Consolidates Public Housing Programs. PHAs will receive most of their funds through either 

the Operating Fund or the Capital Fund. Encourages formula funding rather than labor-intensive 

competitions. This is done by program consolidations, absorption of the CIAP program for 

small PHAs into the Capital Fund, and authority for HUD to provide fixed funding amounts in 

the Drug Elimination Program.

Merges and Reforms the Section 8 Certificate and Voucher 

Programs

• Merger of the Section 8 Certificate and Voucher Programs. Merges the two similar 

PHA-administered tenant-based subsidy programs. The merger program subsidy is based on a 

payment standard set by the PHA anywhere between 90 percent to 110 percent of Fair Market 

Rent (FMR).

• Conformity with Private Market Real Estate Practices. Makes numerous reforms to 

expand owner participation by making the voucher program operate more like the private 

housing market. Reforms include the permanent repeal of the “endless lease,” the owner 

termination notice to HUD, and the “take-one, take-all” requirements.

• Anti-Crime Initiatives. Permits PHA screening of applicants, in addition to the traditional 

tenant screening by owners. Also permits PHA disapproval of owners who refuse to evict 

Section 8 families for drug-related or violent criminal activity.

• Homeownership Vouchers. Allows PHAs to implement a Section 8 homeownership program. 

Makes needed statutory changes, such as elimination of the prior down-payment requirements, 

to make Section 8 vouchers a viable homeownership resource for low-income families.
Comments on Passage of the Public Housing Reform Act

“This bipartisan agreement marks a significant milestone in helping to meet the housing needs of this 

Nation. It provides for new solutions, adds needed resources, and gives local agencies greater flexibility 

in making public housing and homeownership opportunities available to more families throughout the 

country.”

—Senator Paul Sarbanes of Maryland, Ranking Democrat on the Senate Banking, Housing and Urban 

Affairs Committee

“The reforms contained in this legislation will significantly improve the Nation’s public housing and 

tenant-based rental assistance program and the lives of those who reside in federally assisted housing. 

The funding flexibility, substantial deregulation of the day-to-day operations and policies of public 

housing authorities, encouragement of mixed developments, policies to deal with distressed and troubled 

public housing, and rent reforms will change the face of public housing for public housing authorities, 

residents, and local communities.”

—Senator Connie Mack of Florida, Chairman of the Senate Housing Opportunities and Economic 

Development Subcommittee

“This historic reform bill strikes a balance between protecting our Nation’s commitment to housing the 

poorest Americans while opening up units in public housing to middle-income families.”

—Former Representative Joseph Kennedy, Ranking Democrat on the House Subcommittee on 

Housing and Community Opportunity

“This compromise legislation... represents the first major updating of our public housing laws since the 

Depression. Outdated laws and programs are replaced with a new empowering approach for the 

people of our Nation’s smaller communities, as well as our cities.”

—Representative James Leach, Chairman of the House Committee on Banking and Financial Services

“The conference report on HUD appropriations shows the value of persistence and leadership in finding 

ways to address our most urgent housing needs. The inclusion of 50,000 additional vouchers is the most 

dramatic of several important steps forward. They would not have been possible without the leadership 

of the Secretary and the President, coupled with bipartisan recognition of the importance of low-income 

housing and community and human development of the House and Senate committees involved in the 

negotiation process, and—last but not least—the growing support generated by the impact of HUD’s 

involvement in a growing number of successful efforts to improve communities and increase housing 

opportunities.”

—Cushing N. Dolbeare, Founder, National Low Income Housing Coalition
Chapter 3:

Transforming Public Housing Stock

The Problems. Cabrini Green. Robert Taylor Homes. Lafayette Courts. Techwood Homes. Desire. 

These developments represented how many Americans thought of public housing: massive, crime-ridden 

high-rises and overly dense or barracks-like low-rises that fail to provide a decent environment for 

needy families. A 1992 report by the National Commission on Severely Distressed Public Housing 

found that approximately 100,000 out of 1.3 million public housing units in the U.S. were severely 

distressed and in immediate need of attention. Although a small percentage of the entire public housing 

stock, the sheer size and stark image of places like Cabrini Green gave them disproportionate 

importance.

Pull quote:

“To accelerate the reinvention of public housing units, we will demolish and replace 100,000 public 

housing units around the country.... Our reinvention benefits the 3 million residents of public housing and 

taxpayers at the same time.”

—Vice President Al Gore at the 1996 Public Housing Summit

The most serious problems of these developments included high incidence of crime, making residents 

afraid to move about their own buildings and neighborhoods; high vacancy rates in some buildings, 

which then became havens for drug dealers and users; high unemployment and few opportunities for 

meaningful employment, limiting residents’ ability to become self-sufficient; isolation from the rest of the 

community; and physical conditions deteriorated to such a degree that the housing was dangerous to 

residents’ health and safety. 

In 1992, almost all of these severely distressed developments stood as they had for several decades. 

Virtually no progress was made in demolishing and replacing the worst of the developments. The 

well-intentioned one-for-one replacement rule, which required PHAs to replace each demolished unit 

with a new one, prevented many PHAs from eliminating deteriorating buildings due to inadequate 

funding for replacement and lack of available sites for new units. This rule also prevented PHAs from 

replacing demolished units with Section 8 vouchers. With no ability to leverage private capital, PHAs 

were unable to fund necessary demolition and replacement of units in community settings. PHAs were 

trying to modernize some developments that could not be made viable, and were shortchanging viable 

developments. Some of the distressed developments had become so devastated—such as Schuylkill 

Falls in Philadelphia and Columbus Homes in Newark—that they stayed virtually vacant for decades. 

Rather than coming down, they dominated their city’s skyline as visible reminders of public housing’s 

failure.

The New Approach. During the past several years, HUD has worked with Congress to develop and 

implement a comprehensive strategy to transform public housing’s severely distressed developments into 

safe, livable communities. The strategy involves the following components:

• Repealing the one-for-one replacement rule;
• Providing for full replacement of demolished public housing, either with additional public housing 

units or vouchers;

• Creating and implementing a large-scale funding program, HOPE VI, to transform entire 

neighborhoods, including the physical structures of public housing and the lives of the residents;

• Using mixed financing, so that PHAs can leverage private capital with HUD funding and create 

mixed-income communities;

• Requiring conversion of unredeemable and expensive developments to vouchers, when the 

PHA is unable or unwilling to take the needed action voluntarily;

• Providing mobility counseling to applicants, landlord outreach, and other steps to make 

vouchers more effective as a replacement housing resource;

• Creating the Capital Fund, which provides formula shares to all PHAs and allows replacement 

housing as well as modernization and management improvement activities;

• Providing specific Capital Fund resources for replacement housing; and

• Providing additional PHA administrative flexibility and HUD enforcement, where needed, to 

accelerate commitment of capital funds.

This new strategy is being used to transform public housing across entire cities. The Vice President set 

the goal in 1996 that 100,000 severely distressed public housing units would be demolished and 

replaced. So far, 96,000 have been approved for demolition and HUD is honoring its commitment to 

provide full replacement either with public housing units or vouchers.

Bringing HOPE to Communities

Prior to 1992, there was no program to provide grants of the magnitude or flexibility needed to revitalize 

or replace severely distressed developments. Moreover, no program simultaneously addressed not only 

the physical conditions of the buildings but also the quality of life of the residents. That is what HOPE 

VI—first funded in the FY 1993 appropriations act substantially through the efforts of Senator Barbara 

Mikulski of Maryland and strongly supported both by former HUD Secretary Henry Cisneros and 

Secretary Cuomo—is doing. HOPE VI is succeeding in rebuilding public housing neighborhoods as 

communities of opportunity. Through 1999, Congress has appropriated approximately $3.7 billion in 

HOPE VI grants in more than 120 neighborhoods nationwide to bring real change to places where 

poverty and despair were deeply entrenched. All of the developments listed in Table 1 are revitalized or 

demolished and replaced with vouchers or new units—or in the process—largely with HOPE VI funds.

Table 1: Examples of Severely Distressed Developments Still in Operation as of 1993; Now Being Addressed 

(Reconfigured or Demolished and Replaced, Typically with Townhouses, Public Housing, and Vouchers)

City Development Number of Units

Atlanta, Georgia Techwood Homes 457

Clark Howell Homes 624

Baltimore, Maryland Lafayette Courts 805

Lexington Gardens 667

Chicago, Illinois Robert Taylor Homes 4,415

Cabrini Green 1,921
 ABLA Homes & Extension 3,497 

Henry Horner 1,665 

Stateway Gardens 1,644 

Dallas, Texas Lakewest 3,444 

Detroit, Michigan Jeffries Homes 2,170 

 Herman Gardens 1,404 

Houston, Texas Allen Parkway Village 904 

Kansas City, Missouri Guinotte Manor 418 

Los Angeles, California Pico Gardens 260 

 Aliso Apartments 802 

Newark, New Jersey Hayes Homes 1,458 

 Walsh Homes 630 

New Orleans, Louisiana Desire 1,832 

Philadelphia, Pennsylvania Richard Allen Homes 1,321 

 Schuylkill Falls 714 

Southwark 874 

San Francisco, California Bernal Dwellings 208 

Seattle, Washington Holly Park 893 

St. Louis, Missouri Darst-Webbe 1,000 

 Vaughn 684 

Washington, DC Ellen Wilson Homes 134 

The flexibility of the program allows PHAs—along with residents, local governments, and community 

stakeholders—to creatively tailor their plans for the specific needs of their residents and communities. In 

Atlanta, Georgia, that flexibility and community involvement have been crucial to the success of 

Centennial Place, a mixed-income community that replaced the slums 

of Techwood/Clark Howell Homes. 

The demolition of the Techwood and Clark Howell developments was just the beginning of the process. 

Their replacement, Centennial Place, consists of 900 garden apartment and townhouse rental units being 

leased to families at three income levels: 40 percent are eligible for public housing; 20 percent qualify for 

low-income housing tax credit support; and 40 percent pay market rates. 

Pull quote:

“Provided with the right type of environment and the right opportunities, public-housing-eligible families 

can become part of the mainstream. The challenge is to create an environment in which they can thrive.”

—Renee L. Glover, Executive Director of the Atlanta Housing Authority

The Atlanta Housing Authority created a successful mixed-income community; public housing residents 

making $3,000 a year live next door to professionals earning more than $125,000. In addition, a new 

state-of-the-art magnet school, Centennial Place Elementary School, was built on the former Techwood 

grounds with $12 million from the Atlanta Public Schools and support from local private corporations. 
Children of Coca-Cola and Georgia Tech employees attend classes alongside children of families living 

in public housing. Centennial Place residents are part of the community, not isolated from it—and 

therefore benefit from the resources and opportunities available in the community. 

An important aspect of HOPE VI is that it addresses improvements in residents’ lives as well as their 

living spaces. Self-sufficiency programs, as described in Chapter 6, provide residents the training and 

employment opportunities that allow them the chance to get ahead. The involvement of the residents 

themselves in the process ensures that all aspects of the HOPE VI plan, including self-sufficiency 

programs, address the specific needs of the development. Moreover, the residents’ participation 

increases their own empowerment and confidence.

When the HOPE VI plan for Lafayette Courts in Baltimore, Maryland, was being designed, residents 

participated along with the Housing Authority of Baltimore City, city officials, and private and public 

organizations. Close ties have developed among these groups through the process, establishing a new 

approach to resident-management cooperation and communication. The result is Pleasant View 

Gardens, a mixed-income neighborhood of 228 attractively designed townhouses. Residents are 

included in on-site management and maintenance of the new development, promoting pride in their 

community. This has resulted in a substantial change: less crime and property damage, and a better 

place to live.

