Public Housing: HOPE VI Resident Issues and Changes in Neighborhoods Surrounding Grant Sites
Published: 2003-11-21T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Congress established the HOPE VI program in 1992 to revitalize severely distressed public housing by demolition, rehabilitation, or replacement of sites. In fiscal years 1993-2001, the Department of Housing and Urban Development (HUD) awarded approximately $4.5 billion for 165 HOPE VI revitalization grants to public housing authorities (grantees). GAO was asked to examine (1) the types of housing to which the original residents of HOPE VI sites were relocated and the number of original residents that grantees expect to return to the revitalized sites, (2) how the fiscal year 1996 grantees have involved residents in the HOPE VI process, and (3) how the neighborhoods surrounding the 20 sites that received HOPE VI grants in fiscal year 1996 have changed.
section_title: What GAO Found
paragraphs: The largest percentage of the approximately 49,000 residents that had been relocated from HOPE VI sites, as of June 30, 2003, were relocated to other public housing, and about half were expected to return to the revitalized sites. Although grantees, overall, expected 46 percent of relocated residents to return, the percentage of original residents that were expected to return (or the reoccupancy rate) varied greatly from site to site. The level of resident involvement in the HOPE VI process varied at the 1996 sites. While all of the 1996 grantees held meetings to inform residents about revitalization plans and solicit their input, some took additional steps to involve residents. For example, in Tucson, the housing authority submitted the revitalization plan for the Connie Chambers site to the city council for approval only after the residents had voted to approve it. The neighborhoods in which 1996 HOPE VI sites are located generally have experienced improvements in indicators such as education, income, and housing, although GAO could not determine the extent to which the HOPE VI program contributed to these changes. In a comparison of four 1996 HOPE VI neighborhoods to four comparable neighborhoods, mortgage lending activity increased to a greater extent in three of the HOPE VI neighborhoods. But, a comparison of other variables (such as education and new construction) produced inconsistent results, with HOPE VI neighborhoods experiencing both greater positive and negative changes than comparable neighborhoods.

section_title: Letter
paragraphs: The public housing program began in the late 1930s and 1940s as a means  to provide temporary housing for the working poor. By the 1960s and 1970s,  public housing had become the housing of last resort. Over time, some of  the nation’s public housing became old and deteriorated, leaving residents  to live in unsafe and unsanitary conditions. In 1989, Congress formed the  National Commission on Severely Distressed Public Housing (the  Commission) and tasked it with proposing a national action plan to  eradicate severely distressed public housing by the year 2000. In 1992, the  Commission reported that approximately 86,000, or 6 percent, of the  nation’s public housing units were severely distressed—characterized by  physical deterioration and uninhabitable living conditions; high levels of  poverty; inadequate and fragmented services; institutional abandonment;  and location in neighborhoods often as blighted as the sites themselves.  Therefore, the Commission recommended increased funding for support  services to residents of severely distressed public housing, resident  participation in revitalization efforts, and revitalization consistent with any  occurring in surrounding neighborhoods.
In response to the Commission’s report, 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). By providing funds for a combination of  capital improvements and supportive services, such as child care and job  training, HOPE VI seeks to fulfill its legislative goals of (1) improving the  living environment for public housing residents of severely distressed  public housing through the demolition, rehabilitation, reconfiguration, or  replacement of obsolete public housing; (2) revitalizing sites on which such  public housing is located and contributing to the improvement of the  surrounding neighborhood; (3) providing housing that will avoid or  decrease the concentration of very low-income families; and (4) building  sustainable communities. In fiscal years 1993-2001, HUD awarded  approximately $4.5 billion in HOPE VI revitalization grants to 98 public  housing authorities (grantees) for 165 sites.
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. The second report, issued  in May 2003, described HUD’s management of the HOPE VI program. This  third and final report focuses on the effect that the HOPE VI program has  had on residents and the neighborhoods surrounding HOPE VI sites.  Specifically, as agreed with your office, this report examines (1) the types  of housing to which the original residents of HOPE VI sites were relocated  and the number of original residents that grantees expect to return to the  revitalized sites, (2) how the fiscal year 1996 grantees have involved  residents in the HOPE VI process, (3) the types of community and  supportive services that have been provided to residents and the results  achieved, and (4) how the neighborhoods surrounding the sites that  received HOPE VI grants in fiscal year 1996 have changed.
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 relocation, reoccupancy (the  movement of some original residents to completed units), and community  and supportive services data. Second, we visited the 18 housing authorities  that were awarded revitalization grants in fiscal year 1996 and interviewed  resident representatives at 19 of the 20 sites. We selected the 1996 grants  because they were the first awarded after HUD issued a rule allowing  revitalization to be funded with a combination of public and private funds,  which has become the HOPE VI model. Third, to determine how  neighborhoods have changed, we analyzed Census and Home Mortgage  Disclosure Act (HMDA) data and reviewed crime data summaries. Finally,  we interviewed the HUD headquarters officials responsible for  administering the program. We assessed the reliability of the HUD, Census,  HMDA, and summary crime data we used by reviewing information about  how the data were collected 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.
We performed our work in Washington, D.C. and other U.S. cities from  November 2001 to October 2003 in accordance with generally accepted  government auditing standards. Appendixes I and II provide additional  details on our scope and methodology.
subsections: section_title: Background
paragraphs: HUD’s requirements for HOPE VI revitalization grants are laid out in each  fiscal year’s notice of funding availability (NOFA) and grant agreement.  NOFAs announce the availability of funds and set forth application  requirements and the selection process. Grant agreements are executed  between each grantee and HUD and specify the activities, key deadlines,  and documentation that grantees must meet or complete. Both NOFAs and  grant agreements also contain guidance on resident involvement in the  HOPE VI process. For example, the fiscal year 2002 NOFA stated that  residents and the broader community should be involved in the planning,  proposed implementation, and management of revitalization plans. In  additional guidance on resident involvement, HUD encourages grantees to  communicate, consult, and collaborate with affected residents and the  broader community through resident councils, consultative groups,  newsletters, and resident surveys. HUD’s guidance states that residents  should be included in all phases of HOPE VI development, but also states  that grantees have the final decision-making authority.
The majority of HOPE VI grants involve the relocation of residents from a  public housing site prior to demolition or rehabilitation. Grantees must  conduct the relocation process in accordance with laws such as the  Uniform Relocation Act and HUD guidance. Before the relocation process  can begin, the grantee must develop a HOPE VI relocation plan that  includes the number of families to be relocated, a description of the  counseling and advisory services to be offered to families, a description of  housing resources that will be used to relocate families, an estimate of  relocation costs, and an example of the notice the grantee will provide to  residents concerning relocation. Residents are generally given three basic  relocation options: (1) using a housing choice voucher (formerly Section 8)  to move into the private market, (2) moving to a different public housing  site, or (3) leaving federally assisted housing.
Revitalized HOPE VI sites often contain fewer public housing units and  have more stringent screening criteria. HUD guidance states that grantees  must collaborate with residents and other stakeholders to establish criteria  that residents must meet in order to return to the site. Residents are not  guaranteed that they will automatically return to the site. Typically,  grantees offer original residents who remain in good standing the first  priority right to return to the revitalized site.
