a
    GAO
    United States General Accounting Office
    Report to the Ranking Minority Member,
    Subcommittee on Housing and
    Transportation, Committee on Banking,
    Housing, and Urban Affairs, U.S. Senate
    May 2003
    PUBLIC HOUSING
    HUD’s Oversight of
    HOPE VI Sites Needs
    to Be More Consistent
    GAO-03-555

    HUD has generally used the same core rating factors to assess HOPE VI
    grant applications—need, capacity, quality, and leveraging. However, HUD
    has, over time, increased the requirements that housing authorities must
    meet for each of these factors in order to make better selection decisions.
    Although authorities’ historical program performance had been considered
    under various rating factors, it was not until fiscal year 2002 that past
    performance became a threshold requirement that an applicant must meet to
    be eligible for a grant.
    The status of work at HOPE VI sites varies greatly, with construction
    complete at 15 of the 165 sites. As of December 31, 2002, grantees had
    completed 27 percent of the total planned units and spent approximately
    $2.1 of the $4.5 billion in HOPE VI revitalization funds awarded. However,
    the majority of grantees have not met their grant agreement deadlines. For
    example, the time allowed for construction has expired for 42 grants, yet
    grantees completed construction within the deadline on only 3 grants.
    Several factors affect the status of work at HOPE VI sites, including the
    development approach used and changes made to revitalization plans.
    HUD’s oversight of HOPE VI grants has been inconsistent, due partly to
    staffing limitations and confusion about the role of field offices. Both
    headquarters and field office staff are responsible for overseeing HOPE VI
    grants. However, HUD field offices have not systematically performed
    required annual reviews. Additionally, despite grantees’ inability to meet key
    deadlines, HUD has no formal enforcement policies. Instead, the agency
    determines if action should be taken against a grantee on a case-by-case
    basis. Although HUD has declared 9 grants to be in default and issued
    warnings regarding 3 grants, it has not done so for other grants in a similar
    situation.
    Percentage of Construction Completed at 165 HOPE VI Sites
    Note: This figure is based on GAO analysis of data from HUD’s HOPE VI reporting system as of
    December 31, 2002.
    Congress established the HOPE VI
    program to revitalize severely
    distressed public housing. In fiscal
    years 1993 to 2001, the Department
    of Housing and Urban
    Development (HUD) awarded
    approximately $4.5 billion in HOPE
    VI revitalization grants. The
    Ranking Minority Member,
    Subcommittee on Housing and
    Transportation, Senate Committee
    on Banking, Housing, and Urban
    Affairs, asked GAO to examine
    HUD’s process for assessing grant
    applications, the status of work at
    sites for which grants have been
    awarded, and HUD’s oversight of
    HOPE VI grants.
    To improve its selection and
    oversight of HOPE VI grants, GAO
    recommends that HUD (1)
    continue to include past
    performance as an eligibility
    requirement in each year’s notice
    of funding availability; (2) clarify
    the role of HUD field offices in
    HOPE VI oversight and ensure that
    the offices conduct required annual
    reviews of HOPE VI grants; and (3)
    develop a formal, written
    enforcement policy to hold public
    housing authorities accountable for
    the status of their grants.
    HUD found this report to be fair
    and accurate, and it agreed with
    the three GAO recommendations.
    www.gao.gov/cgi-bin/getrpt?GAO-03-555.
    To view the full report, including the scope
    and methodology, click on the link above.
    For more information, contact David G. Wood
    at (202) 512-8678.
    Highlights of GAO-03-555, a report to the
    Ranking Minority Member, Subcommittee
    on Housing and Transportation,
    Committee on Banking, Housing, and
    Urban Affairs, U.S. Senate
    May
    2003
    PUBLIC HOUSING
    HUD's Oversight of HOPE VI Sites Needs
    to Be More Consistent

    Page i
    GAO-03-555 HUD's Management of the HOPE VI Program
    Contents
    Letter
    1
    Results in Brief
    3
    Background
    5
    HUD Uses Core Factors to Assess Applications but Has Not
    Consistently Followed Its Selection Procedures
    8
    Status of Work Varies Greatly, and Most Grantees Have Not Met
    Grant Agreement Deadlines
    16
    HUD’s Oversight of HOPE VI Grants Has Been Inconsistent
    25
    HUD Has Obligated the Majority of Funds Budgeted for Technical
    Assistance for Support to Grantees and HOPE VI Program
    Reporting
    31
    Conclusions
    33
    Recommendations for Executive Action
    34
    Agency Comments
    35
    Appendixes
    Appendix I: Objectives, Scope, and Methodology
    36
    Appendix II: HOPE VI Revitalization Grants
    38
    Appendix III: Fiscal Year 2002 Application Screening and Scoring
    Process
    46
    Appendix IV: Site Visit Summaries
    49
    ABLA Homes—Brooks Extension, Chicago, Illinois
    50
    Arverne/Edgemere Houses, Queens, New York
    55
    Bedford Additions, Pittsburgh, Pennsylvania
    60
    Connie Chambers, Tucson, Arizona
    64
    Cotter and Lang Homes, Louisville, Kentucky
    68
    Dalton Village, Charlotte, North Carolina
    72
    Durkeeville, Jacksonville, Florida
    76
    Heman E. Perry Homes, Atlanta, Georgia
    80
    Henry Horner Homes, Chicago, Illinois
    85
    Herman Gardens, Detroit, Michigan
    89
    Hollander Ridge, Baltimore, Maryland
    93
    Jackson Parkway, Holyoke, Massachusetts
    97
    Lamokin Village, Chester, Pennsylvania
    100
    North Beach, San Francisco, California
    103
    Riverview and Lakeview Terraces, Cleveland, Ohio
    107
    Robert S. Jervay Place, Wilmington, North Carolina
    110
    Robert Taylor Homes B, Chicago, Illinois
    114
    St. Thomas, New Orleans, Louisiana
    119

    Contents
    Page ii
    GAO-03-555 HUD's Management of the HOPE VI Program
    Theron B. Watkins Homes, Kansas City, Missouri
    124
    Tobe Hartwell Courts and Tobe Hartwell Extension, Spartanburg,
    South Carolina
    128
    Appendix V: Comments from the Department of Housing and Urban
    Development
    131
    Appendix VI: GAO Contacts and Staff Acknowledgments
    133
    GAO Contacts
    133
    Staff Acknowledgments
    133
    Glossary
    134
    Tables
    Table 1: Average Number of Days to Complete Key Program
    Activities
    22
    Table 2: 165 Revitalization Grants Awarded, Fiscal Years
    1993-2001
    38
    Table 3: Fiscal Year 2002 Rating Factors
    47
    Figures
    Figure 1: Changes to the HOPE VI Program Over Time
    10
    Figure 2: Percentage of Planned Revitalization Activities That
    Grantees Completed, by Fiscal Year Awarded
    17
    Figure 3: Percentage of Construction Completed at 165 HOPE VI
    Sites
    18
    Figure 4: Status of HOPE VI Funds Budgeted and Expended for
    Revitalization Activities
    20
    Figure 5: Grant Manager Workload, by Fiscal Year
    27
    Figure 6: Technical Assistance Funding, by Fiscal Year
    31
    Figure 7: Total Obligations for Technical Assistance, by Funding
    Category
    32
    Figure 8: Obligations for Technical Assistance, by Fiscal Year
    33
    Figure 9: Time Line for ABLA Homes
    51
    Figure 10: Time Line for Arverne/Edgemere Houses
    56
    Figure 11: Time Line for Bedford Additions
    61
    Figure 12: Time Line for Connie Chambers
    65
    Figure 13: Time Line for Cotter and Lang Homes
    68
    Figure 14: Time Line for Dalton Village
    72
    Figure 15: Time Line for Durkeeville
    76
    Figure 16: Time Line for Heman E. Perry Homes
    81
    Figure 17: Time Line for Henry Horner Homes
    86
    Figure 18: Time Line for Herman Gardens
    89
    Figure 19: Time Line for Hollander Ridge
    94

    Contents
    Page iii
    GAO-03-555 HUD's Management of the HOPE VI Program
    Figure 20: Time Line for Jackson Parkway
    97
    Figure 21: Time Line for Lamokin Village
    100
    Figure 22: Time Line for North Beach
    103
    Figure 23: Time Line for Riverview and Lakeview
    107
    Figure 24: Time Line for Robert S. Jervay Place
    110
    Figure 25: Time Line for Robert Taylor Homes B
    115
    Figure 26: Time Line for St. Thomas
    120
    Figure 27: Time Line for Theron B. Watkins Homes
    125
    Figure 28: Time Line for Tobe Hartwell Courts and Tobe Hartwell
    Extension
    128
    Abbreviations
    ACLU
    American Civil Liberties Union
    CSS
    community and supportive services
    HUD
    Department of Housing and Urban Development
    NOFA
    notice of funding availability
    REAP
    Resource Estimation Allocation Process
    TIF
    tax increment financing
    HOPE VI Urban Revitalization Demonstration Program
    This is a work of the U.S. Government and is not subject to copyright protection in the
    United States. It may be reproduced and distributed in its entirety without further
    permission from GAO. It may contain copyrighted graphics, images or other materials.
    Permission from the copyright holder may be necessary should you wish to reproduce
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    Page 1
    GAO-03-555 HUD's Management of the HOPE VI Program
    United States General Accounting Office
    Washington, D.C. 20548
    Page 1
    GAO-03-555 HUD's Management of the HOPE VI Program
    A
    May 30, 2003
    Lerett
    The Honorable Jack Reed
    Ranking Minority Member
    Subcommittee on Housing
    and Transportation
    Committee on Banking, Housing,
    and Urban Affairs
    United States Senate
    Dear Senator Reed:
    For decades, some of the nation’s public housing sites have exemplified
    urban decay. In 1992, the National Commission on Severely Distressed
    Public Housing reported that approximately 86,000, or 6 percent, of the
    nation’s public housing units were severely distressed—characterized by
    physical deterioration and uninhabitable living conditions, high levels of
    poverty, inadequate and fragmented services, institutional abandonment,
    and location in neighborhoods often as blighted as the sites themselves. In
    an effort to address these long-standing problems in a new way, Congress,
    in October 1992, established the Urban Revitalization Demonstration
    Program, commonly known as HOPE VI, which is administered by the
    Department of Housing and Urban Development (HUD). The program
    provides grants to public housing authorities to rehabilitate or rebuild
    severely distressed public housing and improve the lives of public housing
    residents through supportive services, such as child care and job training.
    In fiscal years 1993 to 2001, HUD awarded approximately $4.5 billion in
    HOPE VI revitalization grants to 98 public housing authorities (grantees)
    for 165 sites.
    1
    While each HOPE VI project is unique, all projects generally involve (1) the
    preparation of a comprehensive revitalization plan; (2) relocation of the
    original residents; (3) demolition of the distressed public housing units; (4)
    construction of new public housing units, often intermingled with other
    types of housing, or rehabilitation of existing public housing units; (5)
    “reoccupancy,” or the movement of some original residents to completed
    1
    HUD did not award the 28 fiscal year 2002 revitalization grants until March 2003; therefore,
    they are not covered in this report. HUD also has awarded about $15 million in HOPE VI
    planning grants and approximately $293 million in HOPE VI demolition grants, but they are
    not the focus of this report.

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    GAO-03-555 HUD's Management of the HOPE VI Program
    units; and (6) occupancy, or the filling of all of the completed housing units.
    To select housing authorities for participation in HOPE VI, HUD publishes
    an annual notice of funding availability (NOFA) setting forth the program’s
    current requirements and available funds. Housing authorities then prepare
    applications from which HUD selects those that best satisfy the NOFA
    requirements and signs grant agreements that serve as contracts with the
    housing authorities. Grant agreements specify the activities and
    documentation, such as revitalization plans, that grantees must complete
    as well as key deadlines that they must meet. Grantees that HUD
    determines are in default of grant agreement terms are subject to various
    sanctions, including having their remaining HOPE VI funds rescinded.
    You requested that we comprehensively review the HOPE VI program.
    Because of the scope of the request, we agreed with your office to provide
    the information in a series of reports. The first report, issued in November
    2002, discussed the financing of HOPE VI sites.
    2
    This second report
    focuses on HUD’s management of the HOPE VI program. Specifically, as
    agreed with your office, this report examines (1) HUD’s process for
    assessing HOPE VI revitalization grant applications and selecting grantees,
    (2) the status of work at sites for which grants have been awarded and
    compliance with grant agreement deadlines, (3) HUD’s oversight of HOPE
    VI grants, and (4) the amount of program funds that HUD has budgeted for
    technical assistance and the types of technical assistance it has provided.
    To address these objectives, we first obtained and analyzed information
    from HUD’s HOPE VI reporting system on the 165 revitalization grants
    awarded through fiscal year 2001, including production data and key
    milestones. We assessed the reliability of these data by reviewing
    information about the system and performing electronic testing to detect
    obvious errors in completeness and reasonableness. We determined that
    the data were sufficiently reliable for the purposes of this report. Second,
    we visited the 18 housing authorities that were awarded revitalization
    grants in fiscal year 1996. We selected 1996 because it was the first year
    that grants were subject to a standard construction deadline, and the
    deadline had passed for the majority of the grants by the time we began our
    site visits. In addition, we interviewed the HUD headquarters officials
    responsible for administering the program.
    2
    U.S. General Accounting Office,
    Public Housing: HOPE VI Leveraging Has Increased, but
    HUD Has Not Met Annual Reporting Requirement
    , GAO-03-91 (Washington, D.C.: Nov. 15,
    2002).

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    GAO-03-555 HUD's Management of the HOPE VI Program
    We performed our work from November 2001 to April 2003 in accordance
    with generally accepted government auditing standards. Appendix I
    provides additional details on our scope and methodology.
    Results in Brief
    To assess HOPE VI revitalization grant applications, HUD has consistently
    used four core factors—that is, the demonstrated need for revitalization
    assistance, the capacity of applicants to use grants effectively, the quality of
    proposed revitalization plans, and the potential for applicants to use grants
    to leverage funds from other sources. However, the agency has imposed
    more stringent requirements over the years to facilitate and improve its
    decision-making process. For example, to demonstrate need, HUD has
    required applicants since fiscal year 1993 to provide basic statistics, such
    as crime and vacancy rates; but, in fiscal year 1999, it began requiring
    applicants to also submit an independent engineer’s certification that
    public housing units targeted for revitalization are “severely distressed.”
    Further, in fiscal year 2002, HUD imposed an additional eligibility criterion
    to eliminate applicants that had made little progress with revitalization
    grants received in prior years. Previously, such applicants were not
    excluded, and some were awarded multiple grants. Although the core
    assessment factors have been consistent over the years, the HUD Inspector
    General—in annual reviews of the grant award process—found that the
    agency has not consistently followed the HOPE VI grant selection
    procedures that it establishes each year; for example, the Inspector
    General reported that the staff making selection decisions did not always
    document their justifications for scoring and rating individual applications.
    HUD has taken steps to improve the process in response to the Inspector
    General’s findings.
    As of December 31, 2002, construction was complete at 15 of the 165 HOPE
    VI sites, and the majority of grantees had not met deadlines established in
    their grant agreements with HUD. Relocation was complete at 101 sites,
    demolition was complete at 87 sites, and at least some units were built at 99
    of the 165 sites. Grantees had completed 27 percent of the total planned
    units and spent approximately $2.1 of the $4.5 billion in HOPE VI
    revitalization funds awarded. However, the majority of grantees had missed
    at least one of the deadlines in their grant agreements. For example,
    grantees did not submit the revitalization plan to HUD within the time
    frame specified in the grant agreement for 75 percent of the grants awarded
    through fiscal year 1999 (for grants awarded after 1999, the deadline had
    not yet passed at the time of our study). Similarly, grantees did not
    complete construction within the deadline on 39 of the 42 grants for which

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    GAO-03-555 HUD's Management of the HOPE VI Program
    the standard time allowed for construction (54 months) had expired at the
    time of our study. Several factors affect the status of work at HOPE VI sites,
    including the development approach used, changes to revitalization plans,
    and relationships with residents. For example, sites funded with a mix of
    public and private financing tend to take longer because housing
    authorities must hire additional staff or outside consultants proficient in
    private-sector real estate construction, financing, and lending practices in
    order to put together financing and retain developers.
    HUD’s oversight of HOPE VI grants has been inconsistent due to staffing
    limitations, confusion about the role of field offices, and a lack of formal
    enforcement policies. Both grant managers who report directly to HUD
    headquarters and staff in HUD field offices are responsible for overseeing
    HOPE VI grants. The workload assigned to HUD grant managers, who have
    primary responsibility for HOPE VI grants, has been increasing since HUD
    last hired a large group of grant managers in 1998, and HUD has reported
    that one reason for project delays has been the limited number of grant
    managers. Staff in HUD’s field offices are required to monitor grants by
    conducting annual reviews. However, by the end of 2002, HUD had not
    conducted any annual reviews for 8 out of the 20 grants awarded in fiscal
    year 1996. According to field office managers, the reviews were not
    performed either because of a lack of staff or because the offices did not
    understand their role in HOPE VI oversight. In a 1998 report, the HUD
    Inspector General noted that HUD had not been performing even the
    minimal monitoring required for the HOPE VI program, in part due to
    understaffing in both headquarters and the field offices. HOPE VI oversight
    also is hampered by a lack of enforcement policies. While HUD’s grant
    agreements describe conditions that the agency may consider a default,
    HUD lacks specific policies on when it will declare a grantee to be in
    default or apply sanctions. Although HUD has issued nine default notices to
    grantees that have not demonstrated significant progress, it has not done
    so for other grantees showing a similar lack of progress.
    Since the HOPE VI program began in fiscal year 1993, about $63 million in
    HOPE VI funding has been budgeted for technical assistance, and HUD has
    obligated the majority of its technical assistance funding for services
    provided directly to grantees. Of the $51 million that HUD estimates it has
    obligated to date, 55 percent has been obligated for services provided
    directly to grantees. This included, in fiscal years 1996 to 2000, providing
    each new grantee with an expediter—a private-sector expert in finance,
    real estate development, and community revitalization—to assist with the
    implementation of its HOPE VI grant. HUD obligated the remaining funds

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    GAO-03-555 HUD's Management of the HOPE VI Program
    for services that help it to manage the program. For example, it obligated
    21 percent of the funding to develop and implement the HOPE VI reporting
    system. In recent years, HUD has eliminated some services previously
    provided to grantees. In fiscal year 2001, for example, HUD stopped
    providing expediters because, according to program officials, the practice
    had become too expensive. Currently, only at-risk grantees—grantees that
    are experiencing problems with their grants or that do not have adequate
    capacity to manage their grants—are considered for technical assistance.
    This report contains recommendations designed to improve HUD’s
    management of the HOPE VI program. HUD agreed with each of our
    recommendations.
    Background
    Under the Housing Act of 1937, as amended, Congress created the federal
    public housing program to help communities provide housing for low-
    income families. Congress annually appropriates funds for the program,
    and HUD allocates these funds to the approximately 3,400 public housing
    authorities nationwide. Housing authorities are typically created under
    state law, and a locally appointed board of commissioners approves their
    decisions. HUD and the housing authorities have an annual contributions
    contract—a written contract under which HUD agrees to make payments
    to the housing authority and the housing authority agrees to administer the
    housing program in accordance with HUD regulations and requirements. In
    addition to competitively awarded HOPE VI grants, HUD provides housing
    authorities with several types of assistance, including operating subsidies
    to cover the difference between rent payments and operating expenses and
    capital funds to improve the physical condition of properties and upgrade
    the management and operation of existing public housing sites.
    HOPE VI is one of the few active federal housing production programs. By
    providing funds for a combination of capital improvements and community
    and supportive services, HOPE VI seeks to (1) improve the living
    environment for public housing residents of severely distressed public
    housing through the demolition, rehabilitation, reconfiguration, or
    replacement of obsolete public housing; (2) revitalize sites on which such
    public housing is located and contribute to the improvement of the
    surrounding neighborhood; (3) provide housing that will avoid or decrease
    the concentration of very low-income families; and (4) build sustainable

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    GAO-03-555 HUD's Management of the HOPE VI Program
    communities.
    3
    With the 165 grants awarded through fiscal year 2001,
    grantees planned, as of December 31, 2002, to demolish 78,265 public
    housing units and construct or rehabilitate 85,327 units, including 44,757
    public housing units.
    HUD’s requirements for HOPE VI revitalization grants are laid out in each
    fiscal year’s NOFA and grant agreement.
    4
    NOFAs announce the availability
    of funds and contain application requirements, threshold requirements,
    rating factors, and the application selection process.
    5
    Grant agreements,
    which change each fiscal year, are executed between each grantee and
    HUD and specify the activities, key deadlines, and documentation that
    grantees must meet or complete. For example, the fiscal year 2001 grant
    agreement specified that the grantee must complete construction within 54
    months of the date on which the grant agreement was executed.
    From fiscal years 1993 to 2001, HUD received 609 revitalization grant
    applications.
    6
    HUD uses the same basic procedures each year to screen,
    review, and rank grant applications. When grant applications are received,
    they are screened to determine whether they meet the eligibility and
    threshold requirements in the NOFA. Next, reviewers rate the grant
    3
    Until fiscal year 1999, the HOPE VI program operated from year to year as a demonstration
    program in accordance with authorization provided each year in appropriations acts. The
    Quality Housing and Work Responsibility Act of 1998 authorized HOPE VI through the end
    of fiscal year 2002. As defined in the act, severely distressed public housing (1) requires
    major redesign, reconstruction, or redevelopment or partial or total demolition; (2) is a
    significant contributing factor to the physical decline of and disinvestments by public and
    private entities; (3) is occupied predominantly by families that are very low-income, whose
    members are unemployed, and that are dependent on various forms of public assistance or
    has high rates of vandalism and criminal activity; and (4) cannot be revitalized through
    assistance under other programs.
    4
    HUD had planned to develop regulations for the HOPE VI program but, as of May 2002, had
    withdrawn its plans to do so.
    5
    A threshold requirement is a requirement that an applicant must meet to be eligible for a
    HOPE VI revitalization grant. For example, the fiscal year 2002 NOFA states that an
    applicant is eligible only if it provides a certification either that it has procured a developer
    for the first phase or that it will act as its own developer. A rating factor is a category that is
    used to evaluate specific aspects of the application, such as the need for funding. For each
    factor, HUD can award anywhere from zero to the maximum amount of points.
    6
    Some of the 609 applications were submitted for the same public housing site. For example,
    of the 66 fiscal year 2001 applicants, 43 had submitted previous applications for the same
    public housing site. Of the 43 repeat applicants, 25 had applied twice, 11 had applied three
    times, 3 had applied four times, and 4 had applied five times.

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    GAO-03-555 HUD's Management of the HOPE VI Program
    applications on the basis of the rating factors described in the NOFA and
    rank them in score order. Generally, a group of applications representing
    twice the amount of funds available is sent to a final review panel, which
    may include the Deputy Assistant Secretary for Public Housing
    Investments, the Assistant Secretary for Public and Indian Housing, and
    other senior HUD staff. The final review panel assigns a final score and
    recommends for selection the most highly rated competitive applications,
    subject to the amount of available funding. For a list of the 165 grants
    awarded through fiscal year 2001, see appendix II.
    Public housing authorities with revitalization grants can use a variety of
    other public and private funds to develop their HOPE VI sites. Public
    funding can come from federal, state, and local sources. For example,
    housing authorities can use funds raised through federal low-income
    housing tax credits. Under this program, states are authorized to allocate
    federal tax credits as an incentive to the private sector to develop rental
    housing for low-income households.
    7
    Private sources can include
    mortgage financing and financial or in-kind contributions from nonprofit
    organizations. Developing public housing with a combination of public and
    private financing sources is known as mixed-finance development.
    HUD’s Office of Public Housing Investments, housed within the Office of
    Public and Indian Housing, manages the HOPE VI program. Grant
    managers within the Office of Public Housing Investments are primarily
    responsible for overseeing HOPE VI grants. They approve changes to the
    revitalization plan and coordinate the review of the community and
    supportive services plan that each grantee submits.
    8
    In addition, grant
    managers track the status of grants by analyzing data on the following key
    activities: relocation of original residents, demolition of distressed units,
    7
    After the state allocates tax credits to developers, the developers typically offer the credits
    to private investors. The private investors use the tax credits to offset taxes otherwise owed
    on their tax returns. The money that private investors pay for the credits is paid into the
    projects as equity financing.
    8
    The revitalization plan includes, among other things, the grantee’s HOPE VI application,
    budgets, a community and supportive services plan, a relocation plan, and any supplemental
    submissions that HUD requests following its review of the HOPE VI application or as a
    result of a visit to the site. The community and supportive services plan contains a
    description of the supportive services that will be provided to residents, proposed steps and
    schedules for establishing arrangements with service providers, plans for actively involving
    residents in planning and implementing supportive services, and a system for monitoring
    and tracking the performance of the supportive services programs as well as resident
    progress.

