Public Housing:

Status of the HOPE VI Demonstration Program

RCED-97-44: Published: Feb 25, 1997. Publicly Released: Feb 27, 1997.

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Pursuant to a congressional request, GAO reviewed the status of the Department of Housing and Urban Development's (HUD) HOPE VI-Urban Revitalization Demonstration Program, focusing on: (1) the expenditures and activities for HOPE VI projects funded with appropriations for fiscal years 1993-1995; (2) whether HUD has identified innovative or successful approaches taken by housing authorities to implement their HOPE VI projects; and (3) HUD's strategy for evaluating the HOPE VI program's outcomes.

GAO found that: (1) of the $1.58 billion that Congress appropriated for the HOPE VI program for fiscal years 1993-95, HUD had awarded $1.54 billion for capital improvements and community and supportive services as of September 30, 1996; (2) in addition, Congress earmarked $5 million of the appropriation for HUD to provide technical assistance to housing authorities; (3) the awards, which fund 39 HOPE VI projects at 32 public housing authorities, range in size from $7.5 million to $50 million and averaging about $39 million; (4) these funds have been used primarily for capital improvements to the housing stock, for which housing authorities have budgeted an average of 87 percent of their grants; (5) the participating authorities, as of September 30, 1996, had: (a) demolished 6,538 housing units out of a planned total of 22,573 units; (b) rehabilitated 705 units out of a planned total of 5,407 units; (c) constructed 419 new units out of a planned 15,299 units; and (d) provided housing vouchers to 1,639 families displaced by the demolition or rehabilitation; (6) HUD has identified several innovative approaches used by HOPE VI grantees to implement their projects; (7) these approaches, which could serve as models for other housing authorities, include Cleveland's concept of centralizing its social services, Milwaukee's street layout to reduce density and enhance the neighborhood's security and cohesiveness, and Atlanta's use of private investors to help finance its improvements; (8) to assist other HOPE VI grantees, HUD has disseminated information about these and other approaches; (9) to evaluate the long-term effectiveness of the HOPE VI program, HUD is conducting a phased 10-year evaluation; (10) in August 1996, HUD completed a baseline study of 15 HOPE VI grantees' distressed housing and early revitalization activities; (11) HUD plans 5- and 10-year follow-up evaluations of these activities; (12) according to HUD, an evaluation at this time of the HOPE VI program's progress to date could be premature because several significant housing policies and regulatory ground rules changed after the program started; and (13) these changes resulted, in turn, in changes to the implementation plans for many HOPE VI projects and in delays in meeting initial milestones.

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