The HOPE VI program is successfully addressing the most serious problems of severely distressed 

housing. Crime has decreased dramatically at the new developments, as have vacancy rates. The 

physical revitalization of previously deteriorating buildings has given families a greater sense of pride in 

living there. By linking the developments to the community, HOPE VI has removed the stigma of public 

housing that once isolated these low-income families, and provides greater access to necessary support 

services and employment opportunities that help residents achieve self-sufficiency. But HOPE VI is just 

one important part of the larger HUD strategy to remove severely distressed developments from public 

housing.

Side bar:

Centennial Place and Pleasant View Gardens: Building Opportunities

Techwood Homes, one of the Nation’s first public housing developments, and Clark Howell Homes, 

built 4 years later in 1940, were developed to replace a slum known as Tech Flats. By the 1990s, 

Techwood/Clark Howell had become the slum they once replaced. Crime was rampant in the housing 

developments, and a typical resident family lived on less than 10 percent of the area’s median income. 

Although located near the Georgia Institute of Technology and the corporate headquarters of 

Coca-Cola, Techwood residents weren’t able to make use of the opportunities. The stigma of living in 

public housing, poor education, and a lack of knowledge of how to access these resources kept 

Techwood residents isolated and demoralized. 

When plans were made to use HOPE VI to turn Techwood/Clark Howell into a new development, 

Centennial Place, one of the decisions the housing authority, residents, and community stakeholders 

made was to build an elementary school as well. “You are never going to have a mixed-income 

neighborhood without a great school,” argued Dr. Norman Johnson, former special assistant to the 
president of Georgia Tech and a key proponent of building the school. The resulting school, Centennial 

Place Elementary School, has five multimedia, Internet-connected computers in every classroom, which 

help the kids better prepare for a future. The school does more than just provide a decent education—it 

provides the first step on a serious career path out of poverty, and provides a focal point to bring the 

neighborhood together. “I feel a sense of community here,” said one Centennial Place resident. “There 

is nowhere else in Atlanta I’d want to be right now.”

Lafayette Courts was a nightmare to its residents and the Housing Authority of Baltimore City. Gangs 

and drug dealers dominated the development. The average annual income was $6,096 and 86 percent 

of families had no earned income. As the largest and oldest of Baltimore’s four public housing family 

high-rises, Lafayette Courts was a security and maintenance disaster. Though near downtown and Johns 

Hopkins University Hospital, the public housing community was physically isolated by major 

thoroughfares and vacant warehouses and storefronts.

The revitalized HOPE VI community of Pleasant View Gardens, which replaced Lafayette Courts, is a 

different, happier story. Crime is down dramatically—total arrests at the development dropped from 

145 in 1994 to 7 in 1998. Twenty-six percent of heads of household are wage earners, and only about 

35 percent still received public assistance as of March 1999. Rosemary Atkinson, supervisor of the 

Family Support Services Program at Pleasant View, proudly states that “almost everyone is in some 

training or education program.” HOPE VI has helped turn around the community. Ms. Atkinson 

explains that the program has built the confidence of the residents, instilling “the idea that ‘I can control 

my destiny. That you can provide me with a beautiful, nice place to live—but it’s really up to me. I can 

take it as far as I want to take it.’”

End side bar

Leveraging Private Capital 

The success of partnering with the private sector to create new communities is apparent in HOPE VI: 

the ratio for leveraging private funds has risen from 31 cents in 1993 to $2 in 1999. Centennial Place 

was one of the first HOPE VI developments built through mixed financing, and the leveraging of private 

capital continues to be an integral part of the program. In Atlantic City, New Jersey, the local housing 

authority teamed with the city government and the State’s Casino Reinvestment Development Authority 

to create a holistic community revitalization plan, which proposes 600 affordable housing units, a 

community and support services complex, and links to job training and employment. At a total cost of 

$192.3 million project, the project will leverage more than $5 for every dollar of the $35 million HOPE 

VI grant the PHA received in 1999.

Leveraging of private funds for public housing was first made possible for PHAs to use, with or without 

HOPE VI, by a HUD Office of General Counsel opinion in 1994. This opinion said that private entities 

can own public housing, as long as they administer the housing in compliance with public housing rules. 

PHRA made leveraging permanent by encouraging mixed financing and providing the statutory rules. 

This initiative allows PHAs more options for providing better, affordable housing.

The importance of this tool is shown by its successes. The Housing Authority of Kansas City, Missouri 

(HAKC) used a mixed financing plan to demolish Pennway Plaza, languishing as a result of 

authority-wide difficulties, and replace it with a new lower density community more in character with the 
surrounding residential neighborhood. The new development will consist of 120 new townhouses and 

garden apartment units, using about $5 million HAKC funds to leverage an additional $7 million in 

public and city funds for the revitalization project. In Pennsylvania, the Philadelphia Housing Authority 

used public housing funds to leverage additional private investment to demolish and rebuild Southwark 

Plaza, three 26-story towers that had been a blight on the landscape for years. Two of the towers have 

been demolished, and the third renovated for 165 one- and two-bedroom apartments. The public 

housing redevelopment, now named The Courtyard Apartments at Riverview, will also include 305 new 

townhouse-style apartments, currently being built. 

Pull quote:

“With this development, we have succeeded in transforming one of the most significant blighting 

influences in South Philadelphia into a true community asset.”

—Carl Greene, Executive Director of the Philadelphia Housing Authority,on the Southwark 

 Redevelopment 

Using the Flexibility of Section 8 Vouchers

One of the critical problems of severely distressed housing is the concentration of poverty in these 

developments. Isolated from the rest of the community in units that were literally falling apart, residents 

were walled out from opportunity. With the repeal of the one-for-one replacement rule, PHAs can use 

Section 8 housing choice vouchers—which help low-income families find housing in the private 

market—as part of the replacement process. 

The advantages are twofold: One, the Section 8 voucher program provides low-income families access 

to neighborhoods with better schools and job opportunities. Two, PHAs reduce the geographic 

concentration of poor people and create less dense, more attractive communities. In any event, the use 

of vouchers will allow HUD and local communities to sustain and eventually exceed past levels of 

housing assistance, even though full replacement of obsolete (and, to a significant extent, vacant) public 

housing with “hard units” cannot occur. 

To better prepare Section 8 voucher holders in moving from public housing to the private market, many 

PHAs provide mobility counseling. The counselors, either from PHAs or nonprofit organizations, assist 

participants in making more informed decisions when choosing a new neighborhood, and provide 

services such as housing search assistance and landlord outreach and negotiations. In its HOPE VI 

program and elsewhere, HUD is demanding much more attention to the needs of families who must 

relocate. Their success in new settings is key to the transformation of public housing.

In some cases, local political gridlock or other problems would prevent the demolition and replacement 

of even the worst developments. The new laws thus require PHAs to convert such developments to 

Section 8 vouchers, generally within a 5-year period. This forced elimination of obsolete, unmanageable 

developments will allow PHAs to better use their limited funds and, most importantly, require them to 

provide vouchers or other decent housing so that Federally assisted tenants no longer live in clearly 

unacceptable living conditions. 

To increase the efforts to use vouchers as effectively as possible, the Administration’s FY 2001 budget 
proposes $50 million for a Voucher Success Fund. This Fund will provide assistance to PHAs, 

low-income families, and communities that are experiencing difficulties in utilizing Section 8 vouchers due 

to problems with market absorption or other constraints. 

A Flexible Capital Fund

HUD has run a public housing modernization program since the 1970s. By the 1990s, the program had 

become outmoded. Funds could be used only to modernize but not replace public housing, program 

rules slowed down the commitment of funds unnecessarily, and small PHAs had to apply for funding on 

a job-by-job basis. 

All of that has changed in the past few years. HUD provided PHAs with the additional flexibility to 

commit funds from multiple program years, and then shortened the required time for obligating funds. As 

a result, the pipeline of these unobligated funds shrank from $4.5 billion in September 1996 to $3.5 

billion in September 1999—a reduction of one billion dollars in 3 years. More fundamentally, HUD and 

Congress created a flexible, formula-based Capital Fund for all PHAs, which could be used for the 

development of replacement housing as well as modernization and management improvements. HUD 

then created, and with its partners expanded through the negotiated rulemaking under PHRA, a 

“replacement housing factor” in the formula to provide a substantial source of funds for this purpose. 

These new options for capital improvement funds allow PHAs the flexibility to choose the best and most 

cost-effective strategies for modernizing or replacing units. 

Changing the Face of Entire Cities 

The extent of severely distressed public housing in several cities called for a change of such magnitude 

that all of the tools discussed above would have to be used. In Chicago, Baltimore, Atlanta, New 

Orleans, Philadelphia, Detroit, and several other cities, a reconfiguring of housing assistance for the 

entire city has been necessary. 

Instead of focusing on particular developments and remedying their problems one at a time, HUD has 

been working with PHAs to create city-wide plans that simultaneously address necessary demolition, 

replacement, modernization, vouchers, and deconcentration of poverty, as well as related issues such as 

management, safety, and resident self-sufficiency. A complete transformation of the city’s public housing 

stock is the goal, providing safe, decent places to live.

In Chicago, a recent agreement between HUD, the city government, and the Chicago Housing Authority 

(CHA) includes more than $1.5 billion in capital funds over the next 10 years to demolish and replace 

or renovate 25,000 public housing units. Among the developments to be torn down over the next 5 

years are all of the remaining gallery-style high-rises of the Robert Taylor Homes, Stateway, Rockwell 

Gardens, Cabrini Green, and several other developments that are longstanding symbols of the failure of 

public housing. The CHA will decrease the density of poverty by building more manageable housing 

with more economically diverse populations, and by using Section 8 vouchers to provide low-income 

families with housing opportunities throughout the city. All together, approximately 18,000 units in 

Chicago will be demolished and replaced with additional public housing units or vouchers. At the same 
time, the management, security and supportive efforts for Chicago’s public housing will be overhauled.

Before Transformation Transformation Strategy Impact

One-for-one replacement rule; 

no other options for PHAs for 

replacement housing

Repeal of one-for-one 

replacement rule; use of Section 

8 vouchers allowed for 

replacement housing; HUD 

commits to full replacement 

either with public housing units 

or Section 8 vouchers; measures 

taken to assure successful use of 

vouchers for relocation

More flexibility in replacement 

process for PHAs, more choice 

for public housing families; 

replacement of demolished 

public housing with 

approximately 45 percent hard 

units, 55 percent vouchers

No large-scale program for 

replacing severely distressed 

housing

HOPE VI program created PHAs empowered to create 

all-encompassing plan to rebuild 

or replace communities

No private capital invested in 

developments

Mixed financing of private and 

public funds permitted under 

PHRA

Mixed income communities can 

be built; additional resources for 

public housing

Modernization funds only used 

for physical and management 

improvements; replacement and 

demolition activities not allowed

Capital Fund allows demolition 

and replacement activities; 

replacement housing factor 

provides additional funding for 

replacement

PHAs able to choose most 

cost-effective strategies for 

renovating or replacing their 

properties

Funds remain unobligated for 

long periods of time

More flexible rules and tighter 

deadlines for obligating funds

Accelerated commitment of 

capital funding
Chapter 4:

Transforming Housing Management

The Problems. The public housing stock was the most visible indicator of the system’s condition, but 

progress could be made only if management failures were addressed. Prior to the mid-1990s, public 

housing authorities in some of America’s major cities—Chicago, New Orleans, Philadelphia, Kansas 

City, Detroit, Washington, DC—had been acknowledged failures for years, unable properly to maintain 

and manage their properties. The principal victims were those cities’ public housing residents, who were 

denied anything close to the promise of safe, decent housing. Even though a small percentage of the 

3,400 PHAs nationwide, these troubled authorities had set the public image of public housing and the 

reputations of all PHAs suffered. Yet, HUD essentially did not intervene.

