HOPE VI Public Housing Revitalization Program: Background, Funding, and Issues







Prepared for Members and Committees of Congress



The Revitalization of Distressed Public Housing program, referred to as HOPE VI, has been
credited with eliminating and replacing some of the most dangerous and dilapidated public
housing in the country with new mixed income communities. However, the program has come
under scrutiny for slow expenditure of funds and for displacing poor families. Reflecting these
criticisms, the Bush Administration requested no new funding for the program in each budget
request from FY2004-FY2009. Congress responded by continuing to fund the program, but at
less than a quarter of what it had been funded at in FY2003 and prior years.
Created in 1992 and administered by the Department of Housing and Urban Development
(HUD), the HOPE VI program provides funds to renovate or demolish existing public housing
and replace it with mixed-income housing. The local public housing authorities (PHAs) that
administer public housing apply for grants, currently capped at $20 million each, and use the
funds to leverage other private and public resources. The bulk of the HOPE VI program is
composed of revitalization grants that can be used for demolition, rehabilitation, and new
construction of public housing, as well as land acquisition, relocation of residents, and
community and supportive services for residents. HUD has also provided demolition-only grants
that could be used—often in conjunction with revitalization grants—for the physical destruction
of distressed public housing and the relocation of its residents, although no demolition grants
have been issued for several years. A third type of grant, planning grants, are no longer awarded,
but could be used for technical assistance in preparing a property to go through a demolition or
revitalization. A new type of revitalization grant, Main Street Revitalization Grants, was created
in 2003. They are available to local governments in small communities rather than PHAs for main
street revitalization projects, which may be unrelated to public housing.
Over the history of the program, 256 HOPE VI revitalization grants have been made to PHAs in
36 states, districts, and territories. As of July 2008, a cumulative total of 89,892 units have been
demolished and 70,435 new and rehabilitated units have been completed.
The HOPE VI program has helped transform a number of severely distressed neighborhoods,
which has made the program popular with many Members of Congress from both parties. Its
authorization was set to expire at the end of FY2006, but Congress extended the program through th
the end of FY2008 (P.L. 110-161). In the 110 Congress, HOPE VI reauthorization legislation
was considered (H.R. 3524 and S. 829)—and approved by the House—but was not enacted th
before the end of the 110 Congress.
This report outlines the program and its history, which sets the context for today’s debate. It will
be updated to reflect congressional action.






Introduc tion ..................................................................................................................................... 1
History of Public Housing.........................................................................................................1
Basis for HOPE VI....................................................................................................................2
History of HOPE VI........................................................................................................................3
The Program....................................................................................................................................5
HOPE VI Funding and Grants..................................................................................................5
Planning Grants...................................................................................................................8
Demolition-Only Grants.....................................................................................................8
Main Street Revitalization Grants.......................................................................................8
Revitalization Grants..........................................................................................................8
The Application and Awards Process......................................................................................10
Demolition-Only Grants...................................................................................................10
Main Street Grants.............................................................................................................11
Revitalization Grants.........................................................................................................11
Leve ragi ng..................................................................................................................... .......... 12
Successes and Concerns................................................................................................................13
Neighborhood Improvements..................................................................................................13
Mixed Finance.........................................................................................................................14
Residents ...................................................................................................................... ........... 15
Mentoring Demonstration Grants.....................................................................................16
Expenditure ............................................................................................................................. 16
Cost-Eff ectiveness ................................................................................................................... 18
One-for-One Replacement......................................................................................................19
Recent Developments....................................................................................................................20
Funding ........................................................................................................................ ........... 20
HOPE VI Reauthorization.......................................................................................................21
Recent Reauthorization Legislation..................................................................................21
Figure 1. HOPE VI Leveraging by Cohorts of Grantees...............................................................12
Figure 2. Composition of Unspent Balances in the Hope VI Program at the End of
FY2008 ....................................................................................................................................... 18
Table 1. HOPE VI Appropriations, 1993-2008...............................................................................6
Table 2. HOPE VI Awards, FY1993-2008......................................................................................7
Table 3. HOPE VI Revitalization and Main Street Revitalization Grants by State,
FY1993-2008 ............................................................................................................................... 9





Author Contact Information..........................................................................................................23






HOPE VI is a public housing reform program. Through HOPE VI, the Department of Housing
and Urban Development (HUD) provides funds to rehabilitate or demolish public housing and
replace it with housing that serves both the poor as well as the middle class. In order to
understand HOPE VI and its issues, it is important to first understand a brief history of the larger
public housing program.
The Low-Rent Public Housing program was created as a part of the U.S. Housing Act of 1937
(P.L. 93-383). The Depression-era program was intended to stimulate construction activity, clear
slums, and provide low-rent housing to poor families. As designed under the act, public housing
is built and operated by local, quasi-governmental, public housing authorities (PHAs). Tenants
who live in public housing typically pay 30% of their adjusted gross incomes toward rent,
although they can opt for a market-based flat rent and PHAs can choose to institute minimum
rents of up to $50 per month. PHAs are able to keep public housing rents low because local
governments provide property tax reductions and the federal government provides both capital
and operating subsidies to supplement the low rents paid by tenants.
From its inception, public housing has faced a number of barriers to success. Many communities
were resistant to accepting public housing. This opposition, paired with strict federal rules about
how much could be spent to build a unit of public housing, led to the construction of public
housing developments in undesirable areas, such as near railroad tracks, highways, and industrial
zones. The housing that was constructed was often high-density, high-rise structures. This form of
development has often been characterized as “the projects.” In addition to location and
construction problems, many projects faced management problems. Although many public
housing projects were run by effective and efficient PHAs, others had inexperienced PHAs, or in
some cases, negligent PHAs, who were unable or unwilling to deal with problems as they arose.
Furthermore, PHA budgets were often insufficient to maintain the properties. It was thought at the
time the program was created that most tenants would be working adults whose incomes would
increase until their economic situation improved enough that they could move out of public
housing. This was the case in the early years of the program. However, policies that adopted rent
levels based on incomes rather than operating costs and gave priority to the elderly and disabled,
paired with changing demographics and a growth in single-mother-headed households, resulted in
a population of public housing residents that was very different than originally envisioned. Today,
about half of public housing residents are elderly or disabled and about half are non-elderly non-
disabled single-adult headed households, the majority with children. Of those non-elderly, non-
disabled households, only about half have income from work, while the other half either receive
some form of cash assistance, such as welfare, or report no income. Today’s public housing
serves the very poor, who are only required to pay a percentage of their income toward rent. Since
the rent that PHAs receive from tenants is so low, public housing is dependent on congressional
appropriations, and the budget has not always kept up with need. Many units of public housing
fell into disrepair, and some units had to be left vacant because they were no longer habitable.
Public housing, over time, became known for terrible living conditions. Research has shown that





