House Bill Makes Significant Improvements In “Hope Vi” Public Housing Revitalization Program
Provisions to Overcome Employment Barriers Need Strengthening
End Notes
[i] Susan J. Popkin, Bruce Katz et al., “A Decade of HOPE VI: Research Findings and Policy Challenges,” Urban Institute, 2004, p. v.
[ii] Margery Austin Turner et al., “Severely Distressed Public Housing: The Costs of Inaction,” Urban Institute, March 2007. For both estimates, the Urban Institute researchers looked only at public housing developments not scheduled for demolition or replacement in census tracts with poverty rates above 30 percent. The lower figure is based on the developments considered to be seriously deteriorated (based on a HUD REAC score below 75) with more than 30 percent of residents relying primarily on welfare income. The higher figure assumes somewhat less stringent measures of physical deterioration (REAC score below 80) and welfare dependency (more than 25 percent).
[iii] HUD figures indicate an average cost per unit developed with HOPE VI of $153,441, of which $63,114 (or 41 percent) is contributed by the HOPE VI program. These figures include demolition and site preparation as well as construction of all units, including market rate and tax credit-assisted units as well as public housing. It appears that the figures do not include relocation costs, housing voucher assistance, or resident services and are not adjusted for inflation of expenditures in earlier years. Statement of Orlando J. Cabrera, Asst. Secretary, U.S. Department of Housing and Urban Development, Subcommittee on Housing and Community Opportunity of the House Financial Services Committee, June 21, 2007, p. 6. The Urban Institute found a median per unit development cost of $160,400, with 37 percent of the cost covered by HOPE VI, and an additional median cost for resident services per original resident of $7,620. Margery Austin Turner et al., “Estimating the Public Costs and Benefits of HOPE VI Investments: Methodological Report,” July 2007, p. 16. Estimates by GAO were considerably higher: $223,190 per unit for development alone (without demolition etc.), and $248,720 including all costs. GAO’s estimates are based on HUD and housing agency data for HOPE VI projects funded in 2000 and earlier. GAO, “Federal Housing Assistance: Comparing the Characteristics and Costs of Housing Programs,” GAO-02-76, January 2002, pp. 21, 62. It is unclear whether the difference in time period covered is sufficient to explain the considerable difference in these cost figures.