While the worst PHAs were easy to spot, determining the performance of the rest of PHAs was difficult 

at best. The introduction of the Public Housing Management Assessment Program (PHMAP) in the 

early 1990s was a good start and focused management attention on some important factors. The 

system, however, was based on self-certification. By 1998, about two thirds of the PHAs certified 

themselves as “high performers.” Even worse, an independent physical inspection was not part of the 

system, nor was any input from the public housing residents themselves. A PHA could be a standard or 

even a high performer, even though many of its tenants were living in grossly unacceptable conditions. 

Pull quote:

“Newark was no longer troubled according to PHMAP, but it was in trouble. Many residents were 

still living in substandard conditions.”

—Harold Lucas, former Executive Director of the Newark Housing Authority and current HUD 

Assistant Secretary for Public and Indian Housing

Those PHAs that were performing well were overregulated and received no particular incentives from 

HUD. As John Hiscox of the Macon Housing Authority in Georgia noted, “If you were a high 

performer, all you got was a piece of paper from HUD congratulating you.” What you didn’t get were 

any funding incentives or reduction in regulations—high-performing PHAs were treated just as any other 

housing authority. 

The New Approach. In the last few years, HUD has instituted a new strategy in its oversight 

capabilities for evaluating overall PHA performance and assisting PHAs improve their management 

performance. The strategy includes the following:

• The Public Housing Assessment System (PHAS), to obtain a more independent evaluation of 

the overall PHA operation, including physical housing stock, financial operations, management 

operations, and resident satisfaction;

• The Real Estate Assessment Center (REAC), to centralize the assessment functions and provide 

independent physical inspections of HUD’s 44,000 properties, as well as analysis of PHA 

financial condition and a survey of PHA resident satisfaction;

• Troubled Agency Recovery Centers (TARCs), to assist those PHAs that fail the PHAS 
evaluation and are designated as “troubled”;

• A statutory mandate to remove PHA management where a troubled PHA is unable to turn 

around failing management and escape troubled status within 2 years; 

• Flexibility needed to encourage better management, by consolidating programs, replacing 

competitions with formulas, requiring comprehensive plans from PHAs rather than case-by-case 

regulatory approvals, providing guidance for PHAs that want to use private management, and 

releasing funding at the beginning of PHAs’ fiscal years; and

• Rewards for excellent performance, by providing a financial incentive in the Capital Fund, 

providing regulatory relief, and highlighting best practices.

Improving the Evaluation of PHAs

HUD has provided technical assistance and intervened where necessary to help PHAs meet the 

management objectives of PHMAP. At the same time, as part of the 2020 Management Reform Plan, 

HUD developed a new assessment system that will focus attention on physical conditions and financial 

health, provide customer input, and provide independent verification of performance. In the Public 

Housing Reform Act, Congress stated:

“... an agency that fails on a wide-spread basis to provide acceptable basic housing conditions 

for its residents shall be designated a troubled housing authority.” 

Consistent with this requirement, the most important change in the new system is to provide for 

independent physical inspections of public housing. The new system, called the Public Housing 

Assessment System (PHAS), was run on an advisory score basis for 11⁄2 years and will be fully 

implemented as of June 30, 2000. 

To administer PHAS, HUD established a Real Estate Assessment Center (REAC) to centralize and 

standardize the assessment functions. REAC inspected more than 44,000 HUD properties in the first 

year of the program, of which 14,000 were public housing. This is the first time in history that HUD has 

inspected its portfolio.

The vast majority of all HUD’s public housing and multifamily buildings were found to be in good to 

excellent condition—more than 80 percent. The first round of advisory scores for the physical 

inspections of public housing properties ranked 87 percent of PHAs as successful or high performers. 

REAC will also conduct independent financial reviews of PHAs. For the first time, the annual financial 

statements of the Nation’s PHAs will be analyzed through REAC’s financial assessment system, and 

PHA financial statements will comply with generally accepted accounting principles (GAAP).

As part of PHAS, residents now are surveyed annually to comment on their satisfaction with the PHAs’ 

services. The results of the first-ever resident satisfaction survey of all PHAs found that 75 percent of 

the residents were satisfied or very satisfied with their dwelling units, demonstrating that the badly run 

PHAs were the exception in the nation’s public housing. “Seventy-five percent of our customers say 

they were satisfied or very satisfied with their public housing authority,” commented Secretary Cuomo. 
“The average customer approval is 72 percent. The satisfaction with public housing is higher than the 

national average.” The most recent resident satisfaction evaluation shows an even greater level of 

resident satisfaction—87 percent now say they are satisfied or very satisfied with the services and 

overall living conditions that PHAs provide.

Pull quote:

“We looked at the numbers compiled by Arthur Anderson, which does customer service surveys of all 

businesses....The satisfaction with public housing is higher than the national average. It's higher than the 

hotel industry, the banking industry, the fast food industry, the retail industry, and the utility industry. 

Public Housing Authorities beat McDonald's. Beat Pizza Hut. Beat Citibank. Beat them all.” 

—HUD Secretary Andrew Cuomo

Providing Concentrated Technical Assistance to Troubled PHAs

For the minority of poor-performing PHAs, however, HUD has developed a system to assist them in 

transforming their operations. PHAs scoring less than 60 percent in the overall PHAS assessment are 

designated as “troubled.” In addition, if PHAs score less than 60 percent in any one of the three major 

indicators—physical, management, or financial—they will be deemed troubled and identified as 

“substandard” in the failing indicator. With reliable information from the assessment process, HUD and 

PHAs are better able to determine the steps necessary to improve PHA management performance. 

To help PHAs plan and implement improvement strategies, HUD established Troubled Agency 

Recovery Centers (TARCs) in Memphis, Tennessee, and Cleveland, Ohio. The TARCs will coordinate 

reform efforts with PHA staff and provide expertise and assistance on management improvement 

strategies. The TARC staff examine each troubled PHA with an on-site evaluation or independent 

assessment and help develop the best solutions for that PHA, often providing housing management 

expertise from the private sector. By centralizing these functions at TARCs, Field Office staff can focus 

on providing assistance to other PHAs.

Troubled PHAs enter into a Memorandum of Agreement (MOA) with HUD, outlining specific recovery 

actions they will take to comprehensively address all management, physical, financial, and resident 

service deficiencies. TARCs provide technical assistance on issues that PHA management is unable to 

address on its own, including operational issues such as demolition/disposition, occupancy and 

administrative reporting procedures, resident relations, property maintenance, and financial management. 

The initial results are encouraging; of the initial 57 PHAs transferred to the TARCs in 1998, 42 have left 

troubled status. Eighty-three percent remained in the TARCs for less than a year, and the average time 

in troubled status of the recovered agencies last year declined from 1.5 years to 9 months.

Removing Bad Management

Unfortunately, some PHA management deficiencies are so pervasive that it is extremely difficult to 

rectify them in a short amount of time. Left intact, inadequate management leads to the deterioration of 

buildings and unsafe and unsanitary housing for residents. 
In the 1980s and early 1990s, a number of large PHAs were designated as troubled year after year. 

HUD initiated concentrated efforts to address chronically troubled PHAs in the mid-1990s under 

Secretary Cisneros. HUD supported the court-ordered receiverships of PHAs in Kansas City and 

Washington, DC; took over the housing authorities in Chicago, New Orleans, and San Francisco; sent 

Recovery Teams to PHAs in Detroit, Philadelphia, Atlanta, and other cities; established an advisory 

Monitoring Committee, including industry and HUD experts, in Detroit; and persuaded the Mayor and 

Comptroller of the City of Philadelphia to serve on the PHA Board. While these interventions largely 

were successful (see Chart 1), HUD had no system in place to standardize these efforts or to provide 

reasonable assurance that they will not have to be repeated. 

To end this long-standing problem, Secretary Cuomo insisted that part of any new law be a requirement 

to remove local PHA management if a PHA remains designated as troubled for 2 years. The PHRA 

contains this requirement. After 2 years, HUD will move to put the troubled authority into judicial 

receivership (or can contract for new management in the case of a small PHA). There is no room for 

excuses and no discretion for HUD to take local situations into account.

By creating a strong, cohesive strategy for approaching bad management at PHAs, HUD is striving to 

ensure the safe, decent living conditions of public housing residents and the trust of the general public 

that Federal funds are being spent effectively. 

Flexibility and Incentives for Better Management

The overwhelming majority of PHAs, however, operate satisfactorily. To enable and promote 

management excellence, HUD must provide both flexibility and incentives. 

To help all PHAs perform better, HUD worked with Congress to make it easier to obtain and use 

funds. The Capital Fund and Public Housing Drug Elimination Program (PHDEP) funds are now 

formula-driven, providing all PHAs with predictable and reliable funding. For small, non-troubled PHAs 

(with less than 250 units), PHRA generally provides full flexibility to use either Operating or Capital 

Funds for eligible activities. These PHAs now can better match funds to local needs. In addition, HUD 

is making this funding coincide with PHA fiscal years and PHA Plan submissions, so that they spend the 

money in a more timely and orderly fashion. PHAs will have one simplified grant process, and will 

receive these funds, on average, several months earlier than under the prior system. Just in the capital 

program, this change is projected to increase the purchasing power of program funds by more than $40 

million each year once the system is fully implemented. 

HUD also worked with Congress to consolidate and streamline programs to allow PHAs more 

flexibility and time to manage rather than write applications or reports. The largest example of this 

consolidation process is the Section 8 program. Prior to PHRA, there were two distinct tenant-based 

rental assistance programs: Section 8 certificates and vouchers. Together, both programs provided a 

rental subsidy for close to 1.5 million low-income families, as well as the elderly and persons with 

disabilities, to rent units in the private market. While the two programs basically provided the same type 

of assistance, they had different sets of rules and regulations. A merger of the two programs had been 

suggested since the late 1980s. HUD took administrative steps in that direction but needed 
Congressional action to complete the job. PHRA allows this merger to be completed, and includes 

other changes that allow the program to work more like private sector rentals, thus encouraging greater 

landlord participation. 

HUD also has encouraged PHAs to look to new management approaches where their management has 

been substandard. For example, private management of public housing is increasing, and is or will be 

used for thousands of units at some large PHAs (Chicago, Atlanta, Dade County in Florida, and 

others). To help PHAs wishing to consider this option, HUD published a guidebook in 1997 on private 

management of public housing. The guidebook was complimented by the General Accounting Office 

and many PHAs and private managers. HUD also has encouraged a few PHAs to try new asset 

management approaches as part of its Moving To Work Demonstration Program, to determine if there 

are innovations from which others can learn.

With the additional flexibility under PHRA comes additional responsibility for PHAs to include residents 

and their communities in the development of their policies. Therefore, PHRA requires PHAs to create a 

PHA Plan, in consultation with a new Resident Advisory Board and the local community, to detail the 

PHA’s strategies for addressing local needs. PHAs now develop both a 5-Year Plan for longer-term 

planning and an Annual Plan for activities to be undertaken in the coming year. HUD processes various 

regulatory approval requests, which otherwise would have been made individually, through the PHA 

Plan process (for example, requests to use site-based waiting lists). PHA Plans are submitted in a 

standard electronic template using a question-and-answer format. Approved PHA Plans are posted on 

the Internet, so that any community can benefit from any other community’s Plan and comparisons 

among cities can be made. PHRA also requires that each PHA now have at least one recipient of 

assistance on their Board of Commissioners. 

