Several leaders in the new Democratically controlled Congress want to renew HOPE VI with significant funding, but their plan faces an uphill battle against a rising budget deficit and the Bush administration’s opposition to the program.
Leading the revival effort is Sen. Barbara Mikulski (D-Md.), who originally authored the program in 1992. She’s expected to reintroduce a bill originally offered in 2005 that would reauthorize the program with new guidance on its mission and new methods for evaluating a public housing authority’s (PHA) progress in spending the grants.
Rep. Barney Frank (D-Mass.), who chairs the House Financial Services Committee, told a January gathering of mayors that restoring funding for HOPE VI was highly likely, according to the U.S. Conference of Mayors.
The Bush administration proposed termination of funding for HOPE VI based on the conclusion of the Office of Management and Budget (OMB) that “the program has accomplished its primary goal to demolish 100,000 severely distressed public housing units by 2003.” OMB states that in 1992, the National Commission on Severely Distressed Public Housing estimated 86,000 federally subsidized public housing units were severely distressed. It says the Department of Housing and Urban Development (HUD) set a goal of demolishing 100,000 severely distressed public housing units by 2003.
PHAs strongly dispute the notion that the problem of severely distressed projects is now solved. They feel HOPE VI is a huge success and still is a crucial tool to redeveloping the most rundown public housing projects.
“We still need HOPE VI, because we still need that substantial investment of a large sum of money that HOPE VI brings—that really helps jump-start a deal. I’m really hopeful that we can keep this program in place,” said Carl Greene, executive director of the Philadelphia Housing Authority.
The OMB analysis is all wet, according to an April 2005 paper from The Urban Institute titled “Distressed Public Housing—What It Costs to Do Nothing.”
In the paper, the authors state that the $5 billion in federal funds invested in HOPE VI projects since it began had financed demolition of more than 83,000 distressed public housing units.
“By our estimates, however, between 47,000 and 82,000 severely distressed units remain in the public housing inventory that are not currently scheduled for demolition and replacement,” it adds.
These units may not all need the full treatment of the existing HOPE VI program, the report says, “but the evidence suggests that they exhibit many symptoms of severe distress and probably require substantial, targeted funding for replacement or revitalization.”
The National Association of Housing and Redevelopment Officials says that a 1998 HUD study estimated the backlog of repairs and modernization at $22 billion at that time.
In its 2003 analysis of public housing operating subsidy calculations, Harvard University’s Graduate School of Design reported that about 60 percent of the public housing inventory was more than 25 years old at that time, though it said there was no reliable data on how much of that older stock had already been rehabilitated.
In justifying the elimination of HOPE VI, OMB went on to compare the cost of HOPE VI projects, which involve massive redevelopment and construction costs, to the cost of the housing voucher program that provides tenants subsidies to pay rent on existing apartments. It said “the housing-related costs of a HOPE VI unit were shown to be 27 percent higher than a housing voucher and 47 percent higher when all costs were included.”
Finally, OMB faulted the program for “significant delays in the execution and completion of these grants.”
Advocates for renewing the program find the OMB arguments about cost and delays laughable. Obviously, redevelopment costs more than vouchers, which do nothing to revitalize neighborhoods or create housing, they point out. Their effectiveness as a tool for economic integration is also questionable.
Critics add that OMB totally ignores the complaint of HOPE VI developers that ineffective management by HUD is causing much of the delay and cost inflation, and that streamlining program administration would save time and money.
In her bill, Mikulski would make it a clear goal of HOPE VI to deconcentrate the poor and require that every HOPE VI grant recipient establish a comprehensive education reform and achievement strategy to turn the school that serves the HOPE VI development into a high-performing school.
It would set new performance benchmarks for each component of HOPE VI projects, including benchmarks for linkages with schools, relocation of residents, and achievement of self-sufficiency.
Funding would be set at $600 million per year.