Case Study

The Tangled Legacy of Hope VI 

8 min read

HOPE VI, a hugely ambitious program to replace nearly 100,000 severely distressed public housing units over two decades with mixed-income units and to improve residential services and quality of life in hundreds of neighborhoods, clearly had mixed results, especially with its legacy of displacing tenants. But some of its successes were remarkable. 

Given a goal by Congress to ameliorate 86,000 severely distressed public housing units, the final tally by the Department of Housing and Urban Development demonstrates major accomplishments. 

The top line? “Between 1993 and 2010, the HOPE VI program demolished 98,592 public housing units and produced a total of 97,389 mixed-income units,” according to a 2016 HUD analysis of the program. 

The bottom line is a bit muddier, though, in terms of public policy directives to boost income levels in an effort to democratize public housing and erase its low-income, high-crime stigma. 

“Of the 97,389 total mixed-income units, most (55,318 units, or 57 percent) were replacement public housing units, and affordable and market-rate units made up 30 percent and 13 percent of the remaining units, respectively,” according to the report by HUD’s Policy Data and Research (PDR) unit. But more than 43,000 public housing units were lost, and while outcomes for many public housing occupants that did not return were good, some were not so good. 

While the percentage of projected successful public housing replacements was quite high, the target for homeownership units and mixed-income units came in lower at HOPE VI, which was funded with more than $6 billion over the 1990s and 2000s. 

HUD’s analysis claimed “a total of 88.3 percent of the units projected in the grantee agreements were produced. Notably, 91.9 percent of the projected rental units were produced, while only 72.7 percent of the projected homeownership units were produced.  

“Also, fewer actual market-rate units (71.8 percent) have been produced than public housing (94 percent) and affordable units (87.1 percent) in comparison to projected production. Barely over half (54 percent) of the projected market-rate for-sale production has been completed, a clear sign of the impact of the 2008 housing market crash.” 

Differing Outcomes 
Many original residents of HOPE VI did not return to the renovated buildings, and while some of those reflected lifestyle improvements, many did not. 

A study of the Park DuValle project in Lexington, KY, notes it “has been often cited as a model or one of the most successful HOPE VI developments in the nation.” 

But the academic study by two professors, Michael Brazley and John I. Gilderbloom, found that “of the 1,273 households that comprised Cotter & Lang Homes (the project’s previous name), only 150 were scheduled to live in the new HOPE VI community.”  

A significant number of occupants were evicted, and there were other hard landings as well. Brazley and Gilderbloom write, “The Housing Authority of Louisville reported that there were 1,273 households relocated from Cotter & Lang Homes, with 611 households being relocated to public housing, 232 households moving to Section 8 housing, 198 households evicted, and 232 households going to “other” (buying homes, living with relatives, going homeless, etc.).” 

Industry executives involved in HOPE VI projects were favorable but differed in emphasis. 

Darcy Jameson, vice president of development at Beacon Communities LLC, Boston, says HOPE VI’s “physical and social programs were some of the most creative thinking around how to transform some of our more challenging housing in the country,” while Rodger Brown, now with Preservation of Affordable Housing, but previously an outside consultant on HOPE VI projects, calls the program “a mixed bag, depending on the skills and talents of local housing authorities,” but one with significant successes, such as those in the Boston area. 

Jameson likes how “communities were both physically redeveloped and augmented with social support for the people that lived there. 

“The physical redevelopment turned out to be the easier part, as the dollars were made available for the demolition and reconstruction. For the most part, there were strong developers who engaged in the HOPE VI program, which meant management of the physical aspect of the communities was strong overall.  Maintaining funding for resident services and community programming has been the long-term challenge.” 

Things Happen 
And, as to the market-rate component, “a couple of things happened over the decades. We had recessions, and rents were not going up. There were years when the public housing and Section 8 rents weren’t going up or going up as quickly as had been projected.” 

Over time “there were projections that didn’t play out as anticipated. Over the course of years, that has long-term implications on the ability to operate and maintain the physical plants of these communities.” 