communities with high concentrations of poverty often fall victim to myriad social ills.1 The often
dense, high-rise structures of public housing became riddled with crime, drugs, and violence.
Public housing was the primary government housing program for the poor until the late 1970s.
However, out of growing concern about the problems with public housing, and other government-
subsidized housing construction programs, President Nixon declared a moratorium on federal
housing construction programs in 1973. In 1974, Congress authorized the Section 8 program,
which provided subsidies to allow low-income families to live in private market housing. It was
hoped that through partnerships with the private sector, the Section 8 program could avoid the
problems faced by public housing. The Section 8 program also introduced tenant-based
assistance, which subsidized tenants rather than units, giving tenants the option to move. Tenant-
based assistance has grown in popularity, partially out of the hope that it can prevent
concentrations of poverty in neighborhoods. Over time, Section 8 overtook public housing as the
government’s largest housing program for the poor; today, almost twice as many households are 2
served by Section 8 than are housed in public housing.
Although new construction of public housing had ended by the early 1970s, over a million units
of public housing were still occupied, and many were still plagued by problems. In order to
determine how to deal with the existing stock of public housing, Congress created the National
Commission on Severely Distressed Public Housing (P.L. 101-235) in 1989. The Commission
was mandated to identify those public housing projects that were in a severe state of distress;
assess the most promising strategies for improvement; and develop a national action plan.
In 1992, the Commission issued its findings and recommendations on the state of the nation’s
public housing. The Commission labeled 6% of the public housing stock as severely distressed, at
the time, equal to 86,000 units. It also reported finding the following:
• residents afraid to move about in their own homes and communities because of
the high incidence of crime;
• high unemployment and limited opportunities for the meaningful employment of
residents;
• programs designed to address the conditions with too few resources, provided too
late;
• programs designed to assist residents of public housing that provide disincentives
to self-sufficiency; and
• families living in physical conditions that have deteriorated to a degree that
renders the housing dangerous to the health and safety of residents.
The national action plan presented by the Commission included proposals for change in five
major categories:

1 See William Julius Wilson, The Truly Disadvantaged: The Inner City, the Underclass and Public Policy (Chicago:
University of Chicago Press, 1987).
2 For more information on Section 8, see CRS Report RL32284, An Overview of the Section 8 Housing Programs, by
Maggie McCarty.





• Addressing the needs of residents: recommendations included increasing
funding for social services, increasing coordination among federal agencies that
provide social services, and promoting economic development opportunities for
residents.
• Addressing the physical conditions: recommendations included increasing
funding for capital improvements, providing national leadership to PHAs in
planning and design, establishing a model process to eliminate the causes of
severe distress, and increasing coordination among government programs that
support the rehabilitation of severely distressed housing.
• Addressing management needs: recommendations included providing funding
for security, further tying PHA funding to performance, and promoting income-
mixing in public housing.
• Other strategies: recommendations included encouraging PHAs to pursue
private and non-profit management opportunities, increasing and improving
available data on public housing, creating a new office on severely distressed
public housing at HUD, and encouraging Congress to authorize a new
partnership program between PHAs, non-profits, the private sector, and residents
to attract additional resources to public housing.

HOPE VI began as a demonstration program, created in reaction to the findings of the National
Commission on Severely Distressed Public Housing. The Commission’s National Action Plan
was presented in August 1992; in October 1992 the final version of the FY1993 HUD
appropriations bill (P.L. 102-389) passed the Congress, including $300 million for an Urban
Revitalization Demonstration program. Under the demonstration, the Secretary of HUD was to
choose 15 cities, based on need, to receive up to $50 million each to revitalize distressed public
housing. Each city was required to spend 80% of its funds toward the capital costs of major
reconstruction, rehabilitation and other physical improvements, the capital costs of replacement
units and/or Section 8 certificates, management improvements for the reconstructed project, and
for planning and technical assistance purposes. The remaining 20% was to be used for
community and supportive services. PHAs were required to match 15% of all funds provided.
From 1993 until 1998, the Urban Revitalization Demonstration, now commonly referred to as
HOPE VI, continued to receive funding through annual appropriations bills; however the program
remained unauthorized. The law governing the program was contained within annual
appropriations bills and the requirements for eligibility and funding changed from year to year.
HUD administered the law not through regulation, but in the directions they issued along with
each annual Notice of Funding Availability (NOFA), to which communities would apply for
HOPE VI funding. Changes to the program, in addition to those mandated by annual
appropriations laws, were included in these NOFAs.
The FY1999 HUD appropriations bill (P.L. 105-276) included a major public housing reform
initiative, the Quality Housing and Work Opportunity Reconciliation Act (QHWRA), that
authorized the HOPE VI program. QHWRA codified four purposes for the program:





• improving the living environment for public housing residents of severely
distressed public housing projects through the demolition, rehabilitation,
reconfiguration, or replacement of obsolete public housing projects (or portions
thereof);
• revitalizing sites (including remaining public housing dwelling units) on which
such public housing projects are located and contributing to the improvement of
the surrounding neighborhood;
• providing housing that will avoid or decrease the concentration of very low-
income families; and
• building sustainable communities.3
In the law, severely distressed public housing was defined as public housing that
• requires major redesign, reconstruction or redevelopment, or partial or total
demolition;
• is a significant contributing factor to the physical decline of and disinvestment by
public and private entities in the surrounding neighborhood;
• is occupied predominantly by families that are very low-income families with
children, unemployed, and dependent on various forms of public assistance; or
has high rates of vandalism and criminal activity (including drug-related criminal
activity) in comparison to other housing in the area;
• cannot be revitalized through assistance under other programs because of cost
constraints and inadequacy of available amounts; and
• is lacking in sufficient appropriate transportation, supportive services, economic
opportunity, schools, civic and religious institutions, and public services, 4
resulting in severe social distress in the project.
QHWRA authorized funding for HOPE VI through the end of FY2002 and included a sunset
clause which stated that no assistance could be provided to the program after September 30, 2002.
The FY2003 HUD appropriations bill (P.L. 108-7) extended authorization for the HOPE VI
program through the end of FY2004 and P.L. 108-186 reauthorized the program, with some
changes, through FY2006. The FY2007 appropriations law (P.L. 110-5) extended the program’s
authorization through the end of FY2007, and the FY2008 appropriations law (P.L. 110-161) 5
extended the program’s authorization through the end of FY2008. The program lacks formal
regulation; guidance is set out for each cohort of grantees in the annual Notice of Funding
Availability to which they apply for funds.

3 See 42 U.S.C. § 1437v(a).
4 This list summarizes the definition given in 42 U.S.C. § 1437v(j)(2); the final criteria was not included in QHWRA
but was added by P.L. 108-186.
5 Authorizaton for the program is currently being extended by the FY2009 continuing resolution (P.L. 110-329).






