Public Housing: HUD's Oversight of HOPE VI Sites Needs to Be More Consistent
Published: 2003-05-30T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Congress established the HOPE VI program to revitalize severely distressed public housing. In fiscal years 1993 to 2001, the Department of Housing and Urban Development (HUD) awarded approximately $4.5 billion in HOPE VI revitalization grants. The Ranking Minority Member, Subcommittee on Housing and Transportation, Senate Committee on Banking, Housing, and Urban\ Affairs, asked GAO to examine HUD's process for assessing grant applications, the status of work at sites for which grants have been awarded, and HUD's oversight of HOPE VI grants.
section_title: What GAO Found
paragraphs: HUD has generally used the same core rating factors to assess HOPE VI grant applications--need, capacity, quality, and leveraging. However, HUD has, over time, increased the requirements that housing authorities must meet for each of these factors in order to make better selection decisions. Although authorities' historical program performance had been considered under various rating factors, it was not until fiscal year 2002 that past performance became a threshold requirement that an applicant must meet to be eligible for a grant. The status of work at HOPE VI sites varies greatly, with construction complete at 15 of the 165 sites. As of December 31, 2002, grantees had completed 27 percent of the total planned units and spent approximately $2.1 of the $4.5 billion in HOPE VI revitalization funds awarded. However, the majority of grantees have not met their grant agreement deadlines. For example, the time allowed for construction has expired for 42 grants, yet grantees completed construction within the deadline on only 3 grants. Several factors affect the status of work at HOPE VI sites, including the development approach used and changes made to revitalization plans. HUD's oversight of HOPE VI grants has been inconsistent, due partly to staffing limitations and confusion about the role of field offices. Both headquarters and field office staff are responsible for overseeing HOPE VI grants. However, HUD field offices have not systematically performed required annual reviews. Additionally, despite grantees' inability to meet key deadlines, HUD has no formal enforcement policies. Instead, the agency determines if action should be taken against a grantee on a case-by-case basis. Although HUD has declared 9 grants to be in default and issued warnings regarding 3 grants, it has not done so for other grants in a similar situation.

section_title: Letter
paragraphs: For decades, some of the nation’s public housing sites have exemplified  urban decay. In 1992, the National Commission on Severely Distressed  Public Housing reported that approximately 86,000, or 6 percent, of the  nation’s public housing units were severely distressed—characterized by  physical deterioration and uninhabitable living conditions, high levels of  poverty, inadequate and fragmented services, institutional abandonment,  and location in neighborhoods often as blighted as the sites themselves. In  an effort to address these long-standing problems in a new way, Congress,  in October 1992, established the Urban Revitalization Demonstration  Program, commonly known as HOPE VI, which is administered by the  Department of Housing and Urban Development (HUD). The program  provides grants to public housing authorities to rehabilitate or rebuild  severely distressed public housing and improve the lives of public housing  residents through supportive services, such as child care and job training.  In fiscal years 1993 to 2001, HUD awarded approximately $4.5 billion in  HOPE VI revitalization grants to 98 public housing authorities (grantees)  for 165 sites.
While each HOPE VI project is unique, all projects generally involve (1) the  preparation of a comprehensive revitalization plan; (2) relocation of the  original residents; (3) demolition of the distressed public housing units; (4)  construction of new public housing units, often intermingled with other  types of housing, or rehabilitation of existing public housing units; (5)  “reoccupancy,” or the movement of some original residents to completed  units; and (6) occupancy, or the filling of all of the completed housing units.  To select housing authorities for participation in HOPE VI, HUD publishes  an annual notice of funding availability (NOFA) setting forth the program’s  current requirements and available funds. Housing authorities then prepare  applications from which HUD selects those that best satisfy the NOFA  requirements and signs grant agreements that serve as contracts with the  housing authorities. Grant agreements specify the activities and  documentation, such as revitalization plans, that grantees must complete  as well as key deadlines that they must meet. Grantees that HUD  determines are in default of grant agreement terms are subject to various  sanctions, including having their remaining HOPE VI funds rescinded.
You requested that we comprehensively review the HOPE VI program.  Because of the scope of the request, we agreed with your office to provide  the information in a series of reports. The first report, issued in November  2002, discussed the financing of HOPE VI sites.  This second report  focuses on HUD’s management of the HOPE VI program. Specifically, as  agreed with your office, this report examines (1) HUD’s process for  assessing HOPE VI revitalization grant applications and selecting grantees,  (2) the status of work at sites for which grants have been awarded and  compliance with grant agreement deadlines, (3) HUD’s oversight of HOPE  VI grants, and (4) the amount of program funds that HUD has budgeted for  technical assistance and the types of technical assistance it has provided.
To address these objectives, we first obtained and analyzed information  from HUD’s HOPE VI reporting system on the 165 revitalization grants  awarded through fiscal year 2001, including production data and key  milestones. We assessed the reliability of these data by reviewing  information about the system and performing electronic testing to detect  obvious errors in completeness and reasonableness. We determined that  the data were sufficiently reliable for the purposes of this report. Second,  we visited the 18 housing authorities that were awarded revitalization  grants in fiscal year 1996. We selected 1996 because it was the first year  that grants were subject to a standard construction deadline, and the  deadline had passed for the majority of the grants by the time we began our  site visits. In addition, we interviewed the HUD headquarters officials  responsible for administering the program.
We performed our work from November 2001 to April 2003 in accordance  with generally accepted government auditing standards. Appendix I  provides additional details on our scope and methodology.
subsections: section_title: Background
paragraphs: Under the Housing Act of 1937, as amended, Congress created the federal  public housing program to help communities provide housing for low- income families. Congress annually appropriates funds for the program,  and HUD allocates these funds to the approximately 3,400 public housing  authorities nationwide. Housing authorities are typically created under  state law, and a locally appointed board of commissioners approves their  decisions. HUD and the housing authorities have an annual contributions  contract—a written contract under which HUD agrees to make payments  to the housing authority and the housing authority agrees to administer the  housing program in accordance with HUD regulations and requirements. In  addition to competitively awarded HOPE VI grants, HUD provides housing  authorities with several types of assistance, including operating subsidies  to cover the difference between rent payments and operating expenses and  capital funds to improve the physical condition of properties and upgrade  the management and operation of existing public housing sites.
HOPE VI is one of the few active federal housing production programs. By  providing funds for a combination of capital improvements and community  and supportive services, HOPE VI seeks to (1) improve the living  environment for public housing residents of severely distressed public  housing through the demolition, rehabilitation, reconfiguration, or  replacement of obsolete public housing; (2) revitalize sites on which such  public housing is located and contribute to the improvement of the  surrounding neighborhood; (3) provide housing that will avoid or decrease  the concentration of very low-income families; and (4) build sustainable communities.  With the 165 grants awarded through fiscal year 2001,  grantees planned, as of December 31, 2002, to demolish 78,265 public  housing units and construct or rehabilitate 85,327 units, including 44,757  public housing units.
HUD’s requirements for HOPE VI revitalization grants are laid out in each  fiscal year’s NOFA and grant agreement.  NOFAs announce the availability  of funds and contain application requirements, threshold requirements,  rating factors, and the application selection process.  Grant agreements,  which change each fiscal year, are executed between each grantee and  HUD and specify the activities, key deadlines, and documentation that  grantees must meet or complete. For example, the fiscal year 2001 grant  agreement specified that the grantee must complete construction within 54  months of the date on which the grant agreement was executed.
From fiscal years 1993 to 2001, HUD received 609 revitalization grant  applications.  HUD uses the same basic procedures each year to screen,  review, and rank grant applications. When grant applications are received,  they are screened to determine whether they meet the eligibility and  threshold requirements in the NOFA. Next, reviewers rate the grant  applications on the basis of the rating factors described in the NOFA and  rank them in score order. Generally, a group of applications representing  twice the amount of funds available is sent to a final review panel, which  may include the Deputy Assistant Secretary for Public Housing  Investments, the Assistant Secretary for Public and Indian Housing, and  other senior HUD staff. The final review panel assigns a final score and  recommends for selection the most highly rated competitive applications,  subject to the amount of available funding. For a list of the 165 grants  awarded through fiscal year 2001, see appendix II.
Public housing authorities with revitalization grants can use a variety of  other public and private funds to develop their HOPE VI sites. Public  funding can come from federal, state, and local sources. For example,  housing authorities can use funds raised through federal low-income  housing tax credits. Under this program, states are authorized to allocate  federal tax credits as an incentive to the private sector to develop rental  housing for low-income households.  Private sources can include  mortgage financing and financial or in-kind contributions from nonprofit  organizations. Developing public housing with a combination of public and  private financing sources is known as mixed-finance development.
HUD’s Office of Public Housing Investments, housed within the Office of  Public and Indian Housing, manages the HOPE VI program. Grant  managers within the Office of Public Housing Investments are primarily  responsible for overseeing HOPE VI grants. They approve changes to the  revitalization plan and coordinate the review of the community and  supportive services plan that each grantee submits.  In addition, grant  managers track the status of grants by analyzing data on the following key  activities:  relocation of original residents, demolition of distressed units,  new construction or rehabilitation, reoccupancy by some original  residents, and occupancy of completed units. Public and Indian Housing  staff located in HUD field offices also play a role in overseeing HOPE VI  grants, including coordinating and reviewing construction inspections.
section_title: HUD Uses Core Factors to Assess Applications but Has Not Consistently Followed Its Selection Procedures
paragraphs: According to our analysis, HUD has generally used a core of four rating  factors as the basis for assessing HOPE VI revitalization grant applications.  Although HUD’s fundamental factors have remained the same, the  requirements that housing authorities must fulfill under each factor have  become more stringent from year to year. Additionally, until the most  recent NOFA, HUD had not eliminated applicants on the basis of poor  performance on previously awarded grants. HUD’s Inspector General also  has reported that HUD has not consistently followed its selection  procedures that are established for each annual assessment.
subsections: section_title: Although HUD Generally Uses the Same Core Factors to Assess Applications, Applicants Must Now Meet More Stringent Requirements
paragraphs: HUD has generally evaluated applications for HOPE VI revitalization grants  on the basis of four core rating factors. Although other factors have been  added and removed over time and the names of the factors have varied  somewhat throughout the years, four key concepts—need, capacity,  quality, and leveraging—have been used consistently to assess  applications.  As defined in the most recent NOFA, need should indicate  the severity of distress at the targeted public housing site. Information  provided under capacity is used to assess the experience of the applicant’s  team in planning, implementing, and managing comparable physical  development, financing, leveraging, and partnership activities.  HUD  determines quality by evaluating the overall quality of the plan, the  likelihood of success, project readiness, and design. Finally, information  provided under leveraging is used to assess the extent to which funds will  be leveraged for physical development and community and supportive  services, what other revitalization activities have been carried out in the  targeted area in anticipation of the HOPE VI grant, and if there are physical  development activities under way that will enhance the new HOPE VI site.  For more information on the most recent NOFA, see appendix III.
Although the core factors have remained the same, the information that  housing authorities must submit and the requirements that they must fulfill  under each factor have generally increased over time (see fig. 1). For  example, although housing authorities have been required to provide basic  statistics, such as crime and vacancy rates, to document severe distress or  need since fiscal year 1993, housing authorities also were required,  beginning in fiscal year 1999, to submit a certification from an independent  engineer that the public housing targeted for revitalization met HUD  criteria for severe distress. Since fiscal year 1993, applicants also were  required to provide information on their own capacity to implement their  plans. But, beginning in fiscal year 1997, housing authorities also were  required to document the ability of their proposed partners to develop,  construct, and manage the proposed activities. To receive the maximum  amount of points for the quality rating factor in fiscal year 1996, applicants  were required to submit several pieces of information, including budgets, a  certification that the proposed activities could not be completed without  HOPE VI funding, and a description of how the housing authority planned  to maintain the proposed programs and policies over the long term. By  fiscal year 2002, housing authorities additionally had to submit  documentation that the revitalization plan would result in outside  investment in the surrounding community and evidence that, if funded,  work could commence immediately. To indicate that they could leverage  funds, housing authorities were encouraged to submit evidence of outreach  and support for the project in fiscal year 1995. However, by fiscal year 2000,  applicants had to show that they would obtain at least $4 in leveraged funds  for every HOPE VI dollar requested for development in order to receive the  maximum amount of points under leveraging.
According to HOPE VI officials, HUD has increased the types and quantity  of information required each year in an effort to obtain information that  makes it easier to rate and rank applications and allows the agency to make  improved selection decisions. In addition, the agency has made some  changes in an effort to make the application process easier for housing  authorities. Finally, HOPE VI officials noted that the program’s annual  appropriation legislation can change the requirements each year and that  the NOFAs must be revised to reflect these changes.
Although the changes have given HUD better information upon which to  base selection decisions, some of the housing authority and public housing  industry group officials that we interviewed expressed concerns about the  changes in the application requirements that housing authorities must  meet. According to these officials, such changes make it difficult for  housing authorities to anticipate what HUD intends to emphasize and to  make detailed revitalization plans until each NOFA is published. The  officials also noted that it is challenging for previously denied applicants to  determine how to revise their applications. Housing authorities and  interest groups report that it generally costs $75,000 to $250,000 to prepare  a HOPE VI grant application. The fiscal year 2002 NOFA was of particular  concern to some of the housing authority officials and industry group  representatives that we interviewed. According to these officials, the NOFA  required housing authorities to conduct impractical up-front planning and  to obtain commitments at an unrealistically early date. For example, an  applicant had to certify that it had procured a developer for the first phase  of construction by the application due date. Officials we interviewed stated  that this requirement would be costly to the applicant, who at that point  would have no guarantee of funding.
section_title: Until Fiscal Year 2002, HUD Did Not Declare Applicants Ineligible because of Past Performance
paragraphs: Although HUD’s annual selection process had considered the performance  of applicants who had received HOPE VI grants in prior years, it was not  until the fiscal year 2002 NOFA that past program performance became a  mandatory threshold requirement for an applicant to be eligible for a HOPE  VI revitalization grant. Incorporating past performance—specifically, the  demonstrated ability to efficiently manage projects—can help direct HOPE  VI funds to where they can most effectively produce results.
Starting in fiscal year 1995, an applicant’s score for capacity was partially  based on the extent to which any previously awarded HOPE VI grants had  progressed. In fiscal years 1993, 1996, and 1997, applicants were also  required, under the capacity factor, to submit Public Housing Management  Assessment Program scores, which were a measure of a housing  authority’s performance in all major areas of management operations. HUD  stopped requiring this information in fiscal year 1998, after the Public  Housing Management Assessment Program was discontinued.  The fiscal  year 2002 NOFA was the first that stated that an applicant with one or more  existing HOPE VI revitalization grants would be disqualified if one or more  of those grants failed to meet certain performance requirements as  required in the applicable HOPE VI revitalization grant agreement.
During the years that past performance was a rating factor—rather than a  threshold eligibility requirement—multiple HOPE VI revitalization grants  were awarded to housing authorities that had made little progress in  constructing new units under previous grants. For example, the Chicago  Housing Authority was awarded grants in fiscal years 1998, 2000, and 2001,  although construction, as of December 31, 2002, was 21 percent complete  at the Cabrini-Green site (fiscal year 1994 grant); 26 percent complete at  the Robert Taylor B site (fiscal year 1996 grant); 27 percent complete at the  ABLA Brooks Extension site (fiscal year 1996 grant); and 0 percent  complete at the Henry Horner site (fiscal year 1996 grant). Similarly, the  Detroit Housing Commission has received three grants and constructed 25  percent of the units planned.
In a June 2002 report to Congress, HUD acknowledged that it has done  little to rectify the problems among low performers and has often awarded  poorly performing housing authorities multiple grants despite low or no  unit production, inadequate oversight, and capacity issues.  HUD also  acknowledged that awarding multiple grants to poor performers further  strains the institutional and staff capacity of these public housing  authorities, intensifying existing problems. Finally, HUD noted that it had  initially awarded grants to large housing authorities for large-scale  developments, without fully recognizing that most of the grantees included  at-risk and troubled public housing authorities.  Some of these large  housing authorities were awarded multiple revitalization grants, and the  burden of managing the grants resulted in slow planning, redevelopment,  and construction.
According to HUD, it elevated the importance of past performance in the  fiscal year 2002 NOFA because it wanted to emphasize accountability and  readiness. It determined that applicants that already had one or more  HOPE VI revitalization grants should demonstrate the capability to manage  them before HUD awarded them more funds. It also concluded that poor  performers should not be rewarded with additional funding when other  housing authorities possibly could implement the grants better.
section_title: HUD Has Not Consistently Followed Its Grant Selection Procedures
paragraphs: In annual reviews of the HOPE VI grant selection process, HUD’s Inspector  General has found that the agency has not consistently followed its grant  selection procedures for each year. For example, in an audit of the fiscal  year 1996 grant award process, the Inspector General found that HUD  revised its screening procedures to allow applicants to comply with only  one of the two eligibility criteria in the NOFA.  Under the revised  screening procedures, HUD awarded $269 million to applicants that should  have been ineligible for funding because they did not demonstrate  compliance with the two criteria as specified in the NOFA. Similarly, when  HUD encountered a defect in a fiscal year 1996 application, often the  reviewers resolved the defect in a manner that improved the applicant’s  application but did not always comply with the NOFA procedures for  resolving application defects. The Inspector General concluded that, as a  result, some applications that should have been ineligible for funding were  inappropriately funded.
Similarly, the Inspector General also has found that in both fiscal years  1998 and 1999 HUD did not fully or consistently implement key application  review procedures.  Specifically, the final review panel, and to a lesser  degree the initial reviewers, did not always document their justifications  for scoring and rating individual applications. For example, in its fiscal year  1998 audit, the Inspector General reviewed 24 applications and identified 6  on which the final review panel changed preliminary scores without  providing adequate documentation or justification to support all the  changes. The scoring changes resulted in 5 of the applicants obtaining  funding and 1 losing funding. In its fiscal year 1999 audit, the Inspector  General reviewed 25 applications and found that HUD’s final review panel  had changed scores for 6 applications without providing adequate  documentation or justification. The scoring changes resulted in 5 of the  applicants obtaining funding.