But overall, she feels, “HOPE VI did a good job providing a lot of the resources for developing beautiful, well-built, sustainable, durable communities.” 

On the social side of the HOPE VI program, “I think that’s where the program really has truly made an impact, in putting in family self-sufficiency and resident services to really make sure when you’re bringing folks back to these communities, you’re giving them the tools to succeed,” she says. These included ESL, computer learning, basic budgeting classes and others. 

Jameson was involved with HOPE VI in Beacon’s Old Colony project, a multi-phase development of 850 apartments that is continuing to this day. HOPE VI was used in the second phase at Old Colony. 

“I had a terrific experience,” she reports, with a result of alleviating blighted, non-energy efficient units and including new streets and infrastructure. 

Jameson was also involved in two Rental Assistance Demonstration (RAD) conversions of Beacon’s early HOPE VI projects. In these 2016 conversions, no construction took place, while the public housing subsidy was converted to Section 8 through RAD, which helped stabilize revenue and reallocate some of the existing reserves to address capital needs. 

Different Subsidies 
The conversion of public housing subsidy to RAD Section 8 helped to stabilize the income, address some capital needs and position the properties for re-financing and/or syndications. 

Brown says he consulted on HOPE VI properties in Boston; Philadelphia; Dayton, OH; St. Louis and Nashville before his time at POAH. 

These varied from city to city, Brown says. He notes that Boston had seen notable HOPE VI successes. 

One less-than-stellar outcome of the program? “They didn’t do a lot of home ownership,” he says. And he adds that on some projects, only 50 percent of original residents returned. 

HOPE VI has certainly elicited a wide range of assessments, from a report entitled, “False HOPE” (telegraphing its conclusions) to an extremely positive one from HUD, saying it had met all of its objectives. 

HUD’s five-year assessment, done by Abt Associates, concludes that across the HOPE VI sites, the researchers found that, relative to preconstruction conditions, the HOPE VI transformation of the neighborhood was associated with the following:  

  • Significant physical improvement in the quality of the housing; 
  • Lower crime rates;  
  • Higher resident incomes;  
  • Increased resident employment;  
  • Higher resident education;  
  • Increased resident racial diversity;  
  • Improved property management; and  
  • Improved neighborhood conditions at most sites.  

Good, Bad and Ineffective 
A more nuanced assessment comes from a 2004 Urban Institute report, which sees much good and not-so-good in HOPE VI, which had been around for a decade by then. 

On the plus side, “hundreds of profoundly distressed developments have been targeted for demolition, and many of them are now replaced with well-designed, high-quality housing serving a mix of income levels. HOPE VI has been an incubator for innovations in project financing, management and service delivery.  

“Some projects have helped turn around conditions in the surrounding neighborhoods and have contributed to the revitalization of whole inner-city communities.”  

On the negative side, however, “some HOPE VI projects have been stalled by ineffective implementation on the part of the housing authority or conflict with city government. In others, developments were simply rehabilitated or rebuilt in the same distressed communities, with little thought to innovative design, effective services or neighborhood revitalization.  

“Most seriously, there is substantial evidence that the original residents of HOPE VI projects have not always benefited from redevelopment, even in some sites that were otherwise successful,” the report concludes. 

Amounts awarded to individual projects could be quite significant. To pick some average ones, The Elizabeth Park Homes in Akron, OH, received $19.25 million in HOPE VI money in fiscal 2002. The Edgewood Homes, also in Akron, received an even $20 million in fiscal 2005. And in Albany, NY, Edwin Corning Homes was awarded $28.9 million in fiscal 1998. 

The largest HOPE VI awards were capped at $50 million. That was the amount received by the Puerto Rico Housing Administration in 1994 and by the Richard Allen Homes in Philadelphia in fiscal 1993.  

In an example of almost but not quite, The Archbishop Walsh Homes in Newark, NJ just missed the top mark, having been awarded $49.996 million in fiscal 1994. That was just $4,000 shy of the maximum.”  

Mark Fogarty has covered housing and mortgages for more than 30 years. A former editor at National Mortgage News, he has written extensively about tax credits.