Grantees must offer community and supportive services—such as child  care, transportation, job training, job placement and retention services, and  parenting classes—to all original residents, regardless of their intention to  return to the revitalized site. HUD guidance states that services for original  residents should begin as soon as possible following the grant award and  help residents make progress toward self-sufficiency. Additionally, HUD  guidance suggests that grantees offer residents community and supportive  services that are specifically designed to help them meet the criteria for  their return to the revitalized site. New households that move to the  revitalized site also are eligible to receive services. HUD guidance  emphasizes that HOPE VI grantees should use case managers to assess the  needs and circumstances of residents and then make appropriate referrals  to a range of service providers. Grantees must submit to HUD a community  and supportive services plan that contains a description of the supportive  services that will be provided to residents, proposed steps and schedules  for establishing arrangements with service providers, plans for actively  involving residents in planning and implementing supportive services, and  a system for monitoring and tracking the performance of the supportive  services programs, as well as resident progress.
section_title: Largest Percentage of Original Residents Were Relocated to Other Public Housing, and About Half Are Expected to Return to HOPE VI Sites
paragraphs: According to HUD data, the largest percentage of residents living at HOPE  VI sites were relocated to other public housing. Because HUD has not  always required grantees to track original residents during the  development process, housing authorities lost track of some original  residents. Overall, grantees estimated that 46 percent of the original  residents would return to the revitalized sites. However, the percentage of  original residents expected to return varied greatly from site to site. Several  factors may affect planned and actual reoccupancy rates, including the  planned mix of units and the criteria used to screen the occupants of the  new units.
subsections: section_title: Half of Original Residents Relocated to Other Public Housing
paragraphs: As shown in figure 1, a majority of the almost 49,000 residents that had  been relocated from HOPE VI sites, as of June 30, 2003, moved to other  public housing (about 50 percent) or received vouchers (about 31 percent).  Additionally, approximately 6 percent were evicted, and about 14 percent  were classified as “other,” which includes either residents who moved  without giving notice or who moved out of public housing. Grantees lost  track of some original residents for a number of reasons. HUD did not  emphasize the need to track original residents until 1998 and did not  require grantees to report the location of residents until 2000. Also, four of  the 1996 grantees we interviewed stated that it was difficult to track  residents who had left federally-assisted housing (i.e., were no longer in  public housing or using a voucher.)
In a June 2002 report to Congress, HUD acknowledged that efforts to track  original residents during the development process had been uneven and  stated that the agency and grantees were working to improve resident  tracking. All but one of the 1996 grantees developed some means of  tracking original residents, although three stated that they only tracked a  subset of original residents, such as those still in public housing or using a  voucher. The Housing Authority of Louisville created a database to track  residents and used it to determine the status of the 1,304 families that  resided at Cotter and Lang Homes prior to relocation. The housing  authority concluded that 65 percent had been relocated to other public  housing or given vouchers, and 33 percent had vacated Cotter or Lang prior  to being relocated. It could not determine if the remaining 2 percent had  been relocated or vacated prior to relocation. In addition, two 1996  grantees took steps to locate original residents with whom they had lost  contact. The Chicago Housing Authority hired a consultant to help it find  relocated residents. To track down those original residents that did not  remain in public housing or take a voucher, the Spartanburg Housing  Authority posted public notices stating that the authority was trying to  track down original residents and held meetings to get their addresses.
section_title: Various Factors May Affect the Return Rate for Original Residents
paragraphs: Overall, grantees estimated that 46 percent of all the original residents of  HOPE VI sites would return to the revitalized sites. However, as shown in  figure 2, the percentage of original residents that were expected to return  varied greatly from site to site. For example, at the 113 sites where  reoccupancy was not yet complete, the planned reoccupancy rate was less  than 25 percent at 23 sites; in contrast, the planned rate was 75 percent or  greater at 24 sites. At the 39 sites where reoccupancy was complete, the  actual reoccupancy rate was less than 25 percent at 17 sites and 75 percent  or greater at 7 sites. Also, the percentage of residents that were expected to  return decreased over time. As of September 30, 1999 (the earliest date for  which we could obtain data), fiscal year 1993–1998 grantees estimated that  61 percent of the original residents would return to the revitalized sites. By  June 30, 2003, the same grantees estimated that 44 percent of the original  residents would return.
Several factors may affect planned and actual reoccupancy rates, including  the mix of units. To reduce the concentration of poverty at HOPE VI sites,  HUD recommends a mix of public housing, affordable housing (low- income housing tax credit or other subsidized housing), and market-rate  housing. As a result, grantees, as of June 30, 2003, had demolished or  planned to demolish 76,393 public housing units and rebuild or renovate  44,781 replacement public housing units. At the 1996 sites, the percentage  of public housing units being replaced ranged from 10 percent to 102  percent (see fig. 3). Resident and low-income housing advocates have  criticized the HOPE VI program for reducing the number of public housing  units. However, HUD, in its June 2002 report to Congress, pointed to the  number of affordable units and vouchers that the program would provide.  HUD also noted that over 20,000 of the units to be demolished were long- standing vacancies when the housing authorities applied for a HOPE VI  grant, and that a majority of the vacant units were uninhabitable.
As shown in figure 4, the percentage of revitalized units that are public  housing units varied from site to site. Among the 143 sites where  construction was not yet complete, as of June 30, 2003, public housing  units constituted less than 50 percent of total units at 69 sites. At all but  three of the 22 sites where construction was complete, 50 percent or more  of the units were public housing units. Additionally, the number of  planned public housing units decreased over time. As of September 30,  1999 (the earliest date for which we could obtain data), fiscal year 1993– 1998 grantees estimated that they would construct 34,199 public housing  units. By June 30, 2003, the same grantees estimated that they would  construct 30,772 public housing units—about a 10-percent decrease. (This  decrease in the number of planned public housing units may help explain  why the percentage of residents that the grantees expected to return  decreased over time, as discussed previously in this report.)
Another factor that may affect reoccupancy is the screening criteria that  original residents must meet to return to the revitalized sites. HUD allows  grantees to determine the screening criteria for each site. Consequently, the  screening criteria varied at the 1996 sites we visited. For example, the  Charlotte Housing Authority required returning Dalton Village residents to  participate in the family self-sufficiency program. Residents that do not  successfully complete the program within 5 years and are not in violation  of their lease will be transferred to another public housing site. In addition  to participation in the family self-sufficiency program, the Spartanburg  Housing Authority required returning Tobe Hartwell residents to agree to  random drug testing. In contrast, there were no special criteria at some  sites. In Tucson, there were no new screening criteria for the original  residents of the Connie Chambers site. Under a settlement agreement, all of  the residents of Henry Horner Homes in Chicago, Illinois, were eligible to  return.