In response to these and other Inspector General criticisms of the HOPE VI  grant selection process, HOPE VI officials told us that they follow their  review procedures to the best of their ability, given the time constraints of  the annual competition. Although the Inspector General generally has  about 4 months to review the previous year’s applications, HOPE VI  officials noted that they have shorter time frames—generally, 6 weeks.  HUD officials also stated that they have made efforts to address the  Inspector General’s concerns, including efforts to better screen  applications. In its report on the fiscal year 1999 HOPE VI competition, the  Inspector General determined that HUD had addressed issues in its fiscal  year 1998 review, relating to the need to ensure that (1) each rejected  applicant would be provided specific written notification as to why the  application was not successful and (2) all evaluations were based on the  facts presented in the applications.
section_title: Status of Work Varies Greatly, and Most Grantees Have Not Met Grant Agreement Deadlines
paragraphs: The status of work at HOPE VI sites varies, with construction completed at  15 of the 165 sites that received revitalization grants through fiscal year  2001. Overall, at least some units have been constructed at 99 of the 165  sites, and 47 percent of all HOPE VI funds have been expended. In general,  more recently awarded grants are progressing more quickly than earlier  grants. Nevertheless, the majority of grantees missed at least one of the  deadlines in their grant agreements. For example, grantees did not submit  the revitalization plan to HUD on time for 75 percent of the grants awarded  through fiscal year 1999. Many factors affect the status of work at HOPE VI  sites, including the development approach, housing authority management,  and relationships with residents and the surrounding community.
subsections: section_title: Status of Work Varies Widely at HOPE VI Sites
paragraphs: Our analysis of data from HUD’s HOPE VI reporting system shows that  work status varies at HOPE VI sites. As of December 31, 2002, relocation  was complete at 101 of the 165 sites, demolition at 87 sites, and  construction at 15 sites.  Reoccupancy—the return of some original  residents to revitalized units—was complete at 37 sites, while occupancy  was complete at 14 of the 165 sites. Grantees had demolished 57,772 units  of severely distressed public housing and constructed or rehabilitated  23,109 units. Figure 2 shows the percentage of planned revitalization  activities completed by each fiscal year’s grantees.
Although construction was complete at only 15 sites as of December 31,  2002, construction was nearing completion at additional sites. As shown in  figure 3, at least some units had been constructed at 99 of the 165 sites.  Where construction was still ongoing, it was 50 percent or more complete  at 40 sites and 75 percent or more complete at 25 sites. No units had been  completed at 66 sites. Overall, 27 percent of the total planned units were  complete as of December 31, 2002.
In general, grantees with more recently awarded grants are completing  activities more quickly than those with the earlier grants. The fiscal year  1993 grantees took an average of 31 months after execution of grant  agreements to start construction. The fiscal year 1994 grantees took an  average of 41 months.  However, the 14 grantees awarded grants in fiscal  year 1999 that have started construction did so an average of 16 months  after grant agreement execution. Furthermore, the 9 fiscal year 2000  grantees that have started construction did so, on average, 10 months after  grant agreement execution.  According to HUD, there are several possible  reasons for this improvement, which include that the later grantees may  have more capacity than the earlier grantees, the applications submitted in  later years were more fully developed to satisfy NOFA criteria, and HUD  has placed greater emphasis on reporting and accountability.
Overall, grantees have expended about $2.1 of the $4.5 billion (47 percent)  in HOPE VI revitalization funds awarded.  As expected, a greater  percentage of the funds budgeted for planning and demolition has been  expended than of the funds budgeted for construction and community and  supportive services (see fig. 4). For example, 67 percent of all HOPE VI  funds budgeted for demolition have been expended, while 42 percent of all  HOPE VI funds budgeted for construction have been expended.
section_title: Majority of Grant Agreement Deadlines Have Not Been Met
paragraphs: The majority of grantees missed at least one of the deadlines established in  their grant agreements.  Grantees must meet three major deadlines  according to their grant agreements: the submission of a revitalization plan  to HUD, the submission of a community and supportive services plan to  HUD, and completion of construction. Overall, for 75 percent of the grants  awarded through fiscal year 1999, the grantees did not submit the  revitalization plan to HUD on time.  For 70 percent of the grants subject to  a standard deadline for the submission of a community and supportive  services plan, the grantees did not meet the deadline.  Additionally,  grantees completed construction within the deadline on only 3 of the 42  grants for which the time allowed for construction—54 months from grant  execution for grants awarded since fiscal year 1996—had expired. For 9 of  the 39 grants that missed their construction deadline, the grantees had not  constructed any units as of December 31, 2002.
HUD data show that the time it has taken grantees to submit key  documents has shortened over the life of the program. For example, as  shown in table 1, grantees have been taking less time to submit  revitalization plans to HUD. On average, the fiscal year 1994 grantees took  about 790 days after the execution of their grant agreements to submit a  revitalization plan. By fiscal year 2000, the grantees took an average of 185  days after the execution of their grant agreements to submit a revitalization  plan. Similarly, although there is no specific grant agreement deadline  related to submitting mixed-finance proposals—documents that HUD must  approve before mixed-finance construction can begin—the recent grantees  have done so in less time than did earlier grantees. The average number of  days between grant execution and submission of a mixed-finance proposal  fell from 2,255 days for the fiscal year 1994 grantees to 508 days for the  fiscal year 2000 grantees.
HUD has taken steps to encourage adherence to deadlines. For instance,  the agency notified grantees in March 2002 that, as part of HUD’s increased  focus on readiness, 10 dates could no longer be revised in the HOPE VI  reporting system as of June 30, 2002. The dates included planned  completion of the revitalization plan, planned completion of a mixed- finance proposal, planned start of construction, and planned completion of  construction. Prior to this decision, grantees had been allowed to adjust  their planned dates when delays occurred, making it difficult for HUD to  determine the extent of delays. In its fiscal year 2002 NOFA, HUD also  stressed project readiness. For example, the NOFA required applicants to  provide a certification stating either that they had procured a developer for  the first phase of development by the application due date or that they  would act as their own developer. Similarly, applicants that proposed off- site replacement housing were required to submit evidence of control of  the proposed off-site locations.
section_title: Many Factors Affect Work Status
paragraphs: Our visits to the sites that were awarded revitalization grants in 1996 show  that many factors—including the development approach, housing authority  management, and relationships with residents and the community—can  affect the status of work at a site. In its June 2002 report to Congress, HUD  stated that a mixed-finance development approach might cause delays  because housing authorities often lack staff with expertise in development  and complex financing approaches. They must hire additional staff or  outside consultants proficient in private-sector real estate construction,  financing, and lending practices to put together financing and retain  developers. For example, the redevelopment of Dalton Village in Charlotte,  North Carolina, was delayed about 1 year due to the denial of its initial  application for low-income housing tax credits. In addition, the Housing  Authority of New Orleans decided to use tax increment financing to raise  additional funds for its St. Thomas site.  It took more than 2 years for the  housing authority to get all of the approvals necessary. In contrast, the  Chester Housing Authority was able to complete construction at Lamokin  Village within 5 years of grant execution because it used only public  housing funds, which did not require them to acquire additional expertise.
Other aspects of the development approach, such as the type and location  of planned revitalization efforts, also can affect status. For example,  rehabilitation of existing buildings tends to take less time than construction  of new ones. As of December 31, 2002, over half of the HOPE VI units  scheduled for rehabilitation had been completed, while less than a quarter  of the new planned units had been constructed. The Cuyahoga  Metropolitan Housing Authority’s fiscal year 1996 grant involves both  rehabilitation of existing units and construction of new units. As of April  2003, rehabilitation of 56 units was under way, whereas the construction of  new units was not scheduled to begin until October 2004. Also, on-site  construction tends to occur faster than off-site construction. As of  December 31, 2002, 29 percent of on-site construction was complete, while  19 percent of off-site construction was complete. Grantees planning for off- site construction sometimes have to purchase the property or properties on  which the units will be built. For example, the Housing Authority of the  City of Pittsburgh plans to acquire numerous parcels of land in the  community surrounding the Bedford Additions site and construct new off- site units prior to beginning construction on-site. Because acquiring the  sites is taking longer than anticipated, the housing authority has yet to  relocate residents and demolish the original site. For more examples of  how development approaches can affect work status, see appendix IV.
The extent to which revitalization plans were changed during the course of  redevelopment also affects work status. The Housing Authority of the City  of Atlanta’s original application for a fiscal year 1996 HOPE VI grant  outlined a plan for 100 percent public housing at the Perry Homes site. Two  years after the grant award, HUD conducted a site visit and determined that  the site should include a wide range of units, including market-rate units.  Due to these changes, a revitalization plan was not approved until October  2002. The Cuyahoga Metropolitan Housing Authority changed the plans for  its Riverview site due to environmental problems. In contrast, the Housing  Authority of Louisville, another fiscal year 1996 grantee, has not had to  make any significant modifications to its revitalization plan for Cotter and  Lang Homes, and over 60 percent of the 1,213 planned units were complete  as of December 31, 2002.
Several grantees we visited stated that the performance of housing  authority management staff affected the status of their revitalization plans.  For example, residents in Jacksonville and housing authority staff in  Spartanburg stated that their fiscal year 1996 grants had progressed  significantly, in part, because the executive director communicated well  with residents, the housing authority board, and local community leaders.  In contrast, the Cuyahoga Metropolitan Housing Authority was  experiencing internal problems at the time its fiscal year 1996 grant was  awarded. Its executive director was ultimately convicted for theft of public  funds, mail fraud, and lying about a loan. A new executive director was  hired in late 1998, and the housing authority was finally able to focus on the  fiscal year 1996 HOPE VI grant in 1999, according to housing authority  officials. In Detroit, the revitalization plans for Herman Gardens changed  multiple times because there were several changes in executive leadership  and each executive director had a different plan for the site. Because the  Detroit Housing Commission had not submitted a formal revitalization plan  for Herman Gardens, HUD notified the commission in March 2000 and  March 2002 that it was in default of its grant agreement.
The extent of support from residents and the local community also can  affect the timing of progress at HOPE VI sites. For example, the Tucson  Community Services Department, which serves as the city’s public housing  authority, worked closely with its residents and the local community during  the planning process for its fiscal year 1996 grant. Tucson did not submit its  revitalization plan until a majority of the residents had approved it. In  contrast, resident or community opposition delayed progress at several of  the sites we visited. For instance, the Chicago Housing Authority’s plans for  Henry Horner Homes were delayed 4 years by legal actions related to a  resident lawsuit. Residents at San Francisco’s North Beach site did not  want to relocate from the site during the redevelopment, which caused the  redevelopment to take longer than it would have otherwise. Because the  Housing Authority of New Orleans’s St. Thomas site is located in a historic  district, local preservationists opposed the construction of a retail store at  the site. In July 2002, a nonprofit organization filed a lawsuit against the  housing authority for failing to comply with environmental and historic  preservation laws. The case was dismissed in April 2003. See appendix IV  for more information on each of the 20 sites we visited.
HUD’s approval process can also affect the status of work at HOPE VI sites.  Officials responsible for managing 12 of the 20 grants awarded in fiscal year  1996 told us that HUD’s approval process for key documents, such as the  revitalization plan and mixed-finance proposals, was too slow. However,  according to a HUD report, the agency’s approval process has been  improving. For instance, HUD’s data show the average number of days  from the submission of a mixed-finance proposal to approval was 185 days  for the fiscal year 1996 grantees. For the fiscal year 1999 grantees, the  average number of days between submission and approval of a mixed- finance proposal was 126 days.
section_title: HUD’s Oversight of HOPE VI Grants Has Been Inconsistent
paragraphs: HUD grant managers located at HUD headquarters and in the field are  primarily responsible for overseeing HOPE VI grants, but staff in HUD’s  field offices also assist grant managers in monitoring grants. In particular,  field office staff are to perform annual on-site monitoring reviews.  However, by the end of 2002, HUD had not conducted any annual reviews  for 8 out of the 20 grants awarded in fiscal year 1996. According to HUD,  staffing limitations have constrained its ability to oversee grants.  Additionally, despite grantees’ inability to meet key deadlines, HUD has not  developed a formal enforcement policy, which is an important part of  oversight.
subsections: section_title: While Grant Managers Oversee Grants, Field Office Staff Share HOPE VI Oversight Responsibilities
paragraphs: Both HUD headquarters and field office staff are responsible for overseeing  HOPE VI revitalization grants. HUD has 30 grant managers that report  directly to the Office of Public Housing Investments—17 located at HUD  headquarters and 13 located in field offices. Grant managers are primarily  responsible for overseeing HOPE VI grants and perform a number of  duties, including tracking the overall status of the grant, reviewing and  approving mixed-finance proposals, reviewing and approving all proposed  changes to program schedules, and reviewing and approving procurement  documents. According to HOPE VI officials, the main tool that grant  managers use to oversee grants is the HOPE VI reporting system, which  since 1998 has provided information on the status of each grant. (Grantee  reporting existed before 1998, but not in the form of the quarterly reporting  system currently used.)  Grantees enter data into the Web-based system at  the end of each quarter.  According to the grant managers, the reports  from the system enable them to track grant activity and deadline  compliance.
Office of Public and Indian Housing staff in HUD’s field offices also play a  role in overseeing HOPE VI grants, but their responsibilities vary. Three  field offices that contain grant managers—located in New York, New York;  Miami, Florida; and Cleveland, Ohio—have signature authority, meaning  that the office’s local Director of Public Housing can approve documents  without approval from headquarters. Other field offices contain grant  managers but do not have signature authority. However, most field offices  do not have a grant manager, but rather have a HOPE VI coordinator,  whose responsibilities include assisting grantees with preparing demolition  applications, reviewing environmental assessments, and coordinating and  reviewing inspections of HOPE VI construction sites performed by the U.S.  Army Corps of Engineers. The field offices also are responsible for  performing an annual on-site monitoring visit to each HOPE VI grant.  Following this visit, the field office is to prepare a report for both the  housing authority staff and the grant manager detailing grantee systems  and controls in place and compliance with HOPE VI program requirements.  The site visit reports also provide an assessment of the overall status of  grant activities.
section_title: Staffing Limitations and Confusion about the Role of Field Offices Constrain HUD’s Ability to Oversee Grants
paragraphs: According to various reports and HUD field staff, the limited number of  grant managers, a shortage of field office staff, and confusion about the  role of field offices have diminished the agency’s ability to oversee HOPE  VI grants. As shown in figure 5, grant manager workload has been  increasing since HUD last hired a large group of grant managers in 1998,  but the workload remains below the previous level. As of fiscal year 2001,  each grant manager was responsible for an average of about 6 grants  totaling about $157 million in HOPE VI funding. In its June 2002 report to  Congress, HUD stated that one factor contributing to delays at HOPE VI  sites was limited HUD grant managers. Similarly, some of the grantees we  visited stated that they believe grant manager workload contributed to the  slow approval process previously discussed in this report.
HUD reports that HOPE VI oversight also has been affected by a shortage  of field office staff and confusion about the role of field offices. Our site  visits showed that HUD field staff are not systematically performing the  required annual reviews. Of the 20 revitalization grants awarded in fiscal  year 1996, 8 had never had an annual review performed as of the end of  2002, and no grant had had an annual review performed each year since the  grant award. Overall, only one in five of the required annual reviews were  performed. However, the annual reviews that were performed did contain  important findings. For example, several of the annual reviews performed  for the fiscal year 1996 grantees noted that housing authorities were not  following procurement policies and lacked proper documentation of  resident relocations.
From our interviews with field office managers, we determined that there  are two reasons why annual reviews were not performed. First, many of the  field office managers we interviewed stated that they simply did not have  enough staff to get more involved in overseeing HOPE VI grants. For  example, one field office manager told us that, because of staffing  constraints, his office did not perform any HOPE VI oversight. Second,  some field offices did not seem to understand their role in HOPE VI  oversight. For instance, one office thought that the annual reviews were  primarily the responsibility of the grant managers. Others stated that they  had not performed the reviews because construction had not yet started at  the sites in their jurisdiction or because they did not think they had the  authority to monitor grants.
The HUD Inspector General and the agency itself have reported that  staffing shortages, particularly in the field, have resulted in a lack of  program oversight. In a 1998 review of the HOPE VI program, the Inspector  General stated that HUD had not been performing even the minimal  monitoring requirements for the HOPE VI program in part due to  understaffing in both headquarters and the field offices.  As noted in that  report, lack of monitoring led to grant implementation problems remaining  unresolved. In addition, HUD’s most significant workforce planning activity  to date—its Resource Estimation Allocation Process (REAP)—cited  staffing shortages related to the HOPE VI program. Under REAP, HUD  systematically estimated the number of employees needed to do its work,  on the basis of current workload and operations. The final resource  estimation report, which was issued in April 2001, noted that the Office of  Public and Indian Housing needed to add approximately 38 full-time  employees in the field to conduct tasks such as monitoring and providing  assistance to HOPE VI grantees.  The report also concluded that the  Office of Public Housing Investments should more clearly articulate its  own role and the role of field offices in the oversight of HOPE VI grants.
section_title: HUD Lacks Clear Enforcement Policies and Has Not Always Enforced Grant Agreement Deadlines
paragraphs: Although the majority of grantees have missed key deadlines, HUD has not  developed and provided to grantees an official HOPE VI enforcement  policy, according to program officials. Instead, the agency determines if  action should be taken against a grantee on a case-by-case basis. A clear  enforcement policy could provide grantees with more certainty regarding  the consequences of not meeting grant agreement deadlines. In a  December 1999 memorandum, HUD’s Office of General Counsel noted that  no statutory or program provisions required grantees to expend HOPE VI  funds within a set period of time. Therefore, it concluded that HUD may  grant extensions to time frames established in the grant agreements, thus  avoiding the need to declare grantees that have missed deadlines to be in  default of their grant agreements.
In the absence of a formal enforcement policy, HUD has outlined in general  terms its default policy in grant agreements. In each grant agreement, HUD  describes several occurrences that might constitute a default by the  grantee under the grant agreement, including a grantee’s failure to comply  with the conditions and terms of its grant agreement. HUD provides written  notice of all defaults and gives the grantee 30 days to remedy the default or  to submit evidence to HUD that it is not in default. If the default cannot be  remedied within 30 days, grantees have an additional 60 days to rectify the  default situation. At that time, if the condition(s) noted in HUD’s initial  letter to the grantee has not been resolved, HUD may require the grantee to  revise its program schedule, management plan, or program budget. HUD  also may restrict the grantee’s authority to draw down grant funds or  require reimbursement by the grantee. HUD also reserves the right to  appoint a receiver to carry out HOPE VI activities, reduce the amount of  the grant award, or terminate the grant.
According to HOPE VI officials, all grantees would have been considered in  default of their grant agreements at some point in their grant process if  HUD had not been flexible regarding time frames. For example, virtually all  of the fiscal year 1996 grantees were allowed an extension to the date  construction was to be completed, and some were allowed multiple  extensions. The Chicago Housing Authority’s Henry Horner grant and the  Housing Authority of the City of Atlanta’s Perry Homes grant received  extensions for the execution of a general contractor’s agreement and for  the date construction was to be completed. In 2000, the Housing Authority  of the City of Pittsburgh’s grant for Bedford Additions received an  extension until early 2003 to complete construction; in 2002, the authority  received an additional extension to complete construction by July 2007.