Pull quote:

“HUD has made great strides in...changing public perceptions of the Department and its 

programs.”

—Richard Y. Nelson, Jr., Executive Director, National Association of Housing and Redevelopment 

Officials

To recognize those PHAs that are using creativity and innovation to provide the best service to their 

residents, HUD has created an award initiative called Best Practices. The awards recognize a wide 

range of outstanding work by PHAs to expand affordable housing, create jobs, strengthen local 

economies, fight housing discrimination, reduce homelessness, increase homeownership, and accomplish 

other goals to improve life in America’s communities. Begun in 1997, the Best Practices program has 

highlighted hundreds of PHAs whose creative programs provide templates from which other PHAs can 

learn and adopt in their own communities.

But recognition is one thing; streamlined regulation and additional funding are rewards for excellent 

performance that can provide time and resources to help successful PHAs excel further. PHAs 

designated as high performers under PHAS will be relieved of some specific HUD regulatory 
requirements and will be eligible for bonus points on competitive grants. In addition, excellent 

performance can be counted on to mean more money. PHRA contains, and HUD has implemented with 

the agreement of its partners in the “negotiated rulemaking” process, a performance reward in the 

Capital Fund for high performers. Their share of the Capital Fund will be increased, initially by 3 percent 

and in later years by 5 percent.

Before Transformation Transformation Strategy Impact

PHMAP evaluation system did 

not assess physical condition of 

PHA properties; relied on 

self-certification; no input from 

residents

Created new evaluation system, 

Public Housing Assessment 

System (PHAS), which includes 

independent assessment of 

physical stock, financial 

operations, management, and 

resident satisfaction

HUD and PHA obtain clearer 

picture of PHA performance 

status; PHAs no longer can be 

standard performers without 

providing decent living 

conditions

Ad hoc system failed to provide 

standardized assistance to 

troubled PHAs 

Established Troubled Agency 

Recovery Centers (TARCs) to 

provide information and 

technical assistance to troubled 

PHAs

More cohesive strategy for 

turning around troubled PHAs; 

Field Offices can concentrate on 

adequately performing PHAs

Troubled PHAs stayed troubled 

for long periods of time without 

consequences

Initial city-by-city intervention; 

HUD sought and implemented 

statutory mandate to remove 

PHA management if they remain 

troubled for 2 years

Badly managed PHAs that do 

not improve will be put into 

receivership, providing relief for 

tenants and increasing public 

trust

Competitive, duplicative 

programs; two separate Section 

8 programs with different rules 

and regulations

Capital Fund and PHDEP funds 

are now formula-driven; 

consolidated Section 8 programs 

into one 

Predictable, reliable funding for 

capital improvements and drug 

elimination; programs easier to 

manage

No comprehensive plan required 

of all PHAs; various individual 

regulatory approvals required in 

a piecemeal fashion

PHRA requires PHAs to 

annually submit a comprehensive 

PHA Plan; HUD tied formula 

grants to Plan approval

Stronger, more effective 

management of public housing; 

more resident and community 

input; consolidated regulatory 

process; funds available earlier 

No incentives for high 

performers

Deregulation and funding 

incentives for high-performing 

PHAs

Incentives to manage better
Chart 1

From Troubled to Standard and High Performers: 

Comparison of 7 Large PHAs 1996-1999

0

20

40

60

80

100

Atlanta

Chicago

Detroit

New Orleans

Philadelphia

Pittsburgh

Washington

DC

7 of the Largest PHAs

PHMAP Scores

1996

1999

From Troubled to Standard and High Performers: 

Comparison of 7 Large PHAs 1996-1999

0

2 0

4 0

6 0

8 0

100

7 of the Largest PHAs

PHMAP Scores

1996

1999
Chapter 5:

Transforming Safety and Security in Public and 

Assisted Housing

The Problems. Feeling safe and secure is a basic need for all families, whether they live in public 

housing or a prosperous suburb. Without proper security, elderly residents have difficulty maintaining 

independent living, parents feel unsafe leaving their children while they go to work, and children can be 

traumatized or learn to accept crime and violence as normal. In the end, PHAs will also lose their 

investments in building modernization and management improvements if crime and drugs are allowed to 

fester.

Pull quote:

“I have to be home when my sons get out of school because the shooting starts around 4:00 p.m. 

everyday.”

—A Chicago Housing Authority resident who indicated that she was unable to work because she 

could not leave her children unprotected in the development

Public housing residents want and deserve safety and security as much as other citizens. Until the past 

few years, however, many public housing authorities were not implementing systematic, strong tenant 

screening and eviction policies to keep criminals out of public housing and hold families responsible for 

their actions. Hundreds of public housing authorities have received HUD Public Housing Drug 

Elimination Program (PHDEP) grants since 1989 to combat crime and drugs, but were hampered by 

the year-to year nature of the competitive funding. No national efforts focused on preventing gun 

violence in public housing despite its prevalence.

The New Approach. If public housing is truly to offer its residents a fair chance at a better life, it must 

provide safe shelter. “As a result of the President’s zero tolerance of crime in public housing,” said 

Secretary Cuomo, “we’re making dramatic progress in reclaiming crime-infested neighborhoods around 

the Nation.” HUD’s strategy to promote safer public and assisted housing communities includes the 

following: 

• Enhancing admissions and occupancy tools under the One Strike and You’re Out Policy;

• Offering more stable resources to PHAs with a new formula allocation system for the successful 

PHDEP grant program, which can be used to leverage other funds; 

• Calling for the full involvement of police and the entire community; and

• Funding gun buybacks, requesting funding for local initiatives to prevent firearm-related 

violence, and negotiating with gun manufacturers for safer guns that are less likely to fall into the 

wrong hands. 

A First Line of Defense: One Strike and You’re Out

A strong admissions and occupancy policy is a first line of defense for housing authorities to ensure 

decent and safe housing and reinforce resident responsibility. Yet, when President Clinton announced 
the “One Strike and You’re Out” policy in his 1996 State of the Union address, only a handful of PHAs 

had implemented individual screening and eviction policies as strong as One Strike. HUD quickly issued 

One Strike guidelines to help PHAs implement screening and address difficult eviction issues. 

Pull quote:

“I challenge local housing authorities and tenant associations: Criminal gang members and drug dealers 

are destroying the lives of decent tenants. From now on, the rule for residents who commit crime and 

peddle drugs should be one strike and you’re out.” 

—President Bill Clinton, 1996 State of the Union Address

By May 1997, 75 percent of 1,818 housing authorities responding to a survey had One Strike policies 

in place. Housing authorities, residents, police, judges, and community partners from coast to coast have 

embraced One Strike. Referring to a 1-year, 34-percent drop in crime at the Housing Authority of the 

City of Fort Pierce, Florida, police officer Jimmy Aikens credits the housing authority’s One Strike 

Policy. “That’s the key to all of this. Without that rule, we couldn’t have accomplished this. It was kind 

of tough at first, but people started to see we’re not their enemies. It’s very simple. All a person has to 

do to stay in their house is abide by the rules.”

Through cooperation between HUD and Congress, the Housing Opportunity Program Extension Act of 

1996 clarified PHAs’ authority to hold residents responsible for the criminal activities of family members 

and guests. Acknowledging that crime and drugs are not solely public housing problems, the Extension 

Act requires all public housing and Section 8 leases to provide that a pattern of alcohol or illegal drug 

use by residents and their guests is grounds for eviction if it threatens the health, safety, or right to 

peaceful enjoyment of the premises by other residents. The law also allows PHAs to access local and 

Federal criminal records for public housing applicants or tenants. 

PHAs gained further authority for One Strike under PHRA, which also expands many One Strike 

provisions to safeguard Section 8 tenant-based and project-based assistance programs. In response to 

the concerns of owners regarding criminal activity among Section 8 voucher applicants, PHAs were 

given ability to screen participants in the voucher program. PHAs also can exclude owners that do not 

undertake responsible screening and eviction policies. Owners of federally assisted housing 

developments gained the ability to have PHAs obtain and process applicant criminal record checks for 

them. 

To adopt and implement One Strike policies effectively, housing authorities are enlisting the support of 

resident organizations, police departments, and the courts. In Greensboro, North Carolina, the 

Greensboro Police Department (GPD) is a critical partner in implementing the housing authority’s One 

Strike policy. GPD provides the housing authority with police reports for all housing applicants age 16 

or older, as well as a daily list of residents arrested for drug-related and other offenses. Officers 

working at Police Neighborhood Resource Centers conduct orientation sessions to ensure that all new 

residents are aware of rights and responsibilities for neighborhood safety. As a result of housing and 

police collaboration, the overall crime rate in five target developments declined 57 percent between 

1990 and 1997. In contrast, the city’s crime rate climbed 14 percent during the same period.
While One Strike offers housing authorities policies to back up their “zero tolerance” for drugs and 

drug-related crime, PHAs are also developing proactive strategies to help families adhere to these 

policies. For example, the Public Housing Agency of St. Paul, Minnesota, partners with the Amherst H. 

Wilder Foundation to prevent evictions and illegal behavior among residents. The foundation’s social 

adjustment program for southeast Asian public housing families, “Living in America,” helps immigrant 

parents work with their children, who may be participating in gangs and other criminal activities that 

could cause eviction for the entire family. 

Side bar:

Building Safe Communities With One Strike: Upland, California

“One Strike can make or break public housing,” said Sammie Szabo, Executive Director of the small 

Housing Authority of the City of Upland, California. “It lowers our maintenance and modernization 

costs and improved our community.” In the past, a small group of residents at the housing authority’s 

100-unit family development were dealing drugs, vandalizing the property, and intimidating law-abiding 

residents from cooperating with the police. 

The PHA has tightened its admissions procedures with the One Strike policy. In addition, the HA has 

trained every member of its staff to be on the lookout out for problems that may indicate lease 

violations. And Upland’s One Strike efforts have paid off. Crime rates for the 1940s-era family 

development are now lower than for the city as a whole. When evictions are necessary, the HA has the 

full support of police and local judges. 

Upland also uses One Strike for its Section 8 program. Using a list of Section 8 addresses, police notify 

the housing authority when Section 8 recipients are arrested on drug-related charges. “If Section 8 gets 

a reputation for harboring criminals, we can’t get support for it from landlords or the community, and 

then families can’t benefit from the program,” 

stated Szabo.

End Sidebar

Designing Local Solutions Through PHDEP

The majority of criminal acts in public housing communities, however, are not committed by the people 

living there. In Macon, Georgia, for example, 77 percent of the 1997 arrests in public housing were 

non-residents. Due to many public housing developments being disproportionately located in the 

poorest neighborhoods, PHAs needed a strategy to fight crime in their communities and empower 

vulnerable populations such as the elderly and disabled to take an active role in neighborhood safety. 

The Public Housing Drug Elimination Program (PHDEP) has provided a key funding stream since 1989 

for hundreds of public housing agencies and residents to leverage additional community resources that 

help stem the tide of crime and drugs in their communities. Many PHAs rely on the resource and service 

contributions of community partners such as social service agencies, nonprofit organizations, and faith 

communities. PHAs are using their flexible PHDEP resources to leverage community policing program 

funds that put more police in public housing neighborhoods, implementing Crime Prevention Through 
Environmental Design physical improvements to deter crime, training resident patrols to provide extra 

eyes and ears for police, and developing prevention and intervention programs such as St. Paul’s 

“Living in America.”

Successful anti-crime strategies also rely on the input and participation of residents. For example, in 

King County, Washington, a group of seven elderly community leaders formed the Park Lake 

Cambodian Elders’ Council in 1997 to act as a liaison between the police, housing authority, and the 

largely Asian immigrant population of Park Lake Homes. Their activities have improved communication 

and interactions between the police and residents, increased community involvement with safety issues, 

and decreased crime and cultural misunderstandings.