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    GAO-03-555 HUD's Management of the HOPE VI Program
    new construction or rehabilitation, reoccupancy by some original
    residents, and occupancy of completed units. Public and Indian Housing
    staff located in HUD field offices also play a role in overseeing HOPE VI
    grants, including coordinating and reviewing construction inspections.
    HUD Uses Core
    Factors to Assess
    Applications but Has
    Not Consistently
    Followed Its Selection
    Procedures
    According to our analysis, HUD has generally used a core of four rating
    factors as the basis for assessing HOPE VI revitalization grant applications.
    Although HUD’s fundamental factors have remained the same, the
    requirements that housing authorities must fulfill under each factor have
    become more stringent from year to year. Additionally, until the most
    recent NOFA, HUD had not eliminated applicants on the basis of poor
    performance on previously awarded grants. HUD’s Inspector General also
    has reported that HUD has not consistently followed its selection
    procedures that are established for each annual assessment.
    Although HUD Generally
    Uses the Same Core Factors
    to Assess Applications,
    Applicants Must Now Meet
    More Stringent
    Requirements
    HUD has generally evaluated applications for HOPE VI revitalization grants
    on the basis of four core rating factors. Although other factors have been
    added and removed over time and the names of the factors have varied
    somewhat throughout the years, four key concepts—need, capacity,
    quality, and leveraging—have been used consistently to assess
    applications.
    9
    As defined in the most recent NOFA, need should indicate
    the severity of distress at the targeted public housing site. Information
    provided under capacity is used to assess the experience of the applicant’s
    team in planning, implementing, and managing comparable physical
    development, financing, leveraging, and partnership activities.
    10
    HUD
    determines quality by evaluating the overall quality of the plan, the
    likelihood of success, project readiness, and design. Finally, information
    provided under leveraging is used to assess the extent to which funds will
    be leveraged for physical development and community and supportive
    services, what other revitalization activities have been carried out in the
    targeted area in anticipation of the HOPE VI grant, and if there are physical
    9
    For example, the need factor has also been called “Extent of Need for Revitalization” and
    “Need for Funding.” The capacity factor was also called “Capability” and “Capability and
    Readiness.” Since 1996, HUD has evaluated the quality of the revitalization plan using terms
    such as “Program Quality, Feasibility, and Sustainability” and “Soundness of Approach.”
    10
    The applicant’s “team” can include housing authority staff, developer partners, program
    managers, property managers, subcontractors, consultants, attorneys, financial consultants,
    and other entities proposed to carry out program activities.

    Page 9
    GAO-03-555 HUD's Management of the HOPE VI Program
    development activities under way that will enhance the new HOPE VI site.
    For more information on the most recent NOFA, see appendix III.
    Although the core factors have remained the same, the information that
    housing authorities must submit and the requirements that they must fulfill
    under each factor have generally increased over time (see fig. 1). For
    example, although housing authorities have been required to provide basic
    statistics, such as crime and vacancy rates, to document severe distress or
    need since fiscal year 1993, housing authorities also were required,
    beginning in fiscal year 1999, to submit a certification from an independent
    engineer that the public housing targeted for revitalization met HUD
    criteria for severe distress. Since fiscal year 1993, applicants also were
    required to provide information on their own capacity to implement their
    plans. But, beginning in fiscal year 1997, housing authorities also were
    required to document the ability of their proposed partners to develop,
    construct, and manage the proposed activities. To receive the maximum
    amount of points for the quality rating factor in fiscal year 1996, applicants
    were required to submit several pieces of information, including budgets, a
    certification that the proposed activities could not be completed without
    HOPE VI funding, and a description of how the housing authority planned
    to maintain the proposed programs and policies over the long term. By
    fiscal year 2002, housing authorities additionally had to submit
    documentation that the revitalization plan would result in outside
    investment in the surrounding community and evidence that, if funded,
    work could commence immediately. To indicate that they could leverage
    funds, housing authorities were encouraged to submit evidence of outreach
    and support for the project in fiscal year 1995. However, by fiscal year 2000,
    applicants had to show that they would obtain at least $4 in leveraged funds
    for every HOPE VI dollar requested for development in order to receive the
    maximum amount of points under leveraging.

    Page 10
    GAO-03-555 HUD's Management of the HOPE VI Program
    Figure 1: Changes to the HOPE VI Program Over Time
    1996
    1992
    1993
    1994
    1995
    1997
    Legislation
    HUD
    October 1992:
    FY 1993 appropriations act creates
    HOPE VI Urban Revitalization
    Demonstration Program
    .
    Targets 40 most populous cities
    and troubled housing authorities
    .
    Limits funding to
    500 units in each city
    .
    Requires using at least 80
    percent of funds for capital costs
    October 1993:
    FY 1994 appropriations act requires
    funding to be provided to qualified
    housing authorities that applied
    in FY 1993 but were not funded
    April 1996:
    FY 1996 appropriations act
    expands program eligibility to all
    housing authorities with
    distressed housing and adds
    demolition to the funding criteria
    September 1994:
    FY 1995 appropriations act
    requires funding for housing
    authorities that received planning
    grants in prior years
    .
    Removed 500 units per city limit
    September 1996:
    FY 1997 appropriations act
    prohibits granting competitive
    advantage in awards to settle
    litigation or pay judgments
    January 1993:
    HUD publishes 1993 HOPE VI NOFA
    .
    Requires applicants to submit
    evidence of their capacity, including
    their Public Housing Management
    Assessment Program scores
    .
    Caps funding at $50 million per city
    February 1995:
    HUD issues special funding
    request letter to the 40 most
    populous cities and troubled
    housing authorities
    .
    Requires applicants to complete
    a worksheet documenting
    severe distress
    .
    Evaluates applicants on the
    extent to which any previous
    HOPE VI grants have
    progressed
    .
    Requires description of
    support from potential
    leveraging partners
    .
    Caps funding at $50
    million per application
    July 1996:
    HUD publishes 1996
    HOPE VI NOFA
    .
    Requires applicants to demolish
    at least one obsolete building;
    strongly encourages them to
    establish a self-sufficiency
    program for residents and
    mixed-income sites
    .
    Sets funding on the basis of
    size, with a maximum award
    of $40 million
    .
    Requires one public meeting
    with residents and community
    members
    April 1997:
    HUD publishes 1997
    HOPE VI NOFA
    .
    Removes demolition
    requirement
    .
    Requires documentation of
    the developer's experience
    .
    Eliminates the
    categorization of
    applicants by size
    .
    Caps funding at $35
    million per application
    .
    Establishes $5,000 limit
    per unit for community
    and supportive services
    Source: GAO.

    Page 11
    GAO-03-555 HUD's Management of the HOPE VI Program
    Note: This figure is based on GAO analysis of HUD’s legislative appropriations and NOFAs.
    1998
    1999
    2000
    2001
    2002
    Legislation
    HUD
    October 1997:
    FY 1998
    appropriations act
    creates new $26
    million set aside for
    senior sites
    October 1998:
    FY 1999 appropriations act
    authorizes $625 million for
    the HOPE VI program
    The Quality Housing and Work
    Responsibility Act of 1998
    authorizes the HOPE VI program
    through September 30, 2002
    .
    Provides a definition of severely
    distressed public housing
    October 1999:
    FY 2000 appropriations act
    specifies that $1.2 million should
    be contracted to the Urban
    Institute to conduct an
    independent study on the
    long-term effects of the HOPE VI
    program on former residents
    March 1998:
    HUD publishes 1998
    HOPE VI NOFA
    .
    Requires
    description of
    resident
    involvement
    .
    Eliminates the
    requirement to
    submit Public
    Housing
    Management
    Assessment
    Program scores
    .
    Establishes $5,000
    limit per household
    for community and
    supportive services
    February 2000:
    HUD publishes
    2000 HOPE VI NOFA
    .
    Fully implements the Quality
    Housing and Work
    Responsibility Act of 1998
    .
    Evaluates applicants on the
    ratio of HOPE VI funds to
    committed leveraged funds
    February 2001:
    HUD publishes
    2001 HOPE VI NOFA
    .
    Gives priority to Section 202
    and other large sites
    a
    .
    Evaluates applicants on the
    ratio of HOPE VI funds to
    community and supportive
    service funds leveraged
    February 1999:
    HUD publishes 1999 HOPE VI NOFA
    .
    Requires grantees to provide matching
    funds (at least 5 percent of the
    revitalization grant amount)
    .
    Disqualifies troubled housing authorities
    unless HUD determines this designation is
    not due to reasons that affect its capacity
    to carry out the proposed activities
    .
    Requires applicants to conduct at least
    one training session for residents and
    at least three public meetings with
    residents and community members
    .
    Limits the amount of the grant that can
    be spent on community and supportive
    services to 15 percent
    .
    Requires applicants to submit a
    certification by an engineer that units
    are severely distressed
    October 2000:
    FY 2001 appropriations act
    authorizes $575 million for the
    HOPE VI program
    November 2001:
    FY 2002 appropriations act
    authorizes $574 million for the
    HOPE VI program
    July 2002:
    HUD publishes
    2002 HOPE VI NOFA
    .
    Emphasizes grant
    timeliness and
    capacity of applicants
    .
    Sets 28 threshold
    requirements that
    applicants must meet
    to be eligible
    .
    Places a $20 million
    cap on award amounts

    Page 12
    GAO-03-555 HUD's Management of the HOPE VI Program
    a
    Section 202 sites are distressed public housing sites with more than 300 units that HUD has
    determined to be subject to conversion to rental assistance under Section 202 of the Omnibus
    Consolidated Rescissions and Appropriations Act of 1996.
    According to HOPE VI officials, HUD has increased the types and quantity
    of information required each year in an effort to obtain information that
    makes it easier to rate and rank applications and allows the agency to make
    improved selection decisions. In addition, the agency has made some
    changes in an effort to make the application process easier for housing
    authorities. Finally, HOPE VI officials noted that the program’s annual
    appropriation legislation can change the requirements each year and that
    the NOFAs must be revised to reflect these changes.
    Although the changes have given HUD better information upon which to
    base selection decisions, some of the housing authority and public housing
    industry group officials that we interviewed expressed concerns about the
    changes in the application requirements that housing authorities must
    meet. According to these officials, such changes make it difficult for
    housing authorities to anticipate what HUD intends to emphasize and to
    make detailed revitalization plans until each NOFA is published. The
    officials also noted that it is challenging for previously denied applicants to
    determine how to revise their applications. Housing authorities and
    interest groups report that it generally costs $75,000 to $250,000 to prepare
    a HOPE VI grant application. The fiscal year 2002 NOFA was of particular
    concern to some of the housing authority officials and industry group
    representatives that we interviewed. According to these officials, the NOFA
    required housing authorities to conduct impractical up-front planning and
    to obtain commitments at an unrealistically early date. For example, an
    applicant had to certify that it had procured a developer for the first phase
    of construction by the application due date. Officials we interviewed stated
    that this requirement would be costly to the applicant, who at that point
    would have no guarantee of funding.
    Until Fiscal Year 2002, HUD
    Did Not Declare Applicants
    Ineligible because of Past
    Performance
    Although HUD’s annual selection process had considered the performance
    of applicants who had received HOPE VI grants in prior years, it was not
    until the fiscal year 2002 NOFA that past program performance became a
    mandatory threshold requirement for an applicant to be eligible for a HOPE
    VI revitalization grant. Incorporating past performance—specifically, the
    demonstrated ability to efficiently manage projects—can help direct HOPE
    VI funds to where they can most effectively produce results.

    Page 13
    GAO-03-555 HUD's Management of the HOPE VI Program
    Starting in fiscal year 1995, an applicant’s score for capacity was partially
    based on the extent to which any previously awarded HOPE VI grants had
    progressed. In fiscal years 1993, 1996, and 1997, applicants were also
    required, under the capacity factor, to submit Public Housing Management
    Assessment Program scores, which were a measure of a housing
    authority’s performance in all major areas of management operations. HUD
    stopped requiring this information in fiscal year 1998, after the Public
    Housing Management Assessment Program was discontinued.
    11
    The fiscal
    year 2002 NOFA was the first that stated that an applicant with one or more
    existing HOPE VI revitalization grants would be disqualified if one or more
    of those grants failed to meet certain performance requirements as
    required in the applicable HOPE VI revitalization grant agreement.
    During the years that past performance was a rating factor—rather than a
    threshold eligibility requirement—multiple HOPE VI revitalization grants
    were awarded to housing authorities that had made little progress in
    constructing new units under previous grants. For example, the Chicago
    Housing Authority was awarded grants in fiscal years 1998, 2000, and 2001,
    although construction, as of December 31, 2002, was 21 percent complete
    at the Cabrini-Green site (fiscal year 1994 grant); 26 percent complete at
    the Robert Taylor B site (fiscal year 1996 grant); 27 percent complete at the
    ABLA Brooks Extension site (fiscal year 1996 grant); and 0 percent
    complete at the Henry Horner site (fiscal year 1996 grant). Similarly, the
    Detroit Housing Commission has received three grants and constructed 25
    percent of the units planned.
    11
    In 1997, HUD instituted a new system—the Public Housing Assessment System—to
    measure overall housing authority performance. Because this system is still undergoing
    changes, applicants have not been asked to submit their scores as part of their application.

    Page 14
    GAO-03-555 HUD's Management of the HOPE VI Program
    In a June 2002 report to Congress, HUD acknowledged that it has done
    little to rectify the problems among low performers and has often awarded
    poorly performing housing authorities multiple grants despite low or no
    unit production, inadequate oversight, and capacity issues.
    12
    HUD also
    acknowledged that awarding multiple grants to poor performers further
    strains the institutional and staff capacity of these public housing
    authorities, intensifying existing problems. Finally, HUD noted that it had
    initially awarded grants to large housing authorities for large-scale
    developments, without fully recognizing that most of the grantees included
    at-risk and troubled public housing authorities.
    13
    Some of these large
    housing authorities were awarded multiple revitalization grants, and the
    burden of managing the grants resulted in slow planning, redevelopment,
    and construction.
    According to HUD, it elevated the importance of past performance in the
    fiscal year 2002 NOFA because it wanted to emphasize accountability and
    readiness. It determined that applicants that already had one or more
    HOPE VI revitalization grants should demonstrate the capability to manage
    them before HUD awarded them more funds. It also concluded that poor
    performers should not be rewarded with additional funding when other
    housing authorities possibly could implement the grants better.
    HUD Has Not Consistently
    Followed Its Grant
    Selection Procedures
    In annual reviews of the HOPE VI grant selection process, HUD’s Inspector
    General has found that the agency has not consistently followed its grant
    selection procedures for each year. For example, in an audit of the fiscal
    year 1996 grant award process, the Inspector General found that HUD
    revised its screening procedures to allow applicants to comply with only
    one of the two eligibility criteria in the NOFA.
    14
    Under the revised
    screening procedures, HUD awarded $269 million to applicants that should
    have been ineligible for funding because they did not demonstrate
    compliance with the two criteria as specified in the NOFA. Similarly, when
    12
    U.S. Department of Housing and Urban Development,
    HOPE VI: Best Practices and
    Lessons Learned 1992-2002
    (Washington, D.C.: June 14, 2002).
    13
    Under the Public Housing Management Assessment Program, housing authorities that
    received an overall score of less than 60 percent were designated as troubled (overall). An
    at-risk housing authority is one that is close to being designated as troubled.
    14
    U.S. Department of Housing and Urban Development, Office of Inspector General,
    Audit of
    the Fiscal Year 1996 HOPE VI Grant Award Process
    , 98-FO-101-0001 (Washington, D.C.:
    Oct. 20, 1997).

    Page 15
    GAO-03-555 HUD's Management of the HOPE VI Program
    HUD encountered a defect in a fiscal year 1996 application, often the
    reviewers resolved the defect in a manner that improved the applicant’s
    application but did not always comply with the NOFA procedures for
    resolving application defects. The Inspector General concluded that, as a
    result, some applications that should have been ineligible for funding were
    inappropriately funded.
    Similarly, the Inspector General also has found that in both fiscal years
    1998 and 1999 HUD did not fully or consistently implement key application
    review procedures.
    15
    Specifically, the final review panel, and to a lesser
    degree the initial reviewers, did not always document their justifications
    for scoring and rating individual applications. For example, in its fiscal year
    1998 audit, the Inspector General reviewed 24 applications and identified 6
    on which the final review panel changed preliminary scores without
    providing adequate documentation or justification to support all the
    changes. The scoring changes resulted in 5 of the applicants obtaining
    funding and 1 losing funding. In its fiscal year 1999 audit, the Inspector
    General reviewed 25 applications and found that HUD’s final review panel
    had changed scores for 6 applications without providing adequate
    documentation or justification. The scoring changes resulted in 5 of the
    applicants obtaining funding.
    In response to these and other Inspector General criticisms of the HOPE VI
    grant selection process, HOPE VI officials told us that they follow their
    review procedures to the best of their ability, given the time constraints of
    the annual competition. Although the Inspector General generally has
    about 4 months to review the previous year’s applications, HOPE VI
    officials noted that they have shorter time frames—generally, 6 weeks.
    HUD officials also stated that they have made efforts to address the
    Inspector General’s concerns, including efforts to better screen
    applications. In its report on the fiscal year 1999 HOPE VI competition, the
    Inspector General determined that HUD had addressed issues in its fiscal
    year 1998 review, relating to the need to ensure that (1) each rejected
    applicant would be provided specific written notification as to why the
    application was not successful and (2) all evaluations were based on the
    facts presented in the applications.
    15
    The results of the Inspector General’s reviews of the fiscal years 1998 and 1999 award
    processes were captured in management letters related to annual financial statement audits.

    Page 16
    GAO-03-555 HUD's Management of the HOPE VI Program
    Status of Work Varies
    Greatly, and Most
    Grantees Have Not Met
    Grant Agreement
    Deadlines
    The status of work at HOPE VI sites varies, with construction completed at
    15 of the 165 sites that received revitalization grants through fiscal year
    2001. Overall, at least some units have been constructed at 99 of the 165
    sites, and 47 percent of all HOPE VI funds have been expended. In general,
    more recently awarded grants are progressing more quickly than earlier
    grants. Nevertheless, the majority of grantees missed at least one of the
    deadlines in their grant agreements. For example, grantees did not submit
    the revitalization plan to HUD on time for 75 percent of the grants awarded
    through fiscal year 1999. Many factors affect the status of work at HOPE VI
    sites, including the development approach, housing authority management,
    and relationships with residents and the surrounding community.
    Status of Work Varies
    Widely at HOPE VI Sites
    Our analysis of data from HUD’s HOPE VI reporting system shows that
    work status varies at HOPE VI sites. As of December 31, 2002, relocation
    was complete at 101 of the 165 sites, demolition at 87 sites, and
    construction at 15 sites.
    16
    Reoccupancy—the return of some original
    residents to revitalized units—was complete at 37 sites, while occupancy
    was complete at 14 of the 165 sites. Grantees had demolished 57,772 units
    of severely distressed public housing and constructed or rehabilitated
    23,109 units. Figure 2 shows the percentage of planned revitalization
    activities completed by each fiscal year’s grantees.
    16
    The following 15 sites are complete: Bernal/Plaza, San Francisco, California (fiscal year
    1993 grant); Earle Village, Charlotte, North Carolina (fiscal year 1993 grant); Outhwaite
    Homes/King Kennedy, Cleveland, Ohio (fiscal year 1993 grant); Allen Parkway Village,
    Houston, Texas (fiscal year 1993 grant); Hillside Terrace, Milwaukee, Wisconsin (fiscal year
    1993 grant); Quigg Newton Homes, Denver, Colorado (fiscal year 1994 grant); Lafayette
    Courts, Baltimore, Maryland (fiscal year 1994 grant); McGuire Gardens, Camden, New
    Jersey (fiscal year 1994 grant); Hayes Valley, San Francisco, California (fiscal year 1995
    grant); Lexington Terrace, Baltimore, Maryland (fiscal year 1995 grant); Valley Green/Sky
    Tower, Washington, D.C. (fiscal year 1997 grant); Enterprise Drive, Helena, Montana (fiscal
    year 1997 grant); Vine Hill Homes, Nashville, Tennessee (fiscal year 1997 grant); Caroline
    Street Apartments, New Bedford, Connecticut (fiscal year 1998 grant); and Heritage House
    II, Kansas City, Missouri (fiscal year 1998 grant).

    Page 17
    GAO-03-555 HUD's Management of the HOPE VI Program
    Figure 2: Percentage of Planned Revitalization Activities That Grantees Completed, by Fiscal Year Awarded
    Note: This figure is based on GAO analysis of data from HUD’s HOPE VI reporting system (as of Dec.
    31, 2002).
    Although construction was complete at only 15 sites as of December 31,
    2002, construction was nearing completion at additional sites. As shown in
    figure 3, at least some units had been constructed at 99 of the 165 sites.
    Where construction was still ongoing, it was 50 percent or more complete
    at 40 sites and 75 percent or more complete at 25 sites. No units had been
    completed at 66 sites. Overall, 27 percent of the total planned units were
    complete as of December 31, 2002.
    0
    20
    40
    60
    80
    100
    Occupancy
    Reoccupancy
    Construction
    Demolition
    Relocation
    1993
    1994
    1995
    1996
    1997
    1998
    1999
    2000
    2001
    Percentage
    Fiscal year
    Source: GAO.

    Page 18
    GAO-03-555 HUD's Management of the HOPE VI Program
    Figure 3: Percentage of Construction Completed at 165 HOPE VI Sites
    Note: This figure is based on GAO analysis of data from HUD’s HOPE VI reporting system (as of Dec.
    31, 2002).
    0
    10
    20
    30
    40
    50
    60
    70
    80
    Number of sites
    Percentage range of construction completed
    75 to
    100
    <100
    50 to
    <75
    25 to
    <50
    >0 to
    <25
    0
    66
    19
    25
    25
    15
    15
    Source: GAO.

    Page 19
    GAO-03-555 HUD's Management of the HOPE VI Program
    In general, grantees with more recently awarded grants are completing
    activities more quickly than those with the earlier grants. The fiscal year
    1993 grantees took an average of 31 months after execution of grant
    agreements to start construction. The fiscal year 1994 grantees took an
    average of 41 months.
    17
    However, the 14 grantees awarded grants in fiscal
    year 1999 that have started construction did so an average of 16 months
    after grant agreement execution. Furthermore, the 9 fiscal year 2000
    grantees that have started construction did so, on average, 10 months after
    grant agreement execution.
    18
    According to HUD, there are several possible
    reasons for this improvement, which include that the later grantees may
    have more capacity than the earlier grantees, the applications submitted in
    later years were more fully developed to satisfy NOFA criteria, and HUD
    has placed greater emphasis on reporting and accountability.
    Overall, grantees have expended about $2.1 of the $4.5 billion (47 percent)
    in HOPE VI revitalization funds awarded.
    19
    As expected, a greater
    percentage of the funds budgeted for planning and demolition has been
    expended than of the funds budgeted for construction and community and
    supportive services (see fig. 4). For example, 67 percent of all HOPE VI
    funds budgeted for demolition have been expended, while 42 percent of all
    HOPE VI funds budgeted for construction have been expended.
    17
    One fiscal year 1994 grant was not included in the calculation because the grantee plans to
    use the grant funds to acquire, rather than construct, homeownership units.
    18
    As of December 31, 2002, 7 of the fiscal year 1999 grantees and 9 of the fiscal year 2000
    grantees had not started construction. Until these grantees start construction, we cannot be
    sure that the fiscal years 1999 and 2000 grantees, as a whole, have moved faster than earlier
    grantees.
    19
    The percentage of HOPE VI dollars expended can be impacted by the fact that, in some
    cases, other money is spent first, reserving the HOPE VI dollars to be expended later in the
    project.

    Page 20
    GAO-03-555 HUD's Management of the HOPE VI Program
    Figure 4: Status of HOPE VI Funds Budgeted and Expended for Revitalization
    Activities
    Note: This figure is based on GAO analysis of data from HUD’s HOPE VI reporting system (as of Dec.
    31, 2002).
    Majority of Grant
    Agreement Deadlines Have
    Not Been Met
    The majority of grantees missed at least one of the deadlines established in
    their grant agreements.
    20
    Grantees must meet three major deadlines
    according to their grant agreements: the submission of a revitalization plan
    to HUD, the submission of a community and supportive services plan to
    HUD, and completion of construction. Overall, for 75 percent of the grants
    0
    500
    1,000
    1,500
    2,000
    2,500
    3,000
    Planning/
    Professional
    services
    Dollars in millions
    Source: GAO.
    Fund uses
    HOPE VI funds budgeted
    HOPE VI funds expended
    Community/
    Supportive
    services
    Relocation/
    Reoccupancy
    Construction
    Demolition
    64%
    67%
    42%
    49%
    43%
    20
    All grants are not subject to the same time frames because the deadlines in each year’s
    grant agreements tend to be different.