Other factors that may affect reoccupancy include resident preferences  and the time between relocation and completion of construction of the new  units. According to three of the 1996 grantees, some relocated residents did  not want to return to the revitalized sites because they preferred a voucher  or were satisfied at their new location. Another 1996 grantee observed that,  because of the length of time between relocation and construction, some  residents did not want to move again. For the 1996 grantees, the average  time between the completion of relocation and the projected or actual  completion of construction was 86 months (times ranged from 26 months  to 129 months).
section_title: Resident Involvement in the HOPE VI Process Has Varied
paragraphs: The extent to which grantees involved residents in the HOPE VI process  has varied at the 1996 sites. HUD has provided guidance on resident  involvement in its NOFAs and grant agreements and on its Web site. The  1996 grantees have taken a variety of steps to involve residents in the  HOPE VI process, ranging from holding informational meetings and  soliciting input to involving residents in major decisions.
subsections: section_title: HUD Has Provided General Guidance on Resident Involvement
paragraphs: HUD’s guidance on resident involvement in the HOPE VI process consists  of annual NOFAs and grant agreements, as well as information located on  its Web site. For example, the fiscal year 2002 NOFA stated that residents  should be involved in the planning, proposed implementation, and  management of revitalization plans. The NOFA required that, prior to  applying for a HOPE VI revitalization grant, housing authorities conduct at  least one training session for residents on the HOPE VI development  process and at least three public meetings with residents and the broader  community to involve them in developing revitalization plans and preparing  the application. The fiscal year 2002 grant agreement (between HUD and  the winning applicants) stated that grantees were required to foster the  involvement of, and gather input and recommendations from, affected  residents throughout the entire development process. Specifically, grantees  were responsible for, among other things, holding regular meetings to  provide the status of revitalization efforts, providing substantial  opportunities for affected residents to provide input, and providing  reasonable resources to prepare affected residents for meaningful  participation in planning and implementation.
HUD’s published guidance on resident involvement provides general  guidelines that grantees must meet. For example, it states that full resident  involvement is a crucial element of the HOPE VI program. HUD requires  grantees to give all affected residents reasonable notice of meetings about  HOPE VI planning and implementation and provide them with  opportunities to give input. The guidance states that, at a minimum,  grantees are required to involve residents throughout the entire HOPE VI  planning, development, and implementation process and to provide  information and training so that residents may participate fully and  meaningfully throughout the entire development process. Although  grantees are required to solicit and consider input from residents, the  guidance makes it clear that the grantees have final decision-making  authority.
section_title: Resident Participation Has Varied at 1996 Sites
paragraphs: The amount and type of resident participation varied at the 1996 sites. All  of the 1996 grantees held meetings to inform residents about revitalization  plans and solicit their input. For example, residents of Dalton Village in  Charlotte and Bedford Additions in Pittsburgh were asked to provide input  on the design plans for the new sites. As the following examples illustrate,  some of the grantees we visited took additional steps to seek a greater level  of resident involvement in the HOPE VI process:   In Tucson, the housing authority first asked residents to vote on the  revitalization plan for the Connie Chambers site. Only after the residents  expressed their support for the plan did the mayor and city council vote  to submit the plan to HUD.
The Chicago Housing Authority formed working groups at each of its  HOPE VI sites to solicit input on plans and the selection of developers.  These groups include representatives from the resident council, the  housing authority, and city agencies.
The Cuyahoga Metropolitan Housing Authority’s plans for its  Riverview/Lakeview grant involved acquiring 54 off-site public housing  units and, in many cases, the residents to be relocated selected the  single-family homes that the housing authority then purchased for them.
The Jacksonville and Chester Housing Authorities worked with  residents to develop screening criteria used to select the occupants of  the new development.
The Holyoke Housing Authority asked residents to be part of its HOPE  VI Implementation Team and the mayor’s HOPE VI Advisory Task Force.
At one site we visited, the resident leader stated that residents were not  adequately involved early in the HOPE VI process. Not until the residents at  Robert Jervay Place in Wilmington, North Carolina, sent a letter to HUD  describing the lack of progress at the site did the housing authority start  moving forward with the project and involving residents in design  meetings.
In some cases, litigation or the threat of litigation has led to increased  resident involvement. Due to a settlement agreement, any decisions  regarding the revitalization of Henry Horner Homes in Chicago are subject  to the approval of the Horner Resident Committee. According to the  president of the St. Thomas resident council, the Housing Authority of New  Orleans agreed to provide an additional 100 off-site public housing eligible  rental units and change the screening criteria so that most of the original  residents would be able to return in response to petitions filed by the  attorney for St. Thomas residents with HUD’s Office of Fair Housing and  Equal Opportunity.
section_title: Community and Supportive Services Yielded Some Positive Outcomes
paragraphs: Grantees have provided a variety of community and supportive services,  including case management and direct services such as job training  programs. HUD data and information obtained during our site visits  suggest that the supportive services yielded at least some positive  outcomes. However, the data are limited and do not capture outcomes for  all programs or reflect all services provided. Also, we could not determine  the extent to which the HOPE VI program was responsible for these  outcomes.
subsections: section_title: Grantees Have Provided a Variety of Community and Supportive Services to Residents
paragraphs: Grantees are using HOPE VI and other funds to provide a variety of  community and supportive services, including case management and direct  services such as job training programs. In our November 2002 report on  HOPE VI financing, we reported that the housing authorities that had been  awarded grants in fiscal years 1993–2001 had budgeted a total of about $714  million for community and supportive services. In addition to their HOPE  VI funds, grantees are encouraged to obtain in-kind, financial, and other  types of resources necessary to carry out and sustain supportive service  activities from organizations such as local boards of education, public  libraries, private foundations, nonprofit organizations, faith-based  organizations, and economic development agencies. Of the $714 million  budgeted for community and supportive services, $418 million were HOPE  VI funds (59 percent), and $295 million (41 percent) were leveraged funds.  Although the majority of funds budgeted overall for supportive services  were HOPE VI funds, we noted that the amount of non-HOPE VI funds  budgeted for supportive services had increased since the program’s  inception.
In recent years, HUD has stressed the importance of grantees using  community and supportive services funding to provide case management  services to residents. In fact, all of the 1996 grantees have used the case  management approach. For example, the Housing Authority of New  Orleans hired a social service provider located near the St. Thomas site to  perform assessments and provide case management plans for residents.  The Holyoke Housing Authority has three case managers, who help  residents of its 1996 grant site find employment, acquire General  Educational Development (GED) certificates, take English as a Second  Language courses, and receive homeownership counseling. The Chester  Housing Authority established a “one-stop shop” at a local hospital, which  serves as the coordinating point for all programs and partners servicing the  authority’s residents.
Grantees have also used funds set aside for community and supportive  services to construct facilities where services are provided by other  entities. For example, the Charlotte Housing Authority spent $1.5 million in  HOPE VI funds to construct an 11,000-square-foot community and  recreational center consisting of a gymnasium, four classrooms, and a  computer lab near its 1996 grant site. In exchange, the residents annually  will receive $60,000 in services from the center, which is run by the  Mecklenburg County Parks and Recreation Department. The Tucson  Community Services Department, which serves as Tucson’s public housing  authority, used some of its 1996 HOPE VI funds to fund the construction of  a child development center and learning center. Two day care programs— one operated by Head Start and the other by a local nonprofit  organization—are operating in the child development center, and a  computer library run by the Tucson-Pima Public Library is operating in the  learning center. The Spartanburg Housing Authority used a portion of its  HOPE VI funds to build a community center containing a computer center,  health clinic, and gymnasium. The Spartanburg Technical College provides  adult and student computer training, and the University of South Carolina  Spartanburg School of Nursing performs health assessments and tracking  at the center.