Although HUD has not developed a formal enforcement policy, it has issued  default notices to grantees. It has generally issued these notices when there  is no evidence of a formal and comprehensive approach to the grantee’s  revitalization effort. As of March 2003, HUD had declared nine grants to be  in default and issued warning notices regarding three other grants.  According to program officials, HUD expects to increase the use of the  default tool because a default letter tends to garner enough attention with  the local media and political leaders to prompt action. However, HUD has  never rescinded any HOPE VI funds, even when it has issued default letters.
Because HUD does not have a formal enforcement policy, its issuance of  default notices can be viewed as arbitrary. For example, in July 2000, HUD  declared the Housing Authority of Baltimore City’s fiscal year 1996 grant  for Hollander Ridge to be in default of its grant agreement on the basis of  “failure to comply with the HOPE VI requirements or any other Federal,  State or local laws, regulations or requirements applicable in implementing  the Revitalization Plan.”  The default letter also noted that, because the  housing authority’s revitalization plan was no longer consistent with the  requirements of a consent decree, the grant was deemed to be in default. In  March 2000 and March 2002, HUD declared the Detroit Housing  Commission’s fiscal year 1996 grant for Herman Gardens to be in default  because the housing authority had not submitted a revitalization plan as  required in its grant agreement. However, HUD has not issued default  letters to other grantees who have not met grant agreement deadlines for  completing construction. For example, even though no units have been  completed at St. Thomas in New Orleans or Bedford Additions in  Pittsburgh and, according to grant agreement deadlines, construction was  to be completed by early 2002, neither fiscal year 1996 grant has been  declared in default.
section_title: HUD Has Obligated the Majority of Funds Budgeted for Technical Assistance for Support to Grantees and HOPE VI Program Reporting
paragraphs: HUD estimates that it has obligated about $51 million of the $63 million in  HOPE VI funds that have been set aside for technical assistance, with the  majority of this obligation funding services provided directly to grantees  and program reporting. As shown in figure 6, the funding budgeted for  technical assistance has fluctuated. Over the first 4 years of the program,  funding ranged between $2.5 and $3.2 million, annually. In fiscal year 1998,  funding increased to $10 million and consistently remained at or above that  level until fiscal year 2002, when it decreased to $6.2 million.
As shown in figure 7, HUD has obligated the majority of its technical  assistance funding for services provided directly to grantees and program  reporting. Of the $51 million that HUD estimates it has obligated to date, 55  percent has been obligated for technical assistance provided to grantees.  For example, HUD assigns each grant an outside technical assistance  provider to help the grantee develop its community and supportive services  plan. In fiscal years 1996 to 2000, HUD assigned each new grant an  expediter to assist the grantee with its HOPE VI plans. These expediters  were private-sector experts in finance, real estate development, and  community revitalization. Another major category of technical assistance  has been program reporting. According to HOPE VI officials, HUD spends  about $2.5 million annually on the HOPE VI reporting system. A contractor  maintains the reporting system and staffs a help desk to respond to  questions from grantees. The remaining technical assistance funding has  been obligated for headquarters management assistance, such as  consultants; site inspections performed by the U.S. Army Corps of  Engineers; and staff training and travel.
In recent years, HUD has eliminated some services previously provided to  grantees.  For example, in fiscal year 2001, HUD stopped providing  expediters because, according to program officials, the practice had  become too expensive. Currently, only at-risk grantees—grantees that are  experiencing problems with their grants or do not have adequate capacity  to manage their grants—are considered for technical assistance. According  to HUD officials, HUD has decreased the amount of technical assistance it  provides because the agency believes that grantees should be responsible  for retaining and funding their own technical assistance. Figure 8 shows  the percentage of technical assistance funds provided directly to grantees  over the life of the program.
section_title: Conclusions
paragraphs: HOPE VI is one of the few active federal housing production programs and  is supposed to deliver almost 45,000 units of rehabilitated or new public  housing. During these tight budgetary times, when Congress faces difficult  choices in deciding how to provide affordable housing, it is increasingly  important that federal housing programs produce results. After 10 years of  the HOPE VI program, construction has been completed at 15 of 165 sites.
However, work is proceeding more quickly at sites financed by more  recently awarded grants. The HOPE VI program has incorporated measures  to increase efficiency—in part attributable to HUD’s requesting more  information from grant applicants and a renewed emphasis on meeting  deadlines. In addition, the emphasis on performance measures, such as  HUD’s incorporation of past performance as an eligibility requirement in  the fiscal year 2002 NOFA, should help direct HOPE VI funds to where they  can most effectively produce results.
However, the HOPE VI program could be improved further. By emphasizing  the need for regular grant oversight and review and improving and  clarifying the lines of communication between headquarters and the field  offices, HUD can eliminate existing confusion about staff roles, build a  consistent record of site reviews and oversight, and improve  communications with grantees to facilitate progress on grants. Since the  HOPE VI grant process involves both HUD and public housing authorities,  HUD can further improve the efficiency of the grant program and help  achieve its goal of revitalizing public housing by holding grantees  accountable for performance, particularly in the areas of meeting deadlines  and producing deliverables. The HOPE VI program, as it is currently set up,  does not have a clear and consistent system for determining if grantees are  not in compliance with grant requirements, nor does it offer clear  incentives for grantees to change behavior or correct undesirable  conditions.
section_title: Recommendations for Executive Action
paragraphs: To improve its selection and oversight of HOPE VI grants, we recommend  that the Secretary of Housing and Urban Development  continue to include past performance as an eligibility requirement in  each year’s notice of funding availability;  clarify the role of HUD field offices in HOPE VI oversight and ensure  that the offices conduct required annual reviews of HOPE VI grants; and  develop a formal, written enforcement policy to hold public housing  authorities accountable for the status of their grants.
section_title: Agency Comments
paragraphs: We provided a draft of this report to HUD for its review and comment. In a  letter from the Assistant Secretary for Public and Indian Housing (see app. V), HUD stated that it found the report to be fair and accurate in its  assessment of the management of the program. HUD also agreed with our  three recommendations. Specifically, it stated that it would take action to  incorporate past performance as an eligibility criterion in the fiscal year  2003 HOPE VI Revitalization NOFA. Regarding the recommendation to  develop a formal enforcement policy, HUD stated that it regards the  development of management tools such as the locked checkpoint system  described in this report to be a key step in the establishment of a  formalized enforcement policy and will endeavor to institute other  responsive measures.  Additionally, HUD provided clarifications on several  technical points, which have been included in this report as appropriate.
As agreed with your office, unless you publicly announce its contents  earlier, we plan no further distribution of this report until 10 days after the  date of this report. At that time, we will send copies of this report to the  Chairman, Subcommittee on Housing and Transportation, Senate  Committee on Banking, Housing, and Urban Affairs; the Chairman and  Ranking Minority Member, Senate Committee on Banking, Housing, and  Urban Affairs; the Chairman and Ranking Minority Member, Subcommittee  on Housing and Community Opportunity, House Committee on Financial  Services; and the Chairman and Ranking Minority Member, House  Committee on Financial Services. We will also send copies to the Secretary  of Housing and Urban Development and the Director of the Office of  Management and Budget. We will make copies available to others upon  request. This report will also be available at no charge on GAO’s Web site at  http://www.gao.gov.
Please call me at (202) 512-8678 if you or your staff have any questions  about this report. Key contributors to this report are listed in appendix VI.
section_title: Objectives, Scope, and Methodology
paragraphs: Our objectives were to examine (1) the Department of Housing and Urban  Development’s (HUD) process for assessing HOPE VI revitalization grant  applications and for selecting grantees, (2) the status of work at sites for  which grants have been awarded and compliance with grant agreement  deadlines, (3) HUD’s oversight of HOPE VI grants, and (4) the amount of  program funds that HUD has budgeted for technical assistance and the  types of technical assistance it has provided.
To accomplish these objectives, we analyzed the data contained in HUD’s  HOPE VI reporting system on the 165 sites that received revitalization  grants in fiscal years 1993 through 2001 and visited 20 sites in 18 cities. We  selected these 20 sites because they received HOPE VI revitalization grants  in fiscal year 1996, which was the first year that grants were subject to a  standard construction deadline. Using the 1996 grants also allowed us to  assess whether grantees had met their deadlines, which had passed for the  majority of the grantees by the time we began our site visits. In addition, we  interviewed the HUD headquarters officials responsible for administering  the HOPE VI program.
To determine the criteria that HUD uses to assess HOPE VI revitalization  grant applications, we analyzed each year’s notice of funding availability  (NOFA). Specifically, we examined the rating factors used each year to  determine if there were any similarities between the different NOFAs. We  also analyzed the information that housing authorities were required to  submit for selected rating factors and identified changes in these  requirements over time. To determine how HUD has followed its grant  selection procedures, we obtained and reviewed HUD Office of Inspector  General reports on the HOPE VI grant selection process for fiscal years  1996 and 1998 to 2001.  Finally, we interviewed public housing industry  groups—the Council of Large Public Housing Authorities, the Public  Housing Authorities Directors Association, and the National Association of  Housing and Redevelopment Officials—regarding the grant selection  process.
To determine the status of work at sites for which grants have been  awarded, we obtained and analyzed information from HUD’s HOPE VI  reporting system. Specifically, we obtained data as of December 31, 2002,  for the 165 revitalization grants awarded through fiscal year 2001. We used  these data to determine the status of relocation, demolition, construction,  reoccupancy, and occupancy and the amount of expended HOPE VI funds.  For each of the 1996 grants, we interviewed housing authority and HUD  officials to determine the status of each grant and the factors affecting that  status. To determine the extent to which grantees have met grant  agreement deadlines, we obtained and analyzed each year’s grant  agreement. We then used milestone data from HUD’s HOPE VI reporting  system to determine the extent to which grantees had met the deadlines in  their grant agreements. To assess the reliability of the data in HUD’s HOPE  VI reporting system, we interviewed the officials that manage the system;  reviewed information about the system, including the user guide, data  dictionary, and steps taken to ensure the quality of these data; and  performed electronic testing to detect obvious errors in completeness and  reasonableness. We determined that these data were sufficiently reliable  for the purposes of this report.
To identify how HUD oversees HOPE VI grants, we obtained and analyzed  HUD’s HOPE VI monitoring guidance and interviewed program officials.  We obtained and analyzed information on the number of grants and grant  managers at the end of each fiscal year to determine grant manager  workload. During each of our site visits, we interviewed housing authority  staff regarding HUD’s oversight of their grants. We also obtained and  analyzed copies of the annual reviews performed for the 1996 grants and  interviewed HUD field office staff regarding their role in HOPE VI  oversight. Finally, we reviewed HUD Inspector General reports on the  HOPE VI program and HUD’s final report on its Resource Estimation and  Allocation Process.
To determine how much HUD has budgeted for technical assistance, we  reviewed information provided by HUD on the total amount budgeted each  fiscal year for technical assistance. To determine the types of technical  assistance HUD has provided, we obtained and analyzed data on the major  types of technical assistance provided with each fiscal year’s budget. The  data HUD provided were estimates of the amounts it had obligated for  technical assistance over the life of the program. We also interviewed  program officials regarding the types of technical assistance provided and  1996 grantees regarding the types of technical assistance they received  from HUD.
We performed our work from November 2001 through April 2003 in  accordance with generally accepted government auditing standards.
section_title: HOPE VI Revitalization Grants
paragraphs: In fiscal years 1993 to 2001, HUD awarded 165 revitalization grants to 98  public housing authorities (see table 2). Nearly half of all of the HOPE VI  revitalization grant funds awarded have been granted to 20 housing  authorities. Within this group of housing authorities, 8 have received 4 or  more revitalization grants:  the Housing Authority of the City of Atlanta, the  Housing Authority of Baltimore City, the Chicago Housing Authority, the  Housing Authority of the City of Oakland, the District of Columbia Housing  Authority, the Philadelphia Housing Authority, the Seattle Housing  Authority, and the City and County of San Francisco Housing Authority.  The Chicago Housing Authority has been awarded 8 HOPE VI revitalization  grants, more than any other housing authority. The Housing Authority of  Baltimore City follows with 6 revitalization grants.
section_title: Fiscal Year 2002 Application Screening and Scoring Process
paragraphs: The fiscal year 2002 NOFA for the HOPE VI program explained the process  that HUD would use to screen and score applications. It stated that HUD  would first screen applications to determine if they met threshold  requirements—requirements that must be met in order for a HOPE VI  revitalization grant application to be considered for funding. The NOFA  also stated that if the application failed to meet any one of these thresholds,  HUD would not rate or rank the application.  The NOFA contained 28  threshold requirements, for which applicants had to attest or document  compliance, including certification signed by an engineer or architect that  the targeted public housing project meets the definition of severe physical  distress and certification either that the applicant had procured a developer  for the first phase by the application deadline or that it would act as its own  developer. Additionally, an applicant that had one or more existing HOPE  VI revitalization grants would be disqualified if one or more of those grants  failed to meet the performance requirements described in the NOFA;  applications that included a proposal to develop market-rate housing had  to include a preliminary market assessment letter.
If an application met all of the threshold requirements, HUD would rate it  using the rating factors outlined in the NOFA. As shown in table 3, the 2002  NOFA listed nine rating factors, some of which comprised various  subfactors. An application could receive a maximum of 114 points.
section_title: Site Visit Summaries
paragraphs: Between January and October 2002, we visited the 18 housing authorities  that were awarded HOPE VI revitalization grants in fiscal year 1996. For  each of the 20 sites that were awarded grants that year, we describe below  background information on the conditions at the original site for which the  grant was awarded, the housing authority’s revitalization and community  and supportive services (CSS) plans for the site, the status of those plans as  of March 2003, and the factors that affected the status. We also include a  time line and photographs for each site. Because the site summaries  incorporate a number of program-specific and technical terms, we have  included a glossary at the end of this report.
subsections: section_title: ABLA Homes—Brooks Extension, Chicago, Illinois
paragraphs: As figure 9 shows, the Chicago Housing Authority was awarded a $24.5  million HOPE VI revitalization grant for the Brooks Extension portion of  ABLA Homes in October 1996.  Relocation and demolition have been  completed at the ABLA Brooks Extension site, but the new construction  has not yet begun. The Chicago Housing Authority’s scattered site program,  which includes the development of any nonelderly public housing, has  been under judicial receivership since 1987. The housing authority is in the  midst of implementing a 10-year transformation plan, which is a $1.5 billion  blueprint for rebuilding or rehabilitating 25,000 units of public housing— enough for every leaseholder as of October 1999—and transforming  isolated public housing sites into mixed-income communities. The housing  authority was awarded another HOPE VI revitalization grant for ABLA in  fiscal year 1998 and also has received revitalization grants for the following  sites:  Cabrini-Green (fiscal year 1994), Henry Horner (fiscal year 1996),  Robert Taylor (fiscal years 1996 and 2001), Madden/Wells/Darrow (fiscal  year 2000), and Rockwell Gardens (fiscal year 2001).
subsections: section_title: Background
paragraphs: The five sites that comprise ABLA Homes had more than 3,500 original  units. Three of the five ABLA sites were included in the authority’s fiscal  year 1996 revitalization plans. Brooks Extension, the focus of the fiscal  year 1996 revitalization grant, was completed in 1961 and consisted of  three, 16-story buildings containing 453 units. Robert Brooks Homes was  completed in 1943 and contained 834 units. Loomis Courts—a project- based Section 8 development—was completed in 1953 and contained 126  units.
The density at ABLA was 37.33 units per acre, as compared with Chicago’s  average density of 28 units per acre. The buildings at ABLA suffered from  significant structural deficiencies as a result of age, weathering, and the  lack of proper maintenance. A central heating plant, located at the Jane  Addams site, provides the heat for the complex. This system is inadequate,  and regulating the amount of heat for each unit has been a problem. The  Chicago Housing Authority was awarded a fiscal year 1995 HOPE VI  planning grant totaling $400,000 for ABLA and two other sites.
section_title: Revitalization and Community and Supportive Services Plans
paragraphs: In addition to the $24.5 million HOPE VI revitalization grant, the Chicago  Housing Authority was awarded four HOPE VI demolition grants totaling  $2.5 million for Brooks Extension and Robert Brooks Homes. The total  budget for the renovation of Brooks Extension, Robert Brooks Homes, and  Loomis Courts is $186 million and includes other public housing funds,  equity from low-income housing tax credits, and tax increment financing.  The revitalization plans call for the rehabilitation of 330 public housing  units at Robert Brooks Homes; the construction of 777 new units at Brooks  Extension (336 public housing units, 90 tax credit units, and 351  homeownership units); and the rehabilitation of 126 subsidized units at  Loomis Courts. A 57,000-square-foot community center to be funded by the  city is also part of the plans.
Of the $24.5 million revitalization grant, the housing authority plans to set  aside $3.6 million for community and supportive services. The community  and supportive services plan for ABLA, which was approved in January  2002, focuses on employment, education, health, community building, and  pilot programs. In addition to special programs funded by the HOPE VI  grant, the housing authority plans to implement its service connector  system at ABLA. The service connector system will help residents access  services through a system of outreach, assessment, referral, and follow-up.
section_title: Current Status
paragraphs: The rehabilitation at Robert Brooks Homes has been completed. The  reconstruction of 132 units was completed in 1998, and the reconstruction  of the remaining 198 units was completed in 2000. Brooks Extension has  been demolished (see fig. 9). The housing authority selected a developer  for the entire ABLA development area in December 2002. Construction on  the new units at Brooks Extension is expected to start in March 2004.
The housing authority has hired a nonprofit organization to serve as ABLA’s  service connector, and the program has been in operation since August  2001. A consultant has also been hired to implement the community and  supportive services plan, including facilitating task forces on employment,  education, and health.
section_title: Factors Contributing to Current Status
paragraphs: The ABLA revitalization has been affected by the need for the revitalization  plans to comply with the Gautreaux consent decree. In 1966, African  American residents of Chicago public housing filed suit against the Chicago  Housing Authority for creating a segregated public housing system. In  response, the court issued a judgment that prohibits the housing authority  from constructing any new public housing in a neighborhood in which  more than 30 percent of the occupants are minorities (limited areas) unless  it develops an equal number of units in neighborhoods where less than 30  percent are minorities (general areas). In 1987, the court appointed a  receiver for the housing authority’s scattered site program, including the  development of nonelderly public housing. In the case of ABLA, the  receiver and the housing authority had to show the court that, while ABLA  was currently in a limited area, the area was going to be revitalized by  HOPE VI. In June 1998, the court approved the housing authority’s request  to designate ABLA a revitalizing area, thus allowing the development of  new nonelderly public housing at the site without requiring an equal  number of units to be built in a general area.