To provide PHAs with a more timely, predictable, and equitable source of funding, HUD and Congress 

agreed that PHDEP funds could be allocated by formula rather than through a competitive grant. The 

new allocation reduces HUD staff involvement in application processing and also reaches more 

communities—formula funding is serving approximately 20 percent more housing agencies than under 

the competitive program. PHAs who perform satisfactorily can renew their grants annually for up to 4 

years, allowing them the stability to plan more effectively for the future and build more long-term 

partnerships. 

PHDEP’s results are promising. Between 1994 and 1997, the crime rate declined for two-thirds of 

PHAs receiving PHDEP funds, according to a recent analysis of detailed crime-trend data of 55 housing 

authorities. Twenty-eight of those housing authorities saw their crime rate decline faster than in the 

surrounding community. Crime declined at four PHAs despite crime rate increases within the 

surrounding municipality. 

Side bar:

Community Policing at Work: Milwaukee, Wisconsin

Two community policing techniques are making life safer for the residents of the Housing Authority of 

the City of Milwaukee (HACM) in Wisconsin: the housing authority’s PHDEP-supported Public Safety 

Intervention Team (I-Team) and a program encouraging police officers to live and volunteer in public 

housing communities. The I-Team maintains a presence around the clock, conducting foot and vehicle 

patrols; mediating disputes between residents; monitoring quality of life problems such as graffiti and 

public drinking; and acting as liaisons with resident organizations and helping tenants start block watch 

groups. Another important role for I-Team members is to refer residents to medical, mental health, or 

social services. The I-Team’s rapid response to low-priority police calls often prevents the escalation of 

potentially serious situations and allows police to respond to more serious criminal problems. HACM 

feels strongly that its I-Team is an effective strategy for reducing criminal activity.

Since 1994, HACM has encouraged police officers to live in public housing by offering reduced rents of 

$25 in exchange for community service—an initiative similar to the Federal Housing Administration’s 

Officer Next Door homeownership program. Live-in officers have made a difference in the lives of 

residents by offering support to families who have been victimized by crime, resolving disputes among 
neighbors, taking senior citizens grocery shopping, running Boy Scout troops, setting up job fairs, 

mentoring youth, and coaching team sports. The live-in officers also assist other police by providing 

observations at monthly intelligence exchange meetings with the housing authority’s Public Safety staff. 

End side bar

Community Involvement and Violence Prevention

As illustrated by some of these examples, progress will not occur without the full involvement of 

resident, police, and other key community organizations. Residents must provide information and 

leadership, and take responsibility. The police must provide information to PHAs, testify in eviction 

proceedings, and provide all needed services. Community organizations must promote constructive 

alternatives to crime and violence. This is all happening in many communities across the Nation.

Pull quote:

“Crime and drugs are hurting a lot of people in public housing. I know there’s no magic solution to 

ending this problem, but the work we’re doing in partnership with community 

residents...is making a big difference and helping improve people’s quality of life.” 

—New York City police officer working in public housing developments in Harlem

PHRA requires that PHDEP recipients develop their Annual Plans in consultation with police, that any 

grant activities be undertaken in coordination with law enforcement, and that any funds expended for 

police result in extraordinary services. Community service providers are doing their part, and more 

residents are taking responsibility for safety in their neighborhoods.

To break the pattern of youth violence in public housing, HUD is also supporting several local demonstration 

initiatives, among them a Peacemaker Corps and Violence-Free Zones Program. The Peacemaker Corps is a youth 

violence prevention and tolerance education initiative developed and supported by HUD, the Simon Youth

Foundation, and Friends of the United Nations for youth leaders in 10 cities across the country. HUD also supports 

the National Center for Neighborhood Enterprise’s (NCNE) grassroots technical assistance, intervention, and training 

services to housing authorities and residents in five cities to develop Violence-Free Zones. In FY 1999, 1,270 youth 

participated in NCNE’s individualized prevention and intervention programs and 200 gained employment and 

apprenticeship opportunities with their local housing authorities.

“To survive, public housing residents rely on a spirit and faith unknown to many of us,” says 

Washington, DC, Housing Authority Receiver David Gilmore. Throughout the Nation—where problems 

of crime, violence, and fear have appeared nearly beyond help—that faith and spirit are creating positive 

change. In the past 3 years, incidents of violent crime in Washington, DC’s public housing have 

decreased by as much as 50 percent. With the help of the housing authority and community-based 

organizations, dozens of former gang members put aside their weapons and turned their energies to 

training and employment opportunities, a win-win situation for themselves, their families, and their 

community. 

Reducing Gun-Related Violence

Gun-related crime is a problem in many public housing and other low-income communities. An average 

of one gun murder takes place every day at 66 of the 100 largest housing authorities. 
Communities across the Nation—including Chicago, Louisville, and Washington, DC—have conducted 

gun buybacks to curtail the hazards of accidental shootings, suicides, and domestic violence. To 

promote this strategy in public housing communities, HUD has authorized public housing authorities to 

reprogram a portion of their FY 1999 PHDEP funds for partnerships with local police to conduct gun 

buyback initiatives. Communities gain from gun reduction efforts when young people and adults feel 

safer going to and from school or work, participation in community safety and crime control efforts 

grows, and police presence and trust in officers increases. Thus far, 85 communities have received 

funding under the initiative.

President Clinton’s FY 2001 budget proposes a $30 million Community Gun Safety and Violence 

Reduction Initiative to reduce gun injury and death. The initiative would fund computerized tracking of 

gun violence to help law enforcement agencies better protect the public, education and outreach 

programs to promote responsible safety measures by gun owners, and innovative community activities 

to reduce both gun crimes and accidents. “As guns grow more powerful and more plentiful, we need to 

empower communities to find more intelligent ways to protect us from their terrible destructive force,” 

said Secretary Cuomo. 

Perhaps the most tragic aspect of gun violence is the extent to which it need not happen, if safer guns 

were produced and guns were kept out of the wrong hands. The Nation will continue to see tragedies 

such as the shooting of one 6-year-old by another in Michigan in March 2000 until these problems are 

addressed. With that in mind, Secretary Cuomo, along with Treasury Secretary Lawrence Summers, 

led negotiations with gun manufacturers despite criticisms that such negotiations would be fruitless or 

were not part of HUD’s mission.

These efforts yielded an agreement with one of the largest gun manufacturers in the United States, Smith & Wesson. 

Some of the key provisions of the agreement include new design standards to make guns safer, such as locking 

devices and smart guns (which use technology to limit a gun’s use to its proper owner), and new sales and 

distribution controls such as disallowing gun sales at gun shows that do not conduct background checks and 

restrictions on multiple handgun sales to deter illegal gun trafficking. 

To encourage other manufacturers to adopt the agreement’s standards, HUD will require PHAs and 

urge cities to purchase guns from manufacturers that adopt these standards. Thus far, 411 local 

governments have agreed to do so. The impact of these actions will extend far beyond public housing, 

but public housing communities clearly will be substantial beneficiaries.

Side bar:

Key Provisions of Smith & Wesson Agreement

1) New Design Standards:

• Locking Devices—required for handguns and pistols.

• Smart Guns—2 percent of annual firearms revenues to development of authorized user 

technology.

• Large Capacity Magazines—new firearms will not be able to accept ammunition magazines with 

a capacity of over 10 rounds.

• Safety Testing and Standards—all firearms will be tested by ATF, and within 1 year, all pistols 
will have chamber load indicators to show a pistol is loaded.

2) New Sales and Distribution Controls:

• Dealers or distributors who sell disproportionate numbers of guns used in crimes within 3 years 

of sale can face termination or suspension by manufacturer.

• Dealers cannot sell at gun shows that do not conduct background checks.

• Ballistic fingerprints will be provided for all new firearms to ATF/FBI Nation Integrated 

Ballistics Identification Network within 6 months.

• Gun purchasers will be required to demonstrate that they can safely handle and store arms.

• Dealers must implement a security plan to prevent gun theft.

• Dealers cannot sell large capacity ammunition magazines or semiautomatic assault weapons.

• Dealers must agree to new limits on multiple handgun sales.

End side bar

Before Transformation Transformation Strategy Impact

Few PHAs using strong 

screening and eviction policies

President announces “One 

Strike and You’re Out”; 

Congress passes supportive 

laws; HUD issues guidelines

PHAs working with residents, 

police, and courts to implement 

fair and comprehensive 

occupancy policies, including 

strong screening and eviction 

elements

PHDEP funds provided 

competitively, year-to-year

PHDEP funds allocated by 

formula

PHAs have stable resource to 

fight crime and leverage 

resources for the long-term; 

more PHAs receive funding

Community involvement was 

sporadic

PHDEP requires coordination 

with police and other local 

anti-crime efforts

Communities are coming 

together to fight crime; specific 

initiatives in which PHAs partner 

with others make a difference

No cohesive strategy to address 

gun violence and safety

Gun buyback funds available; 

President requests Community 

Gun Safety and Violence 

Reduction Initiative; 

Administration negotiates with 

gun manufacturers

Potential to reduce number of 

guns available, increase 

effectiveness of anti-crime 

efforts, and decrease needless 

accidents and deaths; agreement 

reached with Smith & Wesson 

to increase gun safety and 

decrease criminals’ access to 

guns
Chapter 6:

Transforming Resident Self-Sufficiency and Reducing 

Isolation

The Problems. Public housing has long been a world apart. Public housing developments were often 

concentrated in desperately poor urban areas, which left poor families isolated from the rest of the 

community. Jobs were located elsewhere, and inadequate public transportation and physical barriers—

sometimes purposely there to isolate the poor or racial minorities—kept public housing residents from 

connecting with employment opportunities, educational facilities, and support services. 

A majority of African Americans living in public housing are living in poverty-concentrated areas. Racial 

and economic discrimination, along with the stigma of living in public housing, all worked together to 

keep public housing families shut away from the chance for prosperity and ever more reliant on the 

welfare system. 

Because of this isolation and the problems at the sites left behind, working families who had the 

resources to move out of public housing did so, and those with less skills and resources found 

themselves trapped in public housing. PHAs recognized that working families would bring 

critical stability to public housing, and that more had to be done to help these families succeed.

Yet, PHAs traditionally saw themselves as housing providers. Some of those that attempted to assist 

their residents with self-sufficiency activities did so with approaches that were disconnected from their 

local welfare agencies and supportive service providers.

The promotion of self-sufficiency programs became all the more compelling in 1996, when President 

Clinton signed comprehensive welfare reform legislation that ended “welfare as we know it.” This has 

led to major changes for welfare recipients, including a new 5-year lifetime limit on receiving benefits, a 

requirement to work within 2 years of receiving aid, additional assistance to the States for 

self-sufficiency programs, and greater discretion for the States in how they run their welfare programs. 

Many imposed even stricter time limits on benefits and work requirements. 

Like other welfare recipients, those in public housing (about half of all families with children in assisted 

housing receive some of their earnings from welfare benefits) would have to succeed or face a drop in 

income. The welfare reform legislation had financial ramifications for PHAs as well: decreases in

residents’ welfare benefits could mean decreases in income-based rents. 