Grantees also provided direct services such as computer and job training.  For instance, the New York City Housing Authority instituted a computer  incentive program that provides a personal computer system to Arverne  and Edgemere 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. HOPE VI residents enrolled in the San Francisco Housing  Authority’s family self-sufficiency program can receive up to $1,200 per  household to participate in training for various trades. The Detroit Housing  Commission formed a number of partnerships to provide training in retail  sales, computers, manufacturing, and child care to Herman Gardens  residents. For example, 18 different unions formed a partnership that offers  a preapprenticeship program.
section_title: Limited Data Show That HOPE VI Services Have Helped Achieve Positive Outcomes
paragraphs: Limited HUD data on all 165 grants awarded through fiscal year 2001 and  information collected during our visits to the 1996 sites indicated that  HOPE VI community and supportive services have achieved or contributed  to positive outcomes. We recommended in July 1998 that HUD develop  consistent national, outcome-based measures for community and support  services at HOPE VI sites. Since June 2000, HUD has used its HOPE VI  reporting system to collect data from grantees on the major types of  community and supportive services they provide and the outcomes  achieved by some of these services. HUD collects data on services  provided to both original and new residents. According to the data, as of  June 30, 2003, for the 165 sites awarded grants through fiscal year 2001,  about 45,000 of the approximately 70,000 original residents potentially  eligible for community and supportive services made up the grantees’  caseload. The remaining original residents were not part of the caseload  because, among other things, they declined or no longer needed services,  or the grantee could not locate them. Additionally, about 8,000 new  residents were included in the grantees’ caseload, bringing the total to  approximately 53,000.
As shown in table 1, the community and supportive services programs in  which the most residents enrolled, as of June 30, 2003, were employment  and counseling programs. HUD also collects data on the number of  residents that have completed certain of these programs. For example,  about 55 percent of the residents that enrolled in job skills training  programs, as of June 30, 2003, completed the program. About 35 percent of  the residents that signed up for high school or equivalent education classes  completed them.
HUD also collects data on selected outcomes such as employment and  homeownership, although the outcomes cannot always be attributed to  participation in or completion of HOPE VI programs or services. Other  factors such as welfare-to-work requirements may have contributed to  these outcomes. The data collected, as of the quarter ending June 30, 2003,  showed that over 1,000 residents obtained jobs in that quarter. Overall, 22  percent of the grantees’ caseload was employed, and 16 percent had been  employed 6 months or more. In addition, 344 resident-owned businesses  had been started, as of June 30, 2003, and 967 residents had purchased a  home.
HUD has made modifications to the community and supportive services  data that it collects and worked with grantees to help them better  understand their reporting responsibilities. Seven of the 1996 grantees  stated that they were not always certain about what to report, and 11 stated  that the system did not reflect some of the services, such as those for youth  and seniors, that they provided. To improve reporting, HUD hired the  Urban Institute to help identify reporting problems and make refinements  to the system. Also, HUD staff and one of two outside technical assistance  providers review the data provided each quarter for consistency. As a  result, the data are more reliable now than they were initially, according to  the HOPE VI official that oversees community and supportive services. The  same official stated that, while HUD encourages grantees to provide  services to youth and seniors, it does not collect data on these services in  order to limit the reporting burden on grantees.
Limited data collected during our site visits also suggest that community  and supportive services have helped achieve some positive outcomes. For  example, the Housing Authority of the City of Pittsburgh offered in-home  health worker training courses, in which 49 Bedford Additions residents  have participated since October 2000. Thirty-one of the 49 participants  obtained employment, and 12 were still employed, as of September 2003. In  Louisville, 114 former Cotter and Lang residents had enrolled in  homeownership counseling, as of June 2003, 41 had completed the  counseling, and 34 had purchased a home. Between January and June 2003,  76 St. Thomas residents in New Orleans got a job, 12 residents got a GED,  and 5 residents became homeowners. Finally, residents of Arverne and  Edgemere Houses in New York City had earned 242 computers, as of July  2003, as part of the computer incentive program described in the previous  section.
section_title: Indicators for Education, Income, and Housing Have Generally Improved in 1996 HOPE VI Neighborhoods
paragraphs: According to our analysis of census and other data, the 20 neighborhoods  in which the 1996 HOPE VI sites are located have experienced  improvements in a number of indicators used by researchers to measure  neighborhood change, such as educational attainment levels, average  household income, and average housing values. However, for a number of  reasons, we could not determine the extent to which the HOPE VI program  was responsible for these changes. For example, we relied primarily on  decennial census data (adjusted for inflation), comparing measures from  1990 with those of 2000. However, the HOPE VI sites were at varying stages  of completion in 2000. We also used data available under the Home  Mortgage Disclosure Act for numbers of home mortgage originations in  1996 and 2001. Further, a number of factors—such as changes in national  or regional economic conditions—can influence the indicators we  compared.
In an attempt to more directly gauge the influence of the HOPE VI program,  we compared each of four selected HOPE VI neighborhoods with a  comparable non-HOPE VI public housing neighborhood in the same city.  Some variables indicated greater improvements in the HOPE VI  neighborhoods than their comparable neighborhoods, such as in mortgage  lending activity, but other variables indicated inconsistent results among  the sites. We also found that the demolition of old public housing alone may  influence changes in neighborhoods. Analysis of six HOPE VI  neighborhoods where the original public housing units have been  demolished, but no on-site units have been completed, also shows  improvements in educational attainment, unemployment rates, income,  and housing. Finally, other studies have shown similar findings in HOPE VI  neighborhoods.
subsections: section_title: 1996 HOPE VI Neighborhoods Have Generally Experienced Positive Changes
paragraphs: The 20 neighborhoods in which the 1996 HOPE VI sites are located have  experienced positive changes in education, income, and housing indicators  as measured by comparing 1990 and 2000 Census and 1996 and 2001 HMDA  data. When using census data, we defined the neighborhood as consisting  of the census block group or groups in which a public housing site is  located and the immediately adjacent census block groups. When using  HMDA data, which is not available at the census block group level, we  defined the neighborhood as the census tract in which a public housing site  is located (see app. II). Since 2000 data is the most recent census data  available, it reflects the neighborhood conditions at the 1996 HOPE VI sites,  which were at various stages of completion, at that time. Finally, not all of  the changes in census data from 1990 to 2000 were statistically significant  (see app. III). Moreover, at five sites, revitalization work had begun prior  to receipt of HOPE VI funds with various non-HOPE VI funding sources.  As a part of its fiscal year 2001 and 2002 performance goals, HUD specified  that neighborhoods with substantial levels of HOPE VI investment would  show improvements in such dimensions as household income,  employment, homeownership, and housing investment. As a result, we  used similar indicators, as well as other indicators generally used by  researchers, to analyze neighborhood changes. However, it was not  possible to determine the extent to which the HOPE VI program was  responsible for the changes in these neighborhoods. Many factors, such as  national and regional economic trends, can also affect neighborhood  conditions. According to experts, it is extremely rare for any one program  or actor to be able to change a neighborhood single-handedly.
Our analysis of census and HMDA data for the 20 1996 HOPE VI  neighborhoods showed the following positive changes:  In 18 of the 1996 HOPE VI neighborhoods, the percentage of the  population with a high school diploma or equivalent increased, from a  minimum of 4 percentage points in Detroit to a maximum of 21  percentage points in Baltimore.
In 11 of the HOPE VI neighborhoods, the percentage of the population  with an associate’s degree or better increased, from a minimum of 3  percentage points in Tucson to a maximum of 14 percentage points in  San Francisco.
Average household income increased in 15 of the 1996 HOPE VI  neighborhoods, from a minimum of 18 percent in Detroit to a maximum  of 115 percent in Chicago (Henry Horner).
