Progress and Problems in Revitalizing Distressed Public Housing

RCED-98-187: Published: Jul 20, 1998. Publicly Released: Jul 20, 1998.

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Stanley J. Czerwinski
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Pursuant to a legislative requirement, GAO reviewed the: (1) progress in completing capital improvements and implementing community and support services at HOPE VI sites; (2) primary reasons why progress at some HOPE VI sites has been slow; (3) extent to which financial leveraging is used at HOPE VI sites; and (4) Department of Housing and Urban Development's (HUD) capacity to oversee the program.

GAO noted that: (1) progress in completing capital improvements and implementing community and support services varies at HOPE VI sites; (2) overall, the rate of spending on capital improvements is increasing, but the vast majority of the grant funds remain to be disbursed; (3) although housing authorities could spend up to 20 percent of the grant funds awarded in fiscal years 1993 through 1996 for community and support services to help residents find jobs and become self-sufficient, the average expenditure was about 12 percent; (4) to track the progress of capital improvements and community and support services, HUD has established measures of performance for capital improvements and has hired a contractor to collect baseline data on community and support services; (5) at the HOPE VI sites visited, progress in implementing capital improvements and community and support services has varied with structural, social, and management issues specific to each site; (6) legal issues covering the preparation of grant agreements, legislative and administrative changes in unit replacement and demolition policies, and limited HUD staffing have also delayed progress at HOPE VI sites; (7) more complex redevelopment plans have created major opposition among groups of residents at several sites and produced delays; (8) using HOPE VI grants to leverage funding from public and private sources has introduced time-consuming requirements for coordinating the different sources' procedures and schedules; (9) financial leveraging has increased over time, and this trend is expected to continue; (10) a 1998 HUD policy limiting a property's total development costs to industry averages is also expected to encourage leveraging; (11) because HOPE VI developments are more complex and costlier than most multi-family housing developments, the new policy will require the use of leveraging in the future; (12) reorganizing and downsizing have left HUD with fewer resources for overseeing HOPE VI grants; (13) streamlining has also left few employees in the field with knowledge of HOPE VI issues; (14) HUD has hired contractors to provide some additional oversight and has restored 11 positions to the HOPE VI program; and (15) although these additions will offset some of the staffing cuts, the new staff will need time to acquire expertise in the program.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: In response to this recommendation, HUD hired the Urban Institute to devise a tracking system so that HUD could collect both accurate baseline data and outcome-based measures. Beginning in June 2000 HUD is requiring that all hosing authorities with HOPE VI developments supply data quarterly on community and support services. Examples of uniform data being tracked include numbers of residents enrolling in or completing job training, new job placement, family counseling, and substance abuse programs. Other areas being tracked include activity in economic development, homeownership, crime reduction, and education.

    Recommendation: The Secretary of Housing and Urban Development should use the baseline data that the Department collects to develop consistent national, outcome-based measures for community and support services at HOPE VI sites.

    Agency Affected: Department of Housing and Urban Development


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