According to a housing authority official, site planning was progressing at  the Brooks Extension site until the housing authority applied, in 1997, for a  HOPE VI revitalization grant for the Grace Abbott Homes portion of ABLA.  HUD rejected the application, stating that the housing authority needed to  develop plans for the entire ABLA site and establish better relationships  with the city and the receiver. In 1998, the housing authority submitted a  new application that covered all of ABLA and showed that it had worked  closely with the city and receiver. While the housing authority was  preparing this application, work at Brooks Extension stopped. HUD  ultimately awarded the housing authority a fiscal year 1998 grant for the  portions of ABLA not covered by the fiscal year 1996 grant.
Management changes at the housing authority have also affected  implementation of the grant, according to a housing authority official. After  placing the housing authority under administrative receivership for  approximately 4 years, HUD returned control of the housing authority to  Chicago in May 1999. During the reorganization that occurred after the city  resumed control, decisions were delayed. For example, the housing  authority’s negotiations with the program manager selected for ABLA were  delayed, in part, because the agency had just regained control of its  operations and was developing an overall plan for transformation.
According to a housing authority official, the receiver raised some legal  issues that slowed progress at the ABLA site. HOPE VI revitalization grants  are typically awarded to housing authorities. However, under the  Gautreaux case, the receiver believed that the two ABLA grants should be  split so that the funds for “hard” construction costs were awarded to the  receiver, while the funds for social services were awarded to the housing  authority. It took almost 2 years to settle this issue. In October 2000, the  grants were split between the receiver and the housing authority. The only  funds that the housing authority controls are funds for demolition,  relocation, and community and supportive services.
The housing authority had to issue two requests for proposals before  selecting a developer. The first request for proposals to develop Brooks  Extension was issued in November 2001, and the authority received three  responses. The housing authority did not think that the respondents had  sufficient capacity; therefore, it decided to issue another request for  proposals to develop the entire ABLA site. The second request for  proposals was issued in June 2002, and a developer was selected in  December 2002.
section_title: Arverne/Edgemere Houses, Queens, New York
paragraphs: The New York City Housing Authority is using $67.7 million in HOPE VI  revitalization grant funds to renovate Arverne and Edgemere Houses. Some  of these revitalization funds were originally awarded to another site, Beach  41st Street Houses, and transferred to Edgemere in December 1996 (see fig.  10). All three sites are in Far Rockaway, a peninsula on the southern edge  of Queens, south of Jamaica Bay and Kennedy Airport. The housing  authority expects to complete the rehabilitation of Arverne and Edgemere  by the end of 2004. In addition to the Arverne/Edgemere grant, the  authority is overseeing another HOPE VI revitalization grant awarded in  fiscal year 1998 for Prospect Plaza.
subsections: section_title: Background
paragraphs: The New York City Housing Authority received a $400,000 planning grant  for the Arverne and Edgemere sites in fiscal year 1995. In 1996, the  authority was awarded a revitalization grant for Arverne, and HUD  transferred the revitalization grant originally awarded to Beach 41st Street  Houses to Edgemere. The funding was transferred from Beach 41st Street  after an impasse over the residents’ role in the planning process could not  be overcome. The Arverne site, with 418 units, was completed in 1951; the  Edgemere site, with 1,395 units, was completed in 1961 (see fig. 10).  Although soundly constructed, they were in need of significant  modernization and improvement.
The area surrounding Arverne/Edgemere lacks essential retail services and  adequate recreation and community space. In addition, the high density  and current configuration of the buildings have contributed to vandalism  and other criminal activity. Joblessness and low educational achievement  among residents further weaken the community. Though situated in an  attractive locale, between Jamaica Bay and the Atlantic Ocean, the  community is extremely isolated with limited transportation links to other  parts of New York City.
section_title: Revitalization and Community and Supportive Services Plans
paragraphs: The total projected budget for the renovation of Arverne and Edgemere is  $233 million, which includes other public housing funds, city funds, and  private funds. The revitalization plans for Arverne/Edgemere, renamed  Ocean Bay Apartments, call for the modernization of 1,803 apartments,  including lobby and facade improvements and site improvements such as  upgrading infrastructure and landscaping. The plans also include the  construction of a recreational facility, the expansion of the existing  community center and day-care center, and the off-site construction of a  health and education center and two retail centers.
Of the $67.7 million in revitalization grant funds, the housing authority has  budgeted $6.8 million for community and supportive services. The  community and supportive services plan, which was approved in May 1999,  focuses on case management, training, and self-sufficiency programs.
section_title: Current Status
paragraphs: Because the majority of residents chose to remain on-site during the  renovation, only 211 residents were temporarily relocated, with the  majority of households relocating to vacant units within the development.  The renovation is being done in phases. For example, all of the asbestos  was removed and electrical work completed before the kitchens and  bathrooms were renovated. As of March 2003, 79 percent of the interior  modernization work at Arverne and 85 percent of the interior  modernization work at Edgemere was complete. The housing authority  estimates that all of the apartment modernization work will be completed  by June 2003. Under the revised revitalization plan, the community center  will now be combined with the new recreational facility to reduce the  overall costs of the plan. This work is under design and is expected to bid  fall 2003. Also, the day-care center will be upgraded and expanded to create  a state of the art facility with expanded capacity. The day-care center  expansion design documents are completed.
Community and supportive services are being offered to residents and  other community residents. In November 1999, the housing authority  opened a Family Resource Center where it administers various training and  self-sufficiency programs for the residents. Already operating are the  computer lab (see fig. 10), after-school program, and job training classes. A  popular project has been the computer incentive program that provides a  personal computer system to residents who either work 96 hours  volunteering on HOPE VI recruiting and other HOPE VI activities or who  participate in a HOPE VI training program. The authority also has  contracted with Goodwill Industries to provide case management,  counseling, and job preparation, placement, and retention services. To  sustain community and supportive services after the expiration of the  HOPE VI grant, the authority has created the Ocean Bay Community  Development Corporation.
section_title: Factors Contributing to Current Status
paragraphs: Resident opposition to demolition was one of the issues that led to the  impasse at Beach 41st Street Houses. After HUD transferred the HOPE VI  funds from Beach 41st Street to Edgemere in December 1996, the housing  authority again included demolition in the plans for Edgemere’s  redevelopment. The housing authority determined that the best way to  meet the demolition requirement would be to remove some top floors from  each of three, nine-story buildings, thereby eliminating about 100 units.  Subsequently, the housing authority withdrew this plan and proposed to  convert dwelling units on the first floor to space for commercial and  community services. This approach would also have removed about 100  units. The issue became moot when Congress, in the fiscal year 1998  appropriations act for the departments of Veterans Affairs and Housing and  Urban Development and independent agencies, gave the New York City  Housing Authority the option of not following any HOPE VI demolition  requirements, and the housing authority abandoned the plans for  demolishing the 100 units.
It took almost 18 months to get the revitalization plan for  Arverne/Edgemere Houses approved. The housing authority first submitted  a revitalization plan to HUD in June 1997. After HUD returned the plan with  comments for the housing authority to address, the housing authority  submitted a revised plan in February 1998. The housing authority then went  back and forth with HUD on changes to the plan. According to housing  authority officials, the primary point of contention was the types of  economic development activities upon which HOPE VI funds could be  spent. HUD finally approved the housing authority’s revised plan in  November 1999.
The effects of September 11, 2001, have also posed challenges for the  redevelopment of Arverne and Edgemere. Some of the housing authority’s  HOPE VI records were destroyed and had to be recreated. Additionally,  housing authority officials estimated that costs for one portion of the  project had escalated from $22 million to $30 million over the life of the  project—due, in part, to the labor force and materials moving downtown  after September 11. Overall, the housing authority estimated that the  Arverne/Edgemere project was delayed 6 months because of the  September 11 attack.
section_title: Bedford Additions, Pittsburgh, Pennsylvania
paragraphs: The Housing Authority of the City of Pittsburgh was awarded a $26.6  million HOPE VI revitalization grant for Bedford Additions in October 1996,  as shown in figure 11. Off-site construction began in September 2002, and  relocation and demolition have not yet occurred. The authority was  previously awarded HOPE VI revitalization grants for Allequippa Terrace  (fiscal year 1993) and Manchester (fiscal year 1995).
subsections: section_title: Background
paragraphs: Bedford Additions, part of the larger Bedford Dwellings, was constructed  in 1954 and contains 460 units, the majority of which are in three-story,  walk-up buildings (see fig. 11). It is located in the Hill District, a  neighborhood offering access to many job centers. Many of the buildings at  Bedford Additions had leaky roofs, cracks in the walls, and outdated  mechanical systems that had not been well-maintained. Also, 72 percent of  the families in its census tract were earning incomes below the poverty  level. The housing authority was awarded a $395,700 HOPE VI planning  grant for Bedford Dwellings and three other sites in fiscal year 1995.
section_title: Revitalization and Community and Supportive Services Plans
paragraphs: The total estimated budget for the revitalization is about $102 million and  includes other public housing funds and equity from low-income housing  tax credits. The revitalization plans call for  construction of a two-story, 12,000-square-foot community center;  construction of 75 off-site homeownership units and 365 off-site rental  units (phases one and two); and   construction of 45 on-site homeownership units and 175 on-site rental  units (phase three).
Of the 660 total units planned, 220 will be replacement public housing units.  In addition, up to 40 of the homeownership units will be made affordable  for public housing residents. The off-site units will be constructed first, and  then the existing on-site units will be demolished and new units will replace  them.
Of the HOPE VI funds, the housing authority has budgeted about $5.1  million for community and supportive services. A new community center  will house the supportive services program, including the case  management function, computer learning lab, day care, a family support  program, after-school teen program, resident council offices, and housing  authority management offices.
section_title: Current Status
paragraphs: The community center has been completed, and many of the planned  services are operational, including the computer lab. As of March 2003, the  housing authority had acquired 235 of the approximately 650 separate  parcels of land required for the off-site component of the project.  Construction on the first 147 off-site rental units started in September 2002  (see fig. 11), and construction on the first 35 off-site homeownership units  is scheduled to begin in June 2003.
section_title: Factors Contributing to Current Status
paragraphs: The decision to construct the off-site units first and on many different  parcels of land has been the major impediment to progress. According to  housing authority officials, the residents were fearful of being displaced;  therefore, they wanted the housing authority to build the new off-site  structures first so that they could be relocated to the new off-site units. The  housing authority has been going through the lengthy process of acquiring  parcels in the surrounding community either by negotiating the purchase of  properties or through eminent domain. It also had to relocate 111 private  households after acquiring their properties.
Financing the redevelopment also has been a challenge. For example, it  was difficult to obtain low-income housing tax credits because the state  housing finance agency has established strict guidelines. It wants any units  developed as part of a mixed-income project to be contiguous. Because the  housing authority could not acquire certain properties, there is a break  between two sections of off-site parcels. After convincing the state housing  finance agency that it would need two tax credit allocations, one for each  section of the off-site parcels, and that it should not finance one without  the other, the housing authority was awarded tax credits for the first phase  of off-site development. Although this process did not delay the  revitalization plans, it did make financing the first phase of development  more complicated, according to a housing authority official.
section_title: Connie Chambers, Tucson, Arizona
paragraphs: The City of Tucson Community Services Department, which serves as  Tucson’s public housing authority, was awarded a $14.6 million HOPE VI  revitalization grant for Connie Chambers in late 1996, as shown in figure 12.  The grant was closed out in January 2003. The department was also  awarded a fiscal year 2000 revitalization grant for Robert F. Kennedy  Homes.
subsections: section_title: Background
paragraphs: Connie Chambers, built in 1967, consisted of 200 units (see fig. 12). The  surrounding Santa Rosa neighborhood is historic and home to a lower  income population. According to housing authority officials, the primary  problem with Connie Chambers was that it was isolated from other  communities after construction of a new convention center and police and  fire department headquarters. Two out of three households on the public  housing waiting list turned it down because of a history of high crime and  poor physical conditions. The housing authority was awarded a $370,000  planning grant for Connie Chambers in fiscal year 1995. It used the  planning grant to conduct maintenance studies and physical needs  assessments and to hold meetings with residents.
section_title: Revitalization and Community and Supportive Services Plans
paragraphs: The total projected budget for the project is $72 million and includes other  public housing funds, equity from low-income housing tax credits, city  funds, and bond funds. The revitalization plan for Connie Chambers,  renamed Posadas Sentinel, calls for  rehabilitation of 10 units at another site;  construction of 120 on-site units (60 public housing units and 60 tax   acquisition of 130 scattered public housing units;  construction of 60 homeownership units;  construction of a child development center, learning center, and health  center and expansion of the existing recreation center;  construction of a grocery store; and  an elderly building to be built by a nonprofit organization.
Of the $14.6 million revitalization grant, the housing authority has budgeted  $1.2 million for community and supportive services. The community and  supportive services plan, approved in May 1998, calls for a neighborhood  services center to serve as a resource center for residents of the  neighborhood and the provision of services such as language classes, an  expanded child-care program, and job training.
section_title: Current Status
paragraphs: The 10 units at the other site have been renovated, all 120 of the on-site  units have been completed, and all 130 scattered sites have been acquired  (see fig. 12). As of March 2003, 54 of the homeownership units had been  completed. The child development center and learning center, located in  the Santa Rosa Neighborhood Center, were completed in April 2002.  Construction on the recreation and health centers is under way. The  housing authority was able to close out the grant in January 2003 because  the remaining homeownership units and the recreation and health centers  were not financed with HOPE VI funds.
A Head Start program has been operating in the child development center  since January 2002. Another day-care service, operated by a local nonprofit  organization, opened in the center in November 2001. It primarily serves  working families. The learning center has been operational since April 2002  and contains a computer library. The learning center offers basic computer  classes in either Spanish or English.
section_title: Factors Contributing to Current Status
paragraphs: Because the City of Tucson Community Services Department acts as both  the city’s public housing authority and community development agency, it  was able to draw on other resources for the Connie Chambers  revitalization. Funding for the project includes city funds for infrastructure,  general city funds, and bonds. In addition, the state housing finance agency  agreed to set aside 10 percent of its annual tax credit allotment for HOPE  VI sites.
The housing authority has involved the residents and the neighborhoods  surrounding the Connie Chambers site in the revitalization process. Both  residents and the surrounding neighborhoods were involved in developing  the revitalization plan. After the revitalization plan was developed,  residents were asked to vote on the plan. Of the 181 Connie Chambers  households, 107 participated in the vote. Of the 107 that voted, 84 voted in  favor of the plan. Only after the residents expressed their support for the  plan did the mayor and city council vote to submit the plan to HUD. When  the housing authority determined that some residents did not want to  relocate outside the neighborhood, even temporarily, it decided to  demolish Connie Chambers in phases, starting at each end of the site. While  the first phases were under construction, those who did not want to leave  the neighborhood were allowed to live in the remaining units. Once  construction was complete, they were moved into the new units, and the  rest of the original units were demolished.
section_title: Cotter and Lang Homes, Louisville, Kentucky
paragraphs: The Housing Authority of Louisville was awarded a $20 million HOPE VI  revitalization grant for Cotter and Lang Homes in late 1996 (see fig. 13), and  about 65 percent of the planned units were complete as of March 31, 2003.
subsections: section_title: Background
paragraphs: Cotter Homes, completed in 1953, consisted of 620 units. Lang Homes, built  in 1959, contained 496 units (see fig. 13). These two contiguous public  housing sites, located in Louisville’s Park DuValle neighborhood, were the  largest public housing sites in Louisville. Together, they covered almost 80  acres. Almost 80 percent of the residents in the Park DuValle neighborhood  lived in poverty. The neighborhood also had the highest violent crime rate  per square mile in Louisville. The local newspaper referred to one corner  on the Cotter and Lang site as the “meanest” corner in Louisville.  Furthermore, the area surrounding the two sites contained vacant or  underused industrial buildings, unused school land, vacant failed  subsidized housing, and other available housing development sites.
section_title: Revitalization and Community and Supportive Services Plans
paragraphs: The total projected budget for the project is $200 million and includes other  public housing funds, other HUD funds, and equity from low-income  housing tax credits. The revitalization plans for Cotter and Lang Homes,  renamed Park DuValle, call for 1,213 new units to be completed in five  phases.
Phase one: development of 100 rental units.
Phase two: development of 213 rental units and 150 homeownership  units.
Phase three: development of 108 rental units (including some elderly  units) and 300 homeownership units.
Phase four: development of 192 rental units.
Phase five: acquisition of 150 off-site rental units.
Of the 763 total rental units, 500 will be public housing units, 160 will be tax  credit units, and 103 will be market-rate units. The 450 homeownership  units will be targeted to households with a variety of incomes. A town  center will include space for various types of commercial enterprises. The  HOPE VI funds will be used to develop the 150 off-site units and to provide  homeownership assistance.
Of the $20 million in HOPE VI revitalization grant funds, the housing  authority has set aside $3 million for community and supportive services.  The focus of its initial community and supportive services plan, approved  in August 1998, was lifelong learning programs and services, such as child  care, youth programs, and computer training. The developer would provide  services to residents of the Park DuValle revitalization area, and the  housing authority would provide case management services to former  Cotter and Lang residents that were not residing at the Park DuValle site.
section_title: Current Status
paragraphs: Work on the first phase of 100 rental units was begun before the housing  authority received its HOPE VI revitalization grant, and construction was  completed in 1998. The 321 rental units envisioned for phases two and  three also have been completed, and construction on the fourth phase of  192 rental units is under way (see fig. 13). Of the 150 planned off-site units,  112 had been acquired as of March 31, 2003. As part of the phase three  rental units, a 59-unit senior building was constructed. As of March 31,  2003, the first 150 homeownership units had been sold, and 147 had been  completed. Twenty-eight homeowners received soft second mortgages  funded by the HOPE VI program.  The remaining phase of 300  homeownership units is under way. Because it estimates that it can sell  only 4 units a month in the Louisville housing market, the housing authority  does not expect all 300 units to be completed and sold until April 2008.
