HOPE VI: Program with a Future?

HOPE VI, a federal program that converts distressed public housing into mixed-income sites, has strong, bipartisan support in both Houses of Congress, although the current administration claims that HOPE VI has outlived its usefulness.

“HOPE VI has improved the quality of life for many residents who have been able to move to better housing in dramatically safer neighborhoods,” says Susan J. Popkin, a housing expert at the Urban Institute, a Washington, D.C.-based nonpartisan policy research organization. “However, if Congress abandons the program, whatever opportunities that might have existed for low-income households will be lost,” she adds.

To date, the majority of residents affected by HOPE VI revitalization have received Housing Choice Vouchers to use in the private sector. According to a series of reports published recently by the Urban Institute, most residents who received vouchers are substantially better off than their counterparts who remained in traditional public housing. Improved housing in safer, less poor neighborhoods is available to them in the private sector, the Urban Institute's studies show. Relatively few residents have returned to new HOPE VI sites as yet, but most of these sites are still under development, and the final numbers are likely to increase over time.

Study Shows Marked Success

The Urban Institute's HOPE VI Panel Study tracked the experiences of public housing residents who received HOPE VI grants between 2001 and 2005. The Urban Institute surveyed 887 heads of household in 2001, and conducted surveys again in 2003 and 2005. For each of the three surveys, the response rate was 85 percent, researchers said. Sites selected for the studies were in California, District of Columbia, Illinois, New Jersey, and North Carolina.

The study's main finding was that public housing residents who used vouchers to move into units within the private sector have better living conditions than they had before. The units in which they live have improved, and their neighborhoods are significantly less dangerous. But the studies also revealed that another group of residents moved into renovated public housing that is only marginally better than the dilapidated sites they left.

Few Residents Return

At every site the Urban Institute surveyed, federal funds were being applied to revitalize distressed housing. However, none of the sites completed their revitalization during the study period. The Urban Institute found that fewer than 5 percent of households surveyed had returned to new units in the mixed-income housing developments being constructed on the sites. (Other studies indicate a higher return rate—ranging from 20 percent to 75 percent.) According to Popkin, the proportion of original residents returning to the five HOPE VI Panel Study sites is likely to increase as more units are completed.

Legislators who fund the HOPE VI program have long been concerned that move-outs from demolished sites were likely to seek accommodations close by. But the HOPE VI Panel Study found that most of those who received vouchers left the neighborhood entirely.

Better Housing in Safer Neighborhoods

According to the study, in 2005, 68 percent of voucher holders rated their housing as excellent or good. In contrast, only 49 percent of households that had moved to public housing gave their units high ratings. Likewise, private market movers were much less likely to report problems such as broken heating devices, insect and rodent infestation, damaged toilets, and peeling paint and plaster. But those who remained in traditional public housing experienced virtually no improvement in housing quality over time.

The Hope VI Panel Study also found that residents who received vouchers relocated to areas that were dramatically safer, representing a profound improvement in residents’ living conditions. For example, about 90 percent of respondents reported “big problems” with drug trafficking during the study's inception in 2001, says Popkin. However, only 16 percent of voucher holders reported problems of this sort in 2005.

The comments of residents who used vouchers to move reflected a wide range of improvements in their quality of life. New living conditions allowed residents’ children to play outside more frequently and decreased the amount of fighting among neighborhood children. Residents slept better and generally felt less anxious. Residents who remained in traditional public housing experienced some improvement, but nearly half continued to report big problems with crime occurring in their new developments.

The Urban Institute concluded that residents should be encouraged to relocate with vouchers, if possible, and that more attention should be paid to ensuring that “hard to house” families—those with multiple, complex personal problems—do not end up moving from distressed sites to other public housing projects with similar or worse conditions.

EDITOR'S NOTE: The HOPE VI Panel Study is available at http://www.urban.org/projects/hopevi. A companion brief, “Severely Distressed Public Housing: The Costs of Inaction,” is available at http://www.urban.org/publications/411444.

Congress Keeping HOPE VI Alive

Despite HOPE VI's record of success, the Bush administration has proposed no new funding for the program. The fiscal year budget that President Bush sent to Congress sought instead to rescind $99 million in fiscal 2007 funds, thereby eliminating the program. In the face of this opposition, however, Congress has pushed through additional funding for HOPE VI—at least for the current fiscal year, as it has managed to do in each of the past several years.

HUD to Streamline Program

HUD would like to streamline HOPE VI to make it compatible with the low-income housing tax credit (LIHTC) program, says HUD Assistant Secretary Orlando Cabrera. HUD would also prefer not to have one-to-one replacement be a program requirement for public housing, he notes. Mixed finance deals normally allow for units to be affordable to residents earning up to 60 percent of area median gross income (AMGI), he adds.

“If you try to provide that type of affordability with one-for-one replacement, it is going to be hard to underwrite these deals,” says Cabrera. “There won't be sufficient revenues to support the same number of public housing units.”

Insider Sources

Orlando Cabrera: HUD Office of the Assistant Secretary for Public and Indian Housing; Washington, DC

Susan J. Popkin: The Urban Institute; Washington, DC