    Page 21
    GAO-03-555 HUD's Management of the HOPE VI Program
    awarded through fiscal year 1999, the grantees did not submit the
    revitalization plan to HUD on time.
    21
    For 70 percent of the grants subject to
    a standard deadline for the submission of a community and supportive
    services plan, the grantees did not meet the deadline.
    22
    Additionally,
    grantees completed construction within the deadline on only 3 of the 42
    grants for which the time allowed for construction—54 months from grant
    execution for grants awarded since fiscal year 1996—had expired. For 9 of
    the 39 grants that missed their construction deadline, the grantees had not
    constructed any units as of December 31, 2002.
    HUD data show that the time it has taken grantees to submit key
    documents has shortened over the life of the program. For example, as
    shown in table 1, grantees have been taking less time to submit
    revitalization plans to HUD. On average, the fiscal year 1994 grantees took
    about 790 days after the execution of their grant agreements to submit a
    revitalization plan. By fiscal year 2000, the grantees took an average of 185
    days after the execution of their grant agreements to submit a revitalization
    plan. Similarly, although there is no specific grant agreement deadline
    related to submitting mixed-finance proposals—documents that HUD must
    approve before mixed-finance construction can begin—the recent grantees
    have done so in less time than did earlier grantees. The average number of
    days between grant execution and submission of a mixed-finance proposal
    fell from 2,255 days for the fiscal year 1994 grantees to 508 days for the
    fiscal year 2000 grantees.
    21
    We omitted from our analysis 5 fiscal year 1995 grants that were awarded during a second
    round of funding because each grantee signed a grant agreement with HUD that contained
    unique deadlines specific to that grant. The revitalization plan deadlines for the fiscal years
    2000 and 2001 grants have not yet passed.
    22
    We could not assess compliance for grants awarded in fiscal years 1995-99 using the data in
    HUD’s HOPE VI reporting system because the grant agreements stated that the activity
    should be completed in accordance with the schedule in each grantee’s revitalization plan,
    rather than in accordance with a standard deadline.

    Page 22
    GAO-03-555 HUD's Management of the HOPE VI Program
    Table 1: Average Number of Days to Complete Key Program Activities
    Source: HUD.
    Note: Not all of the grantees have submitted a revitalization plan. For example, 1 of the fiscal year
    2000 grantees and 4 of the fiscal year 2001 grantees have not submitted a revitalization plan. Until
    these grantees have submitted a plan, we cannot determine the average number of days for the fiscal
    year 1999 and 2000 grantees, as a whole.
    HUD has taken steps to encourage adherence to deadlines. For instance,
    the agency notified grantees in March 2002 that, as part of HUD’s increased
    focus on readiness, 10 dates could no longer be revised in the HOPE VI
    reporting system as of June 30, 2002. The dates included planned
    completion of the revitalization plan, planned completion of a mixed-
    finance proposal, planned start of construction, and planned completion of
    construction. Prior to this decision, grantees had been allowed to adjust
    their planned dates when delays occurred, making it difficult for HUD to
    determine the extent of delays. In its fiscal year 2002 NOFA, HUD also
    stressed project readiness. For example, the NOFA required applicants to
    provide a certification stating either that they had procured a developer for
    the first phase of development by the application due date or that they
    would act as their own developer. Similarly, applicants that proposed off-
    site replacement housing were required to submit evidence of control of
    the proposed off-site locations.
    Many Factors Affect Work
    Status
    Our visits to the sites that were awarded revitalization grants in 1996 show
    that many factors—including the development approach, housing authority
    management, and relationships with residents and the community—can
    affect the status of work at a site. In its June 2002 report to Congress, HUD
    Fiscal year
    awarded
    Average number of days from
    grant execution to revitalization
    plan submission
    Average number of days from
    grant execution to submission
    of mixed-finance proposal
    1993
    137
    2,047
    1994
    790
    2,255
    1995
    287
    1,276
    1996
    400
    1,421
    1997
    290
    983
    1998
    317
    1,005
    1999
    259
    912
    2000
    185
    508
    2001
    93
    296

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    GAO-03-555 HUD's Management of the HOPE VI Program
    stated that a mixed-finance development approach might cause delays
    because housing authorities often lack staff with expertise in development
    and complex financing approaches. They must hire additional staff or
    outside consultants proficient in private-sector real estate construction,
    financing, and lending practices to put together financing and retain
    developers. For example, the redevelopment of Dalton Village in Charlotte,
    North Carolina, was delayed about 1 year due to the denial of its initial
    application for low-income housing tax credits. In addition, the Housing
    Authority of New Orleans decided to use tax increment financing to raise
    additional funds for its St. Thomas site.
    23
    It took more than 2 years for the
    housing authority to get all of the approvals necessary. In contrast, the
    Chester Housing Authority was able to complete construction at Lamokin
    Village within 5 years of grant execution because it used only public
    housing funds, which did not require them to acquire additional expertise.
    Other aspects of the development approach, such as the type and location
    of planned revitalization efforts, also can affect status. For example,
    rehabilitation of existing buildings tends to take less time than construction
    of new ones. As of December 31, 2002, over half of the HOPE VI units
    scheduled for rehabilitation had been completed, while less than a quarter
    of the new planned units had been constructed. The Cuyahoga
    Metropolitan Housing Authority’s fiscal year 1996 grant involves both
    rehabilitation of existing units and construction of new units. As of April
    2003, rehabilitation of 56 units was under way, whereas the construction of
    new units was not scheduled to begin until October 2004. Also, on-site
    construction tends to occur faster than off-site construction. As of
    December 31, 2002, 29 percent of on-site construction was complete, while
    19 percent of off-site construction was complete. Grantees planning for off-
    site construction sometimes have to purchase the property or properties on
    which the units will be built. For example, the Housing Authority of the
    City of Pittsburgh plans to acquire numerous parcels of land in the
    community surrounding the Bedford Additions site and construct new off-
    site units prior to beginning construction on-site. Because acquiring the
    sites is taking longer than anticipated, the housing authority has yet to
    relocate residents and demolish the original site. For more examples of
    how development approaches can affect work status, see appendix IV.
    23
    Tax increment financing allows a municipality to provide financial incentives to stimulate
    private investment in a designated area, known as a tax increment financing district.

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    GAO-03-555 HUD's Management of the HOPE VI Program
    The extent to which revitalization plans were changed during the course of
    redevelopment also affects work status. The Housing Authority of the City
    of Atlanta’s original application for a fiscal year 1996 HOPE VI grant
    outlined a plan for 100 percent public housing at the Perry Homes site. Two
    years after the grant award, HUD conducted a site visit and determined that
    the site should include a wide range of units, including market-rate units.
    Due to these changes, a revitalization plan was not approved until October
    2002. The Cuyahoga Metropolitan Housing Authority changed the plans for
    its Riverview site due to environmental problems. In contrast, the Housing
    Authority of Louisville, another fiscal year 1996 grantee, has not had to
    make any significant modifications to its revitalization plan for Cotter and
    Lang Homes, and over 60 percent of the 1,213 planned units were complete
    as of December 31, 2002.
    Several grantees we visited stated that the performance of housing
    authority management staff affected the status of their revitalization plans.
    For example, residents in Jacksonville and housing authority staff in
    Spartanburg stated that their fiscal year 1996 grants had progressed
    significantly, in part, because the executive director communicated well
    with residents, the housing authority board, and local community leaders.
    In contrast, the Cuyahoga Metropolitan Housing Authority was
    experiencing internal problems at the time its fiscal year 1996 grant was
    awarded. Its executive director was ultimately convicted for theft of public
    funds, mail fraud, and lying about a loan. A new executive director was
    hired in late 1998, and the housing authority was finally able to focus on the
    fiscal year 1996 HOPE VI grant in 1999, according to housing authority
    officials. In Detroit, the revitalization plans for Herman Gardens changed
    multiple times because there were several changes in executive leadership
    and each executive director had a different plan for the site. Because the
    Detroit Housing Commission had not submitted a formal revitalization plan
    for Herman Gardens, HUD notified the commission in March 2000 and
    March 2002 that it was in default of its grant agreement.
    The extent of support from residents and the local community also can
    affect the timing of progress at HOPE VI sites. For example, the Tucson
    Community Services Department, which serves as the city’s public housing
    authority, worked closely with its residents and the local community during
    the planning process for its fiscal year 1996 grant. Tucson did not submit its
    revitalization plan until a majority of the residents had approved it. In
    contrast, resident or community opposition delayed progress at several of
    the sites we visited. For instance, the Chicago Housing Authority’s plans for
    Henry Horner Homes were delayed 4 years by legal actions related to a

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    GAO-03-555 HUD's Management of the HOPE VI Program
    resident lawsuit. Residents at San Francisco’s North Beach site did not
    want to relocate from the site during the redevelopment, which caused the
    redevelopment to take longer than it would have otherwise. Because the
    Housing Authority of New Orleans’s St. Thomas site is located in a historic
    district, local preservationists opposed the construction of a retail store at
    the site. In July 2002, a nonprofit organization filed a lawsuit against the
    housing authority for failing to comply with environmental and historic
    preservation laws. The case was dismissed in April 2003. See appendix IV
    for more information on each of the 20 sites we visited.
    HUD’s approval process can also affect the status of work at HOPE VI sites.
    Officials responsible for managing 12 of the 20 grants awarded in fiscal year
    1996 told us that HUD’s approval process for key documents, such as the
    revitalization plan and mixed-finance proposals, was too slow. However,
    according to a HUD report, the agency’s approval process has been
    improving. For instance, HUD’s data show the average number of days
    from the submission of a mixed-finance proposal to approval was 185 days
    for the fiscal year 1996 grantees. For the fiscal year 1999 grantees, the
    average number of days between submission and approval of a mixed-
    finance proposal was 126 days.
    HUD’s Oversight of
    HOPE VI Grants Has
    Been Inconsistent
    HUD grant managers located at HUD headquarters and in the field are
    primarily responsible for overseeing HOPE VI grants, but staff in HUD’s
    field offices also assist grant managers in monitoring grants. In particular,
    field office staff are to perform annual on-site monitoring reviews.
    However, by the end of 2002, HUD had not conducted any annual reviews
    for 8 out of the 20 grants awarded in fiscal year 1996. According to HUD,
    staffing limitations have constrained its ability to oversee grants.
    Additionally, despite grantees’ inability to meet key deadlines, HUD has not
    developed a formal enforcement policy, which is an important part of
    oversight.
    While Grant Managers
    Oversee Grants, Field Office
    Staff Share HOPE VI
    Oversight Responsibilities
    Both HUD headquarters and field office staff are responsible for overseeing
    HOPE VI revitalization grants. HUD has 30 grant managers that report
    directly to the Office of Public Housing Investments—17 located at HUD
    headquarters and 13 located in field offices. Grant managers are primarily
    responsible for overseeing HOPE VI grants and perform a number of
    duties, including tracking the overall status of the grant, reviewing and
    approving mixed-finance proposals, reviewing and approving all proposed

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    GAO-03-555 HUD's Management of the HOPE VI Program
    changes to program schedules, and reviewing and approving procurement
    documents. According to HOPE VI officials, the main tool that grant
    managers use to oversee grants is the HOPE VI reporting system, which
    since 1998 has provided information on the status of each grant. (Grantee
    reporting existed before 1998, but not in the form of the quarterly reporting
    system currently used.) Grantees enter data into the Web-based system at
    the end of each quarter.
    24
    According to the grant managers, the reports
    from the system enable them to track grant activity and deadline
    compliance.
    Office of Public and Indian Housing staff in HUD’s field offices also play a
    role in overseeing HOPE VI grants, but their responsibilities vary. Three
    field offices that contain grant managers—located in New York, New York;
    Miami, Florida; and Cleveland, Ohio—have signature authority, meaning
    that the office’s local Director of Public Housing can approve documents
    without approval from headquarters. Other field offices contain grant
    managers but do not have signature authority. However, most field offices
    do not have a grant manager, but rather have a HOPE VI coordinator,
    whose responsibilities include assisting grantees with preparing demolition
    applications, reviewing environmental assessments, and coordinating and
    reviewing inspections of HOPE VI construction sites performed by the U.S.
    Army Corps of Engineers. The field offices also are responsible for
    performing an annual on-site monitoring visit to each HOPE VI grant.
    Following this visit, the field office is to prepare a report for both the
    housing authority staff and the grant manager detailing grantee systems
    and controls in place and compliance with HOPE VI program requirements.
    The site visit reports also provide an assessment of the overall status of
    grant activities.
    Staffing Limitations and
    Confusion about the Role of
    Field Offices Constrain
    HUD’s Ability to Oversee
    Grants
    According to various reports and HUD field staff, the limited number of
    grant managers, a shortage of field office staff, and confusion about the
    role of field offices have diminished the agency’s ability to oversee HOPE
    VI grants. As shown in figure 5, grant manager workload has been
    increasing since HUD last hired a large group of grant managers in 1998,
    24
    Data include current and projected production data (e.g., the number of households
    relocated and the number of units demolished, constructed, and occupied); financial
    information (e.g., HOPE VI funds budgeted and expended); and key milestones (e.g., the
    grant award date, the dates the revitalization and community and supportive services plans
    were submitted and approved by HUD, and dates related to each phase of construction).

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    GAO-03-555 HUD's Management of the HOPE VI Program
    but the workload remains below the previous level. As of fiscal year 2001,
    each grant manager was responsible for an average of about 6 grants
    totaling about $157 million in HOPE VI funding. In its June 2002 report to
    Congress, HUD stated that one factor contributing to delays at HOPE VI
    sites was limited HUD grant managers. Similarly, some of the grantees we
    visited stated that they believe grant manager workload contributed to the
    slow approval process previously discussed in this report.
    Figure 5: Grant Manager Workload, by Fiscal Year
    Note: This figure is based on GAO analysis of data provided by HUD.
    HUD reports that HOPE VI oversight also has been affected by a shortage
    of field office staff and confusion about the role of field offices. Our site
    visits showed that HUD field staff are not systematically performing the
    required annual reviews. Of the 20 revitalization grants awarded in fiscal
    year 1996, 8 had never had an annual review performed as of the end of
    2002, and no grant had had an annual review performed each year since the
    grant award. Overall, only one in five of the required annual reviews were
    performed. However, the annual reviews that were performed did contain
    important findings. For example, several of the annual reviews performed
    for the fiscal year 1996 grantees noted that housing authorities were not
    Fiscal year
    Source: GAO.
    0
    3
    6
    9
    12
    15
    1993
    1994
    1995
    1996
    1997
    1998
    1999
    2000
    2001
    Grants per grant manager

    Page 28
    GAO-03-555 HUD's Management of the HOPE VI Program
    following procurement policies and lacked proper documentation of
    resident relocations.
    From our interviews with field office managers, we determined that there
    are two reasons why annual reviews were not performed. First, many of the
    field office managers we interviewed stated that they simply did not have
    enough staff to get more involved in overseeing HOPE VI grants. For
    example, one field office manager told us that, because of staffing
    constraints, his office did not perform any HOPE VI oversight. Second,
    some field offices did not seem to understand their role in HOPE VI
    oversight. For instance, one office thought that the annual reviews were
    primarily the responsibility of the grant managers. Others stated that they
    had not performed the reviews because construction had not yet started at
    the sites in their jurisdiction or because they did not think they had the
    authority to monitor grants.
    The HUD Inspector General and the agency itself have reported that
    staffing shortages, particularly in the field, have resulted in a lack of
    program oversight. In a 1998 review of the HOPE VI program, the Inspector
    General stated that HUD had not been performing even the minimal
    monitoring requirements for the HOPE VI program in part due to
    understaffing in both headquarters and the field offices.
    25
    As noted in that
    report, lack of monitoring led to grant implementation problems remaining
    unresolved. In addition, HUD’s most significant workforce planning activity
    to date—its Resource Estimation Allocation Process (REAP)—cited
    staffing shortages related to the HOPE VI program. Under REAP, HUD
    systematically estimated the number of employees needed to do its work,
    on the basis of current workload and operations. The final resource
    estimation report, which was issued in April 2001, noted that the Office of
    Public and Indian Housing needed to add approximately 38 full-time
    employees in the field to conduct tasks such as monitoring and providing
    assistance to HOPE VI grantees.
    26
    The report also concluded that the
    Office of Public Housing Investments should more clearly articulate its
    own role and the role of field offices in the oversight of HOPE VI grants.
    25
    U.S. Department of Housing and Urban Development, Office of Inspector General,
    Nationwide Audit of HOPE VI Urban Revitalization Program
    , 99-FW-101-0001
    (Washington, D.C.: Dec. 17, 1998).
    26
    Arthur Andersen LLP,
    HUD Workforce Measurement Final Report – Phase I
    (Washington,
    D.C.: Apr. 17, 2001).

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    GAO-03-555 HUD's Management of the HOPE VI Program
    HUD Lacks Clear
    Enforcement Policies and
    Has Not Always Enforced
    Grant Agreement Deadlines
    Although the majority of grantees have missed key deadlines, HUD has not
    developed and provided to grantees an official HOPE VI enforcement
    policy, according to program officials. Instead, the agency determines if
    action should be taken against a grantee on a case-by-case basis. A clear
    enforcement policy could provide grantees with more certainty regarding
    the consequences of not meeting grant agreement deadlines. In a
    December 1999 memorandum, HUD’s Office of General Counsel noted that
    no statutory or program provisions required grantees to expend HOPE VI
    funds within a set period of time. Therefore, it concluded that HUD may
    grant extensions to time frames established in the grant agreements, thus
    avoiding the need to declare grantees that have missed deadlines to be in
    default of their grant agreements.
    27
    In the absence of a formal enforcement policy, HUD has outlined in general
    terms its default policy in grant agreements. In each grant agreement, HUD
    describes several occurrences that might constitute a default by the
    grantee under the grant agreement, including a grantee’s failure to comply
    with the conditions and terms of its grant agreement. HUD provides written
    notice of all defaults and gives the grantee 30 days to remedy the default or
    to submit evidence to HUD that it is not in default. If the default cannot be
    remedied within 30 days, grantees have an additional 60 days to rectify the
    default situation. At that time, if the condition(s) noted in HUD’s initial
    letter to the grantee has not been resolved, HUD may require the grantee to
    revise its program schedule, management plan, or program budget. HUD
    also may restrict the grantee’s authority to draw down grant funds or
    require reimbursement by the grantee. HUD also reserves the right to
    appoint a receiver to carry out HOPE VI activities, reduce the amount of
    the grant award, or terminate the grant.
    According to HOPE VI officials, all grantees would have been considered in
    default of their grant agreements at some point in their grant process if
    HUD had not been flexible regarding time frames. For example, virtually all
    of the fiscal year 1996 grantees were allowed an extension to the date
    construction was to be completed, and some were allowed multiple
    27
    Prior to fiscal year 2002, HOPE VI appropriations were available until expended. Starting
    in fiscal year 2002, HOPE VI appropriations must be obligated within 2 fiscal years.
    Specifically, the fiscal year 2002 HOPE VI appropriations must be obligated by September
    30, 2003, while the fiscal year 2003 HOPE VI appropriations must be obligated by September
    30, 2004. For fiscal years 2002 and 2003, appropriations must be expended within 5 years
    after the period of availability of obligation.

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    GAO-03-555 HUD's Management of the HOPE VI Program
    extensions. The Chicago Housing Authority’s Henry Horner grant and the
    Housing Authority of the City of Atlanta’s Perry Homes grant received
    extensions for the execution of a general contractor’s agreement and for
    the date construction was to be completed. In 2000, the Housing Authority
    of the City of Pittsburgh’s grant for Bedford Additions received an
    extension until early 2003 to complete construction; in 2002, the authority
    received an additional extension to complete construction by July 2007.
    Although HUD has not developed a formal enforcement policy, it has issued
    default notices to grantees. It has generally issued these notices when there
    is no evidence of a formal and comprehensive approach to the grantee’s
    revitalization effort. As of March 2003, HUD had declared nine grants to be
    in default and issued warning notices regarding three other grants.
    According to program officials, HUD expects to increase the use of the
    default tool because a default letter tends to garner enough attention with
    the local media and political leaders to prompt action. However, HUD has
    never rescinded any HOPE VI funds, even when it has issued default letters.
    Because HUD does not have a formal enforcement policy, its issuance of
    default notices can be viewed as arbitrary. For example, in July 2000, HUD
    declared the Housing Authority of Baltimore City’s fiscal year 1996 grant
    for Hollander Ridge to be in default of its grant agreement on the basis of
    “failure to comply with the HOPE VI requirements or any other Federal,
    State or local laws, regulations or requirements applicable in implementing
    the Revitalization Plan.” The default letter also noted that, because the
    housing authority’s revitalization plan was no longer consistent with the
    requirements of a consent decree, the grant was deemed to be in default. In
    March 2000 and March 2002, HUD declared the Detroit Housing
    Commission’s fiscal year 1996 grant for Herman Gardens to be in default
    because the housing authority had not submitted a revitalization plan as
    required in its grant agreement. However, HUD has not issued default
    letters to other grantees who have not met grant agreement deadlines for
    completing construction. For example, even though no units have been
    completed at St. Thomas in New Orleans or Bedford Additions in
    Pittsburgh and, according to grant agreement deadlines, construction was
    to be completed by early 2002, neither fiscal year 1996 grant has been
    declared in default.

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    GAO-03-555 HUD's Management of the HOPE VI Program
    HUD Has Obligated the
    Majority of Funds
    Budgeted for Technical
    Assistance for Support
    to Grantees and HOPE
    VI Program Reporting
    HUD estimates that it has obligated about $51 million of the $63 million in
    HOPE VI funds that have been set aside for technical assistance, with the
    majority of this obligation funding services provided directly to grantees
    and program reporting. As shown in figure 6, the funding budgeted for
    technical assistance has fluctuated. Over the first 4 years of the program,
    funding ranged between $2.5 and $3.2 million, annually. In fiscal year 1998,
    funding increased to $10 million and consistently remained at or above that
    level until fiscal year 2002, when it decreased to $6.2 million.
    Figure 6: Technical Assistance Funding, by Fiscal Year
    Note: This figure is based on GAO analysis of data provided by HUD.
    As shown in figure 7, HUD has obligated the majority of its technical
    assistance funding for services provided directly to grantees and program
    reporting. Of the $51 million that HUD estimates it has obligated to date, 55
    percent has been obligated for technical assistance provided to grantees.
    For example, HUD assigns each grant an outside technical assistance
    provider to help the grantee develop its community and supportive services
    plan. In fiscal years 1996 to 2000, HUD assigned each new grant an
    expediter to assist the grantee with its HOPE VI plans. These expediters
    0
    5
    10
    15
    20
    1994
    1995
    1996
    1997
    1998
    1999
    2000
    2001
    2002
    Dollars in millions
    Fiscal year
    Source: GAO.