The housing authority hired Jefferson County Human Services to provide  intensive case management services to former Cotter and Lang residents.  The emphasis was on preparing former residents to return to Park DuValle.  The developer focused primarily on community building in the new Park  DuValle neighborhood. For instance, it served as liaison to the Park DuValle  Neighborhood Advisory Council—an organization comprised of former  residents of Cotter and Lang, Park DuValle public housing residents, and  residents of the surrounding neighborhood. However, the housing authority  determined that additional efforts were necessary to ensure that all former  Cotter and Lang residents, whether or not they were residents of the new  community, had access to services aimed toward increasing self- sufficiency. Therefore, it developed a revised community and supportive  services plan, which it submitted to HUD in May 2002. HUD approved the  plan in November 2002.
section_title: Factors Contributing to Current Status
paragraphs: According to housing authority officials, support from the city, other local  entities, and the local HUD field office has been integral to the success of  the Park DuValle project. Both the mayor at the time the grant was awarded  and the subsequent mayor were very supportive of the project. The city has  provided funds and other resources (e.g., the services of the city’s chief  architect). The local school board spent $15 million on a new school in the  Park DuValle neighborhood, and the health department spent $5 million on  a new health center. Staff from the local HUD field office have also been  part of the project team. During planning and much of implementation, a  management team comprised of representatives from the housing  authority, the city, the local HUD field office, and the developer met weekly  to discuss the project. Now that much of the construction has been  completed, the team meets about once a month.
The leadership of the housing authority’s executive director was another  factor cited as contributing to the success of Park DuValle. Housing  authority officials noted that, because the executive director formerly  worked in the mayor’s office, he has been able to strengthen the city’s  support for the project. In addition, according to local HUD officials, the  executive director’s relationship with residents was very good. During his  tenure as executive director, a public housing resident was named the  chairman of the housing authority’s Board of Commissioners.
Another factor contributing to Louisville’s success is that the housing  authority has not had to make any significant modifications to its  revitalization plan. The total number of planned units (1,213) has not  changed. The few changes that have been made are minor. For example,  the housing authority originally planned for the homeownership units to be  constructed in three phases but later decided to consolidate the last two  phases for a total of two phases. Also, instead of the 125 homeownership  units originally planned in phase two, the housing authority was able to sell  150 units.
The housing authority has been able to obtain multiple sources of funding  for the project. In addition to the $20 million in HOPE VI funds, the master  budget includes $56.2 million in other public housing funds and $20.5  million in other HUD funds. The other sources of funding include $37.2  million in equity from low-income housing tax credits and $56.3 million in  debt financing. The state housing finance agency set aside 6 years of tax  credits for the Park DuValle project.
section_title: Dalton Village, Charlotte, North Carolina
paragraphs: The Charlotte Housing Authority was awarded a $24.5 million HOPE VI  revitalization grant for Dalton Village in October 1996 (see fig. 14). As of  March 2003, 194 of 432 total planned units were complete. In addition to the  Dalton Village grant, the authority is overseeing two other revitalization  grants awarded in fiscal years 1993 and 1998.
subsections: section_title: Background
paragraphs: Dalton Village was built in 1970 and consisted of 300 units in brick  townhouse structures with sloped roofs and clapboard facades, as shown  in figure 14. The development was located off Clanton Road, an off-shoot  from West Boulevard, which was once a major route to Charlotte’s Douglas  International Airport. In addition to the presence of lead-based paint and  asbestos materials, the structures at Dalton Village suffered from severe  deficiencies due to the age of the buildings. The site conditions were very  poor with severe erosion taking place over a large portion of the site, and  the lack of adequate drainage devices compounded the site problems.  Dalton Village was isolated from the adjoining communities by virtue of  noncontinuous street access and a steep hill that physically separated it  from the neighboring community.
section_title: Revitalization and Community and Supportive Services Plans
paragraphs: The total projected budget for the revitalization project is $44 million,  which includes equity from low-income housing tax credits. The  revitalization plan for Dalton Village, renamed Arbor Glen, calls for  rehabilitation of 50 existing public housing units and the Family   on-site construction of 144 family and elderly rental units, including 60   on-site and off-site construction of 175 rental townhouses, including 70   construction of 48 on-site homeownership units, including 20 for public   construction of 15 off-site homeownership units designated for public   construction of an outreach center for recreational and educational  programs.
The housing authority has budgeted $4.1 million of the HOPE VI  revitalization grant for community and supportive services. The community  and supportive services plan, approved in March 2000, calls for services to  be provided at the new outreach center, which would house multipurpose  classrooms and a full-size multipurpose gymnasium. The focus would be on  services and programs that promote self-sufficiency.
section_title: Current Status
paragraphs: The 50 existing units and the Family Investment Center have been  renovated, and the 144 family and elderly rental units are complete and  fully occupied (see fig. 14). The housing authority estimates that  construction of the on-site rental townhouses will begin in June 2003 and  be completed by June 2004. The housing authority has submitted two tax  credit applications—one for an additional 23 on-site units and one for 74  units at an off-site location. In January 2003, the housing authority  completed its acquisition of nearby county land needed for the 48 on-site  homeownership units, and groundbreaking is scheduled for summer 2003.
The $1.5 million outreach center was completed and opened to the public  in March 2002. It is an 11,000-square-foot community and recreational  center consisting of a gymnasium, four classrooms, and a computer lab.  The center is open not only to Arbor Glen residents but also to the entire  Arbor Glen community and nearby neighborhoods. It houses recreational  and other educational programs. All of the Arbor Glen public housing  residents are required to participate in the family self-sufficiency program.  A case manager works with participants to develop an individual service  plan and to help the residents meet their self-sufficiency goals, such as  those related to education and employment.
section_title: Factors Contributing to Current Status
paragraphs: The redevelopment of Arbor Glen was delayed initially because the  Charlotte Housing Authority changed development partners. According to  housing authority officials, the first developer, signed on in 1998, did not  have much development expertise, kept changing financial projections, and  did not listen to the community or the state housing finance agency. As a  result, the initial developer’s application for low-income housing tax credits  was denied. In December 1999, the housing authority signed a new  development partner for the site. This developer was part of the initial  development team; therefore, the housing authority did not have to issue  another request for proposals.
Since the new developer was retained, the project has moved forward. The  housing authority and the new developer worked to develop a new site plan  and development scheme that would be more competitive for tax credits.  In late 2000, the project was awarded tax credits for the first phase of new  construction. The first phase of 144 units was completed and leased 6  months ahead of schedule.
section_title: Durkeeville, Jacksonville, Florida
paragraphs: The Jacksonville Housing Authority was awarded a $21.5 million HOPE VI  revitalization grant for Durkeeville in October 1996 (see fig. 15). Of the 303  planned units, 228 have been completed.
subsections: section_title: Background
paragraphs: The 280 units in the Durkeeville public housing complex were poorly  designed, lacked sufficient ventilation, and had extensive plumbing and  drainage deficiencies. For example, the roofs were constructed without an  overhang, which exacerbated the deterioration of the outside walls (see fig.  15). Furthermore, the site consisted of mostly small, one-bedroom units  that no longer met the residents’ needs for space. Built in 1936, the overall  design of the Durkeeville site had become outmoded. Parking was  nonexistent, the density of the housing units was twice that of the  surrounding community, and a porous design with alleyways instead of  roadways provided an environment conducive to criminal activity.
By 1990, the Durkeeville site and its surrounding neighborhood had  become Jacksonville’s most dangerous community—the violent crime rate  for Durkeeville was 12 times higher than for Jacksonville. The  neighborhood surrounding Durkeeville was once a desirable middle-class  neighborhood. However, low incomes in the neighborhood contributed to  low property values, low rents, and little economic activity; over 40 percent  of neighborhood households were below the poverty level, according to the  1990 census. The Jacksonville Housing Authority was awarded a fiscal year  1995 HOPE VI planning grant totaling $400,000 for Durkeeville.
section_title: Revitalization and Community and Supportive Services Plans
paragraphs: The total projected budget for the revitalization is about $37 million, which  includes other public housing funds left over from the redevelopment of  another Jacksonville Housing Authority property. Several key features of  the revitalization plan for Durkeeville, renamed The Oaks at Durkeeville,  include  construction of 200 new rental public housing units (of which 40 will be  for seniors and the disabled) and 28 homeownership units on the  Durkeeville site;  construction of 75 off-site public housing units;  renovation and expansion of the community center;   renovation of two existing buildings for historic preservation; and  retail space containing several businesses and a health clinic.
The housing authority plans to set aside $3.1 million of the revitalization  grant for community and supportive services. The community and  supportive services plan, approved in February 1999, calls for the  renovated community center to become a focal point for the entire  community and to include a computer lab; community meeting rooms;  social service agencies; adult education classes; and recreational facilities,  among other programs.
section_title: Current Status
paragraphs: The Jacksonville Housing Authority has completed the on-site  construction, which includes the 200 rental units (see fig. 15), 28  homeownership units, the renovation of the community center, and  rehabilitation of two historic buildings that include a day-care center and  resident management offices. Several businesses—including a grocery  store, pizza restaurant, Chinese restaurant, and health clinic—have moved  into the retail strip adjacent to the site. All of the housing units are  occupied. The community center houses the family self-sufficiency  program and adult literacy classes, sponsors numerous recreational  activities for children, and hosts community meetings. The day-care facility  and a museum showcasing Durkeeville’s history are operating on-site.
The housing authority does not plan to start the development of the 75 off- site rental units until October 2003. Currently, the housing authority is  planning to use a portion of their HOPE VI funds to purchase 75 to 100  apartments and convert them to public housing.
section_title: Factors Contributing to Current Status
paragraphs: According to officials at the housing authority, on-site construction at  Durkeeville was completed in a timely manner for several reasons. First,  the housing authority was able to develop a sound, comprehensive  revitalization plan because HUD awarded it a planning grant in fiscal year  1995. The grant provided the authority with the necessary resources to hire  several consultants and invest in extensive outreach to public housing and  community residents. Second, the on-site public housing units were funded  entirely with public housing funds. The housing authority used only its  HOPE VI grant and surplus public housing funds from another  rehabilitation project to fund Durkeeville’s redevelopment. The simpler  financial structure of the redevelopment shortened the project’s time  frames by over 1 year, according to one housing authority official.
According to the executive director, in addition to these unique features of  the Durkeeville site, the housing authority enjoys the backing of a  committed board of directors, which includes prominent Jacksonville real  estate developers, attorneys, and former corporate managers. Also  represented on the board are the police department, public housing  residents, and local businesses. This broad base of support, in conjunction  with the executive director’s extensive networking with various  government entities, provided the housing authority with key partnerships  that helped expedite work on the site.
Finally, according to housing authority officials, the decision to place the  HOPE VI-related offices in the community center increased the public  housing residents’ sense of belonging to a community. The increased  number of interactions between public housing and local residents has  improved the overall relations between the two groups. This has had an  overall positive impact on the entire community.
Plans for the off-site portion of the revitalization have not proceeded as  smoothly. First, the initial site that the housing authority chose could not  get approval by the Environmental Protection Agency. The site was once  used for garbage incineration and contains polluted ash in its soil. The  housing authority then proposed to purchase a neglected privately owned  apartment complex (HUD was going to foreclose the property) and convert  all 78 units to public housing, but a local citizens group opposed the plan  and took legal action to enforce a court decree from 2000, which states that  only 25 percent of any apartment complex the authority buys in an area  with a low percentage of minorities can be used for public housing.  Ultimately, HUD did not conduct foreclosure proceedings, and the housing  authority is currently researching other sites.
section_title: Heman E. Perry Homes, Atlanta, Georgia
paragraphs: The Housing Authority of the City of Atlanta was awarded a $20 million  HOPE VI revitalization grant for Heman E. Perry Homes (Perry Homes) in  late 1996 (see fig. 16), but the revitalization effort did not move forward for  some time, primarily because of changes to the revitalization plans.  Construction on the first phase of units began in November 2002. The  housing authority also has received revitalization grants for the following  sites:  Techwood/Clark Howell Homes (fiscal year 1993), Carver Homes  (fiscal year 1998), Harris Homes (fiscal year 1999), and Capitol Homes  (fiscal year 2001). Centennial Place, the name given to the revitalized  Techwood/Clark Howell Homes, was largely completed in 2000 and was the  first mixed-use, mixed-income community (with public housing as a  component) in the nation.
subsections: section_title: Background
paragraphs: Perry Homes and Perry Homes Annex, constructed in 1955, consisted of  944 and 128 units, respectively, and were located on approximately 153  acres of land (see fig. 16). When the housing authority applied for the  revitalization grant, the brick exterior walls had deteriorated, resulting in  water damage to walls, floors, and personal belongings. The sanitary sewer  system leaked, and the storm drainage system did not function properly.
From 1992–95, an average of 254 Perry Homes residents were victims of  crime each year. In addition, more than 60 percent of the residents of Perry  Homes and the surrounding neighborhood were living below the poverty  line. The Housing Authority of the City of Atlanta received a $400,000  HOPE VI planning grant for Perry Homes and one other site in fiscal year  1995.
section_title: Revitalization and Community and Supportive Services Plans
paragraphs: In addition to the $20 million revitalization grant, the housing authority also  was awarded $5.1 million in fiscal year 1998 HOPE VI demolition funds.  The total projected budget for the revitalization of the site is $143 million  and includes other public housing funds and equity from low-income  housing tax credits. The revitalization plan for Perry Homes, renamed West  Highlands at Heman E. Perry Boulevard, calls for 800 new housing units to  be constructed in five phases. The construction phases are as follows:   Phase one: 124 rental units (50 public housing units, 12 tax credit units,  and 62 market-rate units).
Phase two: 152 family rental units (61 public housing units, 19 tax credit  units, and 72 market-rate units) and 130 elderly rental units (100 project- based Section 8 units and 30 market-rate units).
Phase three: 152 rental units (61 public housing units, 14 tax credit units,  and 77 market-rate units).
Phase four: 142 rental units (56 public housing units, 11 tax credit units,  and 75 market-rate units).
Phase five: 100 homeownership units (40 units for public housing  eligible families and 60 market-rate units).
In addition to housing, the plan calls for a town center, an 18-hole public  golf course, and over 90 acres of green space in the form of parklands,  nature trails, and recreational fields.
Of the $20 million revitalization grant, the housing authority has budgeted  $2.6 million for community and supportive services. It plans to deliver  community and supportive services to Perry Homes residents using two  basic approaches. First, it provides authoritywide programs that are  available to all public housing residents, including residents of HOPE VI  sites. These authoritywide programs include the Human Service  Management Program—which provides case management services—and  the Work Force Enterprise Program—which equips participants with the  skills necessary to manage the transition from unemployment to the  workforce. Second, the housing authority plans to ensure that Perry Homes  residents have access to neighborhood-based programs. Some of these  programs will be offered at a new school, public library, and YMCA.
section_title: Current Status
paragraphs: All of the Perry Homes residents have been relocated, and demolition has  been completed (see fig. 16). Construction on the first phase of 124 rental  units began in November 2002. Construction of the rental and  homeownership units is scheduled to be completed by December 2006 and  December 2008, respectively.
HUD approved the community and supportive services plan for Perry  Homes in July 2000, and Perry Homes residents have been participating in  authoritywide programs. The developer has hired a human services  provider to supply case management services specifically for former Perry  Homes residents. Services to be provided include case management  tracking and referral services. Construction has not yet begun on the town  center, which will include the school, public library, and YMCA. The town  center also will include a park, retail, and office space.
section_title: Factors Contributing to Current Status
paragraphs: After the Housing Authority of the City of Atlanta submitted its original  revitalization plan for Perry Homes to HUD in September 1998, HUD  officials visited the site to discuss issues and concerns that they had about  the plan. The plan called for the development of 415 new public housing  units on the existing site; the housing authority planned to use only HOPE  VI funds and other HUD funds. In a June 2, 1999, letter to the housing  authority summarizing its concerns about the plan, HUD questioned  whether rebuilding the site entirely with public housing units, without  funding to provide meaningful supportive services and without significant  partnerships, could result in a sustainable development and provide the  maximum benefits to residents.
In response to HUD’s concerns, the housing authority came up with a new  concept for the Perry Homes site and started developing a new master  plan. In December 1999, the housing authority submitted a revised  revitalization plan to HUD, which called for a mixed-use, mixed-income  community consisting of 750 residential units (40 percent of which would  be public housing units), a recreation center, a public library, and a village  center. After a developer was selected, the revitalization plan was further  refined, and a supplement to the revised revitalization plan was submitted  in February 2002. HUD approved the supplement in October 2002, and  construction began shortly thereafter.
section_title: Henry Horner Homes, Chicago, Illinois
paragraphs: As figure 17 shows, the Chicago Housing Authority was awarded an $18.4  million HOPE VI revitalization grant for Henry Horner Homes in late 1996.  However, the planned revitalization of the site has been delayed by a  lawsuit filed by residents and subsequent legal decisions. The Chicago  Housing Authority’s scattered site program, which includes the  development of any nonelderly public housing, has been under judicial  receivership since 1987. The housing authority is in the midst of  implementing a 10-year transformation plan, which is a $1.5 billion  blueprint for rebuilding or rehabilitating 25,000 units of public housing— enough for every leaseholder as of October 1999—and transforming  isolated public housing sites into mixed-income communities. The housing  authority has also received revitalization grants for the following sites:   Cabrini-Green (fiscal year 1994), ABLA (fiscal years 1996 and 1998), Robert  Taylor (fiscal years 1996 and 2001), Madden/Wells/Darrow (fiscal year  2000), and Rockwell Gardens (fiscal year 2001).
subsections: section_title: Background
paragraphs: Henry Horner Homes, completed in 1957, and Henry Horner Extension,  completed in 1961, consisted of a combination of high-rise and mid-rise  buildings containing 1,659 units (see fig. 17). Henry Horner Homes is  adjacent to the United Center, the arena where the Chicago Bulls play, and  is located about 1.5 miles from Chicago’s central business district. At the  time that the housing authority applied for the grant, the units targeted for  revitalization had broken windows and doors, sewage backups, insect and  rodent infestation, and missing window child guards. The violent crime  rates were three to eight times higher than those for Chicago as a whole,  and the vacancy rate in the targeted area was about 50 percent. The  Chicago Housing Authority was awarded a $400,000 HOPE VI planning  grant for Henry Horner and two other sites in fiscal year 1995.
section_title: Revitalization and Community and Supportive Services Plans
paragraphs: In addition to the $18.4 million revitalization grant, the housing authority  was awarded a $2.3 million HOPE VI demolition grant for Henry Horner in  fiscal year 2000. The total projected budget for the project is $78 million  and includes other public housing funds, equity from low-income housing  tax credits, and state and city funds. The revitalization plan calls for the  construction of 764 new units on-site—271 public housing units, 132  affordable units (80 tax credit rental units and 52 homeownership units),  and 361 market-rate units (114 rental units and 247 homeownership units).  These units will be constructed in three phases. The housing authority has  set aside almost $30,000 of the HOPE VI revitalization grant funds for  community and supportive services. Although this amount is small, the  housing authority plans to submit a community and supportive services  plan for Henry Horner.
section_title: Current Status
paragraphs: Over 600 of the planned 1,197 units have been demolished. According to the  housing authority, the revitalization plans were developed in such a way as  to minimize the temporary relocation of current residents. After the first of  three phases of construction is completed, most of the remaining 176  households will be relocated to the new units. Construction on the first  phase of units began in January 2003. The first units are expected to be  ready for occupancy by the end of 2003. The authority and the Horner  Resident Committee are currently negotiating the relocation notices that  will go out to the residents. The remaining buildings will be demolished on  a schedule negotiated with the Horner Resident Committee.
section_title: Factors Contributing to Current Status
paragraphs: The redevelopment of Henry Horner was delayed for 4 years by legal  actions. In 1991, the Henry Horner Mothers Guild filed a suit against the  Chicago Housing Authority and HUD alleging, among other things, that  Henry Horner had been “de facto” demolished without obtaining HUD or  local government approval or providing replacement housing. The case  was settled in September 1995 when an amended consent decree was  signed. After the housing authority was awarded a HOPE VI revitalization  grant for Henry Horner in 1996, the Henry Horner plaintiffs raised concerns  about the revitalization plans, including the number of replacement public  housing units, which delayed the project and ultimately resulted in two  subsequent court orders, issued in December 1999 and February 2000. As a  result of these legal decisions, the Chicago Housing Authority is required to  designate 220 units or 35 percent of the total units, whichever is greater, as  very low-income units. Also, any decisions regarding the revitalization of  Henry Horner are subject to the approval of the plaintiffs’ counsel and the  Horner Resident Committee.