The New Approach. HUD and Congress developed new strategies to coordinate with welfare reform 

initiatives, encourage self-sufficiency, and combat economic and racial isolation:

• Requiring PHAs to collaborate with local welfare agencies and service providers to help residents 

make the transition from welfare to work; 

• Allowing PHAs to adopt rent policies that provide incentives for public and assisted housing families 
to find and maintain employment;

• Developing self-sufficiency initiatives that link welfare to housing and encourage leveraging of 

community resources, such as the Section 8 Welfare-to-Work Tenant-Based Assistance Program 

and the Resident Opportunities and Self Sufficiency (ROSS) program; 

• Building upon existing programs, such as the Family Self- Sufficiency (FSS) program and the 

 Neighborhood Networks Initiative—first used in project- based assisted housing, to assist residents 

with training and employment and to help them “bridge the digital divide”; 

• Implementing admissions policies to help eliminate concentrations of poverty that keep residents 

isolated from employment and supportive services, and to assure that PHAs’ new flexibility to 

adopt admissions policies would not result in further isolation of the very poor; and

• Requiring PHAs to assure that they are taking every reasonable step to affirmatively further fair 

housing.

Partnering with Welfare Reform Efforts

With welfare reform allowing States more leeway in setting local welfare rules, it has become even more 

imperative that public housing self-sufficiency efforts integrate with local efforts. PHRA requires PHAs 

to make their best efforts to enter into cooperation agreements with local welfare agencies and other 

local support organizations. These agreements will facilitate exchanges of information necessary for 

PHAs to carry out PHRA, target resources, and thus expand the choices of self-sufficiency programs 

available to public housing residents. 

Pull quote:

“State welfare reform is tied to the housing authority self-sufficiency program, and welfare workers are 

working with housing authority residents and staff to coordinate the jobs, education, child care, health 

benefits, and transportation—all the barriers to one’s success in getting off welfare.”

—Terry Feveryear, Salt Lake City Housing Authority

Through these cooperation agreements, PHAs should be able to access the substantial funding States 

have on hand—several billion dollars nationally—to help families become self-sufficient. HUD, in 

collaboration with the U.S. Department of Health and Human Services, has issued a model agreement 

that PHAs and welfare agencies can use for these purposes.

PHAs are attempting to draw upon, rather than duplicate, local supportive services. As one means of 

accomplishing this, PHAs can work with the U.S. Department of Labor’s new “one-stop” system, 

created under the Workforce Investment Act of 1998. The one-stop system comprises numerous local 

partners who provide core employment and training services at single neighborhood locations. For 

example, the Washington, DC, Housing Authority already has satellite one-stop centers at several family 

developments.

Side bar:

Providence Housing Authority Teams with Local Welfare Agency on Resident Self-Sufficiency

Since the passage of Rhode Island’s welfare reform legislation in 1997, the Providence Housing 

Authority (PrHA) has focused its efforts on ensuring that the housing authority programs support 
residents subject to the State and Federal welfare reform. To provide a central location for public 

housing families to participate in self-sufficiency activities, PrHA renovated the Employment Support 

Center, which is located near several public housing developments. The center includes a computer 

learning center that includes 12 fully networked stations, classrooms, and administrative offices, and at 

which PrHA operates its Family Self-Sufficiency (FSS) program. 

PrHA also has been working with State and Federal agencies to supplement their self-sufficiency 

efforts, including entering into a cooperative agreement with the Rhode Island Department of Human 

Services (DHS) to collaborate on implementing and monitoring activities.

DHS will consider PrHA self-sufficiency activities as acceptable TANF activities under the welfare 

reform legislation, and DHS will provide PrHA with TANF information to help monitor self-sufficiency 

participants’ progress. In addition, DHS provided a $50,000 grant in 1998 for Rhode Island housing 

authorities to provide unpaid work experience placements for TANF recipients in public housing 

operations throughout the state. PrHA assigned 25 residents, 11 of whom found paid employment 

afterwards. 

In addition, PrHA won a competitive U.S. Department of Labor welfare-to-work grant of $3 million to 

supplement their training and supportive service activities. The housing authority will, over the 3-year 

contract, identify and serve a minimum of 100 TANF residents with two or more significant barriers to 

employment.

End side bar

Encouraging Work with New Rent Policies

If residents are to make the most of the employment opportunities, incentives must be in place to 

encourage and reward work. For years, the law penalized residents for working. If a resident’s earnings 

went up so did the rent, by 30 cents for every new dollar of income earned. If earnings rose enough, the 

rent could exceed the market value of the apartment.

New public housing rent structures under PHRA and prior appropriations legislation address this 

situation. Flat rents, set at market value, will prevent working families from paying a rent higher than 

market value when their income increases. PHAs may adopt additional rent incentives that reward 

work. 

PHRA also includes a mandatory earned income disregard. The earned income disregard prohibits 

public housing rent increases as a result of increased earned income for 12 months from when 

employment begins. Following that, over the second 12-month period, half of the increased earned 

income will be disregarded for rent calculation purposes.

These and other new rent policies reward work. They also will result in retention in public housing of 

some urgently needed role models who have attained a level of self-sufficiency.
Housing Programs to Support Moving from Welfare to Work 

About two-thirds of new jobs now are being created in the suburbs, but three out of four welfare 

recipients live in central cities or in rural areas. To alleviate this problem, HUD developed the Section 8 

Welfare-to-Work Tenant-Based Assistance Program that permits PHAs to use tenant-based vouchers 

for a specific purpose—to allow eligible families to find affordable housing closer to employment 

opportunities and support services. 

PHAs must coordinate the Section 8 Welfare-to-Work program with the local welfare agencies and 

other welfare-to-work programs, such as local and State entities administering TANF and the 

Department of Transportation’s Job Access program. PHAs additionally must provide assistance in 

locating adequate housing and educating landlords about the Section 8 program. The Housing Authority 

of the Cherokee Nation (HACN) in Oklahoma, having been awarded more than $3 million in 1999 for 

the Section 8 Welfare-to-Work program, will assist 638 families to find housing near employment and 

support services within an expansive14-county area. With an unemployment rate for American Indians 

in Oklahoma at 12.4 percent—almost twice as high as for the rest of the State—the service is clearly 

needed. To work with such a large area, HACN needs to work with a variety of local and Federal 

partners to develop a plan sensitive to the employment, educational, and training needs of the residents. 

This will significantly aid welfare-dependent Native American families on their journey to self-sufficiency. 

President Clinton demonstrated his commitment to the Section 8 Welfare-to-Work initiative by securing 

50,000 vouchers in the FY 1999 budget. The Administration is seeking an additional 32,000 as part of 

an overall request for 120,000 additional vouchers in the FY 2001 budget. “These housing vouchers 

are an integral part of our efforts to reform welfare, reward work, and provide affordable housing for 

low-income families,” the President stated. “They will help families move closer to a job, reduce a long 

commute, or secure more stable housing that will help them get or keep a job.”

Pull quote:

“The people who were on welfare know what a tragedy the welfare system has been. I’ve been all 

across this country. I’ve never once had someone say to me, please help me get a welfare check, never 

once. Help me get a job, help me get training, help me get day care, but never once, help me get a 

welfare check.”

—HUD Secretary Andrew Cuomo

Another new initiative offering self-sufficiency opportunities for public and assisted housing residents is 

the Resident Opportunities and Self Sufficiency (ROSS) program, a consolidation of three previous 

self-sufficiency programs for families and the elderly. ROSS grantees must augment their HUD 

resources with in-kind services or cash from other community organizations. To put resources directly 

into the hands of people who know their needs best, ROSS grants are available directly to resident 

organizations and certain types of nonprofit entities, in addition to PHAs. ROSS can provide the seed 

money to help PHAs attract larger service commitments for their residents.

Successful programs such as the Family Self-Sufficiency (FSS) program, which HUD started before 

welfare reform legislation was passed, are now integrating with local welfare-to-work initiatives. Under 
FSS, PHAs coordinate with local agencies to secure services such as case management, childcare, 

transportation, education, job training and employment counseling, and homeownership training. In 

return, Section 8 and public housing residents enter into a 

contract with the PHA, specifying the family’s responsibilities and goals, including employment of the 

head of household and no family member receiving welfare within 5 years. Upon completing all contract 

requirements, participants can receive funds from escrow savings accounts set up for them by the PHA. 

This program has been particularly important for Section 8 voucher recipients, and is used by more than 

40,000 of those families. In some instances, PHAs also have structured similar programs for public 

housing residents.

FSS is proving to be a program that PHAs can use to work with the local community on innovative 

self-sufficiency approaches, as shown by the example of Ithaca, New York. Under the guidance of the 

Ithaca Housing Authority (IHA), FSS participants got together with community and business leaders, 

human service agencies, and local banks and credit unions to form the Three Pillar Foundation (3PF) in 

1996. 3PF provides finance training, peer support, and a rotating loan fund to better prepare FSS 

participants for supporting themselves. Through IHA’s innovative approach to their FSS program, more 

than a quarter of the 3PF participants have left public assistance.

Side bar:

Innovative FSS Program Shows Success in Ithaca

The Ithaca Housing Authority (IHA) found that participants in their FSS program were facing 

unforeseen obstacles to achieving self-sufficiency. “One factor holding back FSS participants,” said 

Marcy Hudson, Coordinator of the Department of Community Services at IHA, “is an inability to 

manage their day-to-day finances.” 

IHA encouraged the formation of the Three Pillar Foundation (3PF) to assist families in learning to 

better manage their finances, ensuring that FSS participants will be able to maintain self-sufficiency after 

leaving the program.

“I have started working my way out of debt through strategy and planning learned in the classes and 

support group,” said Cindy Christensen, a FSS graduate who was one of the founding members of 

3PF. “I feel stronger and have more control over my life. I can make better decisions.” 

Ms. Christensen, a mother of two, had been on welfare for approximately 15 years by the time she 

enrolled in the FSS program. She participated in the 3PF classes to better control her finances, and 

through FSS was hired part-time with the County Department of Social Services. This led eventually to 

a full-time job with the County. She completed her 5-year FSS contract, and with her escrow account 

funds she hopes to buy a house in the near future.

End sidebar

Bridging the Digital Divide

It is clear that to succeed in the new century, our children must be computer-literate and technologically 

proficient. HUD has sponsored several initiatives to “bridge the digital divide.” Public housing is well 
suited for such activities, because PHAs own the buildings and can take the necessary actions to make 

hardware available and training accessible to residents.

The HOPE VI program, discussed in Chapter 3, contains a component for providing funds for 

community and supportive service (CSS) activities to revitalize public housing communities and 

encourage residents toward self-sufficiency. To bring technology training to low-income families, the FY 

2000 NOFA for HOPE VI requires PHAs winning revitalization grants to adapt the Neighborhood 

Networks Initiative to their HOPE VI projects. This initiative involves establishing Neighborhood 

Network Centers, which provide on-site assess to computers and training resources designed to help 

hundreds of residents improve computer technology skills, which in turn increase job and education 

opportunities. Currently, of the 124 HOPE VI family sites, 30 have fully functioning computer 

laboratories. Eighty-one additional sites plan to include such laboratories in their revitalization plans. In 

addition, $1 million of the Capital Fund technical assistance funds will be committed to provide 

assistance to non-HOPE VI PHAs to establish Neighborhood Network Centers at their sites.

The Campus of Learners (COL) initiative also helps low-income families bridge the digital divide. COL 

attempts to transform public housing into “campuses” where residents can receive education 

opportunities and train in new technology and telecommunications. These campuses, set up at 25 public 

housing sites throughout the country, are created through collaborations between PHAs and local 

educational organizations, private businesses, and nonprofit organizations. 

Side bar:

Seattle uses HOPE VI funds to create Campus of Learners 

At Seattle’s New Holly development, formerly known as Holly Park, half the resident population 

received a majority of their income from welfare, and only 28 percent had a high school education. 