The purpose of the HOPE VI program is to revitalize severely distressed public housing
developments and transform them into safe, liveable environments. As described by HUD, this
includes
• changing the physical characteristics of public housing from high-rise tenements
to attractive, marketable units that blend in with the surrounding neighborhoods;
• lessening concentrations of poverty by reducing density and promoting mixed-
income communities;
• encouraging partnerships with other agencies and local governments for support
and resources; achieving high-quality management in public housing and
enforcing strict eviction rules; and
• helping residents to attain self-sufficiency by providing services and educational
opportunities, and by encouraging economic development in the area surrounding
public housing.
HUD seeks to meet the goals of the HOPE VI program by providing grants to PHAs for
revitalization, or if this is not economically feasible, for demolition of distressed public housing.
The majority of funds are awarded through revitalization grants; funds have also been awarded
through demolition grants (until FY2004) and planning grants (until FY1995). A 2003 HOPE VI
reauthorization law (P.L. 108-186) created a fourth type of HOPE VI grant, designed to promote
“main street” revitalization in small communities, which is unrelated to public housing.
Funding for the HOPE VI program increased in the beginning, but remained relatively steady
over many years. However, in the face of mounting budget pressures and a desire from the Bush
Administration to eliminate funding for the program (discussed later in this report), Congress
enacted a major decrease in funding in FY2004 that has been continued each year since. Table 1
presents HOPE VI appropriations from 1993 to 2008.





Table 1. HOPE VI Appropriations, 1993-2008
(dollars in millions)
FY Public Law Appropriations
1993 P.L. 102-389 300
1994 P.L. 103-124 778
1995 P.L. 103-327 500
1996 P.L. 104-134 480
1997 P.L. 104-204 550
1998 P.L. 105-65 550
1999 P.L. 105-276 625
2000 P.L. 106-569 575
2001 P.L. 106-377 574
2002 P.L. 107-73 574
2003 P.L. 108-7 570
2004 P.L. 108-199 149
2005 P.L. 108-447 143
2006 P.L. 109-115 99
2007 P.L. 110-5 99
2008 P.L. 110-161 100
Total 6,666
Source: Table prepared by CRS using the United States Office of Management and Budget, Public Budget
Database for FY1993-FY2007. FY2008 funding figures based on P.L. 110-161.
This funding has been used to provide 575 grants. Table 2 shows the amount and number of
grants awarded, by type, from FY1993 to FY2008.





Table 2. HOPE VI Awards, FY1993-2008
(dollars in millions)
Other Grant Types Revitalization
FY Grants Totals
Main Street Demolition-Only Planning
$ # $ # $ # $ # $ #
1993 566 13 0 0 1 2 567 15
1994 516 14 — 0 0 3 6 519 20
1995 475 13 0 0 11 27 486 40
1996 383 19 — — 71 22 — — 454 41
1997 497 23 — — 1 4 — — 498 27
1998 532 28 — — 52 46 — — 584 74
1999 573 21 — — 40 31 — — 613 52
2000 514 18 — — 52 27 — — 566 45
2001 492 16 — — 75 44 — — 567 60
2002 492 27 — — 42 41 — — 534 68
2003 433 24 — — 60 69 — — 493 93
2004 127 7 2a 5a 0 0 — — 129 12
2005b 157 8 c c 0 0 — — 157 8
2006 72 4 1 1 0 0 73 5
2007 89 5 d d 0 0 — — 89 5
2008 97 6 4 4 0 0 97 6
Total 6015 246 7 10 393 284 15 35 6426 575
Source: Congressional Research Service (CRS) analysis of HUD expenditure data and FY2004, FY2005, FY2006,
FY2007, and FY2008 grant award statements.
a. The FY2004 Main Street Revitalization Grants were awarded in FY2005.
b. Does not include three “Mentoring Demonstration” grants, totaling $500,000, awarded in FY2005. These
grants were created by the Secretary with previous year’s appropriations funding. See discussion under
“Residents” heading later in this report.
c. Note that FY2005 Main Street Grant funding was made available in combination with FY2006 Main Street
Grant funding in the FY2006 Main Street Revitalization grants NOFA, published in the Federal Register on
April 11, 2006.
d. While $2 million was advertised as available for Main Street grants in FY2007, no funds appear to have been
awarded.





Thirty-five planning grants were awarded to PHAs between 1993 and 1995. They were used to
pay for studies of the area to be revitalized; to develop a plan for revitalization; for economic
development; and for technical support. Planning grants were suspended after 1995, because
HUD believed that there were enough examples of PHAs that had begun the revitalizing process
that the technical assistance was no longer necessary.
In 1996, HUD established a goal of demolishing 100,000 units by the year 2003. Since then, the
Department has awarded 284 demolition-only grants. PHAs are awarded these grants when it is
not economically feasible to redesign or reconstruct the existing units of a project. They are used
to demolish existing units and to relocate the affected tenants in replacement housing, which
could include providing them with tenant-based vouchers. Often, demolition-only grants are used
as precursors to future HOPE VI revitalization grant initiatives. Since FY2004, when funding for
HOPE VI was significantly reduced, HUD has not made any demolition-only grants available.
The American Dream Downpayment Act (P.L. 108-186) added a new category of HOPE VI
grants. Main Street Revitalization grants are awarded to units of local government (rather than
PHAs) in small communities (with a population under 50,000) that are not currently served by a
PHA, or are served by a small PHA (administer 100 or less units) and that have an active main
street rejuvenation effort. Historically, the majority of HOPE VI grants have gone to large cities,
arguably where the most blighted public housing is found. Funds can be used to develop
affordable housing that is located in a community area that is undergoing a historic main street
revitalization; there is no requirement that the use of funds be at all related to public housing.
Main Street grants are statutorily capped at $1 million each (although HUD capped grants at
$500,000 each in FY2005), and grantees must match at least 5% of the grant award. The grants
are funded through a 5% set-aside in the HOPE VI annual appropriation. The first round of grants
was made available in FY2004, but awarded in FY2005.
The bulk of funding provided for the HOPE VI program has been awarded through revitalization 6
grants, which is the most well-known component of the program. HUD has awarded 246
revitalization grants since the inception of the HOPE VI program. They can be used for the
development of new public housing, rehabilitation of existing public housing, demolition and/or 7
disposition of existing public housing, the creation of homeownership replacement units, the
acquisition of new property, the relocation of displaced residents, community and supportive
services for residents, and administrative fees and costs. Up to 20% of grant funds may be used
for community and supportive services programs. Grantees must match grant funds, and they are
generally used to leverage other resources.

6 Early in the HOPE VI program, revitalization grants were called implementation grants.
7 The termdisposition” means the sale or transfer of public housing by the PHA.





