Congress Considering Bills to Extend, Modify HUD HOPE VI Program

By Caitlin Jones & A. J. Johnson
July 23, 2008 5 min read

CONGRESS IS considering
legislation that would extend, increase funding, and amend the federal HOPE VI
public housing redevelopment program administered by the U.S. Department of
Housing and Urban Development (HUD).

Â Â Â Â Â Â Â Â Â Â Â The
pending legislation includes a bill (H.R.3524) passed by the U.S. House of
Representatives on 1/17/08 by 271-130,and a bill (S.829) introduced by Sen.
Barbara Mikulski (D-MD) that was the subject of a June 2007 hearing by the
Senate Banking Committee.

Â Â Â Â Â Â Â Â Â Â Â The
Bush Administration has issued a statement opposing H.R.3524, but hasn’t
threatened a veto.

Â Â Â Â Â Â Â Â Â Â Â Under
HOPE VI, HUD awards competitive “revitalization” grants to public housing
agencies (PHAs) to demolish severely distressed public housing projects and to
replace them with new or rehabilitated housing units, a portion of which must
be reserved for public housing residents. In addition to new public housing
units, new developments frequently also contain other affordable rental units, such
as low-income housing tax credit (LIHTC) units; other market-rate rental units;
and often also owner-occupied units (affordable and market-rate). Grantees must
provide supportive services at projects and relocation benefits for displaced
public housing residents. Many HOPE VI projects utilize housing credits.

Â Â Â Â Â Â Â Â Â Â Â According
to HUD, as of 6/9/07: $5.8 billion in HOPE VI revitalization funds had been awarded
(237 grants to 127 PHAs), of which PHAs had spent $4.4 billion; 78,115 in
public housing units had been demolished, with another 10,354 planned for demolition;
and grantees planned to construct 103,637 public housing, LIHTC, and
market-rate housing units to replace demolished public housing units. In
addition, 56,524 tenant-based housing vouchers had or will be provided under
the HOPE VI revitalization and demolition-only grant programs as replacement
housing.

By 2005,76% of the total 649 rental
phases of development planned across HOPE VI developments used LIHTCs, and HOPE
VI projects accounted for 64% of all LIHTC projects managed by PHAs.

Â Â Â Â Â Â Â Â Â Â Â A
PHA trade group has estimated a current $18 billion backlog in needed capital
improvements to existing public housing properties with another $2 billion
added each year.

Renewal, Funding Level

Â Â Â Â Â Â Â Â Â Â Â The
latest renewal of the HOPE VI program lapsed on9/30/07. H.R.3524 would
reauthorize the program through 9/30/15 and authorize annual funding of $800
million.S.829 would renew the program through 9/30/13 and authorize annual
funding of $600 million.

Â Â Â Â Â Â Â Â Â Â Â Actual
annual funding for HOPE VI has been small for a number of years. For FY 2008, which
ends 9/30/08,Congress has appropriated $100 million. The Bush Administration
for years has proposed no new funding for HOPE VI in its annual budget request.

House Bill

Â Â Â Â Â Â Â Â Â Â Â H.R.3524,
as amended and passed by the House, would substantially modify the HOPE VI program.

Â Â Â Â Â Â Â Â Â Â Â One
change would revise the factors HUD must include when establishing criteria for
the selection of revitalization proposals for grants. The measure would
establish mandatory “core” and “graded” components for proposed revitalization
plans.

Â Â Â Â Â Â Â Â Â Â Â One
mandatory core requirement would be that all public housing units in existence
as of 1/1/05 that are proposed for demolition be replaced on a one-for-one
basis. PHAs would have some flexibility in providing replacement housing, and
could get a waiver in special circumstances such as a court decree or a severe
shortage of land.

Â Â Â Â Â Â Â Â Â Â Â Other
mandatory components would be opportunities for involvement by public housing
residents in the development and implementation of revitalization plans, a plan
for relocation of public housing residents, a right for public housing residents
to occupy housing provided under the revitalization plan, and monitoring of
displaced households.

Â Â Â Â Â Â Â Â Â Â Â PHAs
would have to provide a mixed-income housing development on the site of the
original public housing project in a way that decreases the concentration of poverty.
In general, at least one-third of on-site units would have to be for public housing
residents. There would also be requirements for off-site replacement housing.

Â Â Â Â Â Â Â Â Â Â Â The
legislation would also require that residential construction built as part of a
revitalization plan comply with green building standards.

H.R.3524 would also:

·Â Â Â Â Â
Expand the list of permissible activities that can be
funded with HOPE VI grants.

·Â Â Â Â Â
Require each PHA that receives a HOPEVI grant to
establish performance benchmarks for each component of its revitalization plan.

·Â Â Â Â Â
Mandate HUD site visits to public housing projects for which
a HOPEVI application has been submitted.

·Â Â Â Â Â
Increase to 25% from 15% the maximum portion of a HOPE VI
grant that may be used to fund necessary supportive services.

·Â Â Â Â Â
Bar HUD from requiring that the first phase of a
project to be developed under a proposed revitalization plan already have a
housing credit allocation in hand, in the case of grant applications relying on
an LIHTC allocation as part of the revitalization plan.

·Â Â Â Â Â
Prohibit HOPE VI grants for only demolition of public
housing units.

·Â Â Â Â Â
Bars PHAs from applying different eligibility standards
or screening to displaced public housing residents re-occupying, or new
residents of, a HOPE VI development.

Senate Bill

Â Â Â Â Â Â Â Â Â Â Â S.829
would also make numerous amendments to the HOPE VI program. The changes proposed
by the bill were based on the recommendations of a task force formed at the
request of Sen. Mikulski.

Â Â Â Â Â Â Â Â Â Â Â The
bill would add educational and relocation aims among the purposes of the HOPEVI
program. It would require each HOPE VI grant recipient to establish, in
partnership with local schools, a comprehensive educational reform and
achievement strategy for transforming neighborhood schools that serve the
revitalized HOPE VI sites into high-performing schools. The bill would dictate
the contents of such a strategy, and allow for an alternative strategy.

Â Â Â Â Â Â Â Â Â Â Â S.829
would also revise the HOPE VI grant award criteria. These would broaden the
factors that HUD is to consider in the grant selection criteria it develops, including
the establishment of performance benchmarks, demonstrated linkages to education
by a proposal, the quality and sustainability of the physical redevelopment and
housing choices offered to residents, the strength of local government support
for the project, the degree of leveraging of other resources, and other
factors.

Â Â Â Â Â Â Â It would also mandate HUD site visits for proposed projects, and require PHAs to establish performance benchmarks — with sanctions for failure to meet them — for each of their HOPE VI projects.

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