When the Seattle Housing Authority won a HOPE VI grant to revitalize the development, providing 

residents with the necessary education and technology training to become self-sufficient was one of the 

goals. 

This led to the creation of a Campus of Learners (COL) at the New Holly development. This COL is a 

multiagency collaboration that utilizes a variety of housing authority program funds to set up a 

much-needed education program for the residents. Among the courses offered are computer training 

classes, financial management, and English as Second Language courses with a focus on building the 

vocabulary for specific jobs. An on-site library offers computers for word processing and Internet 

access to residents, and the Seattle Public Schools provided expertise to upgrade donated computers 

for an on-site computer lab serving adults and children. COL helps bring the necessary training and 

equipment to public housing families that provides them with the skills to compete for higher paying jobs.

End sidebar

Deconcentration 

All of these programs, initiatives, and reforms still will not be enough unless public housing residents are 

removed from the isolation that bars them from access to opportunity. This occurred not only because 

of discriminatory or short-sighted site selection and building policies, but also because the law’s 

“Federal preferences” dictated the admission largely of the poorest families with the most difficult 
problems. These concentrated areas of poverty fostered chronic socioeconomic problems, such as 

crime, drug use, teenage pregnancy, and long-term unemployment.

Congress recognized this problem, repealed the Federal preferences, and allowed PHAs more flexibility 

to admit higher income households to public housing. In part, the theory is that working families provide 

a link to the working world for very poor families. That strategy, however, displaces the poorest families 

from public housing opportunities. Secretary Cuomo insisted upon measures in PHRA to ensure that (1) 

the poorest families have substantial continuing access to public housing, (2) such families receive a 

higher proportion of available vouchers, which can be used anywhere and thus do not raise the same 

concerns as public housing regarding concentrations of poverty, and (3) the policy of admitting higher 

income families will be used in developments where it is most needed and will not just exclude the 

poorest applicants from certain developments. PHRA requires PHAs to design an admissions policy to 

bring higher income tenants into lower income developments and lower income tenants into higher 

income developments. HUD is publishing regulations to assure that these admissions policies and other 

PHA efforts will address deconcentration by income. 

Pull quote:

“Segregation is an ugly part of our past that has no place in the 21st century. If we are ever to become 

the One America envisioned by President Clinton and achieve Martin Luther King’s dream of justice 

and equality, we need to come together as neighbors and not remain apart.”

—HUD Secretary Andrew Cuomo 

Unfortunately, contributing to the isolation and to discrimination against public housing communities is 

their concentration of minority families. About 82 percent of families with children in public housing are 

headed by minorities, compared to 68 percent in the Section 8 certificate and voucher programs. 

PHRA places the obligation to affirmatively further fair housing directly on PHAs for the first time. While 

addressing affirmatively the problem of racial concentrations is not easy in some settings, HUD 

regulations will require that PHAs take every reasonable step to do so. This is a necessary part of 

fulfilling the President and Vice President’s vision for One America, in which the government will lead 

the way by word and deed.
Before Transformation Transformation Strategy Impact

Little coordination between 

PHAs and local service 

organizations; confusion 

regarding PHAs’ roles 

PHAs must make their best 

efforts to enter into cooperation 

agreements with local welfare 

agencies to target services 

PHAs are able to facilitate more 

and better services for families to 

assist with self-sufficiency; PHAs 

may obtain access for their 

families to unspent welfare 

(TANF) supportive service 

funds 

Rent policies were a disincentive 

for residents to find employment

New rent policies friendlier to 

working families

More residents able to work and 

save money as rents do not 

increase with earnings; more 

working families will be in public 

housing 

PHAs inconsistent in providing 

self-sufficiency programs

Introduction of Section 8 

Welfare-to-Work program; 

promotion of other 

self-sufficiency programs, 

including programs to help 

residents bridge the digital divide

Families provided with more 

options to increase their 

self-sufficiency 

 Admissions policies and Federal 

preferences contributed to 

poverty concentration; 

discriminatory siting and other 

actions, including past 

segregation, contributed to 

concentrations of minorities 

especially in public housing

New admissions policies to 

deconcentrate poverty but still 

protect lowest income families; 

Federal preferences repealed; 

PHAs required to affirmatively 

further fair housing

PHAs will pursue 

deconcentration of poverty with 

appropriate safeguards to 

protect poorest families, and 

must take every reasonable step 

to address racial concentrations 
Chapter 7:

Transforming Native American Communities

“The descendants of the first Americans should not be locked out of the American Dream of a home, a 

job, and a chance to build a better tomorrow for their children,” Secretary Cuomo stated at “Shared 

Visions II: the 1999 Native American Homeownership and Economic Development Summit,” hosted 

by the Oglala Sioux Tribe in Pine Ridge, South Dakota. But many American Indians and Alaska 

Natives living on tribal lands have been locked out of the dream. Home to nearly half of the 2 million 

Native Americans in the United States, tribal lands face some of the severest shortages of housing and 

economic opportunities in the country. The high percentage of violent crime and drug and alcohol abuse 

on tribal lands creates additional difficulties for Native Americans. 

For years, HUD’s Indian housing programs were bogged down in rules based on largely urban public 

housing initiatives. These rules did not address the unique conditions found in Indian Country. No 

long-term planning was required by HUD, and few communities were planning beyond the next year of 

funding. Funding was directed at Indian Housing Authorities, which were neither accountable to their 

tribal governments nor adequately monitored by HUD. Without confidence in the Indian housing system, 

Congress did not fund Indian housing initiatives sufficiently, despite the obvious need. 

A 1996 HUD-sponsored Urban Institute study paints a disturbing picture of American Indian and 

Alaska Native demographic and housing characteristics. Unemployment is a particularly severe problem 

in tribal areas, with private businesses scarce in many communities. The unemployment rate in tribal 

areas is more than three times as high as in the rest of the population, and much higher on some 

reservations—at Pine Ridge, the unemployment rate is a staggering 75 percent. With such lack of 

opportunities, it is not surprising that three times as many Native American families live in poverty as the 

non-Native population.

It is also not surprising that housing conditions for Native Americans lag behind those elsewhere in the 

country. More than 40 percent of the housing on tribal lands is considered substandard or 

overcrowded—six times the rate for the rest of the United States. For 183 tribal areas that were large 

(Native population of 400 or more) and near an urban center, one-third of households had one or more 

housing problems. For the other 325 mostly remote tribal areas, 62 percent had one or more housing 

problems; more than half had overcrowding and facilities problems. The supply of assisted housing 

clearly is not keeping up with the demand—Native Americans spent an average of 41 months waiting 

for assisted housing in 1998, twice the time spent waiting in 1996. 

Furthermore, Native communities must overcome many unique challenges to provide affordable housing 

for their people: geographic and economic isolation; limited human resources to staff local housing 

programs; inhospitable climates ranging from desert to tundra; and a lack of infrastructure such as paved 

roads, utilities, and sewers. In addition, on most reservations, large portions of tribal lands are held in 

trust for tribes by the Bureau of Indian Affairs. Tribes can allocate parcels of trust land for housing or 

businesses, but cannot sell it. Trust status, along with other complicated land use and ownership 

systems, has deterred the development of private housing on Native lands.
The severe housing needs in Indian Country are the result of decades of problems and conditions that 

will not be fixed easily or quickly. Although the public housing program was established in 1937, Indian 

tribes were not eligible for funding until 1961. By this time, critical demand for Indian housing had 

escalated, putting HUD behind from the beginning. The accomplishment of funding tens of thousands of 

rental and homeownership units—home to about one-quarter of all Native households living on 

reservations, Alaska Native Villages, and similarly designated lands—remains overshadowed by the 

tremendous, growing need for decent and affordable housing in tribal areas. One-size-fits-all 

approaches, often modeled on public housing programs for urban areas, did not adequately address the 

diversity of housing needs faced by communities from the Arctic Circle to the Everglades.

Table 1: Tribal Populations in a National Context

Demographic Characteristics Tribal Areas Non-Native Population

% Pop. Over Age 25 Not 

Graduated from High School

34 25

Unemployment Rate 20 6

% Households Living in Poverty 36 12

Source: U.S. Department of Housing and Urban Development, Office of Policy Development and 

Research, Assessment of American Indian Housing Needs and Programs: Final Report, May 1996

NAHASDA: A New Relationship with Tribes

The key aspect of the new approach to Indian housing is embodied by the Native American Housing 

Assistance and Self-Determination Act of 1996 (NAHASDA). HUD worked with Congress to pass 

NAHASDA to set up a more forward-looking Indian housing framework that promoted flexibility and 

accountability. This legislation was an important affirmation of tribal self-governance because it provided 

funding directly to Indian tribes and Alaska Native Villages for housing, self-sufficiency, and safety 

activities. It also increased tribal accountability by requiring Annual and 5-Year Indian Housing Plans, 

which will be reviewed by HUD.

Since 1996, HUD’s housing programs for Native Americans and Alaskan Natives have undergone a 

radical transformation to help Native communities address their housing and economic needs more 

comprehensively. A strong internal effort within HUD and among Indian tribes to deregulate and create 

flexibility in Indian housing programs, as well as an important national movement toward tribal 

self-determination, were the primary forces behind the reforms of NAHASDA. “Tribes have been 

released from the overly regulated patterns of the past and now have the flexibility to carefully assess 

their own needs, plan for the future of their own tribe and its members, and then make it happen,” said 

Jacqueline Johnson, Deputy Assistant Secretary for Native American Programs. “With that freedom 

comes tremendous responsibility. The success of the program now lies with the tribe and its housing 

entity.”

NAHASDA respects tribal sovereignty by directly funding tribes or their Tribally Designated Housing 

Entity (TDHE) and adds to recent legislative actions affirming the right to self-governance long sought by 

tribes. NAHASDA comports with tribal self-determination and complements this concept by minimizing 
Federal involvement in tribal decision-making.

As an acknowledgment of the government-to-government status of tribes, NAHASDA requires HUD 

to obtain input from tribal governments when negotiating rules for the new program. Forty-eight tribal 

members and HUD representatives met for more than a year in negotiated rulemaking sessions to shape 

the regulations implementing NAHASDA. 

A New Housing Delivery System

NAHASDA’s block grant funding is allocated by a formula, rather than on a competitive basis. The 

new funding system has cast a wider net, reaching a larger number of Native communities and allowing 

for a more comprehensive range of activities. Prior to NAHASDA, approximately 190 Indian Housing 

Authorities were participating in HUD’s Mutual Help homeownership and rental housing programs. By 

FY 1999, 527 tribes were receiving NAHASDA funds independently, or as members of inter-tribal 

partnerships. “We’ve never had the money to build a community before,” said the housing director of 

one tribe. “I had a vision of what I’d like this housing program to do, but until now, there was nothing I 

could do about it.” 

Based on the unique local needs and priorities spelled out in their Indian Housing Plans approved by 

HUD, tribes may implement a much broader variety of strategies to address housing conditions than 

under HUD’s previous programs. Tribes can develop new rental and homeownership units, or housing 

for special uses such as sheltering victims of domestic violence or providing supportive services for the 

elderly. Communities must also continue operating and modernizing existing units developed prior to 

NAHASDA. 

To increase homeownership, NAHASDA increases residential land leases to 50-year terms, providing 

a more stable environment for mortgage lending. New authority under NAHASDA Title VI expands 

opportunities for private housing finance—a factor long absent in Indian housing—through Federal 

guarantees of notes or other obligations issued by tribes to fund affordable Indian housing. Title VI 

allows eligible tribes to pledge up to five times their future Indian Housing Block grant funds to 

collaterize loans. This complements the Section 184 program (Section 184 of the Housing and 

Community Development Act of 1992), which provides Federal insurance for individual home 

mortgages. In addition, President Clinton is requesting funding to create an Indian Homeownership 

Entity to act as a catalyst for providing homeownership and related services on reservations and other

Native lands. 