Over the history of the HOPE VI program, over $6 billion worth of revitalization grants have
been awarded to PHAs in 36 states and territories. In addition, $7 million in Main Street
Revitalization grants have been awarded, including to two states which had never received HOPE
VI Revitalization grants. Table 3 shows the breakdown of revitalization grants and awards by
state.
Table 3. HOPE VI Revitalization and Main Street Revitalization Grants by State,
FY1993-2008
State Total Grants Total Awards (in millions of $)
Alabama 6 119.7
Arizona 5 81.1
Californiab 13 328.1
Colorado 3 72.2
Connecticut 5 131.4
Delaware 1 16.8
District of Columbia 7 181.2
Florida 14 275.6
Georgia 11 285.9
Illinois 13 367.6
Indiana 4 79
Kentucky 6 127.7
Louisianaa 6 116.5
Maineb 1 1.0
Maryland 9 209.8
Massachusetts 7 159.1
Michigan 4 127.6
Minnesota 2 34.2
Mississippia 3 52.8
Missouri 7 172.4
Montana 1 0.9
New Jersey 14 385.4
New Mexicob 1 1.0
New York 7 197.5
North Carolinab 14 327.1
Ohio 12 313.9
Oklahomaa 2 29.1
Oregon 2 51.9
Pennsylvania 18 367.7
Puerto Ricoa 2 51.5





State Total Grants Total Awards (in millions of $)
Rhode Islanda 2 20.5
South Carolina 7 146.5
Tennessee 11 279.8
Texas 12 351.5
Virginia 7 149.3
Washington 9 255.6
West Virginia 2 17.6
Wisconsin 6 136.5
Source: Congressional Research Service (CRS) analysis of HUD expenditure data through June 30, 2004, and
HUD grant announcements for FY2004, FY2005, FY2006, FY2007, and FY2008.
a. Includes one Main Street Grant totaling $500,000.
b. Includes one Main Street Grant totaling $1 million.
Each year, HUD publishes a NOFA in the Federal Register inviting PHAs to apply for HOPE VI
grants. The NOFA includes application procedures and requirements, which change somewhat
every year. PHAs submit applications requesting a specified amount of money to be used to
implement a plan that they have detailed to HUD.
Demolition-only grants were awarded on a first-come, first-served basis. Once the NOFA was
published, eligible PHAs could apply. In order to be eligible, a PHA had to fall into one of four 8
priority groups that involve the mandatory or voluntary demolition of public housing or prior
approval for a revitalization grant. HUD screened applications as they arrived to ensure that they
were in a priority group and that they met minimum requirements. For example, in 2003,
minimum requirements included a cap of 2,500 units to be demolished per applicant, a plan to
relocate residents, and proof that the units are in severe distress. HUD funded eligible applicants
on a first-come, first-served basis, by priority group, until the HOPE VI funds were exhausted.
No demolition-only grants have been awarded since FY2003.

8 The priority groups are, in order of priority, (1) approved for a 202 conversion, (2) applied for a 202 conversion, (3)
approved for a Section 18 demolition, or (4) approved for a HOPE VI revitalization grant. Section 202 Mandatory
Conversion is the conversion of public housing developments to Section 8. If it costs less to give the residents a Section
8 voucher, rather than maintain the low rent public housing building, the building is shut down and the residents are
given Section 8 vouchers. The demolition and disposition of public housing is authorized under Section 18 of the
Housing Act of 1937 (the act), as amended. PHAs can apply to demolish public housing, even outside of the HOPE VI
program.





The application process for Main Street grants largely mirrors that for revitalization grants. A
NOFA for Main Street grants is published in the Federal Register, laying out the application
requirements and deadlines. Once HUD receives applications, it screens them to determine
whether they meet threshold requirements. In the FY2005/FY2006 combined NOFA, the
thresholds included a requirement that a community had a prior Main Street Rejuvenation Master
Plan, that the plan included affordable housing, and that appropriate zoning was in place. Once
applications have been screened, they are scored. Scoring categories in the FY2005/FY2006
NOFA included the capacity of the community, including prior experience, the need for
affordable housing, and the readiness of the plan for implementation. While Main Street grants
are capped in law at $1 million, although in some years, HUD has limited the maximum to
$500,000, presumably to serve more communities.
PHAs who wish to receive a revitalization grant must apply by the deadline published in the
NOFA. Once the deadline has passed, HUD screens the applications to ensure that they meet
threshold requirements. If they do not, then they are disqualified. For example, in order to meet
the threshold requirements in 2006, applicants had to prove, among other factors, that they had
secured site control for the proposed site, had issued a Request for Qualifications (RFQ) to secure
a developer, and that they had prepared a plan in advance for relocating residents impacted by the
revitalization. The NOFA also explains deadlines for spending funds and penalties for slow
expenditure.
Once HUD screens the applications, the agency scores them on a variety of factors. For example,
in the 2006 NOFA, applications received scores in categories including capacity to undertake
development, need, the amount of outside resources brought in (leveraging), the amount of
homeownership housing created, the amount of prior HOPE VI units that had been completed by
the applicant, and community and supportive services. HUD then ranks the scored applications
and funds them, in order, until the HOPE VI funds are exhausted. In the early years of the HOPE
VI program, there was no cap on the amount a HOPE VI grantee could be awarded. However,
since 1996, when HUD began allowing PHAs to use HOPE VI dollars to leverage outside
resources, the average grant amount per project has dropped significantly. In recent years, HUD
has capped revitalization grants at $20 million each.
Once grantees are selected, they are notified and are required to sign a grant agreement with
HUD. The grant agreement includes time-lines for progress. For example, under the terms of the
2006 NOFA, HOPE VI revitalization grantees are expected to complete their developments
within 54 months. However, as the NOFAs change every year, different cohorts of grantees have
had different time-lines for spending their funds. PHAs must agree to meet all requirements of the
program, including match requirements. For example, PHAs must match 5% of their HOPE VI
grant award with other resources and must match, dollar-for-dollar, any amount over 5% of the
grant amount that is used for community and supportive services for residents. If a PHA is not
successfully meeting its deadlines or requirements, HUD has the authority to penalize the PHA
either by appointing some form of receiver or by rescinding grant funds. To date, HUD has not
rescinded HOPE VI funds from delinquent grantees, although performance on a HOPE VI grant
has contributed to HUD’s finding of substantial default and appointment of a receiver for several
PHAs.