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    GAO-03-555 HUD's Management of the HOPE VI Program
    were private-sector experts in finance, real estate development, and
    community revitalization. Another major category of technical assistance
    has been program reporting. According to HOPE VI officials, HUD spends
    about $2.5 million annually on the HOPE VI reporting system. A contractor
    maintains the reporting system and staffs a help desk to respond to
    questions from grantees. The remaining technical assistance funding has
    been obligated for headquarters management assistance, such as
    consultants; site inspections performed by the U.S. Army Corps of
    Engineers; and staff training and travel.
    Figure 7: Total Obligations for Technical Assistance, by Funding Category
    Note: This figure is based on GAO analysis of estimates provided by HUD.
    In recent years, HUD has eliminated some services previously provided to
    grantees. For example, in fiscal year 2001, HUD stopped providing
    expediters because, according to program officials, the practice had
    become too expensive. Currently, only at-risk grantees—grantees that are
    experiencing problems with their grants or do not have adequate capacity
    to manage their grants—are considered for technical assistance. According
    to HUD officials, HUD has decreased the amount of technical assistance it
    provides because the agency believes that grantees should be responsible
    for retaining and funding their own technical assistance. Figure 8 shows
    Source: GAO.
    4%
    7%
    13%
    21%
    55%
    Technical assistance to grantees
    HOPE VI program reporting
    Site inspections
    Headquarters management assistance
    Staff training and travel

    Page 33
    GAO-03-555 HUD's Management of the HOPE VI Program
    the percentage of technical assistance funds provided directly to grantees
    over the life of the program.
    Figure 8: Obligations for Technical Assistance, by Fiscal Year
    Note: This figure is based on GAO analysis of estimates provided by HUD.
    Conclusions
    HOPE VI is one of the few active federal housing production programs and
    is supposed to deliver almost 45,000 units of rehabilitated or new public
    housing. During these tight budgetary times, when Congress faces difficult
    choices in deciding how to provide affordable housing, it is increasingly
    important that federal housing programs produce results. After 10 years of
    the HOPE VI program, construction has been completed at 15 of 165 sites.
    Source: GAO.
    0
    5
    10
    15
    20
    25
    Obligations in millions
    Fiscal year
    Technical assistance to grantees
    All other technical assistance
    Through
    1999
    2000
    2001
    2002
    1998
    59%
    41%
    59%
    50%
    50%
    29%
    71%
    41%
    67%
    33%

    Page 34
    GAO-03-555 HUD's Management of the HOPE VI Program
    However, work is proceeding more quickly at sites financed by more
    recently awarded grants. The HOPE VI program has incorporated measures
    to increase efficiency—in part attributable to HUD’s requesting more
    information from grant applicants and a renewed emphasis on meeting
    deadlines. In addition, the emphasis on performance measures, such as
    HUD’s incorporation of past performance as an eligibility requirement in
    the fiscal year 2002 NOFA, should help direct HOPE VI funds to where they
    can most effectively produce results.
    However, the HOPE VI program could be improved further. By emphasizing
    the need for regular grant oversight and review and improving and
    clarifying the lines of communication between headquarters and the field
    offices, HUD can eliminate existing confusion about staff roles, build a
    consistent record of site reviews and oversight, and improve
    communications with grantees to facilitate progress on grants. Since the
    HOPE VI grant process involves both HUD and public housing authorities,
    HUD can further improve the efficiency of the grant program and help
    achieve its goal of revitalizing public housing by holding grantees
    accountable for performance, particularly in the areas of meeting deadlines
    and producing deliverables. The HOPE VI program, as it is currently set up,
    does not have a clear and consistent system for determining if grantees are
    not in compliance with grant requirements, nor does it offer clear
    incentives for grantees to change behavior or correct undesirable
    conditions.
    Recommendations for
    Executive Action
    To improve its selection and oversight of HOPE VI grants, we recommend
    that the Secretary of Housing and Urban Development
    • continue to include past performance as an eligibility requirement in
    each year’s notice of funding availability;
    • clarify the role of HUD field offices in HOPE VI oversight and ensure
    that the offices conduct required annual reviews of HOPE VI grants; and
    • develop a formal, written enforcement policy to hold public housing
    authorities accountable for the status of their grants.

    Page 35
    GAO-03-555 HUD's Management of the HOPE VI Program
    Agency Comments
    We provided a draft of this report to HUD for its review and comment. In a
    letter from the Assistant Secretary for Public and Indian Housing (see
    app. V), HUD stated that it found the report to be fair and accurate in its
    assessment of the management of the program. HUD also agreed with our
    three recommendations. Specifically, it stated that it would take action to
    incorporate past performance as an eligibility criterion in the fiscal year
    2003 HOPE VI Revitalization NOFA. Regarding the recommendation to
    develop a formal enforcement policy, HUD stated that it regards the
    development of management tools such as the locked checkpoint system
    described in this report to be a key step in the establishment of a
    formalized enforcement policy and will endeavor to institute other
    responsive measures. Additionally, HUD provided clarifications on several
    technical points, which have been included in this report as appropriate.
    As agreed with your office, unless you publicly announce its contents
    earlier, we plan no further distribution of this report until 10 days after the
    date of this report. At that time, we will send copies of this report to the
    Chairman, Subcommittee on Housing and Transportation, Senate
    Committee on Banking, Housing, and Urban Affairs; the Chairman and
    Ranking Minority Member, Senate Committee on Banking, Housing, and
    Urban Affairs; the Chairman and Ranking Minority Member, Subcommittee
    on Housing and Community Opportunity, House Committee on Financial
    Services; and the Chairman and Ranking Minority Member, House
    Committee on Financial Services. We will also send copies to the Secretary
    of Housing and Urban Development and the Director of the Office of
    Management and Budget. We will make copies available to others upon
    request. This report will also be available at no charge on GAO’s Web site at
    http://www.gao.gov.
    Please call me at (202) 512-8678 if you or your staff have any questions
    about this report. Key contributors to this report are listed in appendix VI.
    Sincerely yours,
    David G. Wood
    Director, Financial Markets and
    Community Investment

    Page 36
    GAO-03-555 HUD's Management of the HOPE VI Program
    Appendix I
    Appendxeis
    Objectives, Scope, and Methodology
    AppenIdx i
    Our objectives were to examine (1) the Department of Housing and Urban
    Development’s (HUD) process for assessing HOPE VI revitalization grant
    applications and for selecting grantees, (2) the status of work at sites for
    which grants have been awarded and compliance with grant agreement
    deadlines, (3) HUD’s oversight of HOPE VI grants, and (4) the amount of
    program funds that HUD has budgeted for technical assistance and the
    types of technical assistance it has provided.
    To accomplish these objectives, we analyzed the data contained in HUD’s
    HOPE VI reporting system on the 165 sites that received revitalization
    grants in fiscal years 1993 through 2001 and visited 20 sites in 18 cities. We
    selected these 20 sites because they received HOPE VI revitalization grants
    in fiscal year 1996, which was the first year that grants were subject to a
    standard construction deadline. Using the 1996 grants also allowed us to
    assess whether grantees had met their deadlines, which had passed for the
    majority of the grantees by the time we began our site visits. In addition, we
    interviewed the HUD headquarters officials responsible for administering
    the HOPE VI program.
    To determine the criteria that HUD uses to assess HOPE VI revitalization
    grant applications, we analyzed each year’s notice of funding availability
    (NOFA). Specifically, we examined the rating factors used each year to
    determine if there were any similarities between the different NOFAs. We
    also analyzed the information that housing authorities were required to
    submit for selected rating factors and identified changes in these
    requirements over time. To determine how HUD has followed its grant
    selection procedures, we obtained and reviewed HUD Office of Inspector
    General reports on the HOPE VI grant selection process for fiscal years
    1996 and 1998 to 2001.
    1
    Finally, we interviewed public housing industry
    groups—the Council of Large Public Housing Authorities, the Public
    Housing Authorities Directors Association, and the National Association of
    Housing and Redevelopment Officials—regarding the grant selection
    process.
    To determine the status of work at sites for which grants have been
    awarded, we obtained and analyzed information from HUD’s HOPE VI
    reporting system. Specifically, we obtained data as of December 31, 2002,
    for the 165 revitalization grants awarded through fiscal year 2001. We used
    1
    The HUD Inspector General did not publish a review of the fiscal year 1997 HOPE VI
    selection process.

    Appendix I
    Objectives, Scope, and Methodology
    Page 37
    GAO-03-555 HUD's Management of the HOPE VI Program
    these data to determine the status of relocation, demolition, construction,
    reoccupancy, and occupancy and the amount of expended HOPE VI funds.
    For each of the 1996 grants, we interviewed housing authority and HUD
    officials to determine the status of each grant and the factors affecting that
    status. To determine the extent to which grantees have met grant
    agreement deadlines, we obtained and analyzed each year’s grant
    agreement. We then used milestone data from HUD’s HOPE VI reporting
    system to determine the extent to which grantees had met the deadlines in
    their grant agreements. To assess the reliability of the data in HUD’s HOPE
    VI reporting system, we interviewed the officials that manage the system;
    reviewed information about the system, including the user guide, data
    dictionary, and steps taken to ensure the quality of these data; and
    performed electronic testing to detect obvious errors in completeness and
    reasonableness. We determined that these data were sufficiently reliable
    for the purposes of this report.
    To identify how HUD oversees HOPE VI grants, we obtained and analyzed
    HUD’s HOPE VI monitoring guidance and interviewed program officials.
    We obtained and analyzed information on the number of grants and grant
    managers at the end of each fiscal year to determine grant manager
    workload. During each of our site visits, we interviewed housing authority
    staff regarding HUD’s oversight of their grants. We also obtained and
    analyzed copies of the annual reviews performed for the 1996 grants and
    interviewed HUD field office staff regarding their role in HOPE VI
    oversight. Finally, we reviewed HUD Inspector General reports on the
    HOPE VI program and HUD’s final report on its Resource Estimation and
    Allocation Process.
    To determine how much HUD has budgeted for technical assistance, we
    reviewed information provided by HUD on the total amount budgeted each
    fiscal year for technical assistance. To determine the types of technical
    assistance HUD has provided, we obtained and analyzed data on the major
    types of technical assistance provided with each fiscal year’s budget. The
    data HUD provided were estimates of the amounts it had obligated for
    technical assistance over the life of the program. We also interviewed
    program officials regarding the types of technical assistance provided and
    1996 grantees regarding the types of technical assistance they received
    from HUD.
    We performed our work from November 2001 through April 2003 in
    accordance with generally accepted government auditing standards.

    Page 38
    GAO-03-555 HUD's Management of the HOPE VI Program
    Appendix II
    HOPE VI Revitalization Grants
    AppenIIdx i
    In fiscal years 1993 to 2001, HUD awarded 165 revitalization grants to 98
    public housing authorities (see table 2). Nearly half of all of the HOPE VI
    revitalization grant funds awarded have been granted to 20 housing
    authorities. Within this group of housing authorities, 8 have received 4 or
    more revitalization grants: the Housing Authority of the City of Atlanta, the
    Housing Authority of Baltimore City, the Chicago Housing Authority, the
    Housing Authority of the City of Oakland, the District of Columbia Housing
    Authority, the Philadelphia Housing Authority, the Seattle Housing
    Authority, and the City and County of San Francisco Housing Authority.
    The Chicago Housing Authority has been awarded 8 HOPE VI revitalization
    grants, more than any other housing authority. The Housing Authority of
    Baltimore City follows with 6 revitalization grants.
    1
    Table 2: 165 Revitalization Grants Awarded, Fiscal Years 1993-2001
    1
    Although the Housing Authority of Baltimore City was awarded 6 grants, 1 grant was
    subsequently split into 2 grants, for a total of 7 grants.
    Public housing authority
    Site
    Fiscal year awarded
    Amount awarded
    Albany Housing Authority
    Albany, New York
    Edwin Corning Homes
    1998
    $28,852,200
    Alexandria Redevelopment and
    Housing Authority
    Alexandria, Virginia
    Samuel Madden Homes
    1998
    6,716,250
    Allegheny County Housing Authority
    Pittsburgh, Pennsylvania
    McKees Rocks Terrace
    1997
    15,847,160
    Homestead Apartments
    1998E
    a
    2,549,392
    Housing Authority of the City of Atlanta
    Atlanta, Georgia
    Techwood/Clark Howell/Centennial Place
    1993
    42,562,635
    Perry Homes
    1996
    20,000,000
    Carver Homes
    1998
    34,669,400
    Joel Chandler Harris Homes
    1999
    35,000,000
    Capitol Homes
    2001
    35,000,000
    Atlantic City Housing Authority and
    Urban Redevelopment Agency
    Atlantic City, New Jersey
    Shore Park
    Shore Terrace
    1999
    35,000,000
    Housing Authority of Baltimore City
    Baltimore, Maryland
    Lafayette Courts
    1994
    49,663,600
    Lexington Terrace
    1995(2)
    b
    22,702,000
    Hollander Ridge
    1996
    20,000,000

    Appendix II
    HOPE VI Revitalization Grants
    Page 39
    GAO-03-555 HUD's Management of the HOPE VI Program
    Murphy Homes
    Julian Gardens
    1997
    31,325,395
    Flag House Courts
    1998
    21,500,000
    Broadway Homes
    1999
    21,362,223
    Housing Authority of the City of Biloxi
    Biloxi, Mississippi
    Bayview Homes
    Bayou Auguste
    2000
    35,000,000
    Housing Authority of the Birmingham
    District
    Birmingham, Alabama
    Metropolitan Gardens
    1999
    34,957,850
    Boston Housing Authority
    Boston, Massachusetts
    Mission Main
    1993
    49,992,350
    Orchard Park
    1995(2)
    b
    30,000,000
    Maverick Gardens
    2001
    35,000,000
    Housing Authority of the City of
    Bradenton
    Bradenton, Florida
    GD Rogers and Addition
    1999
    21,483,332
    Housing Authority of the City of
    Bridgeton
    Bridgeton, New Jersey
    Cohansey View
    2001
    10,945,944
    Buffalo Housing Authority
    Buffalo, New York
    Lakeview Homes
    Lower West Side
    1997
    28,015,038
    Cambridge Housing Authority
    Cambridge, Massachusetts
    John F. Kennedy Apartments
    1998E
    a
    5,000,000
    Camden Housing Authority
    Camden, New Jersey
    McGuire Gardens
    1994
    42,177,229
    Westfield Acres
    2000
    35,000,000
    Housing Authority of the City of
    Charlotte
    Charlotte, North Carolina
    Earle Village
    1993
    41,740,155
    Dalton Village
    1996
    24,501,684
    Fairview
    1998
    34,724,570
    Chattanooga Housing Authority
    Chattanooga, Tennessee
    McCallie Homes
    2000
    35,000,000
    Housing Authority of Chester City
    Chester, Pennsylvania
    Lamokin Village
    1996
    14,949,544
    McCafferey Village
    1998
    9,751,178
    Chester County Housing Authority
    West Chester, Pennsylvania
    Oak Street
    1997
    16,434,200
    Chicago Housing Authority
    Chicago, Illinois
    Cabrini-Green
    1994
    50,000,000
    ABLA Brooks Extension
    1996
    24,483,250
    Henry Horner
    1996
    18,435,300
    (Continued From Previous Page)
    Public housing authority
    Site
    Fiscal year awarded
    Amount awarded

    Appendix II
    HOPE VI Revitalization Grants
    Page 40
    GAO-03-555 HUD's Management of the HOPE VI Program
    Robert Taylor
    1996
    25,000,000
    ABLA
    1998
    35,000,000
    Madden/Wells/Darrow
    2000
    35,000,000
    Robert Taylor
    2001
    35,000,000
    Rockwell Gardens
    2001
    35,000,000
    Cincinnati Housing Authority
    Cincinnati, Ohio
    Lincoln Court
    1998
    31,093,590
    Laurel Homes
    1999
    35,000,000
    Housing Authority of the City of
    Columbia, South Carolina
    Columbia, South Carolina
    Saxon Homes
    1999
    25,843,793
    Columbus Metropolitan Housing
    Authority
    Columbus, Ohio
    Windsor Terrace (Rosewind)
    1994
    42,053,408
    Cuyahoga Metropolitan Housing
    Authority
    Cleveland, Ohio
    Outhwaite Homes
    King Kennedy Estate South
    1993
    50,000,000
    Carver Park
    1995(2)
    b
    21,000,000
    Riverview
    1996
    29,733,334
    Dallas Housing Authority
    Dallas, Texas
    Lakewest
    1994
    26,600,000
    Roseland
    1998
    34,907,186
    Danville Redevelopment and Housing
    Authority
    Danville, Virginia
    Liberty View
    2000
    20,647,784
    Dayton Metropolitan Housing Authority
    Dayton, Ohio
    Edgewood Court
    Metro Gardens
    Metro Annex
    1999
    18,311,270
    Decatur Housing Authority
    Decatur, Illinois
    Longview Place
    1999
    34,863,615
    Housing Authority of the City and
    County of Denver
    Denver, Colorado
    Quigg Newton Homes
    1994
    26,489,288
    Curtis Park
    Arapahoe Courts
    1998
    25,753,220
    Detroit Housing Commission
    Detroit, Michigan
    Jeffries Homes
    1994
    39,807,342
    Parkside Homes
    1995(1)
    b
    47,620,227
    Herman Gardens
    1996
    24,224,160
    District of Columbia Housing Authority
    Washington, D.C.
    Ellen Wilson Homes
    1993
    25,075,956
    Valley Green, Skytower
    1997
    20,300,000
    (Continued From Previous Page)
    Public housing authority
    Site
    Fiscal year awarded
    Amount awarded

    Appendix II
    HOPE VI Revitalization Grants
    Page 41
    GAO-03-555 HUD's Management of the HOPE VI Program
    Frederick Douglass Homes
    Stanton Dwellings
    1999
    29,972,431
    East Capitol Dwellings
    Capitol View Plaza
    2000
    30,867,337
    Arthur Capper
    Carrollsburg
    2001
    34,937,590
    Housing Authority of the City of Durham
    Durham, North Carolina
    Few Gardens
    2000
    35,000,000
    Housing Authority of the City of El Paso
    El Paso, Texas
    Kennedy Brothers
    1995(1)
    b
    36,224,644
    Housing Authority of the City of
    Elizabeth
    Elizabeth, New Jersey
    Pioneer Homes
    Migliore Manor
    1997
    28,903,755
    Housing Authority of the City of Gary
    Gary, Indiana
    Duneland Village
    1999
    19,847,454
    Greensboro, North Carolina Housing
    Authority
    Greensboro, North Carolina
    Morningside Homes
    1998
    22,987,722
    Housing Authority of the City of
    Greenville, South Carolina
    Greenville, South Carolina
    Woodland Homes
    Pearce Homes
    1999
    21,075,322
    Housing Authority of the City of
    Hagerstown
    Hagerstown, Maryland
    Westview Homes
    2001
    27,357,875
    Helena Housing Authority
    Helena, Montana
    Enterprise Drive
    1997
    939,700
    Housing Authority of the City of High
    Point, North Carolina
    High Point, North Carolina
    Springfield Townhouses
    1999
    20,180,647
    Holyoke Housing Authority
    Holyoke, Massachusetts
    Jackson Parkway
    1996
    15,000,000
    Houston Housing Authority
    Houston, Texas
    Allen Parkway Village
    1993
    36,602,761
    1997
    21,286,470
    Indianapolis Housing Authority
    Indianapolis, Indiana
    Concord Village
    Eagle Creek
    1995(1)
    b
    29,999,010
    Jacksonville Housing Authority
    Jacksonville, Florida
    Durkeeville
    1996
    21,552,000
    Housing Authority of the City of Jersey
    City
    Jersey City, New Jersey
    Curries Woods
    1997
    31,624,658
    Lafayette Gardens
    2001
    34,140,000
    Housing Authority of Kansas City
    Kansas City, Missouri
    Guinotte Manor
    1993
    47,579,800
    (Continued From Previous Page)
    Public housing authority
    Site
    Fiscal year awarded
    Amount awarded

    Appendix II
    HOPE VI Revitalization Grants
    Page 42
    GAO-03-555 HUD's Management of the HOPE VI Program
    Theron B. Watkins Homes
    1996
    13,000,000
    Heritage House
    1997
    6,570,500
    1998E
    a
    3,429,500
    King County Housing Authority
    Tukwila, Washington
    Park Lake Homes
    2001
    35,000,000
    Knoxville's Community Development
    Corporation
    Knoxville, Tennessee
    College Homes
    1997
    22,064,125
    Housing Authority of the City of
    Lakeland, Florida
    Lakeland, Florida
    Washington Ridge
    1999
    21,842,801
    Lexington-Fayette Urban County
    Housing Authority
    Lexington, Kentucky
    Charlotte Court
    1998
    19,331,116
    Housing Authority of the City of Los
    Angeles
    Los Angeles, California
    Pico Gardens
    1993
    50,000,000
    Aliso Village
    1998
    23,045,297
    Housing Authority of Louisville
    Louisville, Kentucky
    Cotter and Lang Homes
    1996
    20,000,000
    Macon Housing Authority
    Macon, Georgia
    Oglethorpe Homes
    2001
    19,282,336
    Memphis Housing Authority
    Memphis, Tennessee
    LeMoyne Gardens
    1995(1)
    b
    47,281,182
    Hurt Village
    2000
    35,000,000
    Mercer County Housing Authority
    Sharon, Pennsylvania
    Steel City Terrace Extension
    2000
    9,012,288
    Miami-Dade Housing Agency
    Miami, Florida
    Ward Towers
    1998E
    a
    4,697,750
    Scott Homes
    Carver Homes
    1999
    35,000,000
    Housing Authority of the City of
    Milwaukee
    Milwaukee, Wisconsin
    Hillside Terrace
    1993
    45,689,446
    Parklawn
    1998
    35,000,000
    Lapham Park
    2000
    11,300,000
    Mobile Housing Board
    Mobile, Alabama
    Central Plaza Towers
    1998E
    a
    4,741,800
    Metropolitan Development and Housing
    Agency - Nashville
    Nashville, Tennessee
    Vine Hill Homes
    1997
    13,563,876
    Preston Taylor Homes
    1999
    35,000,000
    (Continued From Previous Page)
    Public housing authority
    Site
    Fiscal year awarded
    Amount awarded

    Appendix II
    HOPE VI Revitalization Grants
    Page 43
    GAO-03-555 HUD's Management of the HOPE VI Program
    New Bedford Housing Authority
    New Bedford, Massachusetts
    Caroline Street Apartments
    1998E
    a
    4,146,780
    Housing Authority of the City of New
    Brunswick
    New Brunswick, New Jersey
    New Brunswick Homes
    1998
    7,491,656
    Housing Authority of the City of New
    Haven
    New Haven, Connecticut
    Elm Haven Terrace
    1993
    45,331,593
    Housing Authority of New Orleans
    New Orleans, Louisiana
    Desire
    1994
    44,255,908
    St. Thomas
    1996
    25,000,000
    New York City Housing Authority
    New York, New York
    Arverne Homes
    Edgemere Homes
    1995(1)
    b
    47,700,952
    1996
    20,000,000
    Prospect Plaza
    1998
    21,405,213
    Housing Authority of the City of Newark
    Newark, New Jersey
    Archbishop Walsh Homes
    1994
    49,996,000
    Stella Wright Homes
    1999
    35,000,000
    Newport, Kentucky Housing Authority
    Newport, Kentucky
    Peter G. Noll
    Booker T. Washington
    McDermott-McLane
    2000
    28,415,290
    Norfolk Redevelopment and Housing
    Authority
    Norfolk, Virginia
    Roberts Village
    Bowling Green
    2000
    35,000,000
    North Charleston Housing Authority
    North Charleston, South Carolina
    North Park Village
    2001
    30,347,921
    Housing Authority of the City of Oakland
    Oakland, California
    Lockwood Gardens
    Lower Fruitvale
    1994
    26,510,020
    Chestnut Court
    1998
    12,705,010
    Westwood Gardens
    1999
    10,053,254
    Coliseum Gardens
    2000
    34,486,116
    Housing Authority of the City of Orlando
    Orlando, Florida
    Colonial Park
    1997
    6,800,000
    Housing Authority of the City of
    Paterson
    Paterson, New Jersey
    Christopher Columbus
    1997
    21,662,344
    Peoria Housing Authority
    Peoria, Illinois
    Colonel John Warner Homes
    1997
    16,190,907
    Philadelphia Housing Authority
    Philadelphia, Pennsylvania
    Richard Allen Homes
    1993
    50,000,000
    Schuylkill Falls
    1997
    26,400,951
    Martin Luther King Plaza
    1998
    25,229,950
    Mill Creek
    2001
    34,825,000
    (Continued From Previous Page)
    Public housing authority
    Site
    Fiscal year awarded
    Amount awarded