Because any remaining work at Henry Horner is subject to approval by the  Horner plaintiffs’ counsel and the Horner Resident Committee, decision- making has been slow. According to housing authority officials, it took the  Henry Horner Working Group—which includes the Horner Resident  Committee and the Horner plaintiffs’ counsel—about 2 years to develop the  revitalization plan and issue a request for qualifications for a developer. It  took another 4 months after the request for qualifications was issued to  select a developer.
section_title: Herman Gardens, Detroit, Michigan
paragraphs: The Detroit Housing Commission was awarded a $24.2 million HOPE VI  revitalization grant for Herman Gardens in October 1996 (see fig. 18).  Construction has not yet begun, and HUD notified the housing commission,  for the second time, in March 2002 that it was in default of its grant  agreement. The housing commission previously had been awarded  revitalization grants for Jeffries Homes (fiscal year 1994) and Parkside  Homes (fiscal year 1995).
subsections: section_title: Background
paragraphs: Herman Gardens, built in 1943, originally consisted of 2,144 units on 160  acres (see fig. 18). Problems at the site included structural decay,  deterioration of underground utility systems, rodents, and hazardous  materials contamination. The Detroit Housing Commission received a  $400,000 HOPE VI planning grant for Herman Gardens and two other sites  in fiscal year 1995.
section_title: Revitalization and Community and Supportive Services Plans
paragraphs: In addition to the $24.2 million revitalization grant, the Detroit Housing  Commission was awarded, in fiscal years 1998 and 1999, $3.8 million in  HOPE VI demolition funds for Herman Gardens. The total projected budget  for the revitalization of the site is $232 million and includes other public  housing funds, equity from low-income housing tax credits, and city funds.  The revitalization plan calls for 804 units—470 rental units (including 258  public housing units) and 334 homeownership units. Other elements of the  plan include construction of a regional athletic facility on the site and  construction of 250,000 square feet of institutional space for a new  community college.
Of the $24.2 million revitalization grant, the housing commission has  budgeted $3.5 million for community and supportive services. The  community and supportive services plan, which was approved in August  2001, focuses on case management; employment and training; youth and  senior services and activities; and partnerships to address job readiness,  placement, and retention.
section_title: Current Status
paragraphs: Relocation and demolition have been completed (see fig. 18). As of March  2002, the Detroit Housing Commission had not submitted a revitalization  plan for Herman Gardens. Therefore, HUD notified the housing  commission on March 15, 2002, that it was in default of its grant agreement  and needed to submit a default resolution plan to avoid losing its grant. As  part of the default resolution plan, HUD required the commission to meet a  number of requirements, including submitting a revitalization plan and  obtaining firm financial commitments from the city. The Detroit Housing  Commission submitted its revitalization plan for Herman Gardens to HUD  in August 2002 and submitted a supplement to the plan in December 2002.  In September 2002, the city council passed a resolution committing $22  million to the Herman Gardens project. As of April 2003, HUD had not lifted  the default status or approved the revitalization plan. According to a  housing commission official, the revitalization plan states that construction  is scheduled to begin in January 2004.
However, the housing commission has already formed a number of  partnerships to provide community and supportive services to Herman  Gardens residents. These services include training in retail sales,  computers, manufacturing, and child care. Additionally, 18 different unions  have formed a partnership that offers a preapprenticeship program.
section_title: Factors Contributing to Current Status
paragraphs: Due to management changes, the Detroit Housing Commission developed  several different plans for Herman Gardens. The first plan was developed  prior to the grant award and called for 672 units of public housing. Before  that plan was formally submitted to HUD, the executive director  responsible for the plan left the housing commission and was replaced by  an interim executive director. By February 1999, the interim executive  director had developed a second plan, which proposed a combination of  public and market-rate housing as well as a golf course. After a new  executive director was hired, the housing commission proposed a third  development concept. Although never submitted as a formal revitalization  plan, the concept called for a mixed-use, mixed-income development on  the site.
Problems at one of Detroit’s other HOPE VI projects also contributed to  delays at Herman Gardens. According to a housing commission official,  HUD visited all three of its grant sites shortly after the commission  developed the second plan for Herman Gardens in February 1999. During  the visit, HUD recommended that the commission cease work at Herman  Gardens and Jeffries Homes until problems at Parkside Homes were  addressed. The Parkside Homes project was over budget and behind  schedule. Additionally, once work resumed at Herman Gardens and Jeffries  Homes, the Jeffries Homes project seemed to be more of a priority for  HUD, according to a commission official.
According to commission and local HUD officials, being part of city  government has also affected the pace of progress on the project. Until  recently, all of the commission’s contracts had to be approved by the city  council. Currently, only contracts related to the disposition of land upon  which public housing is situated are subject to city council approval. The  commission also has to go through the city to hire staff. According to a  commission official, the commission is in the process of seeking the  authority to hire its own staff.
Because it never formally submitted a revitalization plan for Herman  Gardens, HUD notified the Detroit Housing Commission in March 2000 that  it was in violation of its grant agreement. In December 2000, HUD issued a  letter to the housing commission requiring it to develop a default resolution  plan. The two parties agreed that the housing commission would submit  biweekly progress reports on Herman Gardens. When HUD found these  biweekly reports to be inadequate, it notified the housing commission  again in March 2002 that it was in default of its grant agreement. In the  letter, HUD stated that it had been 52 months since the grant was awarded  and no substantial progress had occurred.
section_title: Hollander Ridge, Baltimore, Maryland
paragraphs: The Housing Authority of Baltimore City received a $20 million HOPE VI  revitalization grant in October 1996 for Hollander Ridge (see fig. 19).  Project activity was brought to a standstill by a series of legal actions, and  the funds were ultimately transferred to another public housing site in the  city of Baltimore. The housing authority will be selling the Hollander Ridge  property to the city upon HUD approval. Additionally, the housing authority  has completed construction at two HOPE VI sites—Lafayette Courts (fiscal  year 1994) and Lexington Terrace (fiscal year 1995)—and is administering  four additional HOPE VI grants as follows: Homeownership Demonstration  (fiscal year 1994), Murphy Homes and Julian Gardens (fiscal year 1997),  Flag House Courts (fiscal year 1998), and Broadway Homes (fiscal year  1999).
subsections: section_title: Background
paragraphs: Hollander Ridge was built in 1976 and was located on 60 acres at the  eastern edge of Baltimore City. Hollander Ridge was once the public  housing of choice, but over time became one of the most distressed  communities in the housing authority’s portfolio. The property had over  1,000 units of family and elderly public housing. By the late 1990s, only half  of the units were occupied, and the crime rate soared above the rates of  Baltimore’s other public housing sites. Additionally, Hollander Ridge  suffered from significant deferred maintenance, extensive site problems,  and the deterioration of infrastructure and major building systems (see fig.  19). Because of its isolation, the site’s residents had little access to public  transportation and lacked nearby shopping and employment opportunities.  The Housing Authority of Baltimore City received a $700,000 HOPE VI  planning grant for Hollander Ridge and one other site in fiscal year 1995.
section_title: Current Status
paragraphs: Federal legislation was passed in November 2001 that enabled the housing  authority to transfer its HOPE VI funds for Hollander Ridge to Claremont  Homes. The revitalization plans for Claremont Homes, which are in the  preliminary stages, call for the demolition of all existing low-rise buildings  and the construction of a new mixed-income development. The housing  authority plans to reserve 73 units at the Claremont Homes site for former  Hollander Ridge residents. However, according to the housing authority,  the legislation enacted in November 2001 that allowed the housing  authority to transfer the Hollander Ridge funds to the site must be amended  before any of the plans to revitalize Claremont Homes can be implemented.  The legislation currently only allows for the rehabilitation of Claremont  Homes. As a result of third-party master planning, the housing authority  determined that rehabilitation is not financially feasible; therefore, housing  authority officials intend to ask Maryland’s congressional delegation to  propose an amendment to the federal legislation that would allow  demolition and new construction to occur at the site. Concurrence will be  sought from the American Civil Liberties Union (ACLU)—the  representative of the residents. The authority has submitted a disposition  application to HUD for approval to sell the Hollander Ridge site to the city  of Baltimore.
section_title: Factors Contributing to Current Status
paragraphs: Legal actions and community opposition halted progress at Hollander  Ridge and ultimately led to the transfer of the HOPE VI funds to Claremont  Homes. In 1995, six public housing families, represented by the ACLU, filed  suit against the Housing Authority of Baltimore City and HUD alleging that  they had engaged in racial and economic segregation through site selection  and development of public housing in Baltimore City since 1937. On June  25, 1996, the parties entered into a partial consent decree, which was  approved by a United States District Court Judge. Among other things, this  decree provides that the housing authority “will not seek public housing  funds from HUD for public housing construction or acquisition with  rehabilitation in Impacted Areas.”  The Hollander Ridge site is located in an  impacted area, with a high concentration of low-income housing and a high  percentage of minority populations.
The housing authority’s original plan was to modernize Hollander Ridge by  reducing its density through demolition and reconfiguration of existing  units and upgrading the housing units and amenities. This plan was  consistent with the terms of the partial consent decree, and HUD had  awarded the HOPE VI grant on the basis of this plan. However, the adjacent  community resisted plans to place any type of public housing back on the  site. Community residents had long complained about the site’s high crime  rate and its effect on nearby property values. In response to the local  opposition, the housing authority decided to abandon plans to rebuild  family public housing at Hollander Ridge.
The housing authority and the community agreed to a subsequent plan to  demolish all of the existing public housing units and replace them with  facilities for seniors. The plan called for a senior village, which would  provide affordable housing as well as community-based health and  wellness programs for low- to moderate-income seniors. All 1,000 units  would be demolished, and 450 senior units would be built on-site, 225 of  which would be designated as public housing. The housing authority also  agreed to build a $1.2 million fence around the entire Hollander Ridge site.
Because the plans for a senior village would violate sections of the partial  consent decree and residents would be displaced, the ACLU maintained  strict opposition to the senior village concept. Nevertheless, the housing  authority sought a modification to the decree that would allow the  development of public housing on the Hollander Ridge site. In January  1999, the U.S. District Court approved this request. On July 8, 2000,  Hollander Ridge was imploded. Just a few days later, the Fourth Circuit  Court of Appeals, responding to an ACLU appeal, reversed the District  Court’s order. On July 31, 2000, HUD declared the grant to be in default.  Federal legislation enacted in November 2001 allowed the housing  authority to transfer the funds to its Claremont Homes site. As shown in  figure 19, Hollander Ridge remains a vacant lot.
section_title: Jackson Parkway, Holyoke, Massachusetts
paragraphs: The Holyoke Housing Authority received a $15 million HOPE VI  revitalization grant in October 1996 for Jackson Parkway (see fig. 20). Fifty- one of the 272 planned units have been completed.
subsections: section_title: Background
paragraphs: Jackson Parkway was built in 1943 and contained 219 units on a 12.5-acre  site in the Churchill section of Holyoke (see fig. 20). According to housing  authority officials, the apartments and their residents were isolated from  the economic and social fabric of the surrounding community. In addition,  the units were run-down and unappealing. The immediate neighborhood  adjacent to Jackson Parkway was marked by abandoned, obsolete, and  vacant buildings and was affected by drug dealing and vandalism. The  Churchill neighborhood formerly was a residential center for mill workers  and other laborers. However, by the 1990 census, the neighborhood’s  residents had a 50 percent school drop-out rate and only 37 percent  participated in the workforce. Because Jackson Parkway contained almost  25 percent of all residential units in the Churchill neighborhood, its  revitalization was seen as pivotal to the success of future improvements in  the area.
section_title: Revitalization and Community and Supportive Services Plans
paragraphs: The revitalization of Jackson Parkway is estimated to cost around $47  million—which includes other public housing and HUD funds, other  federal funds, and equity from low-income housing tax credits—and will  occur in three phases. The first phase will consist of the demolition of 219  units and a 42-unit elderly complex and the construction of 50 public  housing units, 60 homeownership units, a park, a community center, and a  maintenance facility. The second phase will consist of the rehabilitation of  two, five-story walkups, which will result in 39 public housing units, and  the construction of 11 new public housing units. In the third phase, 112  units will be rehabilitated or constructed in the surrounding neighborhood.  The new community will be called Churchill and Oakhill Homes.
Of the $15 million revitalization grant, $700,000 has been set aside for  community and supportive services. The focus of the community and  supportive services plan, approved in March 1998, is to implement a  comprehensive on-site service delivery system to coordinate existing  health and human services with innovative educational and employment  opportunities. The Holyoke Housing Authority plans to partner with  numerous schools, universities, churches, career development  organizations, libraries, and the Chamber of Commerce to implement its  self-sufficiency programs.
section_title: Current Status
paragraphs: Of the 272 total units to be rehabilitated or constructed, 51 have been  completed. The 50 new public housing units planned for phase one were  built and fully occupied in summer 2002 (see fig. 20). Additionally, all  planned phase one demolition has been completed. The community  buildings are in the design phase, and work on the community park has  begun and is expected to be completed by summer 2003. One model  homeownership unit has been completed. Also, 270 applications to  purchase the 60 homeownership units have been received.
Selective demolition has begun for phase two—the rehabilitation of two,  five-story walkups. Additionally, land has been cleared and footings and  foundation walls have been set. These units are to be completed in the fall  of 2003. The housing authority is working with the Catholic Diocese of  Springfield and Habitat for Humanity to build new homeownership units on  one complete city block. This will be the third and final phase of the  revitalization.
By the spring of 2000, a resident services department was established and  operating to address the needs of former Jackson Parkway residents. Each  Jackson Parkway resident was assessed by one of three case managers,  who help residents to find employment, acquire GEDs, take English as a  Second Language courses, and receive homeownership counseling.
section_title: Factors Contributing to Current Status
paragraphs: Several factors contributed to delays early in the revitalization process.  Because Jackson Parkway was the authority’s first experience with the  HOPE VI program, its staff had to overcome an initial learning curve. For  example, the staff had to learn about real estate development and low- income housing tax credits and about how to work with developers. Also,  HUD’s Inspector General charged the housing authority with procurement  violations related to the selection of its first developer. According to HUD  officials, they placed procurement review restrictions on the authority  because of the lack of sufficient in-house procurement expertise. These  restrictions delayed the authority’s ability to obtain an infrastructure  contractor and a developer for the site. One housing authority official  estimated that the procurement charges delayed the progress of the grant  by 1 year.
Additionally, approval of key documents took longer than expected. For  example, approval of the revitalization plan took 23 months and approval  of the mixed-finance proposal for the first phase took 6 months. The  housing authority has had seven different HUD HOPE VI grant managers  since 1996, and staff believe that this frequent rotation caused temporary  disconnects that resulted in delays.
section_title: Lamokin Village, Chester, Pennsylvania
paragraphs: The Chester Housing Authority was awarded a $14.9 million HOPE VI  revitalization grant in October 1996 for Lamokin Village (see fig. 21).  Construction is complete, and all 150 units are occupied. Since 1994, the  housing authority has been under judicial receivership resulting from a  resident lawsuit concerning distressed housing conditions. The housing  authority also was awarded a fiscal year 1998 HOPE VI revitalization grant  for Wellington Ridge.
subsections: section_title: Background
paragraphs: Lamokin Village was built in the early 1940s and consisted of 38, two- and  three-story buildings, totaling 350 units. The site suffered from substantial  deterioration; major system problems, such as piping leaks and water table  problems; and poor site conditions (see fig. 21). The site also had  significant design problems due to its dense, maze-like building  configuration with no interior streets. According to the Chester Housing  Authority, Chester has been a distressed community for decades. About 56  percent of the population of Chester receives some form of government  assistance, and HUD has ranked Chester as the most depressed city of its  size in the United States. The housing authority was awarded a fiscal year  1995 HOPE VI planning grant for Lamokin Village and one other site as a  part of the overall recovery plan for the city.
section_title: Revitalization and Community and Supportive Services Plans
paragraphs: The total amount budgeted for the redevelopment of Lamokin Village is $27  million, which includes other public housing funds and equity from low- income housing tax credits. The revitalization plan for Lamokin Village,  renamed Chatham Estates, calls for three phases: (1) 22 new residential  buildings with a mix of 110 one-story and duplex row homes, (2) a 40-unit  senior building, and (3) 30 off-site homeownership units. All existing units  in Lamokin Village were to be demolished.
Of the $14.9 million revitalization grant, the housing authority budgeted  about $1.2 million for community and supportive services. The community  and supportive services plan, approved in December 1997, proposes a  comprehensive welfare-to-work strategy designed to cultivate the  economic self-sufficiency of Lamokin Village residents. Specific plans  include the establishment of a “one-stop shop” for social services, a  community center and educational facility to be built on-site, and a  comprehensive evaluative component that will examine the impact of  HOPE VI on the Chester community.
section_title: Current Status
paragraphs: The 150 units, including the 40-unit senior building, planned for phases one  and two are 100 percent complete and occupied (see fig. 21). Thirty-eight  former residents returned to the family rental units, and 21 former  residents moved to the senior building. The third phase of the plan is being  transferred to the housing authority’s fiscal year 1998 HOPE VI  revitalization grant.