One of the key components of the HOPE VI program is the leveraging of outside resources.
Beginning in 1996, revitalization grantees were encouraged to seek outside sources of funding to
undertake their redevelopment, in addition to meeting their match requirement. Since that time,
grantees have partnered with private non-profit and for-profit organizations and local and state
governmental entities who have contributed both expertise and resources to HOPE VI projects. In
aggregate, PHAs have budgeted $2.16 in leveraged (meaning non-HOPE VI) funds for each
HOPE VI revitalization grant dollar awarded. Figure 1 demonstrates the generally increasing
trend in the amount of funds leveraged by HOPE VI grantees.
Figure 1. HOPE VI Leveraging by Cohorts of Grantees
Source: CRS analysis of HOPE VI data (through March 31, 2006) from the U.S. Department of Housing and
Urban Development, using the same methodology as used in U.S. General Accounting Office, GAO-03-91, Hope
VI Leveraging Has Increased, but HUD Has Not Met Annual Reporting Requirement, Nov. 2002, available at
http://www.gao.gov/new.items/d0391.pdf.
Note: Numbers represent amount of leveraged resources budgeted to be spent relative to the amount of
HOPE VI funding budgeted to be spent. Numbers do not reflect actual expenditures. Data are current as of
March 2006.





Despite general satisfaction with the amount of non-HOPE VI funds grantees are bringing into
projects, concern has been raised that HOPE VI redevelopments may be raising only limited
private investment and may be more expensive than they appear. According to HUD’s FY2006
HOPE VI Report to Congress, about 60% of funds spent on revitalization projects had come from
leveraged funds, and 73% of those leveraged funds were from non-federal sources. However, that
estimate includes private equity raised from the sale of Low-Income Housing Tax Credits
(LIHTC) as a non-federal source, although some might consider it a form of federal funding. A
study conducted by General Accounting Office (now the Government Accountability Office) in
2002 found that, after excluding LIHTC funds, only 12% of leveraged funds had come from
private sources; LIHTC funding had accounted for 27% of all leveraged funds in the projects 9
studied.

HOPE VI has been credited with a number of successes. In terms of addressing severely
distressed public housing, the program has largely met its original goal: to eliminate the worst
severely distressed public housing. Grantees have been provided sufficient funding to demolish 10
over 100,000 units of public housing. The homes that are built in place of the demolished units
are typically lower-density, safer, and more attractive. The new designs also generally connect the
public housing developments with their surrounding communities, both functionally and
aesthetically. Despite the HOPE VI program’s successes, there are several program issues facing
Congress. They include the slow expenditure of HOPE VI funds, the impact of HOPE VI on the
original public housing residents, the cost-effectiveness of the program, and the loss of assisted
housing stock.
Success in the HOPE VI program can be measured, in part, by the amount of revitalization it has
sparked in surrounding communities. Although this kind of change is hard to measure, studies
have shown that HOPE VI has had some success. A study of eight HOPE VI sites undertaken by
the Housing Research Foundation found that in communities surrounding recent HOPE VI
revitalization projects
• per capita incomes increased more than for the cities as a whole;
• neighborhood unemployment rates had fallen;
• receipt of public assistance had declined;
• fewer households qualified as low-income;
• commercial and residential lending rates increased at a faster rate than overall
city increases; and

9 U.S. General Accounting Office, Hope VI Leveraging Has Increased, but HUD Has Not Met Annual Reporting
Requirement, GAO-03-91, November 2002, available at http://www.gao.gov/new.items/d0391.pdf.
10 According to HUD program summary data, revitalization grantees have demolished 89,892 units of public housing;
demolition-only grantees planned to demolish 57,593 units of public housing. Despite the fact that some units may be
double-listed, so these figures are not additive, the total demolished likely exceeds 100,000.





• overall and violent crime had declined at a more rapid rate than in the overall
city.
The author concluded that “although there are many non-HOPE VI factors contributing to change
in these communities, the nature of HOPE VI development has helped determine the extent and 11
pace of that change.”
A 2003 GAO report looking at the neighborhoods surrounding several HOPE VI sites also
attempted to assess the impact of HOPE VI on neighborhoods. Using decennial Census and
Home Mortgage Disclosure Act data, GAO found that the neighborhoods surrounding the HOPE
VI developments generally experienced positive changes in education, income, and housing
indicators. However, further analysis found mixed results in some neighborhoods compared to
comparable neighborhoods that had not undergone a HOPE VI redevelopment. In summary,
GAO’s report stated:
We cannot attribute these changes solely to the HOPE VI program. To the extent that they do
reflect the programs influence, however, they suggest that demolition of old, deteriorated
public housing alone may influence surrounding neighborhoods. For example, average
housing value and average household income increased even though no new units had been
constructed. It is possible that the HOPE VI program influenced these indicators by
removing blight from the neighborhoods and temporarily relocating large numbers of low-12
income households during demolition.
Regardless of whether HOPE VI redevelopments actually spur new neighborhood
improvement—or if such improvements would have happened without a HOPE VI grant—the
award of a HOPE VI grant has often brought positive press to areas of towns that were plagued
by negative perceptions. Many news stories have been written about community transformations 13
linked to HOPE VI. Arguably, HOPE VI might help to change the public’s generally negative
perceptions of public housing.
HOPE VI has encouraged PHAs to build relationships with outside partners, including non-
profits and the business community. These partnerships bring new resources into communities
undergoing revitalization. Examples include the creation of community centers, charter schools,
and new commercial activity in redeveloped HOPE VI sites and the provision of capital to help
public housing residents start small businesses and social services to help public housing
residents further their educations or overcome personal barriers.

11 Sean Zielenbach, The Economic Impact of HOPE VI on Neighborhoods (Washington, D.C.: Housing Research
Foundation, 2002), available at http://www.housingresearch.org/hrf/hrfhome.nsf/
e9 c24279c3bd4d1085256a03 00 779c07 /d c6 11 c3 50 fe86e7085256cd800698e98/$FILE/ATTSO6 UM/
ImpactAnalysisFinal.pdf.
12 U.S. Government Accountability Office, HOPE VI Resident Issues and Changes in Neighborhoods Surrounding
Grant Sites, GAO-04-109, November 2003.
13 For example, see Joanne Huist Smith, “Daytonview Gets Update; Area Has New Look, Feel, Soon to Have New
Residents, Dayton Daily News, December 25, 2003, p. Z7-1;Vicki Cheng, “Hope in Durham, The Raleigh News &
Observer, December 8, 2003, p. B1; and David Austin, “Optimism Marks New Columbia Groundbreaking, The
Oregonian, December 2, 2003, p. C01.