    Appendix II
    HOPE VI Revitalization Grants
    Page 44
    GAO-03-555 HUD's Management of the HOPE VI Program
    City of Phoenix Housing Department
    Phoenix, Arizona
    Matthew Henson Homes
    2001
    35,000,000
    Pittsburgh Housing Authority
    Pittsburgh, Pennsylvania
    Allequippa Terrace
    1993
    31,564,190
    Manchester
    1995(2)
    b
    7,500,000
    Bedford Additions
    1996
    26,592,764
    Housing Authority of Portland
    Portland, Oregon
    Columbia Villa,
    Columbia Villa Additions
    2001
    35,000,000
    Portsmouth Redevelopment and
    Housing Authority
    Portsmouth, Virginia
    Ida Barbour
    1997
    24,810,883
    Puerto Rico Housing Administration
    San Juan, Puerto Rico
    Cristantemos y Manuel A. Perez
    1994
    50,000,000
    Housing Authority of the City of Raleigh
    Raleigh, North Carolina
    Halifax Court
    1999
    29,368,114
    Housing Authority of the City of
    Richmond, California
    Richmond, California
    Easter Hill
    2000
    35,000,000
    Richmond Redevelopment and Housing
    Authority
    Richmond, Virginia
    Blackwell
    1997
    26,964,118
    City of Roanoke Redevelopment and
    Housing Authority
    Roanoke, Virginia
    Lincoln Terrace
    1998
    15,124,712
    St. Louis Housing Authority
    St. Louis, Missouri
    Darst-Webbe
    1995(1)
    b
    46,771,000
    Blumeyer Homes
    2001
    35,000,000
    Housing Authority of the City of St.
    Petersburg
    St. Petersburg, Florida
    Jordan Park
    1997
    27,000,000
    San Antonio Housing Authority
    San Antonio, Texas
    Springview
    1994
    48,810,294
    Mirasol
    1995(1)
    b
    48,285,500
    City and County of San Francisco
    Housing Authority
    San Francisco, California
    Bernal
    Plaza East
    1993
    49,992,377
    Hayes Valley North and South
    1995(2)
    b
    22,055,000
    North Beach
    1996
    20,000,000
    Valencia Gardens
    1997
    23,230,641
    Housing Authority of Savannah
    Savannah, Georgia
    Garden Homes
    2000
    16,328,649
    Seattle Housing Authority
    Seattle, Washington
    Holly Park
    1995(1)
    b
    48,116,503
    (Continued From Previous Page)
    Public housing authority
    Site
    Fiscal year awarded
    Amount awarded

    Appendix II
    HOPE VI Revitalization Grants
    Page 45
    GAO-03-555 HUD's Management of the HOPE VI Program
    Source: HUD.
    a
    1998E indicates a special grant for elderly projects.
    b
    There were two funding rounds in fiscal year 1995.
    Roxbury
    1998
    17,020,880
    Rainier Vista Garden
    1999
    35,000,000
    High Point Garden
    2000
    35,000,000
    Housing Authority of the City of
    Spartanburg
    Spartanburg, South Carolina
    Tobe Hartwell
    Tobe Hartwell Extension
    1996
    14,620,369
    Springfield Housing Authority
    Springfield, Illinois
    John Hay Homes
    1994
    19,775,000
    Housing Authority of the City of
    Stamford
    Stamford, Connecticut
    Southfield Village
    1997
    26,446,063
    Housing Authority of the City of Tacoma
    Tacoma, Washington
    Salishan
    2000
    35,000,000
    Housing Authority of the City of Tampa
    Tampa, Florida
    Ponce de Leon
    College Hill
    1997
    32,500,000
    Riverview Terrace
    Tom Dyer
    2001
    19,937,572
    Tucson Public Housing Authority
    Tucson, Arizona
    Connie Chambers
    1996
    14,600,000
    Robert F. Kennedy Homes
    2000
    12,748,000
    Housing Authority of the City of Tulsa
    Tulsa, Oklahoma
    Osage Hills
    1998
    28,640,000
    Housing Authority of the City of
    Wheeling, West Virginia
    Wheeling, West Virginia
    Grandview Manor
    Lincoln Homes
    1999
    17,124,895
    Wilmington, Delaware Housing
    Authority
    Wilmington, Delaware
    Eastlake
    1998
    16,820,350
    Housing Authority of the City of
    Wilmington, North Carolina
    Wilmington, North Carolina
    Robert S. Jervay Place
    1996
    11,620,655
    Housing Authority of the City of
    Winston-Salem
    Winston-Salem, North Carolina
    Kimberly Park Terrace
    1997
    27,740,850
    (Continued From Previous Page)
    Public housing authority
    Site
    Fiscal year awarded
    Amount awarded

    Page 46
    GAO-03-555 HUD's Management of the HOPE VI Program
    Appendix III
    Fiscal Year 2002 Application Screening and
    Scoring Process
    AppenIIIdx i
    The fiscal year 2002 NOFA for the HOPE VI program explained the process
    that HUD would use to screen and score applications. It stated that HUD
    would first screen applications to determine if they met threshold
    requirements—requirements that must be met in order for a HOPE VI
    revitalization grant application to be considered for funding. The NOFA
    also stated that if the application failed to meet any one of these thresholds,
    HUD would not rate or rank the application.
    1
    The NOFA contained 28
    threshold requirements, for which applicants had to attest or document
    compliance, including certification signed by an engineer or architect that
    the targeted public housing project meets the definition of severe physical
    distress and certification either that the applicant had procured a developer
    for the first phase by the application deadline or that it would act as its own
    developer. Additionally, an applicant that had one or more existing HOPE
    VI revitalization grants would be disqualified if one or more of those grants
    failed to meet the performance requirements described in the NOFA;
    applications that included a proposal to develop market-rate housing had
    to include a preliminary market assessment letter.
    2
    If an application met all of the threshold requirements, HUD would rate it
    using the rating factors outlined in the NOFA. As shown in table 3, the 2002
    NOFA listed nine rating factors, some of which comprised various
    subfactors. An application could receive a maximum of 114 points.
    1
    Some of the threshold items were “curable,” meaning that HUD would give the applicant an
    opportunity to correct a technical deficiency. Examples of curable technical deficiencies
    included the failure of an applicant to include a required certification or sign a document. If
    HUD identified a technical deficiency, the applicant would be notified by fax and be
    required to submit information to cure the deficiency to HUD within 14 calendar days from
    the date of HUD notification.
    2
    A market assessment letter should (1) provide an assessment of the demand and associated
    pricing structure for the proposed residential units and any community facilities, economic
    development, and retail structures and (2) be based on the market and economic conditions
    of the project area.

    Appendix III
    Fiscal Year 2002 Application Screening and
    Scoring Process
    Page 47
    GAO-03-555 HUD's Management of the HOPE VI Program
    Table 3: Fiscal Year 2002 Rating Factors
    Factor
    Subfactor
    Maximum possible points
    per subfactor
    Maximum points available
    Capacity
    21
    Capacity of developer
    6
    Development capacity of
    applicant
    6
    Capacity of prior grantees
    a
    -10
    Community and supportive
    services program capacity
    3
    Property management capacity
    4
    Public housing authority plan
    b
    2
    Need
    26
    Severe physical distress
    10
    Impact of the severely distressed
    site on the surrounding
    neighborhood
    5
    Obligation of capital funds
    c
    8
    Need for affordable housing in
    the community
    3
    Leveraging
    17
    Development leveraging
    7
    Community and supportive
    services leveraging
    5
    Variety of community and
    supportive services resources
    1
    Anticipatory resources
    d
    2
    Collateral resources
    e
    2
    Resident and community involvement
    3
    Community and supportive services
    6
    Relocation
    5
    Fair Housing and Equal Opportunity
    7
    Accessibility
    f
    2
    Adaptability
    g
    1
    Visitability
    h
    1
    Fair housing
    3
    Mixed-income communities
    6
    On-site unit mix
    3
    Off-site housing
    1

    Appendix III
    Fiscal Year 2002 Application Screening and
    Scoring Process
    Page 48
    GAO-03-555 HUD's Management of the HOPE VI Program
    Source: GAO analysis of the fiscal year 2002 NOFA.
    a
    Although points could not be earned under this subfactor, points would be deducted if certain
    activities, such as submission of the community and supportive services plan, had not been carried out
    within the initial time frames established. Points also would be deducted on the basis of the percentage
    of the grant funds obligated. For example, if a housing authority received a HOPE VI revitalization grant
    in fiscal year 1996 or prior and had obligated less than 60 percent of its grant funds, 5 points would be
    deducted.
    b
    Two points would be awarded if the revitalization plan described in the application had been
    incorporated into the applicant’s public housing authority plan, and if the public housing authority’s plan
    had been approved by its local HUD field office.
    c
    HUD would evaluate the extent to which the applicant could undertake the proposed revitalization
    activities without a HOPE VI grant. Large amounts of available capital funds may indicate that the
    revitalization could be carried out without a HOPE VI grant.
    d
    In many cases, public housing authorities, cities, or other entities may have carried out revitalization
    activities in previous years in anticipation of the applicant’s receipt of a HOPE VI revitalization grant.
    These expenditures, if documented, may be counted as leveraged anticipatory resources.
    e
    Collateral investment includes physical redevelopment activities under way or projected to be
    completed before October 2007 that would enhance the new HOPE VI community, but would occur
    whether or not the public housing project was revitalized. This includes economic or other kinds of
    development activities that would have occurred with or without the anticipation of HOPE VI funds.
    f
    Points are awarded if the applicant describes a plan to provide housing and services for persons with
    disabilities, such as accessibility in homeownership units or accessibility modifications.
    g
    Adaptability means that certain elements of a dwelling unit, such as kitchen counters, sinks, and grab
    bars, can be added to, raised, lowered, or otherwise altered to accommodate the needs of persons
    with or without disabilities.
    h
    Visitability standards allow a person with mobility impairments access into the home but do not
    require that all features be made accessible.
    i
    Applicants are encouraged to work with their local university(ies), other institutions of learning,
    foundations, or others to evaluate the performance and impact of their HOPE VI revitalization plan over
    the life of the grant. The proposed methodology must measure success against goals set at the outset
    of the revitalization activities. Evaluators must establish baselines and provide ongoing interim reports
    that will allow the applicant to make changes as necessary as the project proceeds.
    Homeownership housing
    2
    Overall quality of plan
    23
    Overall quality of the application
    5
    Likelihood of success
    5
    Project readiness
    7
    Design
    3
    Evaluation
    i
    3
    Maximum points that
    could be awarded
    114
    (Continued From Previous Page)
    Factor
    Subfactor
    Maximum possible points
    per subfactor
    Maximum points available

    Page 49
    GAO-03-555 HUD's Management of the HOPE VI Program
    Appendix IV
    Site Visit Summaries
    AppenVIdx i
    Between January and October 2002, we visited the 18 housing authorities
    that were awarded HOPE VI revitalization grants in fiscal year 1996. For
    each of the 20 sites that were awarded grants that year, we describe below
    background information on the conditions at the original site for which the
    grant was awarded, the housing authority’s revitalization and community
    and supportive services (CSS) plans for the site, the status of those plans as
    of March 2003, and the factors that affected the status. We also include a
    time line and photographs for each site. Because the site summaries
    incorporate a number of program-specific and technical terms, we have
    included a glossary at the end of this report.

    Appendix IV
    Site Visit Summaries
    Page 50
    GAO-03-555 HUD's Management of the HOPE VI Program
    ABLA Homes—Brooks
    Extension, Chicago,
    Illinois
    As figure 9 shows, the Chicago Housing Authority was awarded a $24.5
    million HOPE VI revitalization grant for the Brooks Extension portion of
    ABLA Homes in October 1996.
    1
    Relocation and demolition have been
    completed at the ABLA Brooks Extension site, but the new construction
    has not yet begun. The Chicago Housing Authority’s scattered site program,
    which includes the development of any nonelderly public housing, has
    been under judicial receivership since 1987. The housing authority is in the
    midst of implementing a 10-year transformation plan, which is a $1.5 billion
    blueprint for rebuilding or rehabilitating 25,000 units of public housing—
    enough for every leaseholder as of October 1999—and transforming
    isolated public housing sites into mixed-income communities. The housing
    authority was awarded another HOPE VI revitalization grant for ABLA in
    fiscal year 1998 and also has received revitalization grants for the following
    sites: Cabrini-Green (fiscal year 1994), Henry Horner (fiscal year 1996),
    Robert Taylor (fiscal years 1996 and 2001), Madden/Wells/Darrow (fiscal
    year 2000), and Rockwell Gardens (fiscal year 2001).
    1
    ABLA Homes consists of five contiguous sites: Jane Addams Homes, Grace Abbott Homes,
    Robert Brooks Homes, Brooks Extension, and Loomis Courts.

    Appendix IV
    Site Visit Summaries
    Page 51
    GAO-03-555 HUD's Management of the HOPE VI Program
    Figure 9: Time Line for ABLA Homes
    Note: This time line is based on GAO analysis of data provided by the Chicago Housing Authority.
    Background
    The five sites that comprise ABLA Homes had more than 3,500 original
    units. Three of the five ABLA sites were included in the authority’s fiscal
    year 1996 revitalization plans. Brooks Extension, the focus of the fiscal
    year 1996 revitalization grant, was completed in 1961 and consisted of
    three, 16-story buildings containing 453 units. Robert Brooks Homes was
    '96
    1997
    1998
    1999
    2000
    2001
    2002
    2003
    2004
    2005
    2006
    2007
    2008
    Sources: GAO (except the left photo, which is printed with the permission of the Chicago Housing Authority).
    October:
    Initial
    revitalization
    grant awarded
    July:
    Projected completion
    of new construction
    Demolition of Brooks Extension.
    Vacant Brooks Extension site.
    July:
    Initial grant
    agreement
    executed
    November:
    Second
    revitalization
    grant awarded
    January:
    CSS plan approved by HUD
    March:
    Projected start
    of new construction
    October:
    Second grant
    agreement executed
    November:
    Completion of Brooks
    Homes rehabilitation
    January:
    Relocation completed
    July:
    Revitalization and
    CSS plans submitted
    August:
    Demolition completed
    December:
    Revitalization plan
    approved by HUD

    Appendix IV
    Site Visit Summaries
    Page 52
    GAO-03-555 HUD's Management of the HOPE VI Program
    completed in 1943 and contained 834 units. Loomis Courts—a project-
    based Section 8 development—was completed in 1953 and contained 126
    units.
    The density at ABLA was 37.33 units per acre, as compared with Chicago’s
    average density of 28 units per acre. The buildings at ABLA suffered from
    significant structural deficiencies as a result of age, weathering, and the
    lack of proper maintenance. A central heating plant, located at the Jane
    Addams site, provides the heat for the complex. This system is inadequate,
    and regulating the amount of heat for each unit has been a problem. The
    Chicago Housing Authority was awarded a fiscal year 1995 HOPE VI
    planning grant totaling $400,000 for ABLA and two other sites.
    Revitalization and
    Community and Supportive
    Services Plans
    In addition to the $24.5 million HOPE VI revitalization grant, the Chicago
    Housing Authority was awarded four HOPE VI demolition grants totaling
    $2.5 million for Brooks Extension and Robert Brooks Homes. The total
    budget for the renovation of Brooks Extension, Robert Brooks Homes, and
    Loomis Courts is $186 million and includes other public housing funds,
    equity from low-income housing tax credits, and tax increment financing.
    The revitalization plans call for the rehabilitation of 330 public housing
    units at Robert Brooks Homes; the construction of 777 new units at Brooks
    Extension (336 public housing units, 90 tax credit units, and 351
    homeownership units); and the rehabilitation of 126 subsidized units at
    Loomis Courts. A 57,000-square-foot community center to be funded by the
    city is also part of the plans.
    Of the $24.5 million revitalization grant, the housing authority plans to set
    aside $3.6 million for community and supportive services. The community
    and supportive services plan for ABLA, which was approved in January
    2002, focuses on employment, education, health, community building, and
    pilot programs. In addition to special programs funded by the HOPE VI
    grant, the housing authority plans to implement its service connector
    system at ABLA. The service connector system will help residents access
    services through a system of outreach, assessment, referral, and follow-up.
    Current Status
    The rehabilitation at Robert Brooks Homes has been completed. The
    reconstruction of 132 units was completed in 1998, and the reconstruction
    of the remaining 198 units was completed in 2000. Brooks Extension has
    been demolished (see fig. 9). The housing authority selected a developer

    Appendix IV
    Site Visit Summaries
    Page 53
    GAO-03-555 HUD's Management of the HOPE VI Program
    for the entire ABLA development area in December 2002. Construction on
    the new units at Brooks Extension is expected to start in March 2004.
    The housing authority has hired a nonprofit organization to serve as ABLA’s
    service connector, and the program has been in operation since August
    2001. A consultant has also been hired to implement the community and
    supportive services plan, including facilitating task forces on employment,
    education, and health.
    Factors Contributing to
    Current Status
    The ABLA revitalization has been affected by the need for the revitalization
    plans to comply with the Gautreaux consent decree. In 1966, African
    American residents of Chicago public housing filed suit against the Chicago
    Housing Authority for creating a segregated public housing system. In
    response, the court issued a judgment that prohibits the housing authority
    from constructing any new public housing in a neighborhood in which
    more than 30 percent of the occupants are minorities (limited areas) unless
    it develops an equal number of units in neighborhoods where less than 30
    percent are minorities (general areas). In 1987, the court appointed a
    receiver for the housing authority’s scattered site program, including the
    development of nonelderly public housing. In the case of ABLA, the
    receiver and the housing authority had to show the court that, while ABLA
    was currently in a limited area, the area was going to be revitalized by
    HOPE VI. In June 1998, the court approved the housing authority’s request
    to designate ABLA a revitalizing area, thus allowing the development of
    new nonelderly public housing at the site without requiring an equal
    number of units to be built in a general area.
    According to a housing authority official, site planning was progressing at
    the Brooks Extension site until the housing authority applied, in 1997, for a
    HOPE VI revitalization grant for the Grace Abbott Homes portion of ABLA.
    HUD rejected the application, stating that the housing authority needed to
    develop plans for the entire ABLA site and establish better relationships
    with the city and the receiver. In 1998, the housing authority submitted a
    new application that covered all of ABLA and showed that it had worked
    closely with the city and receiver. While the housing authority was
    preparing this application, work at Brooks Extension stopped. HUD
    ultimately awarded the housing authority a fiscal year 1998 grant for the
    portions of ABLA not covered by the fiscal year 1996 grant.

    Appendix IV
    Site Visit Summaries
    Page 54
    GAO-03-555 HUD's Management of the HOPE VI Program
    Management changes at the housing authority have also affected
    implementation of the grant, according to a housing authority official. After
    placing the housing authority under administrative receivership for
    approximately 4 years, HUD returned control of the housing authority to
    Chicago in May 1999. During the reorganization that occurred after the city
    resumed control, decisions were delayed. For example, the housing
    authority’s negotiations with the program manager selected for ABLA were
    delayed, in part, because the agency had just regained control of its
    operations and was developing an overall plan for transformation.
    According to a housing authority official, the receiver raised some legal
    issues that slowed progress at the ABLA site. HOPE VI revitalization grants
    are typically awarded to housing authorities. However, under the
    Gautreaux case, the receiver believed that the two ABLA grants should be
    split so that the funds for “hard” construction costs were awarded to the
    receiver, while the funds for social services were awarded to the housing
    authority. It took almost 2 years to settle this issue. In October 2000, the
    grants were split between the receiver and the housing authority. The only
    funds that the housing authority controls are funds for demolition,
    relocation, and community and supportive services.
    The housing authority had to issue two requests for proposals before
    selecting a developer. The first request for proposals to develop Brooks
    Extension was issued in November 2001, and the authority received three
    responses. The housing authority did not think that the respondents had
    sufficient capacity; therefore, it decided to issue another request for
    proposals to develop the entire ABLA site. The second request for
    proposals was issued in June 2002, and a developer was selected in
    December 2002.

    Appendix IV
    Site Visit Summaries
    Page 55
    GAO-03-555 HUD's Management of the HOPE VI Program
    Arverne/Edgemere
    Houses, Queens, New
    York
    The New York City Housing Authority is using $67.7 million in HOPE VI
    revitalization grant funds to renovate Arverne and Edgemere Houses. Some
    of these revitalization funds were originally awarded to another site, Beach
    41
    st
    Street Houses, and transferred to Edgemere in December 1996 (see fig.
    10). All three sites are in Far Rockaway, a peninsula on the southern edge
    of Queens, south of Jamaica Bay and Kennedy Airport. The housing
    authority expects to complete the rehabilitation of Arverne and Edgemere
    by the end of 2004. In addition to the Arverne/Edgemere grant, the
    authority is overseeing another HOPE VI revitalization grant awarded in
    fiscal year 1998 for Prospect Plaza.

    Appendix IV
    Site Visit Summaries
    Page 56
    GAO-03-555 HUD's Management of the HOPE VI Program
    Figure 10: Time Line for Arverne/Edgemere Houses
    Note: This time line is based on GAO analysis of data provided by the New York City Housing
    Authority.
    Background
    The New York City Housing Authority received a $400,000 planning grant
    for the Arverne and Edgemere sites in fiscal year 1995. In 1996, the
    authority was awarded a revitalization grant for Arverne, and HUD
    transferred the revitalization grant originally awarded to Beach 41
    st
    Street
    1995
    1996
    1997
    1998
    1999
    2000
    2001
    2002
    2003
    2004
    Source: GAO.
    December:
    Projected
    completion of
    all rehabilitation
    Arverne and Edgemere Houses.
    HOPE VI Technology Lab at Ocean Bay
    Apartments (formerly Arverne and
    Edgemere Houses).
    January:
    Revitalization grant
    awarded to
    Beach 41st Street
    June:
    Grant
    agreement
    executed
    February:
    Revised
    revitalization
    plan submitted
    December:
    CSS plan
    submitted
    June:
    First revitalization
    plan submitted
    December:
    Revitalization grant funds
    transferred from Beach
    41st Street to Edgemere
    October:
    Revitalization
    grant awarded
    to Arverne
    November:
    Revitalization
    plan
    conditionally
    approved by HUD
    May:
    CSS plan
    approved
    by HUD
    January:
    Start of
    rehabilitation
    July:
    Projected
    completion
    of relocation
    June:
    Projected completion
    of interior rehabilitation

    Appendix IV
    Site Visit Summaries
    Page 57
    GAO-03-555 HUD's Management of the HOPE VI Program
    Houses to Edgemere. The funding was transferred from Beach 41
    st
    Street
    after an impasse over the residents’ role in the planning process could not
    be overcome. The Arverne site, with 418 units, was completed in 1951; the
    Edgemere site, with 1,395 units, was completed in 1961 (see fig. 10).
    Although soundly constructed, they were in need of significant
    modernization and improvement.
    The area surrounding Arverne/Edgemere lacks essential retail services and
    adequate recreation and community space. In addition, the high density
    and current configuration of the buildings have contributed to vandalism
    and other criminal activity. Joblessness and low educational achievement
    among residents further weaken the community. Though situated in an
    attractive locale, between Jamaica Bay and the Atlantic Ocean, the
    community is extremely isolated with limited transportation links to other
    parts of New York City.
    Revitalization and
    Community and Supportive
    Services Plans
    The total projected budget for the renovation of Arverne and Edgemere is
    $233 million, which includes other public housing funds, city funds, and
    private funds. The revitalization plans for Arverne/Edgemere, renamed
    Ocean Bay Apartments, call for the modernization of 1,803 apartments,
    including lobby and facade improvements and site improvements such as
    upgrading infrastructure and landscaping. The plans also include the
    construction of a recreational facility, the expansion of the existing
    community center and day-care center, and the off-site construction of a
    health and education center and two retail centers.
    Of the $67.7 million in revitalization grant funds, the housing authority has
    budgeted $6.8 million for community and supportive services. The
    community and supportive services plan, which was approved in May 1999,
    focuses on case management, training, and self-sufficiency programs.
    Current Status
    Because the majority of residents chose to remain on-site during the
    renovation, only 211 residents were temporarily relocated, with the
    majority of households relocating to vacant units within the development.
    The renovation is being done in phases. For example, all of the asbestos
    was removed and electrical work completed before the kitchens and
    bathrooms were renovated. As of March 2003, 79 percent of the interior
    modernization work at Arverne and 85 percent of the interior
    modernization work at Edgemere was complete. The housing authority
    estimates that all of the apartment modernization work will be completed

    Appendix IV
    Site Visit Summaries
    Page 58
    GAO-03-555 HUD's Management of the HOPE VI Program
    by June 2003. Under the revised revitalization plan, the community center
    will now be combined with the new recreational facility to reduce the
    overall costs of the plan. This work is under design and is expected to bid
    fall 2003. Also, the day-care center will be upgraded and expanded to create
    a state of the art facility with expanded capacity. The day-care center
    expansion design documents are completed.
    Community and supportive services are being offered to residents and
    other community residents. In November 1999, the housing authority
    opened a Family Resource Center where it administers various training and
    self-sufficiency programs for the residents. Already operating are the
    computer lab (see fig. 10), after-school program, and job training classes. A
    popular project has been the computer incentive program that provides a
    personal computer system to residents who either work 96 hours
    volunteering on HOPE VI recruiting and other HOPE VI activities or who
    participate in a HOPE VI training program. The authority also has
    contracted with Goodwill Industries to provide case management,
    counseling, and job preparation, placement, and retention services. To
    sustain community and supportive services after the expiration of the
    HOPE VI grant, the authority has created the Ocean Bay Community
    Development Corporation.
    Factors Contributing to
    Current Status
    Resident opposition to demolition was one of the issues that led to the
    impasse at Beach 41
    st
    Street Houses. After HUD transferred the HOPE VI
    funds from Beach 41
    st
    Street to Edgemere in December 1996, the housing
    authority again included demolition in the plans for Edgemere’s
    redevelopment. The housing authority determined that the best way to
    meet the demolition requirement would be to remove some top floors from
    each of three, nine-story buildings, thereby eliminating about 100 units.
    Subsequently, the housing authority withdrew this plan and proposed to
    convert dwelling units on the first floor to space for commercial and
    community services. This approach would also have removed about 100
    units. The issue became moot when Congress, in the fiscal year 1998
    appropriations act for the departments of Veterans Affairs and Housing and
    Urban Development and independent agencies, gave the New York City
    Housing Authority the option of not following any HOPE VI demolition
    requirements, and the housing authority abandoned the plans for
    demolishing the 100 units.
    It took almost 18 months to get the revitalization plan for
    Arverne/Edgemere Houses approved. The housing authority first submitted

    Appendix IV
    Site Visit Summaries
    Page 59
    GAO-03-555 HUD's Management of the HOPE VI Program
    a revitalization plan to HUD in June 1997. After HUD returned the plan with
    comments for the housing authority to address, the housing authority
    submitted a revised plan in February 1998. The housing authority then went
    back and forth with HUD on changes to the plan. According to housing
    authority officials, the primary point of contention was the types of
    economic development activities upon which HOPE VI funds could be
    spent. HUD finally approved the housing authority’s revised plan in
    November 1999.
    The effects of September 11, 2001, have also posed challenges for the
    redevelopment of Arverne and Edgemere. Some of the housing authority’s
    HOPE VI records were destroyed and had to be recreated. Additionally,
    housing authority officials estimated that costs for one portion of the
    project had escalated from $22 million to $30 million over the life of the
    project—due, in part, to the labor force and materials moving downtown
    after September 11. Overall, the housing authority estimated that the
    Arverne/Edgemere project was delayed 6 months because of the
    September 11 attack.