The percentage of the population in poverty decreased in 14 of the  HOPE VI neighborhoods, from a minimum of 4 percentage points in  Atlanta and Detroit to a maximum of 20 percentage points in Baltimore.  Despite these decreases, 9 of the HOPE VI neighborhoods remained  “high-poverty neighborhoods” (having poverty rates of 30 percent or  more), and 5 remained “extremely high-poverty neighborhoods” (having  poverty rates of 40 percent or more). According to the Urban Institute,  areas where 30-40 percent of the population lives in poverty represent  significantly more deteriorated and threatening living environments  than those with poverty rates below those thresholds.
Average housing values increased in 13 of the 20 HOPE VI  neighborhoods, ranging from a minimum of 11 percent in Tucson to a  maximum of 215 percent in Chicago (Henry Horner). It is generally  accepted among researchers that housing values represent the best  available index of expectations regarding future economic activity in an  area.
Rental housing costs increased in 15 of the HOPE VI neighborhoods,  from a minimum of 9 percent in Tucson to a maximum of 61 percent in  Louisville. Increasing rental-housing costs are an indication that there is  a greater demand for housing in that area.
The number of mortgage loans originated in 10 of the HOPE VI  neighborhoods increased between 1996 and 2001. These increases  ranged from a minimum of 21 percent in Holyoke to a maximum of 728  percent in Charlotte—where the number of loans originated increased  from 7 to 58.
However, some of the HOPE VI neighborhoods showed negative changes  for certain indicators. For example:  The percent unemployed rose at 4 of the 20 sites, from a minimum of 2  percentage points in Charlotte to a maximum of 8 percentage points in  Kansas City.
In the Holyoke HOPE VI neighborhood, average housing values declined  by 26 percent.
The number of mortgage loans originated in seven of the HOPE VI  neighborhoods decreased between 1996 and 2001. These decreases  ranged from a minimum of 5 percent in Atlanta to a maximum of 58  percent in Wilmington.
Appendix III shows the census and HMDA data for all of the indicators we  analyzed for each of the 1996 HOPE VI sites.
section_title: By Some Measures, HOPE VI Neighborhoods Have Experienced More Positive Change Than Neighborhoods with Comparable Public Housing
paragraphs: Comparison of four HOPE VI neighborhoods with neighborhoods in which  comparable public housing sites are located (comparable neighborhoods)  showed that HOPE VI neighborhoods experienced greater positive changes  in some, but not all, of the variables that we evaluated. We conducted this  comparative analysis to attempt to better isolate the effects of the HOPE VI  program, although it was not possible to directly link changes to the HOPE  VI program (see app. II). In addition, 2000 census data may not reflect some  of the changes that could occur over time in these neighborhoods because  the demolition and new construction at these sites did not begin until the  late 1990s. Moreover, in these four HOPE VI neighborhoods, the units put  back on-site were all public housing and, thus, not representative of the  majority of HOPE VI projects, which are mixed-income.
Three of the four HOPE VI neighborhoods experienced greater increases in  mortgage loan originations than their comparable neighborhoods,  according to HMDA data. From 1996 to 2001, the percentage of loans  originated for home purchases increased 25 percent in Kansas City, 50  percent in Jacksonville, and 166 percent in Chester, while the percentage  decreased in the comparable neighborhoods. In Spartanburg, the  percentage of mortgage loans originated in the HOPE VI neighborhood  decreased 33 percent, in contrast to a 46-percent decrease in the  comparable neighborhood.
While crime data summaries were not available at the neighborhood level,  we were able to obtain crime data summaries for each of the sites being  compared. Available crime data summaries show that three of the four  HOPE VI sites experienced greater decreases in crime than their  comparable sites (see app. III). Although incidents of crime generally  decreased at both the HOPE VI and comparable site in Spartanburg, South  Carolina, they decreased to a greater extent at the HOPE VI site. In both  Chester, Pennsylvania, and Jacksonville, Florida, crime decreased at the  HOPE VI sites while it increased at the comparable sites. In contrast, crime  incidents at Kansas City’s HOPE VI site have generally increased.  According to officials from the Housing Authority of Kansas City, Missouri,  in 1996 the HOPE VI site had a 24-percent occupancy rate because most of  the residents had already been relocated, and a 98-percent occupancy rate  in 2002. They attribute the increase in crime during this time period to this  increased occupancy rate. Officials from the Housing Authority of Kansas  City, Missouri, also reported that crimes per household decreased from .51  to .31 at the HOPE VI site from 1996 to 2002.
Comparison of census data for the HOPE VI and comparable  neighborhoods between 1990 and 2000 showed some positive and some  negative changes. However, we were able to compare only a small number  of variables because the differences in the changes for others were not  statistically significant (see fig. 5). Kansas City, Missouri, had the largest  number of statistically significant differences between the HOPE VI and  comparable neighborhoods; specifically, in Kansas City, the differences  between the HOPE VI and comparable neighborhood were statistically  significant for four variables. It should be noted that Kansas City’s HOPE VI  neighborhood has been changing for a longer period of time than the other  HOPE VI neighborhoods in our analysis. The first phase of revitalization in  this neighborhood began in May 1995 with non-HOPE VI funds, whereas  the other three sites in our comparative analysis did not begin revitalization  activities until after being awarded HOPE VI revitalization grant funds in  1996. While the Kansas City HOPE VI neighborhood experienced greater  positive changes in new construction, it also experienced a greater  increase in unemployment, and a greater decrease in the percentage of the  population with both a high school diploma and an associate’s degree or  better. In Spartanburg, South Carolina, the differences between the HOPE  VI and its comparable neighborhood were statistically significant for two  variables. The percentage of the population with a high school diploma  increased to a greater extent in the HOPE VI neighborhood than the  comparable neighborhood, while new construction decreased to a greater  extent in the HOPE VI neighborhood relative to the comparable  neighborhood. In addition, in Jacksonville, Florida, the HOPE VI  neighborhood experienced a greater increase in new construction relative  to its comparable neighborhood.
section_title: Changes in Indicators Suggest That HOPE VI Can Influence Neighborhoods through the Demolition of the Old, Deteriorated Public Housing Alone
paragraphs: Even in the six 1996 HOPE VI neighborhoods where the original public  housing units had been demolished, but no units had been completed on- site as of December 2002, a comparison of 1990 and 2000 Census data  showed that positive changes occurred in educational attainment,  unemployment, income, and housing. For example:  The percentage of the population with a high school diploma or  equivalent increased in all six neighborhoods, from a minimum of 4  percentage points in Detroit to a maximum of 21 percentage points in  Baltimore. Similarly, the percentage of population with an associate’s  degree or better increased in five neighborhoods, from a minimum of 4  percentage points in Atlanta and Baltimore to a maximum of 14  percentage points in San Francisco.
The unemployment rate decreased in four of the six HOPE VI  neighborhoods, from a minimum of 4 percentage points in Cleveland to  a maximum of 6 percentage points in Baltimore and Detroit.
Average household income increased in all of the neighborhoods, from a  minimum of 18 percent in Detroit to a maximum of 46 percent in  Cleveland.
The poverty rate decreased in five of the neighborhoods, from a  minimum of 4 percentage points in Atlanta and Detroit to a maximum of  20 percentage points in Baltimore.