PHAs have also gained new knowledge about private capital markets partly as a result of HOPE
VI. This new knowledge has allowed a number of PHAs, outside of the HOPE VI program, to
participate in mixed-finance deals and secure private loans. As of December 2007, HUD has
approved 106 transactions in which 186 PHAs secured a total of approximately $3.06 billion in 14
loan and bond financing to address the capital needs of public housing. These extra funds
supplement federal funds and rents used to modernize public housing. It is hoped that, with the
use of outside funding, PHAs can begin to address the large backlog of modernization needs in
existing public housing and prevent further disrepair.
The majority of HOPE VI revitalization plans require at least the temporary displacement of
residents. Grantees can relocate residents, either temporarily or permanently, to other public
housing sites or by providing them with vouchers to be used in the private market. According to
HUD program summary data, as of March 2006, 63,885 households had been relocated by HOPE
VI revitalization grantees. Of those households, 49% had been moved to other public housing,
32% had been given Section 8 vouchers, 6% had been evicted, and 13% had made other
arrangements or left the program. Of the 63,885 that were relocated, 22% are now living in
revitalized units.
Although the intention of many grantees is to return as many displaced residents as possible to
redeveloped sites, often fewer residents return than planned. GAO found that, in 1999, grantees
estimated that 61% of original residents would return to redeveloped sites; by 2003, their estimate 15
of resident returns had dropped to 44%. Some families choose not to return, opting instead to
stay where they were relocated and avoid the hassle of another move. In other cases, families are
ineligible to move back because of blemished credit or rental histories. According to March 2006
HUD data, grantees now estimate that 38% of original residents will return to redeveloped sites.
Given that many residents who are displaced from public housing projects undergoing HOPE VI
renovation do not return when the revitalization is complete, low-income housing advocates have
raised questions about what has happened to them. Since HUD has not always required PHAs to
follow residents during the revitalization process, some PHAs have lost track of residents after
their initial relocation. To learn more about what has happened to displaced residents, the Urban
Institute conducted a study that looked at the living conditions of former residents of eight HOPE
VI sites that had been relocated either with vouchers or to other public housing units, several
years after their initial relocation. Their study found that, overall, relocated tenants lived in safer,
healthier communities and better housing after relocation. Although both groups have seen some
gains, families relocated with vouchers have generally fared better than families relocated to other
public housing. Particularly, the study found that children in voucher households have done better
than children relocated to other public housing, for whom behavior problems have increased. One
way in which voucher holders have done worse includes financial hardship. Voucher holders are
more likely than public housing residents to report difficulty in paying for utilities and food—16
indicating that they are having to make tradeoffs to pay their rent.

14 According to HUD’s FY2009 Congressional Budget Justifications.
15 U.S. Government Accountability Office, Public Housing: HOPE VI Resident Issues and Changes in Neighborhoods
Surrounding Grant Sites ,GAO-04-109 November 21, 2003.
16 Jennifer Comey, HOPE VI’d and On the Move, Urban Institute, June 2007.





Low-income housing advocates argue that HUD should put a greater priority on the needs of
public housing residents when selecting HOPE VI grantees. Advocates contend that more units of
public housing should be built through HOPE VI and that displaced tenants should have a right to
return. They also argue that PHAs should be responsible for providing sufficient support to
displaced residents, especially residents that leave public housing, to ensure that their relocation
is successful. The Urban Institute findings have also led to calls for the greater use of vouchers 17
when relocating families.
In FY2005, HUD awarded more than $500,000 of prior years’ funds for Mentoring
Demonstration grants. They were awarded to prior revitalization grantees to partner with
community and faith-based organizations who provide community and supportive services to
families. HUD will use these grantees to see whether a “mentoring” model improves self-
sufficiency outcomes for families affected by HOPE VI redevelopments. The grants were funded
with previous years’ appropriations funding, presumably recaptured from grantees who were
unable to use them.
One main criticism of the HOPE VI program has been the slow expenditure of HOPE VI funds.
In FY2003, unspent balances reached a peak of over $3.3 billion (over half of the $6 billion
appropriated for the program).
A number of reasons have been cited for PHAs’ slow expenditure of HOPE VI funds. One is the
changing nature of the program. In the beginning, grantees were chosen almost solely on the basis
of need. Often, the PHAs with the most need had the weakest management capacity. As a result,
the poorest-performing PHAs were awarded large grants. It is not surprising that they had
difficulty in implementing their redevelopment plans. This was especially true in 1996, when 18
Congress set aside grants for a set of PHAs outside of any competitive process. A 2003 GAO
report found that the majority of revitalization grantees had missed at least one of the deadlines 19
established in their grant agreements.
HUD has worked to address several of these problems. Over time, the process for selecting
grantees has become more competitive, and HUD now uses a number of criteria to judge
applicants’ capacity for undertaking these complicated development projects. For example, recent

17 See testimony of George Moses, representing the National Low Income Housing Coalition, and Dr. Susan Popkin
from the Urban Institute, before the House Financial Services Subcommittee on Housing and Community Opportunity,
June 21, 2007, available at http://www.house.gov/apps/list/hearing/financialsvcs_dem/ht0621072.shtml.
18 The 1996 grantees are known to have had problems in undertaking their HOPE VI redevelopments. Their problems
are especially visible in expenditure data displayed in Figure 2 later in this report. A GAO assessment of 1996 grantees
cited several additional factors that have led to delays in HOPE VI projects: PHAs often lack staff with expertise in
development and finance, which hinders their ability to undertake complicated mixed-finance deals without acquiring
additional staff or consultants; certain types of development, including on-site construction and new construction, are
more difficult than others, which may not have been accounted for in original plans; a lack of community and resident
support can hinder HOPE VI development plans, and may lead to lengthy litigation; and the HUD approval process can
move slowly, perhaps because of staffing limitations.
19 U.S. General Accounting Office, HUD’s Oversight of HOPE VI Sites Need to Be More Consistent, GAO-03-555,
May 2003, available at http://www.gao.gov/new.items/d03555.pdf.





revitalization NOFAs have included rating factors that reward applicant and developer capacity
and deduct points from applicants with previous HOPE VI grants that are behind in development.
There is reason to believe that more recent HOPE VI grantees have performed better than earlier nd
grantees. HUD’s FY2006 2 Quarter HOPE VI Progress Report to Congress included
information demonstrating the improved performance of more recent cohorts of grantees on a
number of administrative performance measures. For example, the number of days it took more
recent grantees (those from FY2002 through FY2004) from the execution of their grant
agreement to the approval of their revitalization plan averaged 177 days, compared to an average
of over 600 days for older grantees (those from FY1993 through FY2001). Pre-2002 grantees
took an average of over 1,100 days to get approval of their mixed finance proposals, compared to
an average of about 356 days for FY2002 and later grantees. These improvements may be due, in
part, to more robust selection criteria used by HUD in choosing grantees, greater PHA experience
and familiarity with HOPE VI-like mixed finance developments, and more focus by HUD on
interim performance measures.
Another important change has come in the way that Congress provides funding to the HOPE VI
program. Prior to FY2002, HOPE VI was provided with no-year funding, meaning that the funds
provided by Congress remained available to the grantee until they were spent. Beginning in
FY2002, Congress adopted a one-year obligation and a five-year expenditure deadline for HOPE
VI funds. Any HOPE VI funds remaining unspent at the end of that period will expire and revert
back to the Treasury. This change in funding should effectively solve the problem of future
accumulations of unspent balances. The FY2002 cohort of grantees were the first to experience
an expiration of funds; $12 million of FY2002 grant funds expired at the end of FY2008 before
they could be used by grantees.
At the end of FY2008, unspent balances in the HOPE VI fund had been reduced from their peak
of $3.3 billion in FY2003 to under $860 billion. As illustrated in Figure 2, just under half of that
amount (46%) is funding that will not expire. The remaining 54% of those funds will expire if not
spent within six years of their award.