    Appendix IV
    Site Visit Summaries
    Page 60
    GAO-03-555 HUD's Management of the HOPE VI Program
    Bedford Additions,
    Pittsburgh,
    Pennsylvania
    The Housing Authority of the City of Pittsburgh was awarded a $26.6
    million HOPE VI revitalization grant for Bedford Additions in October 1996,
    as shown in figure 11. Off-site construction began in September 2002, and
    relocation and demolition have not yet occurred. The authority was
    previously awarded HOPE VI revitalization grants for Allequippa Terrace
    (fiscal year 1993) and Manchester (fiscal year 1995).

    Appendix IV
    Site Visit Summaries
    Page 61
    GAO-03-555 HUD's Management of the HOPE VI Program
    Figure 11: Time Line for Bedford Additions
    Note: This time line is based on GAO analysis of data provided by the Housing Authority of the City of
    Pittsburgh.
    Background
    Bedford Additions, part of the larger Bedford Dwellings, was constructed
    in 1954 and contains 460 units, the majority of which are in three-story,
    walk-up buildings (see fig. 11). It is located in the Hill District, a
    neighborhood offering access to many job centers. Many of the buildings at
    '96
    1997
    1998
    1999
    2000
    2001
    2002
    2003
    2004
    2005
    2006
    2007
    Sources: GAO (except the photos, which are printed with the permission of the Housing Authority of the City of Pittsburgh).
    July:
    Projected
    completion
    of all new
    construction
    Bedford Additions before revitalization.
    Off-site construction under way.
    October:
    Revitalization
    grant awarded
    July:
    Grant agreement
    executed;
    CSS plan submitted
    October:
    Revitalization
    plan submitted
    March:
    Revitalization plan
    approved by HUD
    December:
    CSS plan
    approved
    by HUD
    September:
    Start of new
    off-site
    construction
    December:
    Relocation to
    be completed
    May:
    Demolition
    to be completed

    Appendix IV
    Site Visit Summaries
    Page 62
    GAO-03-555 HUD's Management of the HOPE VI Program
    Bedford Additions had leaky roofs, cracks in the walls, and outdated
    mechanical systems that had not been well-maintained. Also, 72 percent of
    the families in its census tract were earning incomes below the poverty
    level. The housing authority was awarded a $395,700 HOPE VI planning
    grant for Bedford Dwellings and three other sites in fiscal year 1995.
    Revitalization and
    Community and Supportive
    Services Plans
    The total estimated budget for the revitalization is about $102 million and
    includes other public housing funds and equity from low-income housing
    tax credits. The revitalization plans call for
    • construction of a two-story, 12,000-square-foot community center;
    • construction of 75 off-site homeownership units and 365 off-site rental
    units (phases one and two); and
    • construction of 45 on-site homeownership units and 175 on-site rental
    units (phase three).
    Of the 660 total units planned, 220 will be replacement public housing units.
    In addition, up to 40 of the homeownership units will be made affordable
    for public housing residents. The off-site units will be constructed first, and
    then the existing on-site units will be demolished and new units will replace
    them.
    Of the HOPE VI funds, the housing authority has budgeted about $5.1
    million for community and supportive services. A new community center
    will house the supportive services program, including the case
    management function, computer learning lab, day care, a family support
    program, after-school teen program, resident council offices, and housing
    authority management offices.
    Current Status
    The community center has been completed, and many of the planned
    services are operational, including the computer lab. As of March 2003, the
    housing authority had acquired 235 of the approximately 650 separate
    parcels of land required for the off-site component of the project.
    Construction on the first 147 off-site rental units started in September 2002
    (see fig. 11), and construction on the first 35 off-site homeownership units
    is scheduled to begin in June 2003.

    Appendix IV
    Site Visit Summaries
    Page 63
    GAO-03-555 HUD's Management of the HOPE VI Program
    Factors Contributing to
    Current Status
    The decision to construct the off-site units first and on many different
    parcels of land has been the major impediment to progress. According to
    housing authority officials, the residents were fearful of being displaced;
    therefore, they wanted the housing authority to build the new off-site
    structures first so that they could be relocated to the new off-site units. The
    housing authority has been going through the lengthy process of acquiring
    parcels in the surrounding community either by negotiating the purchase of
    properties or through eminent domain. It also had to relocate 111 private
    households after acquiring their properties.
    Financing the redevelopment also has been a challenge. For example, it
    was difficult to obtain low-income housing tax credits because the state
    housing finance agency has established strict guidelines. It wants any units
    developed as part of a mixed-income project to be contiguous. Because the
    housing authority could not acquire certain properties, there is a break
    between two sections of off-site parcels. After convincing the state housing
    finance agency that it would need two tax credit allocations, one for each
    section of the off-site parcels, and that it should not finance one without
    the other, the housing authority was awarded tax credits for the first phase
    of off-site development. Although this process did not delay the
    revitalization plans, it did make financing the first phase of development
    more complicated, according to a housing authority official.

    Appendix IV
    Site Visit Summaries
    Page 64
    GAO-03-555 HUD's Management of the HOPE VI Program
    Connie Chambers,
    Tucson, Arizona
    The City of Tucson Community Services Department, which serves as
    Tucson’s public housing authority, was awarded a $14.6 million HOPE VI
    revitalization grant for Connie Chambers in late 1996, as shown in figure 12.
    The grant was closed out in January 2003. The department was also
    awarded a fiscal year 2000 revitalization grant for Robert F. Kennedy
    Homes.

    Appendix IV
    Site Visit Summaries
    Page 65
    GAO-03-555 HUD's Management of the HOPE VI Program
    Figure 12: Time Line for Connie Chambers
    Note: This time line is based on GAO analysis of data provided by the City of Tucson Community
    Services Department.
    Background
    Connie Chambers, built in 1967, consisted of 200 units (see fig. 12). The
    surrounding Santa Rosa neighborhood is historic and home to a lower
    1996
    1997
    1998
    1999
    2000
    2001
    2002
    2003
    Sources: GAO (except the top left photo, which is printed with the permission of the City of Tucson Community Services Department).
    January:
    Closeout
    of grant
    Connie Chambers prior to demolition.
    Santa Rosa Neighborhood Center (top), scattered off-site unit (bottom right), and
    Posadas Sentinel (formerly Connie Chambers) duplex (bottom left).
    October:
    Revitalization
    grant awarded
    August:
    Grant
    agreement
    executed
    November:
    Revitalization
    plan submitted;
    CSS plan
    submitted
    April:
    Revitalization
    plan approved
    by HUD
    May:
    CSS plan
    approved
    by HUD
    March:
    Start of new
    on-site
    construction
    November:
    Demolition
    completed
    December:
    Relocation
    completed
    December:
    Completion of
    new on-site
    construction

    Appendix IV
    Site Visit Summaries
    Page 66
    GAO-03-555 HUD's Management of the HOPE VI Program
    income population. According to housing authority officials, the primary
    problem with Connie Chambers was that it was isolated from other
    communities after construction of a new convention center and police and
    fire department headquarters. Two out of three households on the public
    housing waiting list turned it down because of a history of high crime and
    poor physical conditions. The housing authority was awarded a $370,000
    planning grant for Connie Chambers in fiscal year 1995. It used the
    planning grant to conduct maintenance studies and physical needs
    assessments and to hold meetings with residents.
    Revitalization and
    Community and Supportive
    Services Plans
    The total projected budget for the project is $72 million and includes other
    public housing funds, equity from low-income housing tax credits, city
    funds, and bond funds. The revitalization plan for Connie Chambers,
    renamed Posadas Sentinel, calls for
    • rehabilitation of 10 units at another site;
    • construction of 120 on-site units (60 public housing units and 60 tax
    credit units);
    • acquisition of 130 scattered public housing units;
    • construction of 60 homeownership units;
    • construction of a child development center, learning center, and health
    center and expansion of the existing recreation center;
    • construction of a grocery store; and
    • an elderly building to be built by a nonprofit organization.
    Of the $14.6 million revitalization grant, the housing authority has budgeted
    $1.2 million for community and supportive services. The community and
    supportive services plan, approved in May 1998, calls for a neighborhood
    services center to serve as a resource center for residents of the
    neighborhood and the provision of services such as language classes, an
    expanded child-care program, and job training.
    Current Status
    The 10 units at the other site have been renovated, all 120 of the on-site
    units have been completed, and all 130 scattered sites have been acquired

    Appendix IV
    Site Visit Summaries
    Page 67
    GAO-03-555 HUD's Management of the HOPE VI Program
    (see fig. 12). As of March 2003, 54 of the homeownership units had been
    completed. The child development center and learning center, located in
    the Santa Rosa Neighborhood Center, were completed in April 2002.
    Construction on the recreation and health centers is under way. The
    housing authority was able to close out the grant in January 2003 because
    the remaining homeownership units and the recreation and health centers
    were not financed with HOPE VI funds.
    A Head Start program has been operating in the child development center
    since January 2002. Another day-care service, operated by a local nonprofit
    organization, opened in the center in November 2001. It primarily serves
    working families. The learning center has been operational since April 2002
    and contains a computer library. The learning center offers basic computer
    classes in either Spanish or English.
    Factors Contributing to
    Current Status
    Because the City of Tucson Community Services Department acts as both
    the city’s public housing authority and community development agency, it
    was able to draw on other resources for the Connie Chambers
    revitalization. Funding for the project includes city funds for infrastructure,
    general city funds, and bonds. In addition, the state housing finance agency
    agreed to set aside 10 percent of its annual tax credit allotment for HOPE
    VI sites.
    The housing authority has involved the residents and the neighborhoods
    surrounding the Connie Chambers site in the revitalization process. Both
    residents and the surrounding neighborhoods were involved in developing
    the revitalization plan. After the revitalization plan was developed,
    residents were asked to vote on the plan. Of the 181 Connie Chambers
    households, 107 participated in the vote. Of the 107 that voted, 84 voted in
    favor of the plan. Only after the residents expressed their support for the
    plan did the mayor and city council vote to submit the plan to HUD. When
    the housing authority determined that some residents did not want to
    relocate outside the neighborhood, even temporarily, it decided to
    demolish Connie Chambers in phases, starting at each end of the site. While
    the first phases were under construction, those who did not want to leave
    the neighborhood were allowed to live in the remaining units. Once
    construction was complete, they were moved into the new units, and the
    rest of the original units were demolished.

    Appendix IV
    Site Visit Summaries
    Page 68
    GAO-03-555 HUD's Management of the HOPE VI Program
    Cotter and Lang
    Homes, Louisville,
    Kentucky
    The Housing Authority of Louisville was awarded a $20 million HOPE VI
    revitalization grant for Cotter and Lang Homes in late 1996 (see fig. 13), and
    about 65 percent of the planned units were complete as of March 31, 2003.
    Figure 13: Time Line for Cotter and Lang Homes
    Note: This time line is based on GAO analysis of data provided by the Housing Authority of Louisville.
    a
    The first phase of rental units was begun prior to receipt of the HOPE VI revitalization grant.
    '96
    1997
    1998
    1999
    2000
    2001
    2002
    2003
    2004
    2005
    2006
    2007
    2008
    October:
    Revitalization grant awarded
    Sources: GAO (except the two left photos, which are printed with the permission of the Housing Authority of Louisville).
    September:
    Relocation completed
    December:
    Grant agreement executed
    February:
    Revitalization and CSS plans submitted
    May:
    Revitalization plan approved by HUD
    June:
    New construction started on second phase
    a
    August:
    CSS plan approved by HUD
    October:
    Demolition completed
    May:
    Revised CSS
    plan submitted
    November:
    Revised CSS plan
    approved by HUD
    June:
    Projected
    completion
    of rental units
    April:
    Projected completion
    of homeownership
    units
    Cotter and Lang Homes prior to demolition.
    Park DuValle (formerly Cotter and Lang Homes) rental units (bottom left),
    homeownership unit (bottom right), and senior building (top right).

    Appendix IV
    Site Visit Summaries
    Page 69
    GAO-03-555 HUD's Management of the HOPE VI Program
    Background
    Cotter Homes, completed in 1953, consisted of 620 units. Lang Homes, built
    in 1959, contained 496 units (see fig. 13). These two contiguous public
    housing sites, located in Louisville’s Park DuValle neighborhood, were the
    largest public housing sites in Louisville. Together, they covered almost 80
    acres. Almost 80 percent of the residents in the Park DuValle neighborhood
    lived in poverty. The neighborhood also had the highest violent crime rate
    per square mile in Louisville. The local newspaper referred to one corner
    on the Cotter and Lang site as the “meanest” corner in Louisville.
    Furthermore, the area surrounding the two sites contained vacant or
    underused industrial buildings, unused school land, vacant failed
    subsidized housing, and other available housing development sites.
    Revitalization and
    Community and Supportive
    Services Plans
    The total projected budget for the project is $200 million and includes other
    public housing funds, other HUD funds, and equity from low-income
    housing tax credits. The revitalization plans for Cotter and Lang Homes,
    renamed Park DuValle, call for 1,213 new units to be completed in five
    phases.
    • Phase one: development of 100 rental units.
    • Phase two: development of 213 rental units and 150 homeownership
    units.
    • Phase three: development of 108 rental units (including some elderly
    units) and 300 homeownership units.
    • Phase four: development of 192 rental units.
    • Phase five: acquisition of 150 off-site rental units.
    Of the 763 total rental units, 500 will be public housing units, 160 will be tax
    credit units, and 103 will be market-rate units. The 450 homeownership
    units will be targeted to households with a variety of incomes. A town
    center will include space for various types of commercial enterprises. The
    HOPE VI funds will be used to develop the 150 off-site units and to provide
    homeownership assistance.
    Of the $20 million in HOPE VI revitalization grant funds, the housing
    authority has set aside $3 million for community and supportive services.
    The focus of its initial community and supportive services plan, approved

    Appendix IV
    Site Visit Summaries
    Page 70
    GAO-03-555 HUD's Management of the HOPE VI Program
    in August 1998, was lifelong learning programs and services, such as child
    care, youth programs, and computer training. The developer would provide
    services to residents of the Park DuValle revitalization area, and the
    housing authority would provide case management services to former
    Cotter and Lang residents that were not residing at the Park DuValle site.
    Current Status
    Work on the first phase of 100 rental units was begun before the housing
    authority received its HOPE VI revitalization grant, and construction was
    completed in 1998. The 321 rental units envisioned for phases two and
    three also have been completed, and construction on the fourth phase of
    192 rental units is under way (see fig. 13). Of the 150 planned off-site units,
    112 had been acquired as of March 31, 2003. As part of the phase three
    rental units, a 59-unit senior building was constructed. As of March 31,
    2003, the first 150 homeownership units had been sold, and 147 had been
    completed. Twenty-eight homeowners received soft second mortgages
    funded by the HOPE VI program.
    2
    The remaining phase of 300
    homeownership units is under way. Because it estimates that it can sell
    only 4 units a month in the Louisville housing market, the housing authority
    does not expect all 300 units to be completed and sold until April 2008.
    The housing authority hired Jefferson County Human Services to provide
    intensive case management services to former Cotter and Lang residents.
    The emphasis was on preparing former residents to return to Park DuValle.
    The developer focused primarily on community building in the new Park
    DuValle neighborhood. For instance, it served as liaison to the Park DuValle
    Neighborhood Advisory Council—an organization comprised of former
    residents of Cotter and Lang, Park DuValle public housing residents, and
    residents of the surrounding neighborhood. However, the housing authority
    determined that additional efforts were necessary to ensure that all former
    Cotter and Lang residents, whether or not they were residents of the new
    community, had access to services aimed toward increasing self-
    sufficiency. Therefore, it developed a revised community and supportive
    services plan, which it submitted to HUD in May 2002. HUD approved the
    plan in November 2002.
    2
    The soft second mortgages are recorded liens for 10 years. The amount of the soft second
    mortgage is forgiven at 20 percent per year beginning with year 6. After 10 years, the equity
    in the home belongs to the owner. The soft second mortgages are not transferable if the
    home is sold prior to year 10.

    Appendix IV
    Site Visit Summaries
    Page 71
    GAO-03-555 HUD's Management of the HOPE VI Program
    Factors Contributing to
    Current Status
    According to housing authority officials, support from the city, other local
    entities, and the local HUD field office has been integral to the success of
    the Park DuValle project. Both the mayor at the time the grant was awarded
    and the subsequent mayor were very supportive of the project. The city has
    provided funds and other resources (e.g., the services of the city’s chief
    architect). The local school board spent $15 million on a new school in the
    Park DuValle neighborhood, and the health department spent $5 million on
    a new health center. Staff from the local HUD field office have also been
    part of the project team. During planning and much of implementation, a
    management team comprised of representatives from the housing
    authority, the city, the local HUD field office, and the developer met weekly
    to discuss the project. Now that much of the construction has been
    completed, the team meets about once a month.
    The leadership of the housing authority’s executive director was another
    factor cited as contributing to the success of Park DuValle. Housing
    authority officials noted that, because the executive director formerly
    worked in the mayor’s office, he has been able to strengthen the city’s
    support for the project. In addition, according to local HUD officials, the
    executive director’s relationship with residents was very good. During his
    tenure as executive director, a public housing resident was named the
    chairman of the housing authority’s Board of Commissioners.
    Another factor contributing to Louisville’s success is that the housing
    authority has not had to make any significant modifications to its
    revitalization plan. The total number of planned units (1,213) has not
    changed. The few changes that have been made are minor. For example,
    the housing authority originally planned for the homeownership units to be
    constructed in three phases but later decided to consolidate the last two
    phases for a total of two phases. Also, instead of the 125 homeownership
    units originally planned in phase two, the housing authority was able to sell
    150 units.
    The housing authority has been able to obtain multiple sources of funding
    for the project. In addition to the $20 million in HOPE VI funds, the master
    budget includes $56.2 million in other public housing funds and $20.5
    million in other HUD funds. The other sources of funding include $37.2
    million in equity from low-income housing tax credits and $56.3 million in
    debt financing. The state housing finance agency set aside 6 years of tax
    credits for the Park DuValle project.

    Appendix IV
    Site Visit Summaries
    Page 72
    GAO-03-555 HUD's Management of the HOPE VI Program
    Dalton Village,
    Charlotte, North
    Carolina
    The Charlotte Housing Authority was awarded a $24.5 million HOPE VI
    revitalization grant for Dalton Village in October 1996 (see fig. 14). As of
    March 2003, 194 of 432 total planned units were complete. In addition to the
    Dalton Village grant, the authority is overseeing two other revitalization
    grants awarded in fiscal years 1993 and 1998.
    Figure 14: Time Line for Dalton Village
    Note: This time line is based on GAO analysis of data provided by the Charlotte Housing Authority.
    '96
    1997
    1998
    1999
    2000
    2001
    2002
    2003
    2004
    2005
    2006
    Sources: GAO (except the photos, which are printed with the permission of the Charlotte Housing Authority).
    October:
    Revitalization
    grant awarded
    September:
    Grant
    agreement
    executed
    June:
    Projected completion
    of all new construction
    Dalton Village prior to demolition.
    Arbor Glen (formerly Dalton Village) rental units.
    December:
    CSS plan submitted
    January:
    Revitalization
    plan submitted;
    rehabilitation
    completed;
    first developer
    signed on
    March:
    Relocation completed
    October:
    Demolition completed
    December:
    Second developer signed on
    March:
    CSS plan approved by HUD
    May:
    Revised revitalization plan submitted
    September:
    Revised revitalization plan approved by HUD
    March:
    Start of new construction

    Appendix IV
    Site Visit Summaries
    Page 73
    GAO-03-555 HUD's Management of the HOPE VI Program
    Background
    Dalton Village was built in 1970 and consisted of 300 units in brick
    townhouse structures with sloped roofs and clapboard facades, as shown
    in figure 14. The development was located off Clanton Road, an off-shoot
    from West Boulevard, which was once a major route to Charlotte’s Douglas
    International Airport. In addition to the presence of lead-based paint and
    asbestos materials, the structures at Dalton Village suffered from severe
    deficiencies due to the age of the buildings. The site conditions were very
    poor with severe erosion taking place over a large portion of the site, and
    the lack of adequate drainage devices compounded the site problems.
    Dalton Village was isolated from the adjoining communities by virtue of
    noncontinuous street access and a steep hill that physically separated it
    from the neighboring community.
    Revitalization and
    Community and Supportive
    Services Plans
    The total projected budget for the revitalization project is $44 million,
    which includes equity from low-income housing tax credits. The
    revitalization plan for Dalton Village, renamed Arbor Glen, calls for
    • rehabilitation of 50 existing public housing units and the Family
    Investment Center;
    • on-site construction of 144 family and elderly rental units, including 60
    public housing units;
    • on-site and off-site construction of 175 rental townhouses, including 70
    public housing units;
    • construction of 48 on-site homeownership units, including 20 for public
    housing residents;
    • construction of 15 off-site homeownership units designated for public
    housing residents; and
    • construction of an outreach center for recreational and educational
    programs.
    The housing authority has budgeted $4.1 million of the HOPE VI
    revitalization grant for community and supportive services. The community
    and supportive services plan, approved in March 2000, calls for services to
    be provided at the new outreach center, which would house multipurpose

    Appendix IV
    Site Visit Summaries
    Page 74
    GAO-03-555 HUD's Management of the HOPE VI Program
    classrooms and a full-size multipurpose gymnasium. The focus would be on
    services and programs that promote self-sufficiency.
    Current Status
    The 50 existing units and the Family Investment Center have been
    renovated, and the 144 family and elderly rental units are complete and
    fully occupied (see fig. 14). The housing authority estimates that
    construction of the on-site rental townhouses will begin in June 2003 and
    be completed by June 2004. The housing authority has submitted two tax
    credit applications—one for an additional 23 on-site units and one for 74
    units at an off-site location. In January 2003, the housing authority
    completed its acquisition of nearby county land needed for the 48 on-site
    homeownership units, and groundbreaking is scheduled for summer 2003.
    The $1.5 million outreach center was completed and opened to the public
    in March 2002. It is an 11,000-square-foot community and recreational
    center consisting of a gymnasium, four classrooms, and a computer lab.
    The center is open not only to Arbor Glen residents but also to the entire
    Arbor Glen community and nearby neighborhoods. It houses recreational
    and other educational programs. All of the Arbor Glen public housing
    residents are required to participate in the family self-sufficiency program.
    A case manager works with participants to develop an individual service
    plan and to help the residents meet their self-sufficiency goals, such as
    those related to education and employment.
    Factors Contributing to
    Current Status
    The redevelopment of Arbor Glen was delayed initially because the
    Charlotte Housing Authority changed development partners. According to
    housing authority officials, the first developer, signed on in 1998, did not
    have much development expertise, kept changing financial projections, and
    did not listen to the community or the state housing finance agency. As a
    result, the initial developer’s application for low-income housing tax credits
    was denied. In December 1999, the housing authority signed a new
    development partner for the site. This developer was part of the initial
    development team; therefore, the housing authority did not have to issue
    another request for proposals.
    Since the new developer was retained, the project has moved forward. The
    housing authority and the new developer worked to develop a new site plan
    and development scheme that would be more competitive for tax credits.
    In late 2000, the project was awarded tax credits for the first phase of new

    Appendix IV
    Site Visit Summaries
    Page 75
    GAO-03-555 HUD's Management of the HOPE VI Program
    construction. The first phase of 144 units was completed and leased 6
    months ahead of schedule.