Average housing values increased in four of the neighborhoods, from a  minimum of 26 percent in Atlanta to a maximum of 116 percent in  Detroit.
The percentage of occupied housing units increased in four  neighborhoods, from a minimum of 4 percentage points in Atlanta to a  maximum of 8 percentage points in Cleveland and New Orleans.
Rental-housing costs increased in all six neighborhoods, from a  minimum of 11 percent in New Orleans to a maximum of 38 percent in  Baltimore.
In contrast, the level of mortgage lending activity decreased in four of these  neighborhoods from a range of 5 percent in Atlanta to 57 percent in  Baltimore between 1996 and 2001. Moreover, new construction decreased  by 2 percentage points in Cleveland, New Orleans, and San Francisco  between 1990 and 2000.
We cannot attribute these changes solely to the HOPE VI program. To the  extent that they do reflect the program’s influence, however, they suggest  that demolition of old, deteriorated public housing alone may influence  surrounding neighborhoods. For example, average housing value and  average household income increased even though no new units had been  constructed. It is possible that the HOPE VI program influenced these  indicators by removing blight from the neighborhoods and temporarily  relocating large numbers of low-income households during demolition.
section_title: Studies Have Shown Positive Changes in HOPE VI Neighborhoods
paragraphs: Studies by housing and community development researchers have shown  positive changes in HOPE VI neighborhoods as reflected in income,  employment, community investment, and crime indicators. In reviewing  the literature, we identified one report that discussed changes in the  neighborhoods surrounding eight HOPE VI sites and two reports that  evaluated changes at two of the sites we visited. While each study covered  a small number of HOPE VI neighborhoods, they showed positive changes:  Per capita incomes in eight selected HOPE VI neighborhoods increased  an average of 71 percent, compared with 14.5 percent for the cities in  which these sites are located between 1989 and 1999.
The percentage of low-income households living in eight selected HOPE  VI neighborhoods decreased from 82 to 69 percent from 1989 to 1999.
Median income increased 80 percent from 1990 to 2000 in Chester’s 1996  HOPE VI neighborhood.
Unemployment rates decreased from 24 to 15 percent between 1989 and  1999 in eight selected HOPE VI neighborhoods.
The number of small business loans closed in seven selected HOPE VI  neighborhoods grew by an average of 248 percent from 1998 to 2001,  compared with 153 percent in the neighborhoods’ respective counties.
The number of new business licenses issued in Tucson’s 1996 HOPE VI  neighborhood increased from 6 in 1996 to 28 in 2002. In addition, the  number of business closures in the neighborhood decreased from 23 in  1996 to 15 in 2001.
The vacancy rate decreased from 9 to 6 percent between 1990 and 2000  in Chester’s 1996 HOPE VI neighborhood, while the vacancy rate for the  city increased from 12 to 14 percent during the same period.
Overall and violent crime rates decreased by 48 and 68 percent,  respectively, between 1993 and 2001 in four of the HOPE VI  neighborhoods where crime data were available. Overall and violent  crimes decreased by 25 and 38 percent, respectively, during the same  time period for the cities in which these sites are located.
section_title: Agency Comments
paragraphs: We provided a draft of this report to HUD for its comment and review. We  received comments from the Assistant Secretary for Public and Indian  Housing (see app. IV) who thanked GAO for its thorough review of the  HOPE VI program and stated that HUD regards our study as an important  tool in its continuing efforts to improve the program.
As agreed with your office, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. 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 also will send copies to the Secretary of Housing and Urban  Development and the Director of the Office of Management and Budget. We  also will make copies available to others upon request. In addition, the  report will be available at no charge on the GAO 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 V.
section_title: Objectives, Scope, and Methodology
paragraphs: Our objectives were to examine (1) the types of housing to which the  original residents of HOPE VI sites were relocated and the number of  original residents that grantees expect to return to the revitalized sites, (2)  how the fiscal year 1996 grantees have involved residents in the HOPE VI  process, (3) the types of community and supportive services that have been  provided to residents and the results achieved, and (4) how the  neighborhoods surrounding the sites that received HOPE VI grants in fiscal  year 1996 have changed.
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 1993-2001. 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;  performed electronic testing to detect obvious errors in completeness and  reasonableness; and interviewed grantees regarding the data they reported.  We determined that these data were sufficiently reliable for the purposes of  this report. For the second and fourth objectives, we then focused on and  visited the 20 sites in 18 cities that received HOPE VI revitalization grants in  fiscal year 1996. We selected the 1996 grants because they were the first  awarded after HUD issued a rule allowing revitalization to be funded with a  combination of public and private funds, which has become the HOPE VI  model. We also analyzed Census and Home Mortgage Disclosure Act data  and reviewed crime data summaries. In addition, we interviewed the HUD  headquarters officials responsible for administering the HOPE VI program.
To determine the types of housing to which the original residents of HOPE  VI sites were relocated and the number of original residents that grantees  expect to return to the revitalized sites, we analyzed the relocation and  reoccupancy data in HUD’s HOPE VI reporting system. Specifically, we  determined what percentage of the original residents that had been  relocated as of June 30, 2003, were relocated to other public housing, given  vouchers, or evicted. We also determined the percentage of original  residents overall and at each site that was expected, as of June 30, 2003, to  return to the revitalized sites. At the 113 sites where reoccupancy was not  yet complete, we divided the number of original residents the grantee  estimated would return by the total number of residents the grantee  estimated would be relocated. At the 39 sites where reoccupancy was  complete, we divided the number of original residents who actually  returned by the total number of residents relocated. We excluded 10 of the  165 sites from our analysis because they did not involve relocation and an  additional three sites because the reoccupancy data reported as of June 30,  2003, was incorrect. To determine how reoccupancy estimates changed  over time, we compared the data in HUD’s HOPE VI reporting system as of  September 30, 1999 (the earliest date for which we could obtain data) with  data as of June 30, 2003. Finally, to determine what factors affected  whether residents returned to the revitalized sites, we interviewed HUD  officials, public housing authority (PHA) officials responsible for managing  the fiscal year 1996 grants, and resident representatives at 19 of the 20  fiscal year 1996 sites.
For all 165 sites, we used data from HUD’s HOPE VI reporting system to  calculate the percentage of revitalized units that would be units under an  annual contributions contract (that is, public housing units). At the 143  sites where construction was not yet complete, we divided the number of  planned public housing units by the total number of planned units. At the  22 sites where construction was complete, we divided the actual number of  public housing units by the total number of units. To determine how the  number of planned public housing units has changed over time, we  compared the number of public housing units planned as of September 30,  1999 (the earliest date for which we could obtain data) with data as of June  30, 2003. For 19 of the 20 1996 HOPE VI sites, we used data from HUD’s  HOPE VI reporting system and data collected during our site visits to  calculate the percentage of public housing units being replaced.
To determine how the fiscal year 1996 grantees have involved residents in  the HOPE VI process, we obtained and reviewed HUD’s guidance on  resident involvement, including the portions of the fiscal year 2002 notice  of funding availability and fiscal year 2002 grant agreement that address  resident involvement. For the 1996 grants, we interviewed PHA officials  and resident representatives to determine the extent to which residents  had been involved in the HOPE VI process. Finally, we interviewed two  resident advocate groups—Everywhere and Now Public Housing Residents  Organizing Nationally Together and the National Low Income Housing  Coalition—regarding resident involvement and other resident issues.