Figure 2. Composition of Unspent Balances in the Hope VI Program at the End of
FY2008
(in thousands of dollars)
FY03 funds, $159,27928% of awarded funds
(expires in 2009)
FY04 funds, $52,28435% of awarded funds
(expires in 2010)
Total Unspent No Year FundsTotal UnspentExpiring FundsFY05 funds, $89,431
$393,239(46% of unspent funds)$463,939(54% of unspent funds)63% of awarded funds(expires in 2011)
FY05 funds, $65,65066% of awarded funds
(expires in 2012)
FY07 funds, $98,11199% of awarded funds
(expires in 2013)
Source: Chart prepared by CRS using data from the Department of Treasury Combined Statement of Receipts,
Outlays, and Balances, FY2008.
Over time, the remaining balance of unspent, no-year funds (awarded pre-FY2002) has been
declining. As shown in Figure 2, of the $4.9 billion in no-year funding awarded to grantees prior
to FY2002, just under $400 million remained at the end of FY2008. That balance has been
reduced significantly in recent years; at the beginning of FY2002, the unspent balance of no-year
funds was over $3 billion. Outlays among the pre-FY2002 grantees have been relatively constant
in recent years, averaging roughly $300 million per year for the past five years. Because outlays
have been relatively steady and because no new no-year money is being added, the remaining
balance of these no-year funds is being depleted at a increasingly rapid rate. In FY2008, pre-
FY2002 grantees spent over 30% of the remaining no-year funds. HUD has taken a number of
steps to encourage these earlier grantees to spend their funds, including hiring grant expediters to
provide technical assistance to grantees. Also, as noted earlier, HUD has also used poor
performance on a HOPE VI grant as a factor in deciding to place a PHA in receivership.
Over the history of federal housing programs, priorities have shifted from providing publicly
constructed and owned housing for low-income families to providing subsidies, either to the
private market to build low-cost, private housing, or to residents for use in the private market.
One of the main reasons for this shift was the finding that it was more expensive to build and





maintain publicly owned housing than it was to provide subsidies to the private market.20 As a
result, the government has not funded the development of new public housing units for many
years. Grantees can use HOPE VI funds, in conjunction with other public and private funds, to
build replacement units of public housing. Given what is known about the past cost-effectiveness
of the construction of public housing, questions can be raised as to whether this is an effective use
of limited government dollars. HUD testified before Congress in 2003 that it is not an efficient
method. According to the Assistant Secretary for Public and Indian Housing, the division that
oversees the HOPE VI program:
Moreover, it is evident to us that HOPE VI is not an efficient method for meeting the current
and future capital needs of the public housing program. The average cost of building a unit
under HOPE VI is $120,000, more than 33% greater than the average cost of building a 21
similar unit using the HOME block grant program. Given overall budget constraints, it just
doesnt make sense for us to continue funding for this program at the expense of more cost 22
effective programs to serve the same ends.
Taking a different look at the costs of HOPE VI, researchers at the Urban Institute attempted to
undertake a cost-benefit analysis of HOPE VI redevelopment compared to maintaining the status
quo in distressed public housing. Their study contrasted the up-front costs of undertaking a HOPE
VI development (including HOPE VI and other government funding, but excluding equity
generated by LIHTCs) to the savings to the government that could result from undertaking the
redevelopment. They estimate savings from reduced housing subsidy needs (since new buildings
require lower subsidies and are likely to be more energy efficient), improved family well-being
(lower welfare, unemployment insurance, Medicaid, and criminal justice system costs), and
improved neighborhoods (increased property tax revenue). The Urban Institute study estimates
that a prototypical distressed public housing project, undergoing a HOPE VI mixed income 23
redevelopment, could save the government more than $20 million over 20 years.
The loss of the nation’s stock of publicly assisted housing, affordable to low-income families, has
been a concern for a number of years. The congressionally mandated, bipartisan Millennial
Housing Commission found “a critical shortage of affordable apartments for extremely low-24
income households.” As noted earlier, most HOPE VI developments do not replace every unit of
public housing demolished, and most include a number of market rate units that are too expensive

20 Mark Shroder and Arthur Reiger, “Vouchers versus Production Revisited,” Journal of Housing Research, vol. 11, no.
1 (2000), pp. 91-107.
21 The HUD HOME program provides formula grants to States and localities that communities use—often in
partnership with local nonprofit groups—to fund a wide range of activities that build, buy, and/or rehabilitate
affordable housing for rent or homeownership or provide direct rental assistance to low-income people.
22 Testimony of Assistant Secretary for Public and Indian Housing Michael Liu, in U.S. Congress, House Financial
Services Committee, Subcommittee on Housing and Community Opportunity, Strengthening and Rejuvenating Our thst
Nation’s Communities and the HOPE VI Program, hearings, 108 Cong., 1 sess., April 29, 2003, H. Hrg. 108-23
(Washington: GPO, 2003), at http://financialservices.house.gov/media/pdf/108-23.pdf.
23 Margery Austin Turner, Mark Woolley, G. Thomas Kingsley, Susan J. Popkin, Diane Levy, Elizabeth Cove,
Estimating the Public Costs and Benefits of HOPE VI Investments: Methodological Report, the Urban Institute, July
16, 2007.
24 Report of the Bipartisan Millennial Housing Commission, Meeting Our Nation’s Challenges (Washington: GPO,
2002), p. 17.





for public housing residents to afford. As of March 2006, HOPE VI revitalization grantees
planned to demolish 88,469 units of public housing, rehabilitate 10,993 units of existing public
housing, and build 92,644 units of new housing—only about half of which would be public
housing units, a net loss of 41,000 public housing units. As of March 2006, 88% of the units
planned for demolition had been demolished, and 54% of the public housing units slated for
construction had been built, an interim net loss of over 50,000 units.
Low-income housing advocates have expressed concern that HOPE VI is eroding the nation’s
stock of affordable housing, and many have argued that HUD should reinstate the one-for-one
replacement requirement. They argue that, in many communities, there is simply a shortage of
lower-cost housing and that the federal government has some responsibility to help increase, or at
least maintain, the supply.
The requirement that each unit of public housing destroyed be replaced with a new unit of public
housing, called “one-for-one replacement,” was suspended in 1994 and fully repealed in 1996.
Much of the impetus behind the suspension of the requirement was the argument put forward by
PHAs that they were unable to deal with troubled public housing because the one-for-one
replacement requirement, coupled with site standards, deconcentration requirements, limited
funding, and other rules, made the demolition and revitalization process unworkable. At
Congress’s request, GAO investigated these issues and reported that PHAs were concerned that 25
one-for-one replacement was resulting in developments becoming decrepit. In addition to
development concerns, critics of one-for-one replacement argued that it promoted concentrations
of poverty, did not appeal to investors, and that the low rents paid by public housing residents
would not allow projects to remain financially viable.
PHA groups have contended that reinstating traditional one-for-one replacement will again
hamper their ability to undertake housing rehabilitation. Further, there are questions about how
one-for-one replacement could affect efforts to deconcentrate poverty. Some compromise
strategies, such as requiring some minimum threshold of hard unit replacement, or greater
replacement with project-based subsidies, have been considered.