    Appendix IV
    Site Visit Summaries
    Page 76
    GAO-03-555 HUD's Management of the HOPE VI Program
    Durkeeville,
    Jacksonville, Florida
    The Jacksonville Housing Authority was awarded a $21.5 million HOPE VI
    revitalization grant for Durkeeville in October 1996 (see fig. 15). Of the 303
    planned units, 228 have been completed.
    Figure 15: Time Line for Durkeeville
    Note: This time line is based on GAO analysis of data provided by the Jacksonville Housing Authority.
    '96
    1997
    1998
    1999
    2000
    2001
    2002
    2003
    2004
    2005
    Sources: GAO (except the left photo, which is printed with the permission of the Jacksonville Housing Authority).
    December:
    Projected
    completion of
    off-site units
    October:
    Revitalization
    grant awarded
    July:
    Grant agreement
    executed
    August:
    Revitalization
    plan submitted
    Durkeeville prior to demolition.
    The Oaks at Durkeeville (formerly Durkeeville).
    December:
    Demolition
    completed
    February:
    CSS plan
    approved
    by HUD
    December:
    On-site
    construction
    completed
    December:
    CSS plan
    submitted
    April:
    Start of
    new on-site
    construction
    October:
    Relocation
    completed
    September:
    Revitalization plan
    approved by HUD

    Appendix IV
    Site Visit Summaries
    Page 77
    GAO-03-555 HUD's Management of the HOPE VI Program
    Background
    The 280 units in the Durkeeville public housing complex were poorly
    designed, lacked sufficient ventilation, and had extensive plumbing and
    drainage deficiencies. For example, the roofs were constructed without an
    overhang, which exacerbated the deterioration of the outside walls (see fig.
    15). Furthermore, the site consisted of mostly small, one-bedroom units
    that no longer met the residents’ needs for space. Built in 1936, the overall
    design of the Durkeeville site had become outmoded. Parking was
    nonexistent, the density of the housing units was twice that of the
    surrounding community, and a porous design with alleyways instead of
    roadways provided an environment conducive to criminal activity.
    By 1990, the Durkeeville site and its surrounding neighborhood had
    become Jacksonville’s most dangerous community—the violent crime rate
    for Durkeeville was 12 times higher than for Jacksonville. The
    neighborhood surrounding Durkeeville was once a desirable middle-class
    neighborhood. However, low incomes in the neighborhood contributed to
    low property values, low rents, and little economic activity; over 40 percent
    of neighborhood households were below the poverty level, according to the
    1990 census. The Jacksonville Housing Authority was awarded a fiscal year
    1995 HOPE VI planning grant totaling $400,000 for Durkeeville.
    Revitalization and
    Community and Supportive
    Services Plans
    The total projected budget for the revitalization is about $37 million, which
    includes other public housing funds left over from the redevelopment of
    another Jacksonville Housing Authority property. Several key features of
    the revitalization plan for Durkeeville, renamed The Oaks at Durkeeville,
    include
    • construction of 200 new rental public housing units (of which 40 will be
    for seniors and the disabled) and 28 homeownership units on the
    Durkeeville site;
    • construction of 75 off-site public housing units;
    • renovation and expansion of the community center;
    • renovation of two existing buildings for historic preservation; and
    • retail space containing several businesses and a health clinic.

    Appendix IV
    Site Visit Summaries
    Page 78
    GAO-03-555 HUD's Management of the HOPE VI Program
    The housing authority plans to set aside $3.1 million of the revitalization
    grant for community and supportive services. The community and
    supportive services plan, approved in February 1999, calls for the
    renovated community center to become a focal point for the entire
    community and to include a computer lab; community meeting rooms;
    social service agencies; adult education classes; and recreational facilities,
    among other programs.
    Current Status
    The Jacksonville Housing Authority has completed the on-site
    construction, which includes the 200 rental units (see fig. 15), 28
    homeownership units, the renovation of the community center, and
    rehabilitation of two historic buildings that include a day-care center and
    resident management offices. Several businesses—including a grocery
    store, pizza restaurant, Chinese restaurant, and health clinic—have moved
    into the retail strip adjacent to the site. All of the housing units are
    occupied. The community center houses the family self-sufficiency
    program and adult literacy classes, sponsors numerous recreational
    activities for children, and hosts community meetings. The day-care facility
    and a museum showcasing Durkeeville’s history are operating on-site.
    The housing authority does not plan to start the development of the 75 off-
    site rental units until October 2003. Currently, the housing authority is
    planning to use a portion of their HOPE VI funds to purchase 75 to 100
    apartments and convert them to public housing.
    3
    Factors Contributing to
    Current Status
    According to officials at the housing authority, on-site construction at
    Durkeeville was completed in a timely manner for several reasons. First,
    the housing authority was able to develop a sound, comprehensive
    revitalization plan because HUD awarded it a planning grant in fiscal year
    1995. The grant provided the authority with the necessary resources to hire
    several consultants and invest in extensive outreach to public housing and
    community residents. Second, the on-site public housing units were funded
    entirely with public housing funds. The housing authority used only its
    HOPE VI grant and surplus public housing funds from another
    rehabilitation project to fund Durkeeville’s redevelopment. The simpler
    3
    This will satisfy, in part, a federal court consent decree that stipulates that the Jacksonville
    Housing Authority must create 225 new public housing units by 2006 in designated areas of
    Duval County where public housing had not previously been built.

    Appendix IV
    Site Visit Summaries
    Page 79
    GAO-03-555 HUD's Management of the HOPE VI Program
    financial structure of the redevelopment shortened the project’s time
    frames by over 1 year, according to one housing authority official.
    According to the executive director, in addition to these unique features of
    the Durkeeville site, the housing authority enjoys the backing of a
    committed board of directors, which includes prominent Jacksonville real
    estate developers, attorneys, and former corporate managers. Also
    represented on the board are the police department, public housing
    residents, and local businesses. This broad base of support, in conjunction
    with the executive director’s extensive networking with various
    government entities, provided the housing authority with key partnerships
    that helped expedite work on the site.
    Finally, according to housing authority officials, the decision to place the
    HOPE VI-related offices in the community center increased the public
    housing residents’ sense of belonging to a community. The increased
    number of interactions between public housing and local residents has
    improved the overall relations between the two groups. This has had an
    overall positive impact on the entire community.
    Plans for the off-site portion of the revitalization have not proceeded as
    smoothly. First, the initial site that the housing authority chose could not
    get approval by the Environmental Protection Agency. The site was once
    used for garbage incineration and contains polluted ash in its soil. The
    housing authority then proposed to purchase a neglected privately owned
    apartment complex (HUD was going to foreclose the property) and convert
    all 78 units to public housing, but a local citizens group opposed the plan
    and took legal action to enforce a court decree from 2000, which states that
    only 25 percent of any apartment complex the authority buys in an area
    with a low percentage of minorities can be used for public housing.
    Ultimately, HUD did not conduct foreclosure proceedings, and the housing
    authority is currently researching other sites.

    Appendix IV
    Site Visit Summaries
    Page 80
    GAO-03-555 HUD's Management of the HOPE VI Program
    Heman E. Perry
    Homes, Atlanta,
    Georgia
    The Housing Authority of the City of Atlanta was awarded a $20 million
    HOPE VI revitalization grant for Heman E. Perry Homes (Perry Homes) in
    late 1996 (see fig. 16), but the revitalization effort did not move forward for
    some time, primarily because of changes to the revitalization plans.
    Construction on the first phase of units began in November 2002. The
    housing authority also has received revitalization grants for the following
    sites: Techwood/Clark Howell Homes (fiscal year 1993), Carver Homes
    (fiscal year 1998), Harris Homes (fiscal year 1999), and Capitol Homes
    (fiscal year 2001). Centennial Place, the name given to the revitalized
    Techwood/Clark Howell Homes, was largely completed in 2000 and was the
    first mixed-use, mixed-income community (with public housing as a
    component) in the nation.

    Appendix IV
    Site Visit Summaries
    Page 81
    GAO-03-555 HUD's Management of the HOPE VI Program
    Figure 16: Time Line for Heman E. Perry Homes
    Note: This time line is based on GAO analysis of data provided by the Housing Authority of the City of
    Atlanta.
    Background
    Perry Homes and Perry Homes Annex, constructed in 1955, consisted of
    944 and 128 units, respectively, and were located on approximately 153
    acres of land (see fig. 16). When the housing authority applied for the
    revitalization grant, the brick exterior walls had deteriorated, resulting in
    water damage to walls, floors, and personal belongings. The sanitary sewer
    system leaked, and the storm drainage system did not function properly.
    '96
    1997
    1998
    1999
    2000
    2001
    2002
    2003
    2004
    2005
    2006
    2007
    2008
    Sources: GAO (except the photos, which are printed with the permission of the Housing Authority of the City of Atlanta).
    December:
    Projected completion
    of homeownership
    units
    October:
    Revitalization
    grant
    awarded
    July:
    Grant
    agreement
    executed
    September:
    Initial
    revitalization
    plan submitted
    August:
    Relocation
    completed
    February:
    Demolition of
    community center completed
    July:
    CSS plan
    approved by
    HUD
    June:
    CSS plan
    submitted
    December:
    Revised
    revitalization
    plan submitted
    Perry Homes prior to demolition.
    Cleared Perry Homes site.
    August:
    Demolition of dwelling units completed
    February:
    Supplement to revised
    revitalization plan submitted
    October:
    HUD approval of supplement
    to revised revitalization plan
    November:
    Start of new construction
    December:
    Projected
    completion
    of rental units

    Appendix IV
    Site Visit Summaries
    Page 82
    GAO-03-555 HUD's Management of the HOPE VI Program
    From 1992–95, an average of 254 Perry Homes residents were victims of
    crime each year. In addition, more than 60 percent of the residents of Perry
    Homes and the surrounding neighborhood were living below the poverty
    line. The Housing Authority of the City of Atlanta received a $400,000
    HOPE VI planning grant for Perry Homes and one other site in fiscal year
    1995.
    Revitalization and
    Community and Supportive
    Services Plans
    In addition to the $20 million revitalization grant, the housing authority also
    was awarded $5.1 million in fiscal year 1998 HOPE VI demolition funds.
    The total projected budget for the revitalization of the site is $143 million
    and includes other public housing funds and equity from low-income
    housing tax credits. The revitalization plan for Perry Homes, renamed West
    Highlands at Heman E. Perry Boulevard, calls for 800 new housing units to
    be constructed in five phases. The construction phases are as follows:
    • Phase one: 124 rental units (50 public housing units, 12 tax credit units,
    and 62 market-rate units).
    • Phase two: 152 family rental units (61 public housing units, 19 tax credit
    units, and 72 market-rate units) and 130 elderly rental units (100 project-
    based Section 8 units and 30 market-rate units).
    • Phase three: 152 rental units (61 public housing units, 14 tax credit units,
    and 77 market-rate units).
    • Phase four: 142 rental units (56 public housing units, 11 tax credit units,
    and 75 market-rate units).
    • Phase five: 100 homeownership units (40 units for public housing
    eligible families and 60 market-rate units).
    4
    In addition to housing, the plan calls for a town center, an 18-hole public
    golf course, and over 90 acres of green space in the form of parklands,
    nature trails, and recreational fields.
    4
    Although the revitalization plans call for 100 homeownership units, an additional 150
    market-rate homeownership units may be built on-site, and up to 300 additional
    homeownership units may be built off-site.

    Appendix IV
    Site Visit Summaries
    Page 83
    GAO-03-555 HUD's Management of the HOPE VI Program
    Of the $20 million revitalization grant, the housing authority has budgeted
    $2.6 million for community and supportive services. It plans to deliver
    community and supportive services to Perry Homes residents using two
    basic approaches. First, it provides authoritywide programs that are
    available to all public housing residents, including residents of HOPE VI
    sites. These authoritywide programs include the Human Service
    Management Program—which provides case management services—and
    the Work Force Enterprise Program—which equips participants with the
    skills necessary to manage the transition from unemployment to the
    workforce. Second, the housing authority plans to ensure that Perry Homes
    residents have access to neighborhood-based programs. Some of these
    programs will be offered at a new school, public library, and YMCA.
    Current Status
    All of the Perry Homes residents have been relocated, and demolition has
    been completed (see fig. 16). Construction on the first phase of 124 rental
    units began in November 2002. Construction of the rental and
    homeownership units is scheduled to be completed by December 2006 and
    December 2008, respectively.
    HUD approved the community and supportive services plan for Perry
    Homes in July 2000, and Perry Homes residents have been participating in
    authoritywide programs. The developer has hired a human services
    provider to supply case management services specifically for former Perry
    Homes residents. Services to be provided include case management
    tracking and referral services. Construction has not yet begun on the town
    center, which will include the school, public library, and YMCA. The town
    center also will include a park, retail, and office space.
    Factors Contributing to
    Current Status
    After the Housing Authority of the City of Atlanta submitted its original
    revitalization plan for Perry Homes to HUD in September 1998, HUD
    officials visited the site to discuss issues and concerns that they had about
    the plan. The plan called for the development of 415 new public housing
    units on the existing site; the housing authority planned to use only HOPE
    VI funds and other HUD funds. In a June 2, 1999, letter to the housing
    authority summarizing its concerns about the plan, HUD questioned
    whether rebuilding the site entirely with public housing units, without
    funding to provide meaningful supportive services and without significant
    partnerships, could result in a sustainable development and provide the
    maximum benefits to residents.

    Appendix IV
    Site Visit Summaries
    Page 84
    GAO-03-555 HUD's Management of the HOPE VI Program
    In response to HUD’s concerns, the housing authority came up with a new
    concept for the Perry Homes site and started developing a new master
    plan. In December 1999, the housing authority submitted a revised
    revitalization plan to HUD, which called for a mixed-use, mixed-income
    community consisting of 750 residential units (40 percent of which would
    be public housing units), a recreation center, a public library, and a village
    center. After a developer was selected, the revitalization plan was further
    refined, and a supplement to the revised revitalization plan was submitted
    in February 2002. HUD approved the supplement in October 2002, and
    construction began shortly thereafter.

    Appendix IV
    Site Visit Summaries
    Page 85
    GAO-03-555 HUD's Management of the HOPE VI Program
    Henry Horner Homes,
    Chicago, Illinois
    As figure 17 shows, the Chicago Housing Authority was awarded an $18.4
    million HOPE VI revitalization grant for Henry Horner Homes in late 1996.
    However, the planned revitalization of the site has been delayed by a
    lawsuit filed by residents and subsequent legal decisions. The Chicago
    Housing Authority’s scattered site program, which includes the
    development of any nonelderly public housing, has been under judicial
    receivership since 1987. The housing authority is in the midst of
    implementing a 10-year transformation plan, which is a $1.5 billion
    blueprint for rebuilding or rehabilitating 25,000 units of public housing—
    enough for every leaseholder as of October 1999—and transforming
    isolated public housing sites into mixed-income communities. The housing
    authority has also received revitalization grants for the following sites:
    Cabrini-Green (fiscal year 1994), ABLA (fiscal years 1996 and 1998), Robert
    Taylor (fiscal years 1996 and 2001), Madden/Wells/Darrow (fiscal year
    2000), and Rockwell Gardens (fiscal year 2001).

    Appendix IV
    Site Visit Summaries
    Page 86
    GAO-03-555 HUD's Management of the HOPE VI Program
    Figure 17: Time Line for Henry Horner Homes
    Note: This time line is based on GAO analysis of data provided by the Chicago Housing Authority.
    Background
    Henry Horner Homes, completed in 1957, and Henry Horner Extension,
    completed in 1961, consisted of a combination of high-rise and mid-rise
    buildings containing 1,659 units (see fig. 17). Henry Horner Homes is
    adjacent to the United Center, the arena where the Chicago Bulls play, and
    is located about 1.5 miles from Chicago’s central business district. At the
    time that the housing authority applied for the grant, the units targeted for
    revitalization had broken windows and doors, sewage backups, insect and
    1991
    1992
    1997
    1993
    1994
    1995
    1996
    1998
    1999
    2000
    2001
    2002
    2003
    2004
    2005
    2006
    Source: GAO.
    December:
    Projected
    completion
    of new
    construction
    Henry Horner high-rise awaiting demolition.
    May:
    Lawsuit filed
    by residents
    September:
    Amended consent
    decree signed
    August:
    Grant
    agreement
    executed
    February:
    Second
    court order
    January:
    Start of new
    construction
    May:
    Revitalization plan
    conditionally
    approved by HUD
    December:
    Revitalization
    plan submitted
    December:
    First
    court order
    August:
    Revitalization
    grant awarded
    December:
    Projected
    completion
    of relocation
    and demolition

    Appendix IV
    Site Visit Summaries
    Page 87
    GAO-03-555 HUD's Management of the HOPE VI Program
    rodent infestation, and missing window child guards. The violent crime
    rates were three to eight times higher than those for Chicago as a whole,
    and the vacancy rate in the targeted area was about 50 percent. The
    Chicago Housing Authority was awarded a $400,000 HOPE VI planning
    grant for Henry Horner and two other sites in fiscal year 1995.
    Revitalization and
    Community and Supportive
    Services Plans
    In addition to the $18.4 million revitalization grant, the housing authority
    was awarded a $2.3 million HOPE VI demolition grant for Henry Horner in
    fiscal year 2000. The total projected budget for the project is $78 million
    and includes other public housing funds, equity from low-income housing
    tax credits, and state and city funds. The revitalization plan calls for the
    construction of 764 new units on-site—271 public housing units, 132
    affordable units (80 tax credit rental units and 52 homeownership units),
    and 361 market-rate units (114 rental units and 247 homeownership units).
    These units will be constructed in three phases. The housing authority has
    set aside almost $30,000 of the HOPE VI revitalization grant funds for
    community and supportive services. Although this amount is small, the
    housing authority plans to submit a community and supportive services
    plan for Henry Horner.
    Current Status
    Over 600 of the planned 1,197 units have been demolished. According to the
    housing authority, the revitalization plans were developed in such a way as
    to minimize the temporary relocation of current residents. After the first of
    three phases of construction is completed, most of the remaining 176
    households will be relocated to the new units. Construction on the first
    phase of units began in January 2003. The first units are expected to be
    ready for occupancy by the end of 2003. The authority and the Horner
    Resident Committee are currently negotiating the relocation notices that
    will go out to the residents. The remaining buildings will be demolished on
    a schedule negotiated with the Horner Resident Committee.
    Factors Contributing to
    Current Status
    The redevelopment of Henry Horner was delayed for 4 years by legal
    actions. In 1991, the Henry Horner Mothers Guild filed a suit against the
    Chicago Housing Authority and HUD alleging, among other things, that
    Henry Horner had been “de facto” demolished without obtaining HUD or
    local government approval or providing replacement housing. The case
    was settled in September 1995 when an amended consent decree was
    signed. After the housing authority was awarded a HOPE VI revitalization

    Appendix IV
    Site Visit Summaries
    Page 88
    GAO-03-555 HUD's Management of the HOPE VI Program
    grant for Henry Horner in 1996, the Henry Horner plaintiffs raised concerns
    about the revitalization plans, including the number of replacement public
    housing units, which delayed the project and ultimately resulted in two
    subsequent court orders, issued in December 1999 and February 2000. As a
    result of these legal decisions, the Chicago Housing Authority is required to
    designate 220 units or 35 percent of the total units, whichever is greater, as
    very low-income units. Also, any decisions regarding the revitalization of
    Henry Horner are subject to the approval of the plaintiffs’ counsel and the
    Horner Resident Committee.
    Because any remaining work at Henry Horner is subject to approval by the
    Horner plaintiffs’ counsel and the Horner Resident Committee, decision-
    making has been slow. According to housing authority officials, it took the
    Henry Horner Working Group—which includes the Horner Resident
    Committee and the Horner plaintiffs’ counsel—about 2 years to develop the
    revitalization plan and issue a request for qualifications for a developer. It
    took another 4 months after the request for qualifications was issued to
    select a developer.

    Appendix IV
    Site Visit Summaries
    Page 89
    GAO-03-555 HUD's Management of the HOPE VI Program
    Herman Gardens,
    Detroit, Michigan
    The Detroit Housing Commission was awarded a $24.2 million HOPE VI
    revitalization grant for Herman Gardens in October 1996 (see fig. 18).
    Construction has not yet begun, and HUD notified the housing commission,
    for the second time, in March 2002 that it was in default of its grant
    agreement. The housing commission previously had been awarded
    revitalization grants for Jeffries Homes (fiscal year 1994) and Parkside
    Homes (fiscal year 1995).
    Figure 18: Time Line for Herman Gardens
    Note: This time line is based on GAO analysis of data provided by the Detroit Housing Commission.
    '96
    1997
    1998
    1999
    2000
    2001
    2002
    2003
    2004
    2005
    2006
    2007
    Sources: GAO (except the left photo, which is printed with the permission of the Detroit Housing Commission).
    September:
    Projected completion
    of new construction
    October:
    Revitalization
    grant
    awarded
    June:
    Relocation
    completed
    April:
    Demolition
    completed
    December:
    Supplement to
    revitalization
    plan submitted
    January:
    Projected
    start of new
    construction
    August:
    Revitalization
    plan submitted
    March:
    Second
    default
    notice
    August:
    CSS plan
    approved
    by HUD
    June:
    CSS plan
    submitted
    October:
    Grant
    agreement
    executed
    Herman Gardens prior to demolition.
    Vacant Herman Gardens site.
    March:
    First
    default notice

    Appendix IV
    Site Visit Summaries
    Page 90
    GAO-03-555 HUD's Management of the HOPE VI Program
    Background
    Herman Gardens, built in 1943, originally consisted of 2,144 units on 160
    acres (see fig. 18). Problems at the site included structural decay,
    deterioration of underground utility systems, rodents, and hazardous
    materials contamination. The Detroit Housing Commission received a
    $400,000 HOPE VI planning grant for Herman Gardens and two other sites
    in fiscal year 1995.
    Revitalization and
    Community and Supportive
    Services Plans
    In addition to the $24.2 million revitalization grant, the Detroit Housing
    Commission was awarded, in fiscal years 1998 and 1999, $3.8 million in
    HOPE VI demolition funds for Herman Gardens. The total projected budget
    for the revitalization of the site is $232 million and includes other public
    housing funds, equity from low-income housing tax credits, and city funds.
    The revitalization plan calls for 804 units—470 rental units (including 258
    public housing units) and 334 homeownership units. Other elements of the
    plan include construction of a regional athletic facility on the site and
    construction of 250,000 square feet of institutional space for a new
    community college.
    Of the $24.2 million revitalization grant, the housing commission has
    budgeted $3.5 million for community and supportive services. The
    community and supportive services plan, which was approved in August
    2001, focuses on case management; employment and training; youth and
    senior services and activities; and partnerships to address job readiness,
    placement, and retention.
    Current Status
    Relocation and demolition have been completed (see fig. 18). As of March
    2002, the Detroit Housing Commission had not submitted a revitalization
    plan for Herman Gardens. Therefore, HUD notified the housing
    commission on March 15, 2002, that it was in default of its grant agreement
    and needed to submit a default resolution plan to avoid losing its grant. As
    part of the default resolution plan, HUD required the commission to meet a
    number of requirements, including submitting a revitalization plan and
    obtaining firm financial commitments from the city. The Detroit Housing
    Commission submitted its revitalization plan for Herman Gardens to HUD
    in August 2002 and submitted a supplement to the plan in December 2002.
    In September 2002, the city council passed a resolution committing $22
    million to the Herman Gardens project. As of April 2003, HUD had not lifted
    the default status or approved the revitalization plan. According to a

    Appendix IV
    Site Visit Summaries
    Page 91
    GAO-03-555 HUD's Management of the HOPE VI Program
    housing commission official, the revitalization plan states that construction
    is scheduled to begin in January 2004.
    However, the housing commission has already formed a number of
    partnerships to provide community and supportive services to Herman
    Gardens residents. These services include training in retail sales,
    computers, manufacturing, and child care. Additionally, 18 different unions
    have formed a partnership that offers a preapprenticeship program.
    Factors Contributing to
    Current Status
    Due to management changes, the Detroit Housing Commission developed
    several different plans for Herman Gardens. The first plan was developed
    prior to the grant award and called for 672 units of public housing. Before
    that plan was formally submitted to HUD, the executive director
    responsible for the plan left the housing commission and was replaced by
    an interim executive director. By February 1999, the interim executive
    director had developed a second plan, which proposed a combination of
    public and market-rate housing as well as a golf course. After a new
    executive director was hired, the housing commission proposed a third
    development concept. Although never submitted as a formal revitalization
    plan, the concept called for a mixed-use, mixed-income development on
    the site.
    Problems at one of Detroit’s other HOPE VI projects also contributed to
    delays at Herman Gardens. According to a housing commission official,
    HUD visited all three of its grant sites shortly after the commission
    developed the second plan for Herman Gardens in February 1999. During
    the visit, HUD recommended that the commission cease work at Herman
    Gardens and Jeffries Homes until problems at Parkside Homes were
    addressed. The Parkside Homes project was over budget and behind
    schedule. Additionally, once work resumed at Herman Gardens and Jeffries
    Homes, the Jeffries Homes project seemed to be more of a priority for
    HUD, according to a commission official.
    According to commission and local HUD officials, being part of city
    government has also affected the pace of progress on the project. Until
    recently, all of the commission’s contracts had to be approved by the city
    council. Currently, only contracts related to the disposition of land upon
    which public housing is situated are subject to city council approval. The
    commission also has to go through the city to hire staff. According to a
    commission official, the commission is in the process of seeking the
    authority to hire its own staff.