The authority did establish an interagency “one-stop shop” in 1998 that is  used as the coordinating point for all programs and partners servicing the  authority’s residents. The shop is located in the Chester Crozier Hospital,  along with various other social service agencies. For example, the Chester  Education Foundation provides an employment program at the hospital.  The authority has also included a family self-sufficiency component, which  is optional for residents and provides services such as case management,  computer hardware and software training, van transportation,  homeownership training, and entrepreneurial training. The supportive  services funding was expended before construction of the community and  educational center could begin; the authority is currently trying to raise  additional funding for this center. Finally, Widener University’s School of  Social Work has been evaluating impacts and outcomes of HOPE VI  initiatives in Chester since 1997.
section_title: Factors Contributing to Current Status
paragraphs: In 1994, the Chester Housing Authority was placed on HUD’s troubled  status list after receiving an extremely low evaluation score. During this  same period, a federal judge appointed a federal court receiver for the  housing authority in an effort to transform the authority. The receivership  is scheduled to end in June 2003. According to officials at the local HUD  field office, the receiver has brought about many positive changes for the  housing authority and its residents, including the two HOPE VI  revitalization grants. In 2002, the authority received a high evaluation  score, placing it in HUD’s high-performer category. The receiver ensured  that the authority had the proper staffing and knowledge to administer its  HOPE VI grants. Additionally, the authority brought the president of the  resident council on staff, helping to rebuild the relationship between the  authority and its residents. The receiver also created a separate police  force to increase the safety and security of the authority’s public housing  sites, the lack of which had been a major complaint of former residents.  Finally, during the receivership, all of Chester’s public housing family units  have either been demolished or rehabilitated.
Relying primarily on public housing funds simplified the development  process. Tax credit equity was only used to finance the construction of the  40-unit senior building. The remainder of the redevelopment was financed  by HOPE VI and other public housing funds. In addition, the housing  authority elected to act as its own developer of the family units. Finally, all  units were constructed on-site, thus the housing authority did not have to  purchase additional property.
section_title: North Beach, San Francisco, California
paragraphs: The San Francisco Housing Authority was awarded a $20 million HOPE VI  revitalization grant for North Beach in October 1996. Construction at the  site did not begin until November 2002 (see fig. 22). The housing authority  has also completed three sites with two HOPE VI revitalization grants— Bernal/Plaza (fiscal year 1993) and Hayes Valley (fiscal year 1995)—and  construction at its Valencia Gardens site (fiscal year 1997) is scheduled to  begin later this year.
subsections: section_title: Background
paragraphs: Located adjacent to Fisherman’s Wharf and surrounding the historic cable  car turnaround, North Beach is situated in the heart of San Francisco’s  tourist attractions. The site is surrounded by a busy, densely built, vibrant  neighborhood that is well-served by public transportation, schools,  shopping, and services. However, North Beach itself has been a pocket of  poverty, with residents earning, on average, only 17 percent of area median  income. The site was built in 1952 and consisted of 13 concrete buildings  with 229 walk-up units, which filled two city blocks (see fig. 22). It was  poorly designed with large amounts of indefensible space that became  havens for criminal activity. Due to repeated earthquake stress, the  buildings were weakening and had substandard major systems, including  sewer and plumbing. A $400,000 HOPE VI planning grant awarded in fiscal  year 1995 for North Beach funded a study of the site. The study determined  that due to the dilapidated condition of the site and the high crime rate in  the area, complete neighborhood revitalization would be essential to any  redevelopment plan.
section_title: Revitalization and Community and Supportive Services Plans
paragraphs: In addition to the $20 million revitalization grant, the San Francisco  Housing Authority was subsequently awarded a $3.2 million HOPE VI  demolition grant for the North Beach site in fiscal year 2001. The total  projected budget is $106 million—up from the $69 million estimated in  1996—and includes other public housing funds, other HUD funds, other  federal funds, and equity from low-income housing tax credits. The  revitalization plans call for 341 units. The 341 units will be divided as  follows:  229 public housing units, which will be a one-for-one replacement for  the units that were demolished on both the east and west blocks and  112 rental apartments for families with incomes below 50 percent of the  city median income.
Also included in the plans are a parking garage for 323 cars and commercial  and retail space surrounding the cable car turnaround area.
Approximately $1.5 million of the revitalization grant was set aside for  community and supportive services. This service component was created  to provide residents with opportunities to achieve self-sufficiency through  education, employment, and entrepreneurship. The community and  supportive services plan, approved in May 2001, calls for a commitment to  lifelong education that includes the development of basic intellectual skills,  specific training for particular types of employment, and a focus on life  skills such as parenting.
section_title: Current Status
paragraphs: Relocation, abatement, and demolition of both the east and west blocks has  been completed (see fig. 22). California awarded the authority $55 million  in tax credits in the spring of 2002 for the North Beach site, the largest  award in California history. With this additional funding, the housing  authority was able to begin construction at the site in November 2002.
About half of all residents currently participate in community and  supportive services. Participants create an individual plan with a case  manager, who then directs the resident to the various services offered, such  as employment assistance, computer, and English as a Second Language  classes. Additionally, 30 residents from North Beach are enrolled in the  housing authority’s family self-sufficiency program. Program participation  enables each household to receive up to $1,200 for training in various  trades.
section_title: Factors Contributing to Current Status
paragraphs: According to housing authority officials, the primary factor contributing to  delays at North Beach was resident resistance. To address resident  concerns regarding relocation, a former executive director initially  promised residents that the redevelopment would occur in two phases,  which meant that they would not have to be relocated off-site. However,  the housing authority later determined that this option would be too  expensive, and that the residents would have to be relocated off-site so that  redevelopment could occur all at once. The residents were not happy with  this decision and were very reluctant to move out of their apartments.
Funding shortfalls have also contributed to delays at the North Beach site.  San Francisco’s original HOPE VI application requested $30 million to  complete the revitalization of North Beach. Because HUD only awarded  them $20 million, making up the difference has been difficult. The authority  had to add 112 units to the plan in order to convince the city to provide $10  million in funding assistance. According to housing authority officials, now  that the project has been awarded $55 million in tax credits, the pace of the  redevelopment should accelerate.
Administering over $118 million in HOPE VI funds for five sites  simultaneously has been challenging for the authority’s staff. The housing  authority has a history of management and financial problems that have  affected its redevelopment efforts. HUD took over the housing authority in  1996 after the Mayor of San Francisco requested HUD’s assistance. The  authority had managerial problems, high crime at its public housing  developments, and problems with the physical condition of its housing  stock. After implementing new policies and procedures and reorganizing  the housing authority, HUD returned it to local control in 1997. Several  years after the housing authority was returned to local control, it developed  financial difficulties and again sought HUD’s assistance. HUD continues to  monitor and provide assistance to the housing authority.
Another factor that delayed the North Beach redevelopment was  environmental problems on-site. Half of the units contained lead paint and  asbestos, and the site’s soil had some arsenic, mercury, zinc, and lead  contamination (due to the site’s early industrial history). As a result, the  city required additional environmental reviews before it gave its approval  to begin construction.
section_title: Riverview and Lakeview Terraces, Cleveland, Ohio
paragraphs: The Cuyahoga Metropolitan Housing Authority was awarded a $29.7  million HOPE VI revitalization grant for Riverview and Lakeview Terraces  in October 1996 (see fig. 23). Although the housing authority has completed  relocation and demolition, the rehabilitation of units at Lakeview has been  slow, and little progress has been made with the construction of new units  at Riverview. The housing authority has been awarded two other HOPE VI  revitalization grants:  a $50 million grant in fiscal year 1993 for Outhwaite  Homes/King Kennedy, which is complete, and a $21 million grant in fiscal  year 1995 for the Carver Park site.
subsections: section_title: Background
paragraphs: Riverview, completed in 1963, consisted of 143 family units and 501 elderly  units (see fig. 23).  Lakeview, completed in 1932, contained 570 family units  and 214 elderly units. Riverview and Lakeview are neighboring public  housing sites, which collectively housed 715 elderly units and 713 family  units. Riverview is on unstable ground, which includes numerous  sinkholes. Both developments are located in the Ohio City neighborhood,  home to the West Side Market, which has been in operation since the 1880s  and attracts around 1 million visitors each year. Due to its age, the  Lakeview units had many problems, including high lead levels, lack of  parking, and obsolete underground plumbing and storm lines. In addition,  the majority of the Lakeview units were one- and two-bedroom units, while  the local demand is for three-bedroom and larger units.
section_title: Revitalization and Community and Supportive Services Plans
paragraphs: The total projected budget for the Riverview/Lakeview revitalization is  about $112 million, which includes other public housing funds, other  federal funds, equity from the sale of low-income housing tax credits, bank  financing, and other local funds. The current revitalization plan calls for 95  new public housing units, 240 rehabilitated public housing units, and 345  new market-rate and moderate-income units. For Riverview, there are  plans to construct 45 public housing units on-site and 50 off-site, to acquire  54 off-site public housing units, and to construct 228 market-rate and 117  affordable (tax credit) units. At the Lakeview site, there are plans to  renovate 186 public housing units and a community center. There are also  plans for site improvements, including the demolition of garage  compounds.
Of the $29.7 million in HOPE VI funds, the housing authority plans to set  aside $5.8 million for community and supportive services. The goals of its  community and supportive services plan, approved in July 2000, are to  track and provide services to Lakeview residents and relocated families  from Riverview, make all interested residents meet the qualifications for  moving into the newly renovated units, and help Lakeview and Riverview  residents make the transition from welfare to work.
section_title: Current Status
paragraphs: The renovation of the first 56 units at the Lakeview site is under way, and  six units have been completed (see fig. 23). The demolition of the garage  compounds and rehabilitation work are moving along as scheduled,  according to the housing authority. The relocation of 98 households and  demolition of 135 units is complete at the Riverview site (see fig. 23). The  housing authority has also acquired 54 single-family homes in scattered  sites, which are fully occupied, but the construction of new units is not  scheduled to begin until October 2004. In June 2002, the housing authority  received an award for its plan for the Riverview site from the Congress for  New Urbanism. The housing authority is in the process of executing a  development agreement.
Case management activities are in progress for 343 Riverview and  Lakeview residents. These residents participate in a range of activities,  including entrepreneurial and employment training and educational  programs. The housing authority is also in the process of implementing a  new system for ensuring that residents can receive the job-training services  that they need by using vouchers to purchase services.
section_title: Factors Contributing to Current Status
paragraphs: The housing authority was experiencing internal problems when the grant  was awarded in 1996. The prior administration was not following  appropriate procurement procedures, according to HUD officials, and the  former executive director was ultimately convicted for theft of public  funds, mail fraud, and lying about a loan. A new executive director was  hired in late 1998, and the housing authority was finally able to focus on the  HOPE VI grant in 1999.
The project has also experienced delays due to cost constraints,  consideration of community and resident input, and problems with the site.  First, the housing authority requested $40 million to implement its  revitalization plan, but it was awarded $29.7 million. As a result, it took  time for the housing authority to obtain other funding. Next, the housing  authority did not originally plan to put public housing back on the  Riverview site because the land was sloping and unstable. Due to  community and resident opposition to this plan, the housing authority  agreed to put public housing units back on-site. Subsequent analysis by an  engineering firm revealed that certain areas were stable enough for new  construction. Similarly, while the housing authority originally planned to  modernize 12 of the buildings at Lakeview, it later revised these plans to  include modernization of an additional 66 row-house units.
section_title: Robert S. Jervay Place, Wilmington, North Carolina
paragraphs: The Wilmington Housing Authority was awarded an $11.6 million HOPE VI  revitalization grant for Robert S. Jervay Place (Jervay Place) in October  1996 (see fig. 24). Relocation and demolition at Jervay Place are complete,  but construction has been slow to start.
subsections: section_title: Background
paragraphs: Jervay Place, constructed in 1951, was made up of 30, two-story, brick  buildings that housed 250 units on 14 acres of land (see fig. 24). The  building configuration yielded limited defensible space for each dwelling  unit and rendered the site vulnerable to criminal activity. The site needed  renovation, lead-based paint removal, asbestos abatement, and  modifications for the handicapped. In addition, the resident population  consisted of young, welfare-dependent, single-parent families.
section_title: Revitalization and Community and Supportive Services Plans
paragraphs: The total projected budget for the Jervay Place revitalization is $33 million,  which includes equity from low-income housing tax credits, other grants,  and private debt. The revitalization plans called for 190 new units to be  developed at Jervay Place and surrounding sites in four phases, excluding a  phase dedicated to the implementation of community and supportive  services. The construction phases are as follows:  construction of 14 for-sale or lease-purchase units on the original site;  construction of 60 units and a community center on the original site and   construction of 44 for-sale or lease-purchase units on the original site;   construction of 32 scattered site for-sale or lease-purchase units.
Of the 190 new units, 71 would be public housing units, 29 would be  financed with a combination of low-income housing tax credits and  project-based Section 8, 28 would be lease-purchase units, and 62 would be  other subsidized homeownership units. A 7,000-square-foot, commercial- retail space will also be constructed on-site, but the housing authority has  not determined in which phase this will be done.
Of the $11.6 million in HOPE VI funds, the Wilmington Housing Authority  planned to set aside $1.5 million for community and supportive services.  The focus of its service efforts would be transportation, job training and  placement, education, health care, and child care. The housing authority  also planned to establish partnerships with local schools and businesses.
section_title: Current Status
paragraphs: Relocation, demolition, and 4 of the 14 phase one homeownership units  have been completed, and construction of the next 5 units is under way  (see fig. 24). For phase two, construction began in November 2002, and tax  credits have been approved. For phase three, the housing authority is  working on its homeownership plan. The final phase of construction has  not begun. The housing authority estimates that all of the units will be  complete in August 2005.
HUD approved the housing authority’s community and supportive services  plan in February 1999. The housing authority administers services through  its family self-sufficiency program, through which case managers are  assigned to work with individual households and match them with  appropriate services. Case managers have worked with participants to  assist them with their self-sufficiency goals, including working with  residents to prequalify them to purchase the homes constructed in phase  one. Residents who wish to return to Jervay Place must be enrolled in this  program. As of January 2003, 62 of the 132 original residents were enrolled.
section_title: Factors Contributing to Current Status
paragraphs: The procurement of the initial development partner was legally challenged  by one of the other bidders. According to HUD, a considerable amount of  time was spent resolving this issue, and HUD’s Office of General Counsel  ultimately determined the challenge was unfounded. However, the housing  authority and the initial developer did not work well together, and the  developer was released in July 1999. A new developer was hired in April  2001, and HUD assigned an expediter—a private-sector expert in finance,  real estate development, or community revitalization—to help move the  project. Both the housing authority and the second developer had to work  through resistance from the community and residents, who did not  understand the plans because they were not involved in the planning by the  previous developer and who were frustrated by the lack of progress at  Jervay Place, according to housing authority officials. As a result of these  issues, the housing authority did not submit its revitalization plan until  December 2000. HUD approved the plan in October 2001.
According to housing authority officials, revitalization also has been  adversely affected by the city’s and HUD’s slow approval processes. For  example, while the city informed the housing authority in August 2001 that  its site plan had been approved, it was informed in December 2001 that the  site plan should not have been approved because the setbacks, the space  between the building area and the property line, were incorrect. As a result,  the site plans had to be changed and resubmitted to obtain the city’s  approval. Similarly, housing authority officials stated that HUD’s slow  approval process has contributed to delays. For example, it took HUD 5  months to conditionally approve the revitalization plan. In addition,  housing authority officials stated that they had to take out a line of credit to  begin construction because HUD was taking too long to make the grant  funds available. According to HUD, approval could not be completed until  the housing authority fulfilled several conditions, including submission of a  mixed-finance proposal, a revised implementation schedule, proposed unit  designs, and a revised HOPE VI budget. In addition, the HUD grant  manager assigned to the housing authority was responsible for closing six  mixed-finance deals as well as reviewing new HOPE VI grant applications  during this time frame.
section_title: Robert Taylor Homes B, Chicago, Illinois
paragraphs: The Chicago Housing Authority was awarded a $25 million HOPE VI  revitalization grant in October 1996 for Robert Taylor Homes B (see fig. 25).  Relocation and demolition are complete, and approximately one-quarter of  the planned units have been constructed. The housing authority’s scattered  site program, which includes the development of any nonelderly public  housing, has been under judicial receivership since 1987. The authority is in  the midst of implementing a 10-year transformation plan, a $1.5 billion  blueprint for rebuilding or rehabilitating 25,000 units of public housing— enough for every leaseholder as of October 1999—and transforming  isolated public housing sites into mixed-income communities. The  authority was awarded a revitalization grant for Robert Taylor A in fiscal  year 2001 and has also received grants for the following sites:  Cabrini- Green (fiscal year 1994), ABLA (fiscal years 1996 and 1998), Henry Horner  (fiscal year 1996), Madden/Wells/Darrow (fiscal year 2000), and Rockwell  Gardens (fiscal year 2001).
subsections: section_title: Background
paragraphs: The Robert Taylor Homes consisted of over 4,300 units in 28 detached, 16- story buildings along Chicago’s State Street corridor, a 4-mile stretch of five  different public housing sites (see fig. 25). It was the nation’s largest, most  densely populated public housing enclave. The Robert Taylor Homes were  divided into two subsites called Robert Taylor A and B. The fiscal year 1996  HOPE VI revitalization grant is for Robert Taylor B, which was constructed  between 1959 and 1963, and consisted of 2,400 units spread over 16 high- rise buildings. The surrounding neighborhood included many boarded-up  buildings, vacant lots, and a few small businesses. However, the site also is  near bus and train services and a technical vocational school.
section_title: Revitalization and Community and Supportive Services Plans
paragraphs: In addition to the revitalization grant for Robert Taylor B, the Chicago  Housing Authority was subsequently awarded a $6.3 million HOPE VI  demolition grant in fiscal year 2000 and a $13 million HOPE VI demolition  grant in fiscal year 2001. The total projected budget for the Robert Taylor B  revitalization is $113 million, which includes other public housing funds,  other federal funds, conventional debt, and equity from the sale of low- income housing tax credits. The revitalization plans call for the demolition  of 762 units and the construction of 251 public housing units in scattered  off-site locations throughout the surrounding neighborhoods.