To identify the types of community and supportive services that have been  provided to residents of HOPE VI sites, we obtained and reviewed HUD’s  draft guidance on community and supportive services. To obtain specific  examples of community and supportive services provided at the fiscal year  1996 sites, we interviewed PHA officials and obtained and reviewed  community and supportive services plans. We also obtained data from  HUD’s HOPE VI reporting system to determine the number of residents that  have participated in different types of community and supportive services.  To determine the results that have been achieved, we obtained data from  HUD’s HOPE VI reporting system on selected outcomes, including the  number of new job placements and the number of residents that have  purchased homes. We also obtained information during our site visits that  documents the results achieved by various community and supportive  services programs.
To determine how the neighborhoods surrounding the sites that received a  1996 HOPE VI revitalization grant have changed, we analyzed nine key  variables from 1990 and 2000 census data for each neighborhood, including  the average household income, the percentage of the population in poverty,  and the percentage of occupied housing units. When using census data, we  defined a “HOPE VI neighborhood” as consisting of the census block group  in which the original public housing site was located, as well as all of the  immediately adjacent census block groups (see app. II). We also analyzed  changes in mortgage lending activity using 1996 and 2001 Home Mortgage  Disclosure Act (HMDA) data. These data are only available by census tract,  which encompasses a larger area than a census block group. As a result, for  this analysis we used only the census tract in which the original public  housing site was located as the proxy for the neighborhood.
In addition to using the census and HMDA data to analyze changes in the  neighborhoods around all 20 1996 HOPE VI sites, we performed additional  analysis for those sites where demolition, but no on-site construction, was  complete and those that were the closest to completion. To explore the  change in neighborhoods where only demolition had occurred, we used the  HOPE VI reporting system to identify the six sites that had demolished all  of the original public housing units, but not completed any on-site  construction as of December 31, 2002. We also used the HOPE VI reporting  system to identify the five sites where on-site construction was 75 percent  or more complete as of December 31, 2002. We then compared changes in  census, HMDA, and summary crime data for four of the five HOPE VI  neighborhoods with changes in comparable public housing  neighborhoods—neighborhoods containing public housing sites that PHAs  identified as similar in condition to the HOPE VI sites prior to  revitalization. However, these comparisons are not perfect. For example,  in two cases the HOPE VI sites are about 10 years older than the  comparable sites. In Chester, Pennsylvania, the comparable site was  rehabilitated in 1997, and units were enlarged.
We obtained crime data summaries for the Lamokin Village (HOPE VI) and  Matopos Hills (comparable) sites from the Chester Housing Authority; for  the Durkeeville (HOPE VI) and Brentwood Park (comparable) sites from  the Jacksonville Housing Authority; for the Theron B. Watkins (HOPE VI)  and West Bluff (comparable) sites from the Housing Authority of Kansas  City, Missouri; and for the Tobe Hartwell/Extension (HOPE VI) and  Woodworth Homes (comparable) sites from the Spartanburg Housing  Authority. Each of these PHAs obtained site-specific crime data summaries  from their local police departments. We reviewed the crime data  summaries for reasonableness and followed up on anomalies. Because we  did not have disaggregated crime data directly from each city’s police  department, we were unable to perform tests of statistical significance on  the summary crime trends. Although we did not do extensive testing of the  summary crime data, we feel that it is sufficiently reliable for the  informational purposes of this report.
Finally, we obtained and reviewed reports by various universities and  private institutions that discussed the social and economic impacts of the  HOPE VI program. We focused on one report that discussed changes in the  neighborhoods surrounding eight sites and two reports that evaluated  changes at sites we visited. See appendix II for more detailed information  on the methodology we used to determine how the 1996 HOPE VI  neighborhoods have changed.
We performed our work from November 2001 through October 2003 in  accordance with generally accepted government auditing standards.
section_title: Technical Methodology
paragraphs: This appendix provides detailed information on the methodologies we used  to analyze neighborhood changes observed in the HOPE VI neighborhoods  (for recipients of 1996 HOPE VI revitalization grants) and, where  applicable, four comparison neighborhoods.
subsections: section_title: Data Sources
paragraphs: To analyze changes observed in HOPE VI neighborhoods, we first defined  HOPE VI neighborhoods as the census block group in which the public  housing site was located and the adjacent census block groups. This  definition allowed us to examine changes observed in HOPE VI  neighborhoods and the extent to which some of the goals of the HOPE VI  program may have been addressed, such as improvements in household  income, employment, and housing investment. Census block groups were  used, as this geographic area was likely to better represent the area of the  housing site and its adjacent neighborhood than a larger census entity, such  as a census tract, would have. That is, use of block groups lessened the  likelihood that both community residents and characteristics that are not  influenced by the housing development were included in the analyses. The  block groups in which HOPE VI sites were located, and the adjacent block  groups, were identified by electronically mapping the addresses using  MapInfo.
Next, we obtained 1990 and 2000 census data on nine population and  housing characteristics for the census block groups in which the HOPE VI  sites were located and the adjacent block groups. In order to make valid  and reliable comparisons between decennial censuses, we had to ensure  that the geographic regions in 1990 and in 2000 shared the same, or nearly  the same, physical boundaries and land area. We visually inspected a map  of the 1990 boundaries for each of the block groups contained in a HOPE VI  neighborhood and compared them with the 2000 boundaries.
In some cases, we had to reclassify block groups in order to maintain  comparability between the two census years. For example, in 2000,  Wilmington's Jervay Place site was located in block group 11002. One of its  adjacent block groups, part of the Jervay Place “neighborhood” (as defined  by our study), was block group 10001. However, in 1990, the same area  constituting block group 10001 had been partitioned into two block groups,  10001 and 10003, of which only 10003 was adjacent to the site block group,  11002. In order to have consistent and comparable geographic areas, we  added the respondents of 1990 block group 10001 and their characteristics  into the calculations for the 1990 descriptive statistics.
We also obtained 1996 and 2001 Home Mortgage Disclosure Act (HMDA)  data from the Federal Financial Institutions Examination Council.  Specifically, for each of the 20 HOPE VI neighborhoods and the four  comparable neighborhoods we compared the number of loans originated in  1996 with the number originated in 2001. However, the smallest geographic  unit for which HMDA data are available is the census tract. Therefore,  analyses of these data were conducted at the census tract level, and each  neighborhood was defined as consisting of the census tract in which the  site was located.
section_title: Data Reliability
paragraphs: We reviewed information related to the census data variables and  performed electronic data testing to identify obvious gaps in data  completeness or accuracy. We determined that the data were sufficiently  reliable for use in this report. We conducted a similar review of information  related to the HMDA variables. Finally, since we found no issues impacting  the use of these data as a result of electronic data testing, we concluded  that the data elements being used were sufficiently reliable for the  purposes of the report.
section_title: Limitations of Analysis
paragraphs: In evaluating community development initiatives such as HOPE VI, we note  that it is difficult to determine the impact of a program or to definitely  conclude that a program caused a specified outcome to occur. For  example, several factors—such as other community initiatives, re- emphasis on the Community Reinvestment Act (Zielenbach, 2002), or  national trends in the economy and unemployment (Zielenbach, 2002)—in  conjunction with HOPE VI efforts may have contributed to observed  changes in the geographic region surrounding a HOPE VI site.