The Bush Administration requested no new funding for the HOPE VI program in each of his
FY2004-FY2008 budget requests to Congress. Citing the slow expenditure of funds, concerns
about cost-effectiveness, and that the program had effectively reached its goal of demolishing
100,000 units of distressed public housing, the Administration states it is time to rethink whether
HOPE VI is still necessary or effective. The Administration argues that even without new
funding, the program would not end any time soon, since so many projects are still in the
pipeline, but that by not funding the program, HUD would have time to throughly evaluate the
program and consider alternatives.

25 U.S. General Accounting Office, Public Housing: Funding and Other Constraints Limit Housing Authorities Ability
to Comply with One-for-One Rule, RCED-95-78, March 3, 1995, available at http://archive.gao.gov/t2pbat1/
153789.pdf.





Each year, Congress has rejected the Administration’s request to eliminate funding for the
program. The FY2004 Consolidated Appropriations Act (P.L. 108-199) provided $149 million for
HOPE VI, significantly less than the $570 million provided in FY2003. In budget hearings, many
Members of Congress from both parties expressed their satisfaction with the HOPE VI program,
citing successful revitalization initiatives in their own communities. The FY2005 Consolidated
Appropriations Act (P.L. 108-447) also funded the HOPE VI program, providing $143 million.
The FY2006 Appropriations Act for the Departments of Transportation, Treasury, and HUD, the
Judiciary, the District of Columbia and Related Agencies (P.L. 109-115) provided $99 million to
the program. The FY2007 year long continuing resolution funded the program at the FY2006
level (P.L. 110-5). The FY2008 Consolidated Appropriations Act (P.L. 110-161) funded the
program at $100 million.
The HOPE VI program was originally authorized through the end of FY2002. The 108th Congress
initially extended the program through the end of FY2004 (P.L. 108-7) but later extended the
HOPE VI program through the end of FY2006, as a part of a larger bill designed to make changes
to a number of housing programs, including HOPE VI. The American Dream Downpayment Act
(P.L. 108-186) amended the program to change the selection criteria, broaden the definition of
severe distress, require GAO to conduct a study, and add a new category of grant (Main Street
Revitalization grants). Several bills to reauthorize the HOPE VI program were introduced in the th

109 Congress, although none were enacted. Several reauthorization bills were also considered in th


the 110, and one version (H.R. 3524) passed the House; they are summarized below.
The program’s authorization has been maintained through extensions included in the annual
appropriations bills. The most recent extension was included as a part of the FY2009 continuing th
resolution (P.L. 110-329). The 111 Congress may consider HOPE VI reauthorization, and may
use past legislation as guidance.

The HOPE VI Improvement and Reauthorization Act of 2007 (S. 829) was introduced on March
8, 2007. Sponsored by Senator Mikulski with bi-partisan cosponsors, it would have reauthorized
the HOPE VI program through FY2013 and amended it, adding education and relocation-related
requirements. Specifically, it would have required each HOPE VI grant recipient to establish, in
partnership with local schools, a comprehensive educational reform and achievement strategy for
transforming the neighborhood schools into high-performing schools. The bill would also have
required public housing agencies to establish performance benchmarks for each of their HOPE VI
projects and required the Secretary to establish specified sanctions for failure to meet such
benchmarks. The Senate Banking Committee held a hearing on the bill on June 20, 2007.






The HOPE VI Improvement and Reauthorization Act of 2007 (H.R. 3524) was introduced on 26
September 11, 2007. It would have reauthorized the HOPE VI program through FY2015 at $800
million per year and makd a number of changes to the program. The bill proposed to:
• eliminate demolition-only and Main Street grants;
• establish new selection criteria and application requirements;
• establish enhanced relocation requirements for displaced tenants;
• establish enhanced resident and citizen participation requirements;
• establish green building standards (largely taken from H.R. 2536);
• establish a modified one-for-one replacement requirement, requiring at least 33%
of new public housing units be built on site;
• require that every displaced resident be offered a revitalized public housing unit
either on site or in the jurisdiction of the PHA;
• expand the eligible uses of HOPE VI funds; and
• permit the Secretary to establish performance standards for grantees and
sanctions for failure to meet the standards.
H.R. 3524 was marked up by the House Financial Services Committee on September 26, 2007.
During markup, a manager’s amendment was approved making several technical changes and
authorizing the Secretary to use up to 2% of funding for planning and technical assistance grants.
It was reported by the Committee on January 3, 2008.
On January 17, 2008, the House passed H.R. 3524, with several amendments. A manager’s
amendment was approved that included provisions to limit the one-for-one replacement
requirement to units that were in place January 1, 2005; allow for limited waivers of the one-for-
one replacement requirement; extend the deadline for completion of HOPE VI developments;
modify the green building requirements by removing the reference to specific green building
standards and directing the HUD Secretary to select or establish standards; add requirements that
PHAs must meet in order to modify their HOPE VI plans; require that displaced families be
subject only to ongoing occupancy requirements (and not initial occupancy requirements); extend
the availability of HOPE VI funds for hurricane-affected areas; clarify that undocumented non-
citizens are not eligible to receive HOPE VI assistance; and make other technical corrections.
Two floor amendments were also approved, one to restore the set-aside for Main Street grants and
another to limit the liability of certain elderly persons and victims of crime for criminal activity
that takes place in their home and that could otherwise lead to their eviction. A minority-
sponsored motion to recommit was also approved that (1) added veterans to the list of hard-to-
house families that would receive preference for HOPE VI units and (2) prohibited PHAs from
providing such a preference to individuals who have been released from a prison, jail, or other
correctional facilities (PHAs would have been required to give such individuals preference under

26 This bill is similar to a bill with the same title and sponsor, but a different bill number (H.R. 3126) that was
introduced on July 23, 2007.





the provisions of the bill prior to approval of the motion to recommit). No further action was th
taken on the legislation before the close of the 110 Congress.
Maggie McCarty
Specialist in Housing
mmccarty@crs.loc.gov, 7-2163