Addressing Safety and Economic Well-Being

Indian communities, already hampered by generally weak economic bases, have been hit hard by the 

time limits and work requirements of welfare reform. NAHASDA now allows tribes and TDHEs to 

address self-sufficiency needs that are critical to improving the quality of life for Indian housing residents. 

The Kodiak Island Housing Authority in Alaska has created a Building Maintenance Apprenticeship 

Training Program with resources from HUD and the U.S. Department of Labor. The program offers 

apprentices nearly 300 hours of correspondence instruction from the Alaska Vocational Technical 

Center in Seward and 4,000 hours of hands-on experience in housing maintenance. 
Side bar:

Apache Dawn: A New Housing Era

On December 2, 1999, at the White Mountain Apache Indian Reservation in Arizona, tribal members 

conducted a groundbreaking ceremony for a 250-unit single family housing development to be owned 

by the White Mountain Apache Housing Authority. The new development, Apache Dawn, will provide 

long-term rentals with an option to own in 10 years. The tribe, its tribal council, and the housing 

authority share a common belief that Apache Dawn is the beginning of a more diversified housing 

market for the community.

Apache Dawn helps stretch NAHASDA dollars to meet the tribe’s housing needs through strong 

partnerships and a mix of public and private financing. “I have a waiting list with 1,000 people on it,” 

said Victor Velasquez, director of the housing authority. “It doesn’t take a math genius to figure out that 

if you just depend on [NAHASDA] money, you’re never going to get your people housed.” The tribe is 

the project sponsor, the housing authority will own the new housing, the Bureau of Indian Affairs is 

trustee of the land and leaseholds, and the Indian Health Service designed and installed safe water and 

sanitary systems on several sites. 

For the first time in history, Indian housing developments are blending tribally issued tax-exempt bonds, 

HUD Section 184 loans, and NAHASDA funds. In this project, Banc One Mortgage Corporation will 

lend the housing authority funds for each house constructed, using a HUD-guaranteed Section 184 

mortgage loan for each house.

End sidebar

The Quinault Tribe of Washington uses its NAHASDA funds to support a wide range of self-sufficiency 

activities: summer school programs for youth, tuition assistance and materials for residents enrolled in the 

tribe’s education programs, rehabilitation of a housing unit for use as a daycare center, and employment 

of a specialist to assess the needs of families entering tribal housing programs. Other tribes provide 

services such as housing counseling, GED classes, vocational training, life skills counseling, and capacity 

building for resident councils. 

As in public housing, NAHASDA recognizes that crime prevention and safety activities are also key to 

the long-term success of housing delivery and healthy communities. Though many reservations and 

Alaska Native Villages are remote and rural, they have not escaped the crime problems typically 

thought to plague only urban areas. According to a 1999 Bureau of Justice Statistics report, American 

Indians experienced 124 violent crimes per 1,000 population among persons 12 and older—twice the 

rate for the Nation as a whole. With HUD assistance, tribal communities are fighting back with law 

enforcement partnerships, creating police substations in housing communities, implementing physical 

improvements to deter crime, supporting tenant patrols, and offering drug treatment. They are also 

engaging in prevention activities such as culture camps, drug education, computer learning centers, and 

youth programs such as Boys & Girls Clubs. 
Side bar:

Tyonek Boys & Girls Club

To help support the Boys & Girls Club in the tiny village of Tyonek, the Cook Inlet Housing Authority in 

south-central Alaska is committed to annually providing a portion of its NAHASDA funds to support 

the Club's operation. Every youth in the rural village of 150 Athabascan Indians is a member of the 

Boys & Girls Club, which provides much needed youth development opportunities such as education, 

physical fitness, cultural awareness, and leadership activities. 

In particular, the Club supports a number of cultural programs that promote pride and self-esteem, such 

as Native Youth Olympics training, beading, a talking circle, and a drum group that proudly performs 

for Tyonek visitors and in other villages. An annual highlight for Club members is the traditional fishing 

subsistence camp with other area villages, where youth learn the salmon fishing techniques of their 

ancestors. Through the Club, youth also volunteer as reading and math tutors at the local school and 

helpers for elders in the village.

The Club has made a difference in the community. According to Emil McCord, the Club's first director, 

“There was a feeling of hope when the Club opened. The kids had something that really belonged to 

them.”

End sidebar

Presidential Attention

President Clinton’s trip to Pine Ridge in July 1999 with Secretary Cuomo—the first official Presidential 

visit to a reservation since 1927—built on the momentum of NAHASDA and helped bring national 

attention to the extreme housing and economic conditions faced by many Native communities. 

Addressing the Pine Ridge community, President Clinton stated, “When we are on the verge of a new 

century and a new millennium where people are celebrating the miracles of technology...and there are 

still reservations with few phones and no banks, when still three or four families are forced to share two 

simple rooms, where communities where Native Americans live have deadly disease and infant mortality 

rates at many times the national rate, when these things still persist, we cannot rest until we do better.” 

In demonstrating the continued support of the administration and HUD for Indian tribes, President 

Clinton announced several new initiatives at the historic summit, including $1.6 million in new rural 

housing and economic development grants to benefit reservations in South Dakota and a partnership 

with private lenders to issue new mortgages to create 1,000 additional Indian homeowners on 

reservations around the Nation over the next 3 years. This is just another step on the long road to better 

housing and more opportunities for Native Americans.

HUD Monitoring and Technical Assistance

Effective HUD monitoring of Indian Housing Plans and direct technical assistance to tribes are critical to 

NAHASDA’s success. To monitor and assist tribes in implementing their Indian Housing Plans, HUD 

staff are reviewing Annual Performance Reports and visiting at least 20 percent of grantees each year. 

HUD is also conducting ongoing quality control reviews of HUD-guaranteed loans. HUD has provided 

technical assistance directly, through trainings such as the annual Crime Prevention and Drug Elimination 

Conference and the Native American Homeownership and Economic Development Summit, and site 
visits to tribes. HUD also offers on-line training modules through its Native American programs Internet 

site, Codetalk, as well as printed technical assistance materials on a variety of topics. The remote 

location of some reservations make access to on-line training particularly important. 
Congressional Confidence

With new Congressional confidence in the Indian housing system as restructured by NAHASDA, HUD 

has worked with Congress to increase funding for Indian Housing Block Grants. The appropriation 

increased 24 percent between FY 1997 and 1998, the first year after NAHASDA’s enactment, and 

then again by 3 percent in 1999. President Clinton’s FY 2001 request for Indian housing provides for 

an additional 5 percent increase from FY 2000 levels (see Chart 1). “For too long, reservations have 

been islands of poverty in a sea of American prosperity. We will not allow this to continue,” said 

Secretary Cuomo. The future of the first Americans, from California to Maine, points the way to the 

future of all Americans: building stronger, more vibrant communities.

Before Transformation Transformation Strategy Impact

HUD funding directed to Indian 

Housing Authorities instead of 

tribes

Tribes become direct recipients 

through Indian Housing Block 

Grant; tribes negotiate program 

rules with HUD

Tribal sovereignty status 

respected and tribal 

responsibility enhanced 

Indian housing constrained by 

cumbersome, inappropriate 

public housing rules 

Flexible NAHASDA rules 

based on experience of Indian 

Country

Greater ability to design 

appropriate activities that meet 

needs of reservations and 

villages

Local planning only 

year-to-year; inadequate 

Federal monitoring and technical 

assistance

5-Year and Annual Plans 

approved by HUD are required 

for tribes to receive funding; 

monitoring and technical 

assistance improved

Tribes are developing long-term 

plans for housing and economic 

development; HUD is 

monitoring regularly and 

providing more effective 

technical assistance, including 

on-line assistance

Inadequate funding for Indian 

housing

Funding increased significantly 

after NAHASDA’s enactment 

and new rules encourage private 

investment in Indian housing

Federal resources are more 

adequate; tribes are in a better 

position to leverage private 

financing
Chart 1

Indian Housing Block Grant 

Budget Authority: FY 1997-2001 

$0

$100

$200

$300

$400

$500

$600

$700

1997 1998 1999 2000 2001

request

Fiscal Year

Amount in millions 

Indian Housing Block Grant 

Budget Authority: FY 1997-2001 

$0

$100

$200

$300

$400

$500

$600

$700

1997 1998 1999 2000 2001

request

Fiscal Year

Amount in millions 
Chapter 8:

Vision for the Future

The transformation of the public housing system is well under way. The worst housing in the country is 

being replaced with mixed-income communities or vouchers. Public housing management is being 

overhauled, with zero tolerance for failure. Comprehensive security efforts are working. PHAs are 

teaming up with welfare reform initiatives to provide their residents new opportunities and allow them to 

take advantage of our strong economy. NAHASDA's flexibility, and the new role of the tribes, have 

reinvigorated Native American housing programs. 

The infrastructure to allow continued progress also is largely in place. HUD management reforms, such 

as the specialized processing centers, are fully operational. The new Public Housing Assessment 

System is kicking in. HUD has completed regulations under the Public Housing Reform Act, converted 

the CIAP and Drug Elimination programs from competitions to formulas, and received the majority of 

PHAs' first 5-Year and Annual Plans in an electronic format. 

Congress’ renewed confidence in HUD and the programs also contributed to appropriation of 

desperately needed incremental vouchers after a four-year gap—50,000 in fiscal 1999 and 60,000 for 

fiscal 2000 (see Chart 1).

These steps are putting us in a position to pursue our vision for the public housing program. The basics 

of that vision for the future include:

• The nightmare of failed and frightening family public housing is over; there are no more Cabrini 

Greens, Desires, or Columbus Homes;

• All demolished public housing is fully replaced, either with townhouse units that blend into the 

community or vouchers;

• Public housing is being upgraded efficiently and effectively with the capital funds available;

• Both public/private partnerships and new appropriations allow more families with severe 

housing needs to be served;

• All occupied public housing is decent, safe, and sanitary;

• The management of public housing and vouchers has an outstanding reputation, and there are no 

more “troubled” PHAs;

• Waste, fraud, and abuse are eliminated in the programs;

• Public housing is as safe as or safer than other neighborhoods in the community, and the 

voucher program clearly contributes to neighborhood stability;

• The public housing and voucher programs’ linkages and incentives offer families substantial opportunities 

to become self-sufficient, and virtually all families take advantage of those opportunities;

• Public housing and vouchers are fully deconcentrated and integrated into communities by 

income and race, and thus families are no longer segregated and isolated from the rest of these 

communities;

• Under the new leadership of Indian tribes, Native American housing programs are successfully 

and dramatically improving Native Americans’ housing situation; and
• HUD is a partner that enables performing housing authorities and tribes to succeed with a 

minimum of interference, and an enforcer that does not tolerate substandard performance.

We have made the adjustments in our programs to pursue this vision; however, more work is ahead, 

and HUD, Congress, PHAs, tribes, residents, and local leaders and organizations all must work 

together if the potential of the reforms is to be fully realized. The promise has been made, the strategy 

has been adopted, the framework is in place, and the actions are occurring. Working together, we will 

fulfill the promise.
Chart 1

New Section 8 Vouchers 

Appropriations, 1994-2000

0

10

20

30

40

50

60

70

 1994 1995 1996 1997 1998 1999 2000

Fiscal Year

Thousands of Units

New Section 8 Vouchers 

Appropriations, 1994-2000

0

10

20

30

40

50

60

70

 1994 1995 1996 1997 1998 1999 2000

Fiscal Year

Thousands of Units