To attempt to isolate the influence of HOPE VI activities, an ideal  evaluation research design would include the identification of a  neighborhood identical to the HOPE VI community based on key  characteristics (such as size, ethnic distribution, income distribution,  number of social institutions, crime rates) and ideally use an in-depth,  longitudinal case study to track changes in the HOPE VI and comparison  communities from the inception of HOPE VI work until its completion.  While we recognized that such a method would permit the greatest  understanding of community changes and their relationship to HOPE VI,  we could not utilize it for two reasons. First, in-depth, longitudinal case  studies of multiple HOPE VI sites would be very resource-intensive and  were outside the scope of this study. Second, it is unlikely that we or other  analysts could identify a series of identical neighborhoods given the natural  variation in population, business, and housing development characteristics  that occurs within a city over the length of a longitudinal study. Therefore,  in an attempt to limit the potential factors that could explain changes  observed in HOPE VI communities, we worked with the public housing  authorities that managed the four 1996 HOPE VI sites that had completed  75 percent or more of their on-site construction, as of December 31, 2002,  to identify comparison neighborhoods. These comparison neighborhoods  contained public housing sites that were comparable to the original HOPE  VI sites in terms of age, size, or condition. Each of these comparison sites  was located in the same city as the HOPE VI site, but had not received any  HOPE VI revitalization funding.
The decennial nature of the Census also constrained our analysis. The  HOPE VI sites were awarded their grants in 1996; however, relocation did  not begin at most sites until 1997 or later. Demolition did not begin at over  half of the sites until 1999 or later, and construction did not begin at the  majority of sites until 2000 or later. In addition, as of June 30, 2003, the  majority of sites had not completed construction. Thus, data collected  during the 2000 Census may not have detected neighborhood changes.  However, the 2000 data are the most current available. Similarly, at the time  of our analysis, 2001 HMDA data were the most current available. Despite  these limitations, we believe that we have constructed a design that is as  methodologically sound as possible given resource and data constraints  and the varying stages of implementation of HOPE VI plans.
section_title: Analytical Approach and Results
paragraphs: To analyze census data, we selected nine population and housing  characteristics. Those characteristics were average household income,  percent of population living in poverty, percent unemployed, percent of the  population with a high school degree, average housing value, percent of  housing units constructed within the last 10 years, percent of occupied  housing units, average gross rent, and population total. For the six  percentage characteristics, we calculated the percent change by finding the  difference between the 1990 sample estimate and the 2000 sample estimate.  For the three average characteristics, we calculated the percent change by  finding the difference between the 1990 sample estimate and the 2000  sample estimate and then dividing this difference by the 1990 sample  estimate. In our comparison of four HOPE VI sites with comparable public  housing sites, we also analyzed census data on population totals for each  neighborhood. Populations were based on a 100 percent count of the  individuals living in the block groups.
With the exception of the population total, each of the census variables is  based on sample data. Since this sample is only one of a large number of  samples that might have been drawn and each sample could have provided  different estimates, we express our confidence in the precision of this  particular sample’s results as a 95 percent confidence interval (for  example, plus or minus 7 percentage points). This is the interval that would  contain the actual population value for 95 percent of the samples that could  have been drawn. As a result, we are 95 percent confident that each of the  confidence intervals in this report will include the true values for the  population. We used the methodology described in the Census Bureau’s  documentation for the 1990 and 2000 Censuses (Appendix C: Accuracy of  the Data, 1990, and Chapter 8: Accuracy of the Data, 2000) to calculate  standard errors and confidence intervals. Essentially, we used the Census  Bureau’s formulas to compute the standard error for the sample estimate  under the assumption of simple random sampling. We then multiplied this  result by a design effect factor to adjust for the survey’s sample design to  give the appropriate standard error.
In order to determine whether the 1990 and 2000 percent change estimates  were statistically significant, we interpreted the confidence interval. For  example, if the confidence interval includes zero, then the difference  between the 1990 and 2000 estimates is not considered a statistically  significant difference. If the confidence interval does not include zero, then  the percent change between the 1990 and 2000 estimates is considered  statistically significant (see app. III). We also calculated 95 percent  confidence intervals to determine whether there are statistically significant  differences between the HOPE VI and non-HOPE VI (comparable)  neighborhoods on the percent differences from 1990 to 2000.
In addition to sampling errors, sample data (and 100 percent data) are  subject to nonsampling errors, which may occur during the operations  used to collect and process census data. Examples of nonsampling errors  are not enumerating every housing unit or person in the sample, failing to  obtain all required information from a respondent, obtaining incorrect  information, and recording information incorrectly. Operations such as  field review of enumerators’ work, clerical handling of questionnaires, and  electronic processing of questionnaires also may introduce nonsampling  errors in the data. The Census Bureau discusses sources of nonsampling  errors and attempts to control in detail.
To analyze the HMDA data for each of the 20 HOPE VI sites and the four  comparable sites, we compared the number of loans originated in 1996  with the number originated in 2001 (see app. III). The HMDA data contain  all of the loans originating in these time periods; therefore, it is not a  sample, and confidence intervals did not need to be computed for these  data.
section_title: Selected Census, Home Mortgage Disclosure Act, and Summary Crime Data
paragraphs: We obtained 1990 and 2000 census data for each neighborhood in which a  1996 HOPE VI site is located, as well as for four neighborhoods in which  public housing that is comparable to selected 1996 HOPE VI sites is  located.  When using census data, we defined a neighborhood as consisting  of the census block group in which a site is located, as well as the adjacent  census block groups.  We selected nine census data variables, which are  generally used by researchers to measure neighborhood change, and  analyzed the changes in these variables from 1990 to 2000 (see tables 2  through 4).  We also determined whether these changes were statistically  significant.
For these same 20 HOPE VI and four comparable neighborhoods, we  obtained 1996 and 2001 Home Mortgage Disclosure Act (HMDA) data.  With  this data, we compared the number of loans originated for the purchase of  a home in 1996 with the number originated in 2001 (see table 5).  When  using HMDA data, we defined each neighborhood as consisting of the  census tract in which each site is located.
We also obtained 1996 and 2002 crime data summaries for each of the four  HOPE VI sites that had completed 75 percent or more of their on-site  construction (as of December 2002), as well as for four comparable public  housing sites.  This data was obtained from public housing authority  officials and consisted of the total number of crimes that occurred in  selected categories.  We then calculated the percent change in the total  number of crimes over time (see fig. 6).
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 individuals named above, Kristine Braaten, Jackie  Garza, Catherine Hurley, Grant Mallie, Alison Martin, John McGrail, Sara  Moessbauer, Marc Molino, Lisa Moore, Barbara Roesmann, Sidney  Schwartz, Paige Smith, Ginger Tierney, and Carrie Watkins made key  contributions to this report.
section_title: GAO’s Mission
paragraphs: The General Accounting Office, the audit, evaluation and investigative arm of  Congress, exists to support Congress in meeting its constitutional responsibilities  and to help improve the performance and accountability of the federal government  for the American people. GAO examines the use of public funds; evaluates federal  programs and policies; and provides analyses, recommendations, and other  assistance to help Congress make informed oversight, policy, and funding  decisions. GAO’s commitment to good government is reflected in its core values of  accountability, integrity, and reliability.
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subsections: section_title: Order by Mail or Phone
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