Of the $25 million revitalization grant, approximately $1.5 million has been  budgeted for community and supportive services. The community and  supportive services plan was submitted and approved in June 1998. The  plan states that the housing authority will provide case managers to  monitor families’ progress in meeting goals established in self-sufficiency  plans. The plan also allowed for the housing authority to use a Boys and  Girls Club to deliver self-sufficiency activities until a community center  was constructed in 1998. The services provided would include a  combination of employment; education; and family services, such as child  care and health care.
section_title: Current Status
paragraphs: As shown in figure 25, a 116-unit site, referred to as The Langston, has been  constructed and is at capacity. Twenty-nine of these units are public  housing units and are occupied by former residents of Robert Taylor A and  B. The remaining units are a mixture of tax credit and market-rate units.  Construction of a second site, referred to as The Quincy, is also complete.  The Quincy has 107 units, including 27 public housing units, which are fully  occupied. The remaining units are also a mixture of market-rate and tax  credit units. In February 2003, HUD approved the combination of the 1996  grant for Robert Taylor B with the 2001 grant for Robert Taylor A for  planning and implementation purposes as well as the extension of certain  grant agreement deadlines affecting the 1996 grant. As a result, while the  housing authority is still obligated to complete 195 more public housing  units under the 1996 grant, these units will be developed as a part of a new  three-phase Robert Taylor Master Plan. Construction on the first phase of  this plan is scheduled to begin in late 2003.
The housing authority is currently in the process of revising its community  and supportive services plan to incorporate its service connector program,  in which case managers work individually with residents to provide either  necessary services or refer them to the appropriate providers. The housing  authority is in the process of locating the original residents, finding out  whether they are using any supportive services through the housing choice  program, and determining what services they need. According to the  housing authority, the primary service provided to the original residents  has been relocation assistance. In addition, the Charles Hayes Family  Investment Center opened in September 1998 adjacent to the original site,  offering a one-stop source for computer training, job placement, medical,  and other supportive services.
section_title: Factors Contributing to Current Status
paragraphs: The revitalization of Robert Taylor B has been slowed by tension early in  the relationship between the Chicago Housing Authority and its receiver  and by the need for the plans to comply with the Gautreaux consent  decree. In 1966, African American residents of the Chicago public housing  community filed suit against the housing authority for creating a segregated  public housing system. In response, the court issued a judgment that  prohibits the housing authority from constructing any new family public  housing in a neighborhood in which more than 30 percent of the occupants  are minorities (limited areas) unless it develops an equal number of units in  neighborhoods where less than 30 percent are minorities (general areas).  In 1987, the court appointed a receiver for Chicago’s scattered-site  program, which includes the development of nonelderly public housing.
According to a housing authority official, the first delay at Robert Taylor B  occurred because the housing authority did not develop its revitalization  plan with the input of the receiver. The housing authority submitted the  plan to HUD in January 1998, and 9 months later HUD informed the  housing authority that it could not act on the plans without the  concurrence of the receiver. It took over 1 year for the housing authority  and the receiver to revise the plans together and to address HUD’s specific  concerns. HUD approved the plan in December 1999, but it only partially  approved the HOPE VI budget because the housing authority and the  receiver had not come to agreement on the receiver fee. The determination  of how grant funds should be dispersed between the housing authority and  the receiver was not finalized until May 2000.
The housing authority also has experienced difficulty obtaining off-site  locations for the balance of the public housing units that need to be  constructed. To address this difficulty, the housing authority has proposed  combining the revitalization efforts of Robert Taylor B with the  revitalization funded under the fiscal year 2001 Robert Taylor A grant. The  housing authority is working on obtaining a revitalizing order for the  Robert Taylor community, which would waive the Gautreaux restrictions.  Revitalizing orders allow the construction of new family public housing  units in limited areas without requiring an equal number of units to be built  in a general area. The revitalizing circumstances must support a reasonable  forecast of economic integration, with the longer term possibility of racial  integration. The housing authority hopes that it can use the work already  completed with the Robert Taylor B grant to show that the area is being  revitalized.
Finally, receipt of the fiscal year 2001 HOPE VI grant for Robert Taylor A  has slowed progress at Robert Taylor B. After receiving this grant, the  housing authority took time to develop a master plan to coordinate the  development of both Robert Taylor A and B. The master plan allows the  housing authority to combine the grants for planning purposes, although  they remain administratively separate. In addition, the Robert Taylor site  has not consistently been a top priority for the housing authority.  According to a housing authority official, other sites that are further along  have been selected to get the majority of the housing authority’s time,  energy, and resources.
section_title: St. Thomas, New Orleans, Louisiana
paragraphs: The Housing Authority of New Orleans was awarded a $25 million HOPE VI  revitalization grant for St. Thomas in 1996. Although relocation and  demolition have been completed, no new units have been constructed (see  fig. 26). The housing authority is currently under administrative  receivership. The housing authority was also awarded a HOPE VI  revitalization grant for the Desire site in fiscal year 1994.
subsections: section_title: Background
paragraphs: St. Thomas, completed in 1941, consisted of 1,510 public housing units on  almost 50 acres (see fig. 26). The site was located in a mixed-use  neighborhood close to the central business district and the Garden District.  The neighborhood in which St. Thomas is located was recently designated  as a historic district. St. Thomas had a vacancy rate of 50 percent when the  Housing Authority of New Orleans applied for the HOPE VI grant. The  original site had a density of approximately 30 units per acre and contained  long spaces between buildings, which were conducive to criminal and  violent behavior. Moreover, underground utilities were either obsolete or  deteriorated. Stormwater flooding and sanitary line overflows were  common. The odor of sewage was pervasive throughout the site.
section_title: Revitalization and Community and Supportive Services Plans
paragraphs: In addition to the revitalization grant, the Housing Authority of New  Orleans was awarded a HOPE VI demolition grant in the amount of $3.5  million to demolish 701 units at St. Thomas. With funds from the city, state,  tax-exempt bonds, and other sources, the total projected budget for the  revitalization of St. Thomas is $293 million. The revitalization plans call for  a total of 1,238 units, including construction of 182 on-site public  housing units, 107 on-site public housing eligible rental units, 15 on-site  affordable homeownership units, 100 off-site public housing eligible  rental units, and 50 off-site affordable homeownership units;  construction of a 200,000-square-foot retail center on 17 acres adjacent  to the site; and  historic preservation and renovation of five of the original St. Thomas  buildings.
Of the $25 million revitalization grant, the housing authority plans to spend  $4 million on community and supportive services. The housing authority  will attempt to contact all of the original St. Thomas households and  conduct assessments of their needs. On the basis of these assessments, a  detailed case management plan will be drafted. The St. Thomas community  and supportive services plan, which HUD approved in July 2001,  documents goals and objectives for achieving self-sufficiency for the  residents of St. Thomas in the following areas: employment and income  generation, education, training, homeownership training and assistance,  health, strengthening families, and services to build community leadership.
section_title: Current Status
paragraphs: The St. Thomas site has been cleared, but construction has not yet started  (see fig. 26). The relocation of 739 families was completed in June 2001,  and demolition of 1,365 units was completed in December 2001. As of April  2003, infrastructure work at the St. Thomas site was 60 percent complete.
The transfer of property from the housing authority to the retail developer  for the construction of the retail center is scheduled to occur by June 2003.  This property transfer is contingent upon the housing authority’s  submission of documents to HUD for the closing of the first phase of  construction on residential units, an escrow deposit from the developer to  guarantee the construction of residential housing, and the environmental  clearance for the retail site. State economic development bonds were  approved in December 2002, which enabled negotiations regarding the  retail center to progress.  The historic preservation of five of the original St.  Thomas buildings also has begun.
The housing authority has hired Kingsley House, a social service provider  located near the St. Thomas site, to perform assessments and provide case  management plans in accordance with the community and supportive  services plan. The Kingsley House, established in 1896, administers a  variety of programs from Head Start to adult day care. Assessments have  been conducted on 451 of the 739 families that were affected by the  redevelopment plans.
section_title: Factors Contributing to Current Status
paragraphs: According to housing authority officials, progress has been delayed due to  funding shortfalls. Although the housing authority requested $40 million,  HUD awarded $25 million, which was not enough to revitalize the St.  Thomas site. Similarly, the city could provide $6 million of the $20 million  needed for infrastructure at the site. As a result, the developer had to take  time to identify other funding sources. Moreover, it took approximately 2  years from the time that the developer told HUD its intentions to employ  tax-increment financing (TIF) until the New Orleans City Council approved  it. Approval of the TIF was delayed due to public pressure against the TIF  concept and the project itself. Moreover, the state bond commission did not  approve the issuance of bonds until December 2002, after nearly 6 months  of delays due in part to the need to complete environmental review  processes.
Also, although the housing authority selected a developer in September  1997, the HUD Office of Inspector General identified problems with the  selection process.   Specifically, the Inspector General found that the  housing authority allowed the majority of the selection panel members to  be nonhousing authority individuals. The Inspector General also found that  the interaction of the initial developer with certain members of the  selection panel and St. Thomas residents constituted both a perceived and  actual conflict of interest. As a result, the housing authority selected a new  developer in October 1999. Once selected, the new developer reconfigured  the revitalization plan.
Delays continue because the St. Thomas site is located in a historic district.  Preservationists opposed demolition of existing buildings and the  construction of the retail center because of its size, design, financing,  impact upon traffic, and negative effect upon local businesses. The housing  authority consulted with environmental and preservationist groups and  executed a Memorandum of Agreement in September 2000 that stipulated  the preservation of five of the original St. Thomas buildings and a  warehouse as well as other measures aimed at minimizing adverse  environmental impact in and around St. Thomas. Consultation began in  2001 for an amended Memorandum of Agreement to consider the retail  component proposed for the site.
In July 2002, a nonprofit organization filed a lawsuit against the housing  authority and HUD (1) stating that they were not in compliance with  environmental and historic preservation laws and (2) seeking HUD to  withhold all HOPE VI funds from the housing authority. Since the filing of  the lawsuit, HUD has completed a supplemental environmental assessment  and has published a finding of no significant impact. Moreover, the housing  authority, HUD, and other parties have executed an amended  Memorandum of Agreement. The case was reopened in March 2003, but it  was dismissed by a judge in April 2003.
Finally, the Housing Authority of New Orleans has had a long history of  management problems, and its public housing has long been in very poor  condition. In 1996, HUD entered into a “cooperative endeavor agreement”  with New Orleans to correct problems at the housing authority. Under this  agreement, HUD dissolved the housing authority’s board of commissioners  and chose a HUD representative as Executive Monitor to oversee the  authority’s progress in implementing improvements. In 2002, after the  housing authority had made little progress, HUD took control of its  management and operations. According to HUD officials involved in the  receivership, they are working on reallocating staff resources, reorganizing  the housing authority’s structure, and cutting back on unnecessary  expenditures.
section_title: Theron B. Watkins Homes, Kansas City, Missouri
paragraphs: The Housing Authority of Kansas City, Missouri, received a $13 million  HOPE VI revitalization grant for Theron B. Watkins in November 1996 (see  fig. 27). This grant has funded the revitalization of the Watkins site and will  fund additional revitalization plans at another site and off-site units. The  authority has had numerous problems related to management and  maintenance of its properties, and it was placed under judicial receivership  in 1994. The authority also was awarded three other HOPE VI revitalization  grants—a fiscal year 1993 revitalization grant for Guinotte Manor, a fiscal  year 1997 revitalization grant for Heritage House, and a smaller  revitalization grant for Heritage House awarded in fiscal year 1998 that is  complete.
subsections: section_title: Background
paragraphs: For many years, the Theron B. Watkins site served as the symbol for urban  decline in Kansas City. With its deteriorated structures, large open  entryways, and outdated and neglected electrical systems, the site suffered  from many of the same problems identified in housing of similar design  throughout the country. The site was built in 1953 and contained 288 units  in 22, three-story buildings. In the late 1980s, living conditions at the site  began to deteriorate at a rapid pace with drug dealing and related crime  rampant; units in disrepair and neglect; and the housing authority unable to  address problems due to its mismanagement problems. These conditions  created an unsafe living environment that prompted residents to vacate the  site in large numbers. Upon the arrival of the receiver in 1994, problems at  the site included a 43 percent vacancy rate; enormous backlogs of  uncompleted maintenance work; high rates of criminal activity; and  hundreds of families living in dangerous, substandard conditions.
section_title: Revitalization and Community and Supportive Services Plans
paragraphs: According to the revitalization plan, the Housing Authority of Kansas City,  Missouri, would use their $13 million HOPE VI revitalization grant to fund  portions of several redevelopment projects. The majority of the grant  would fund the rehabilitation of 75 units at the Theron B. Watkins site.  (Other public housing funds would be used to complete the rehabilitation  of the remaining units.)  Additionally, some of the HOPE VI funds would be  used to rehabilitate 74 townhomes at the housing authority’s Wayne Miner  site. Finally, the funding would be used to demolish 24 units at Theron B.  Watkins. These units would be replaced in two off-site communities. Of the  $13 million revitalization grant, $1.4 million was budgeted for community  and supportive services. The funds would be used to provide case  management, community policing, and programs and activities. An  additional $314,000 would be used to renovate the housing authority’s  family development center.
section_title: Current Status
paragraphs: Of the 173 total planned units, 149 have been completed. The rehabilitation  of 75 units at the Theron B. Watkins site is complete (see fig. 27), as is the  renovation of the family development center. The rehabilitation of the 74  townhomes at the Wayne Miner site was completed in March 2003. The  replacement of the 24 demolished units in two, off-site, mixed-income  developments remains in the planning stage. However, due to recent tax  credit awards, construction on 13 of the 24 replacement units is scheduled  to begin in June 2003.
Community and supportive services for residents of Theron B. Watkins  include bilingual case management for the large immigrant population,  community policing, transportation, public health programs, and youth  development activities. The housing authority recently conducted a needs  assessment of its residents, which demonstrated the residents’ preference  for case management. Services for children are offered at an on-site  community center, including Head Start, Parents as Teachers, Boy/Girl  Scouts, and the Police Athletic League.
section_title: Factors Contributing to Current Status
paragraphs: The housing authority had already begun the revitalization of Theron B.  Watkins with other public housing funds when the fiscal year 1996 HOPE VI  revitalization grant was awarded. Additionally, the receivership improved  the management of the housing authority, which ensured that the authority  had the staffing and expertise to implement its HOPE VI grants.
Although the on-site renovation was completed by April 2000, the other two  parts of the redevelopment effort have faced challenges. The housing  authority’s initial HOPE VI application included the Wayne Miner site as a  mixed-income development, but after an evaluation of financial feasibility  and market demand, the housing authority decided that mixed-income  development would not be sustainable at the site. Thus, the housing  authority had to redo its plans for the site to include only public housing.  The plans to replace the 24 demolished Theron B. Watkins units at two, off- site, mixed-income developments were delayed when the housing  authority’s fiscal years 2001 and 2002 applications for low-income housing  tax credits were denied. However, in early 2003, one of the two mixed- income developments was awarded tax credits, and construction is  expected to begin in June 2003. The housing authority plans to reapply for  tax credits for the other development in the fall of 2003.
section_title: Tobe Hartwell Courts and Tobe Hartwell Extension, Spartanburg, South Carolina
paragraphs: The Spartanburg Housing Authority was awarded a $14.6 million HOPE VI  revitalization grant for Tobe Hartwell Courts and Tobe Hartwell Extension  in October 1996 and has completed all of the planned public housing and  homeownership units, a community center, and nearly half of the planned  tax credit units (see fig. 28).
subsections: section_title: Background
paragraphs: Tobe Hartwell Courts and Tobe Hartwell Extension—constructed in 1941  and 1952, respectively—contained 266 units in concrete and masonry  buildings (see fig. 28). High density, narrow streets, limited rehabilitation  options, and general disrepair characterized the development. In 1996,  incidents of crime were 19 percent higher at this development than crime in  Spartanburg public housing in general, and nearly 40 percent of the  residents did not have a high-school diploma. The housing authority was  awarded a $400,000 HOPE VI planning grant for Tobe Hartwell Courts and  Extension in May 1995.
section_title: Revitalization and Community and Supportive Services Plans
paragraphs: The total projected budget for the project is $30 million, which includes tax  credit equity and private funds. The revitalization plans for Tobe Hartwell  Courts and Tobe Hartwell Extension, renamed the Tobias Booker Hartwell  Campus of Learners, call for 268 new units to be developed in the following  four phases:  Phase one: 118 public housing replacement units and a community  center on the original site.
Phase two: 50 single-family homes on two off-site locations.
Phase three: 50-unit, off-site apartment complex (40 low-income  housing tax credit units and 10 public housing units).
Phase four: another 50 low-income housing tax credit off-site units.
Of the $14.6 million in HOPE VI funds, approximately $803,000 was set  aside for community and supportive services. The community and  supportive services plan, approved in May 1998, stated that case managers  would administer the program and monitor residents’ progress. The  community center would be the hub of the supportive services component  and would include a day-care facility, a computer center, a clinic, meeting  rooms, staff offices, and a combined gymnasium and multipurpose  community room.
section_title: Current Status
paragraphs: The 118 replacement public housing units were completed in February  2001 and are now fully occupied (see fig. 28). All 50 homes are complete, 36  have been sold, and contracts are in place for 7. Of the 50 tax credit units  planned for phase three, all have been constructed and accepted. Site  infrastructure work is complete for phase four, and the housing authority is  awaiting the 2003 low-income housing tax credit cycle to apply for building  funds for this phase.
A needs assessment of the residents was updated in January 2000, and  provision of supportive services began in December 2000. The community  center is complete, and the day-care and health-care components are fully  operational. Classes are also under way in the computer lab, and case  managers are on-site.
section_title: Factors Contributing to Current Status
paragraphs: Spartanburg Housing Authority officials believe that they have been  successful for several reasons. First, receipt of a planning grant enabled the  housing authority to thoroughly plan the revitalization. As a result of this  early planning, the housing authority made few changes to their plans after  the revitalization grant was awarded. Also, housing authority officials  emphasized that they involved their residents early and often, enabling  them to avoid the delays and difficulties that many other housing  authorities have experienced. Moreover, housing authority officials  emphasized that their previous executive director provided strong  leadership and was the driving force behind the planning and  implementation of their revitalization grant.
The financing of this grant was relatively simple compared with the  financing that other housing authorities must arrange to construct mixed- income developments. For example, the housing authority put all public  housing units back on-site. In addition, in South Carolina, the state housing  finance agency sets aside low-income housing tax credits for HOPE VI  sites. This made it easier for the housing authority to obtain tax credits for  its off-site components.
section_title: Comments from the Department of Housing and Urban Development
section_title: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contacts
section_title: Staff Acknowledgments
paragraphs: In addition to those named above, Catherine Hurley, Kevin Jackson,  Barbara Johnson, Alison Martin, John McGrail, Sara Moessbauer, Marc  Molino, Lisa Moore, Barbara Roesmann, Paige Smith, Ginger Tierney, and  Carrie Watkins made key contributions to this report.
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