Contact:                      
Sunia Zaterman
Executive Director
(202) 638-1300

Despite strong bi-cameral, bi-partisan support and recent congressional testimony on the success of the HOPE VI program, the House VA-HUD Appropriations Subcommittee, chaired by Rep. James Walsh (R-NY), included only token funding for the widely-acclaimed program at $50 million, a 95% cut from last year's appropriation of $574 million.  In an about-face, the Administration's budget proposal zeroed-out the program, despite HUD's repeated praise for the program over the last two years.

In recent congressional hearings, HUD Secretary Martinez and Assistant Secretary Liu were grilled by members of Congress to justify the sudden elimination of the program.  HUD failed to offer a convincing rationale and the House Committee on Financial Services quickly passed H.R. 1614, sponsored by Rep. James Leach (R-IA), reauthorizing HOPE VI. 

At the appropriations mark-up, members of the Subcommittee from both sides of the aisle criticized the HOPE VI funding level as being inadequate.  Rep. David Price (D-NC) recalled that at the Subcommittee hearing on the HUD budget, Republican and Democratic members agreed that HOPE VI should be continued.  Rep. Ray LaHood (R-IL) also rejected the Chairman's argument stating that the main reason why there remains unspent money in the HOPE VI account is that HUD dislikes the program and undermines housing authority efforts to implement their grants.  He reiterated that HOPE VI is successful in bringing back distressed communities and is a catalyst to implementing one of the Administration's main priorities, affordable homeownership programs.  Rep. Chaka Fattah (D-PA) also agreed that HOPE VI was working well in his district in Philadelphia and elsewhere, thus should be fully funded.   

A GAO report issued in May, entitled "HUD's Oversight of HOPE VI Sites Needs to Be More Consistent", confirms Rep. LaHood's concerns. The GAO report found that, "HUD's oversight of HOPE VI grants has been inconsistent, due partly to staffing limitations and confusion about the role of field offices."  The report also states, "HUD has reported that one reason for project delays has been the limited number of grant managers."   In addition, the GAO found that  - in recent years, HUD has eliminated some services previously provided to grantees - despite the fact that HUD has not spent 20 percent of the funding appropriated for technical assistance.

In fact, HUD does not dispute that there are still severely distressed public housing neighborhoods in desperate need of revitalization funding. Recent HUD studies confirm that public housing needs at least $22 billion in capital investment to provide basic acceptable living conditions for its almost 3 million residents.  For every three public housing authority applicants for the HOPE VI program, on average only one receives funding each year. The demand for revitalization funds far outstrips the appropriation levels in every application cycle since the inception of the program.  

HOPE VI, which has revitalized severely distressed communities across the country through public/private partnerships, has been hailed by lawmakers, local governments, private investors, researchers, and residents as being one of the most successful federal housing programs and a driving force in turning around neighborhoods that were once forgotten.  The Urban Land Institute called HOPE VI "the single most significant new federal housing initiative of the last decade - producing dramatic results in some of America's worst neighborhoods - creating revitalized communities where despair predominated for decades."  The program received an Innovations in American Government Award crediting the program with "transforming the fundamentals of public housing in the United States by using public and private development resources to replace the bleak, isolated public housing of the past with attractive new mixed-income communities." The bipartisan Millennial Housing Commission reported to Congress, "The HOPE VI program must be retained as both a preservation and production tool."
 

CLPHA Executive Director Sunia Zaterman noted that recent studies show that HOPE VI has made significant progress in revitalizing severely distressed communities and bringing billions of dollars in new investment to needy neighborhoods across the country.  "The HOPE VI program is accomplishing many of the key goals of both the Administration and Congress by using public/private partnerships to leverage new private investment in neighborhoods that deconcentrates poverty and creates quality, affordable rental and homeownership opportunities in long-neglected communities," said Zaterman.

The Urban Institute summarized its major findings in 2002, reporting, "A majority of the original residents in our study sample are living in decent housing in neighborhoods that have lower poverty rates than their original public housing developments, and most are satisfied with their current living situation". indeed most are considerably better off as a result of the changes associated with leaving distressed public housing.

The Housing Research Foundation examined the economic impact of the HOPE VI program on surrounding neighborhoods in 2003 and found that in the past five to ten years conditions in the HOPE VI neighborhoods have improved considerably.  Crime rates have fallen significantly.  Residents' education levels have increased, as have their incomes and their rates of employment.  The proportion of very low-income households has declined, as well as the percentage of households receiving public assistance. There are also indications of increased private investment in these communities.  Both residential and commercial lending has increased. Property values have generally kept pace with (or outpaced) inflation and the overall appreciation in the single-family market

According to a General Accounting Office (GAO) report in November 2002, PHAs that received revitalization grants through 2001 estimate that they will leverage an additional $9 billion in investments for their HOPE VI sites.  By fiscal year 2001, housing authorities were augmenting every HOPE VI revitalization grant dollar awarded to them with an additional $2.63 from other sources. The GAO also found that PHA HOPE VI grantees expect to leverage $295 million in additional funds for community and supportive services.

CLPHA joins members of Congress, local government officials, private investors, lenders and public housing residents in calling for the reauthorization and full funding of the highly successful and acclaimed HOPE VI program.