    Appendix IV
    Site Visit Summaries
    Page 92
    GAO-03-555 HUD's Management of the HOPE VI Program
    Because it never formally submitted a revitalization plan for Herman
    Gardens, HUD notified the Detroit Housing Commission in March 2000 that
    it was in violation of its grant agreement. In December 2000, HUD issued a
    letter to the housing commission requiring it to develop a default resolution
    plan. The two parties agreed that the housing commission would submit
    biweekly progress reports on Herman Gardens. When HUD found these
    biweekly reports to be inadequate, it notified the housing commission
    again in March 2002 that it was in default of its grant agreement. In the
    letter, HUD stated that it had been 52 months since the grant was awarded
    and no substantial progress had occurred.

    Appendix IV
    Site Visit Summaries
    Page 93
    GAO-03-555 HUD's Management of the HOPE VI Program
    Hollander Ridge,
    Baltimore, Maryland
    The Housing Authority of Baltimore City received a $20 million HOPE VI
    revitalization grant in October 1996 for Hollander Ridge (see fig. 19).
    Project activity was brought to a standstill by a series of legal actions, and
    the funds were ultimately transferred to another public housing site in the
    city of Baltimore. The housing authority will be selling the Hollander Ridge
    property to the city upon HUD approval. Additionally, the housing authority
    has completed construction at two HOPE VI sites—Lafayette Courts (fiscal
    year 1994) and Lexington Terrace (fiscal year 1995)—and is administering
    four additional HOPE VI grants as follows: Homeownership Demonstration
    (fiscal year 1994), Murphy Homes and Julian Gardens (fiscal year 1997),
    Flag House Courts (fiscal year 1998), and Broadway Homes (fiscal year
    1999).

    Appendix IV
    Site Visit Summaries
    Page 94
    GAO-03-555 HUD's Management of the HOPE VI Program
    Figure 19: Time Line for Hollander Ridge
    Note: This time line is based on GAO analysis of data provided by the Housing Authority of Baltimore
    City.
    Background
    Hollander Ridge was built in 1976 and was located on 60 acres at the
    eastern edge of Baltimore City. Hollander Ridge was once the public
    housing of choice, but over time became one of the most distressed
    communities in the housing authority’s portfolio. The property had over
    1,000 units of family and elderly public housing. By the late 1990s, only half
    of the units were occupied, and the crime rate soared above the rates of
    Baltimore’s other public housing sites. Additionally, Hollander Ridge
    suffered from significant deferred maintenance, extensive site problems,
    1996
    1997
    1998
    1999
    2000
    2001
    Sources: GAO (except the left photo, which is printed with the permission of the Housing Authority of Baltimore City).
    November:
    Federal legislation
    enacted allowing
    Hollander Ridge
    funds to be
    used for
    Claremont
    Homes
    June:
    Partial consent decree
    approved by U.S. District Court
    October:
    Revitalization grant awarded
    January:
    American Civil Liberties Union
    writes HUD concerning its legal
    objections to revitalization plans
    August:
    Grant agreement executed
    January:
    U.S. District
    Court grants
    housing
    authority's
    motion to amend
    partial consent
    decree allowing
    construction of
    senior village at
    Hollander Ridge
    September:
    Revitalization
    plan submitted
    April:
    Relocation
    completed;
    demolition
    started
    July:
    Fourth Circuit
    Federal Appeals
    Court overturns
    District Court's
    decision;
    HUD declares
    Hollander Ridge
    grant in default
    February:
    Housing authority
    proposes reuse of
    Hollander Ridge funds;
    demolition completed
    Hollander Ridge prior to demolition.
    Vacant Hollander Ridge site.

    Appendix IV
    Site Visit Summaries
    Page 95
    GAO-03-555 HUD's Management of the HOPE VI Program
    and the deterioration of infrastructure and major building systems (see fig.
    19). Because of its isolation, the site’s residents had little access to public
    transportation and lacked nearby shopping and employment opportunities.
    The Housing Authority of Baltimore City received a $700,000 HOPE VI
    planning grant for Hollander Ridge and one other site in fiscal year 1995.
    Current Status
    Federal legislation was passed in November 2001 that enabled the housing
    authority to transfer its HOPE VI funds for Hollander Ridge to Claremont
    Homes. The revitalization plans for Claremont Homes, which are in the
    preliminary stages, call for the demolition of all existing low-rise buildings
    and the construction of a new mixed-income development. The housing
    authority plans to reserve 73 units at the Claremont Homes site for former
    Hollander Ridge residents. However, according to the housing authority,
    the legislation enacted in November 2001 that allowed the housing
    authority to transfer the Hollander Ridge funds to the site must be amended
    before any of the plans to revitalize Claremont Homes can be implemented.
    The legislation currently only allows for the rehabilitation of Claremont
    Homes. As a result of third-party master planning, the housing authority
    determined that rehabilitation is not financially feasible; therefore, housing
    authority officials intend to ask Maryland’s congressional delegation to
    propose an amendment to the federal legislation that would allow
    demolition and new construction to occur at the site. Concurrence will be
    sought from the American Civil Liberties Union (ACLU)—the
    representative of the residents. The authority has submitted a disposition
    application to HUD for approval to sell the Hollander Ridge site to the city
    of Baltimore.
    Factors Contributing to
    Current Status
    Legal actions and community opposition halted progress at Hollander
    Ridge and ultimately led to the transfer of the HOPE VI funds to Claremont
    Homes. In 1995, six public housing families, represented by the ACLU, filed
    suit against the Housing Authority of Baltimore City and HUD alleging that
    they had engaged in racial and economic segregation through site selection
    and development of public housing in Baltimore City since 1937. On June
    25, 1996, the parties entered into a partial consent decree, which was
    approved by a United States District Court Judge. Among other things, this
    decree provides that the housing authority “will not seek public housing
    funds from HUD for public housing construction or acquisition with
    rehabilitation in Impacted Areas.” The Hollander Ridge site is located in an
    impacted area, with a high concentration of low-income housing and a high
    percentage of minority populations.

    Appendix IV
    Site Visit Summaries
    Page 96
    GAO-03-555 HUD's Management of the HOPE VI Program
    The housing authority’s original plan was to modernize Hollander Ridge by
    reducing its density through demolition and reconfiguration of existing
    units and upgrading the housing units and amenities. This plan was
    consistent with the terms of the partial consent decree, and HUD had
    awarded the HOPE VI grant on the basis of this plan. However, the adjacent
    community resisted plans to place any type of public housing back on the
    site. Community residents had long complained about the site’s high crime
    rate and its effect on nearby property values. In response to the local
    opposition, the housing authority decided to abandon plans to rebuild
    family public housing at Hollander Ridge.
    The housing authority and the community agreed to a subsequent plan to
    demolish all of the existing public housing units and replace them with
    facilities for seniors. The plan called for a senior village, which would
    provide affordable housing as well as community-based health and
    wellness programs for low- to moderate-income seniors. All 1,000 units
    would be demolished, and 450 senior units would be built on-site, 225 of
    which would be designated as public housing. The housing authority also
    agreed to build a $1.2 million fence around the entire Hollander Ridge site.
    Because the plans for a senior village would violate sections of the partial
    consent decree and residents would be displaced, the ACLU maintained
    strict opposition to the senior village concept. Nevertheless, the housing
    authority sought a modification to the decree that would allow the
    development of public housing on the Hollander Ridge site. In January
    1999, the U.S. District Court approved this request. On July 8, 2000,
    Hollander Ridge was imploded. Just a few days later, the Fourth Circuit
    Court of Appeals, responding to an ACLU appeal, reversed the District
    Court’s order. On July 31, 2000, HUD declared the grant to be in default.
    Federal legislation enacted in November 2001 allowed the housing
    authority to transfer the funds to its Claremont Homes site. As shown in
    figure 19, Hollander Ridge remains a vacant lot.

    Appendix IV
    Site Visit Summaries
    Page 97
    GAO-03-555 HUD's Management of the HOPE VI Program
    Jackson Parkway,
    Holyoke,
    Massachusetts
    The Holyoke Housing Authority received a $15 million HOPE VI
    revitalization grant in October 1996 for Jackson Parkway (see fig. 20). Fifty-
    one of the 272 planned units have been completed.
    Figure 20: Time Line for Jackson Parkway
    Note: This time line is based on GAO analysis of data provided by the Holyoke Housing Authority.
    Background
    Jackson Parkway was built in 1943 and contained 219 units on a 12.5-acre
    site in the Churchill section of Holyoke (see fig. 20). According to housing
    authority officials, the apartments and their residents were isolated from
    '96
    1997
    1998
    1999
    2000
    2001
    2002
    2003
    2004
    2005
    2006
    Sources: GAO (except the left photo, which is printed with the permission of the Holyoke Housing Authority).
    April:
    Projected
    completion of
    new construction
    October:
    Revitalization
    grant
    awarded
    March:
    CSS plan
    approved by
    HUD;
    revitalization
    plan submitted
    January:
    Relocation
    completed
    October:
    Start of new
    construction
    December:
    Projected
    completion
    February:
    of demolition
    Revitalization plan
    approved by HUD
    August:
    Grant
    agreement
    executed
    February:
    CSS plan
    submitted
    Jackson Parkway prior to demolition.
    New rental units.

    Appendix IV
    Site Visit Summaries
    Page 98
    GAO-03-555 HUD's Management of the HOPE VI Program
    the economic and social fabric of the surrounding community. In addition,
    the units were run-down and unappealing. The immediate neighborhood
    adjacent to Jackson Parkway was marked by abandoned, obsolete, and
    vacant buildings and was affected by drug dealing and vandalism. The
    Churchill neighborhood formerly was a residential center for mill workers
    and other laborers. However, by the 1990 census, the neighborhood’s
    residents had a 50 percent school drop-out rate and only 37 percent
    participated in the workforce. Because Jackson Parkway contained almost
    25 percent of all residential units in the Churchill neighborhood, its
    revitalization was seen as pivotal to the success of future improvements in
    the area.
    Revitalization and
    Community and Supportive
    Services Plans
    The revitalization of Jackson Parkway is estimated to cost around $47
    million—which includes other public housing and HUD funds, other
    federal funds, and equity from low-income housing tax credits—and will
    occur in three phases. The first phase will consist of the demolition of 219
    units and a 42-unit elderly complex and the construction of 50 public
    housing units, 60 homeownership units, a park, a community center, and a
    maintenance facility. The second phase will consist of the rehabilitation of
    two, five-story walkups, which will result in 39 public housing units, and
    the construction of 11 new public housing units. In the third phase, 112
    units will be rehabilitated or constructed in the surrounding neighborhood.
    The new community will be called Churchill and Oakhill Homes.
    Of the $15 million revitalization grant, $700,000 has been set aside for
    community and supportive services. The focus of the community and
    supportive services plan, approved in March 1998, is to implement a
    comprehensive on-site service delivery system to coordinate existing
    health and human services with innovative educational and employment
    opportunities. The Holyoke Housing Authority plans to partner with
    numerous schools, universities, churches, career development
    organizations, libraries, and the Chamber of Commerce to implement its
    self-sufficiency programs.
    Current Status
    Of the 272 total units to be rehabilitated or constructed, 51 have been
    completed. The 50 new public housing units planned for phase one were
    built and fully occupied in summer 2002 (see fig. 20). Additionally, all
    planned phase one demolition has been completed. The community
    buildings are in the design phase, and work on the community park has
    begun and is expected to be completed by summer 2003. One model

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    Site Visit Summaries
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    GAO-03-555 HUD's Management of the HOPE VI Program
    homeownership unit has been completed. Also, 270 applications to
    purchase the 60 homeownership units have been received.
    Selective demolition has begun for phase two—the rehabilitation of two,
    five-story walkups. Additionally, land has been cleared and footings and
    foundation walls have been set. These units are to be completed in the fall
    of 2003. The housing authority is working with the Catholic Diocese of
    Springfield and Habitat for Humanity to build new homeownership units on
    one complete city block. This will be the third and final phase of the
    revitalization.
    By the spring of 2000, a resident services department was established and
    operating to address the needs of former Jackson Parkway residents. Each
    Jackson Parkway resident was assessed by one of three case managers,
    who help residents to find employment, acquire GEDs, take English as a
    Second Language courses, and receive homeownership counseling.
    Factors Contributing to
    Current Status
    Several factors contributed to delays early in the revitalization process.
    Because Jackson Parkway was the authority’s first experience with the
    HOPE VI program, its staff had to overcome an initial learning curve. For
    example, the staff had to learn about real estate development and low-
    income housing tax credits and about how to work with developers. Also,
    HUD’s Inspector General charged the housing authority with procurement
    violations related to the selection of its first developer. According to HUD
    officials, they placed procurement review restrictions on the authority
    because of the lack of sufficient in-house procurement expertise. These
    restrictions delayed the authority’s ability to obtain an infrastructure
    contractor and a developer for the site. One housing authority official
    estimated that the procurement charges delayed the progress of the grant
    by 1 year.
    Additionally, approval of key documents took longer than expected. For
    example, approval of the revitalization plan took 23 months and approval
    of the mixed-finance proposal for the first phase took 6 months. The
    housing authority has had seven different HUD HOPE VI grant managers
    since 1996, and staff believe that this frequent rotation caused temporary
    disconnects that resulted in delays.

    Appendix IV
    Site Visit Summaries
    Page 100
    GAO-03-555 HUD's Management of the HOPE VI Program
    Lamokin Village,
    Chester, Pennsylvania
    The Chester Housing Authority was awarded a $14.9 million HOPE VI
    revitalization grant in October 1996 for Lamokin Village (see fig. 21).
    Construction is complete, and all 150 units are occupied. Since 1994, the
    housing authority has been under judicial receivership resulting from a
    resident lawsuit concerning distressed housing conditions. The housing
    authority also was awarded a fiscal year 1998 HOPE VI revitalization grant
    for Wellington Ridge.
    Figure 21: Time Line for Lamokin Village
    Note: This time line is based on GAO analysis of data provided by the Chester Housing Authority.
    1996
    1997
    1998
    1999
    2000
    2001
    2002
    October:
    Revitalization
    grant awarded
    September:
    Revitalization
    plan submitted
    July:
    Grant
    agreement
    executed
    November:
    CSS plan
    submitted
    December:
    CSS plan
    approved
    by HUD
    July:
    Revitalization
    plan approved
    by HUD
    September:
    Relocation
    completed
    July:
    Start of new
    construction
    June:
    Senior
    building
    completed
    September:
    Demolition
    completed
    June:
    Rental
    units
    completed
    Sources: GAO (except the left photo, which is printed with the permission of the Chester Housing Authority).
    Lamokin Village prior to demolition.
    Chatham Estates (formerly Lamokin Village).

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    Site Visit Summaries
    Page 101
    GAO-03-555 HUD's Management of the HOPE VI Program
    Background
    Lamokin Village was built in the early 1940s and consisted of 38, two- and
    three-story buildings, totaling 350 units. The site suffered from substantial
    deterioration; major system problems, such as piping leaks and water table
    problems; and poor site conditions (see fig. 21). The site also had
    significant design problems due to its dense, maze-like building
    configuration with no interior streets. According to the Chester Housing
    Authority, Chester has been a distressed community for decades. About 56
    percent of the population of Chester receives some form of government
    assistance, and HUD has ranked Chester as the most depressed city of its
    size in the United States. The housing authority was awarded a fiscal year
    1995 HOPE VI planning grant for Lamokin Village and one other site as a
    part of the overall recovery plan for the city.
    Revitalization and
    Community and Supportive
    Services Plans
    The total amount budgeted for the redevelopment of Lamokin Village is $27
    million, which includes other public housing funds and equity from low-
    income housing tax credits. The revitalization plan for Lamokin Village,
    renamed Chatham Estates, calls for three phases: (1) 22 new residential
    buildings with a mix of 110 one-story and duplex row homes, (2) a 40-unit
    senior building, and (3) 30 off-site homeownership units. All existing units
    in Lamokin Village were to be demolished.
    Of the $14.9 million revitalization grant, the housing authority budgeted
    about $1.2 million for community and supportive services. The community
    and supportive services plan, approved in December 1997, proposes a
    comprehensive welfare-to-work strategy designed to cultivate the
    economic self-sufficiency of Lamokin Village residents. Specific plans
    include the establishment of a “one-stop shop” for social services, a
    community center and educational facility to be built on-site, and a
    comprehensive evaluative component that will examine the impact of
    HOPE VI on the Chester community.
    Current Status
    The 150 units, including the 40-unit senior building, planned for phases one
    and two are 100 percent complete and occupied (see fig. 21). Thirty-eight
    former residents returned to the family rental units, and 21 former
    residents moved to the senior building. The third phase of the plan is being
    transferred to the housing authority’s fiscal year 1998 HOPE VI
    revitalization grant.

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    Site Visit Summaries
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    GAO-03-555 HUD's Management of the HOPE VI Program
    The authority did establish an interagency “one-stop shop” in 1998 that is
    used as the coordinating point for all programs and partners servicing the
    authority’s residents. The shop is located in the Chester Crozier Hospital,
    along with various other social service agencies. For example, the Chester
    Education Foundation provides an employment program at the hospital.
    The authority has also included a family self-sufficiency component, which
    is optional for residents and provides services such as case management,
    computer hardware and software training, van transportation,
    homeownership training, and entrepreneurial training. The supportive
    services funding was expended before construction of the community and
    educational center could begin; the authority is currently trying to raise
    additional funding for this center. Finally, Widener University’s School of
    Social Work has been evaluating impacts and outcomes of HOPE VI
    initiatives in Chester since 1997.
    Factors Contributing to
    Current Status
    In 1994, the Chester Housing Authority was placed on HUD’s troubled
    status list after receiving an extremely low evaluation score. During this
    same period, a federal judge appointed a federal court receiver for the
    housing authority in an effort to transform the authority. The receivership
    is scheduled to end in June 2003. According to officials at the local HUD
    field office, the receiver has brought about many positive changes for the
    housing authority and its residents, including the two HOPE VI
    revitalization grants. In 2002, the authority received a high evaluation
    score, placing it in HUD’s high-performer category. The receiver ensured
    that the authority had the proper staffing and knowledge to administer its
    HOPE VI grants. Additionally, the authority brought the president of the
    resident council on staff, helping to rebuild the relationship between the
    authority and its residents. The receiver also created a separate police
    force to increase the safety and security of the authority’s public housing
    sites, the lack of which had been a major complaint of former residents.
    Finally, during the receivership, all of Chester’s public housing family units
    have either been demolished or rehabilitated.
    Relying primarily on public housing funds simplified the development
    process. Tax credit equity was only used to finance the construction of the
    40-unit senior building. The remainder of the redevelopment was financed
    by HOPE VI and other public housing funds. In addition, the housing
    authority elected to act as its own developer of the family units. Finally, all
    units were constructed on-site, thus the housing authority did not have to
    purchase additional property.

    Appendix IV
    Site Visit Summaries
    Page 103
    GAO-03-555 HUD's Management of the HOPE VI Program
    North Beach, San
    Francisco, California
    The San Francisco Housing Authority was awarded a $20 million HOPE VI
    revitalization grant for North Beach in October 1996. Construction at the
    site did not begin until November 2002 (see fig. 22). The housing authority
    has also completed three sites with two HOPE VI revitalization grants—
    Bernal/Plaza (fiscal year 1993) and Hayes Valley (fiscal year 1995)—and
    construction at its Valencia Gardens site (fiscal year 1997) is scheduled to
    begin later this year.
    Figure 22: Time Line for North Beach
    Note: This time line is based on GAO analysis of data provided by the San Francisco Housing
    Authority.
    1996
    1997
    1998
    1999
    2000
    2001
    2002
    2003
    2004
    Source: GAO.
    December:
    Projected
    completion
    of new
    construction
    North Beach prior to demolition.
    Vacant North Beach site.
    October:
    Revitalization
    grant awarded
    February:
    Grant
    agreement
    executed
    December:
    Revitalization
    plan submitted
    June:
    Revitalization
    plan
    approved
    by HUD
    March:
    CSS plan
    submitted
    May:
    CSS plan
    approved
    by HUD
    November:
    Start of new
    construction
    October:
    Relocation
    completed
    January:
    Demolition
    completed

    Appendix IV
    Site Visit Summaries
    Page 104
    GAO-03-555 HUD's Management of the HOPE VI Program
    Background
    Located adjacent to Fisherman’s Wharf and surrounding the historic cable
    car turnaround, North Beach is situated in the heart of San Francisco’s
    tourist attractions. The site is surrounded by a busy, densely built, vibrant
    neighborhood that is well-served by public transportation, schools,
    shopping, and services. However, North Beach itself has been a pocket of
    poverty, with residents earning, on average, only 17 percent of area median
    income. The site was built in 1952 and consisted of 13 concrete buildings
    with 229 walk-up units, which filled two city blocks (see fig. 22). It was
    poorly designed with large amounts of indefensible space that became
    havens for criminal activity. Due to repeated earthquake stress, the
    buildings were weakening and had substandard major systems, including
    sewer and plumbing. A $400,000 HOPE VI planning grant awarded in fiscal
    year 1995 for North Beach funded a study of the site. The study determined
    that due to the dilapidated condition of the site and the high crime rate in
    the area, complete neighborhood revitalization would be essential to any
    redevelopment plan.
    Revitalization and
    Community and Supportive
    Services Plans
    In addition to the $20 million revitalization grant, the San Francisco
    Housing Authority was subsequently awarded a $3.2 million HOPE VI
    demolition grant for the North Beach site in fiscal year 2001. The total
    projected budget is $106 million—up from the $69 million estimated in
    1996—and includes other public housing funds, other HUD funds, other
    federal funds, and equity from low-income housing tax credits. The
    revitalization plans call for 341 units. The 341 units will be divided as
    follows:
    • 229 public housing units, which will be a one-for-one replacement for
    the units that were demolished on both the east and west blocks and
    • 112 rental apartments for families with incomes below 50 percent of the
    city median income.
    Also included in the plans are a parking garage for 323 cars and commercial
    and retail space surrounding the cable car turnaround area.
    Approximately $1.5 million of the revitalization grant was set aside for
    community and supportive services. This service component was created
    to provide residents with opportunities to achieve self-sufficiency through
    education, employment, and entrepreneurship. The community and
    supportive services plan, approved in May 2001, calls for a commitment to

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    Site Visit Summaries
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    GAO-03-555 HUD's Management of the HOPE VI Program
    lifelong education that includes the development of basic intellectual skills,
    specific training for particular types of employment, and a focus on life
    skills such as parenting.
    Current Status
    Relocation, abatement, and demolition of both the east and west blocks has
    been completed (see fig. 22). California awarded the authority $55 million
    in tax credits in the spring of 2002 for the North Beach site, the largest
    award in California history. With this additional funding, the housing
    authority was able to begin construction at the site in November 2002.
    About half of all residents currently participate in community and
    supportive services. Participants create an individual plan with a case
    manager, who then directs the resident to the various services offered, such
    as employment assistance, computer, and English as a Second Language
    classes. Additionally, 30 residents from North Beach are enrolled in the
    housing authority’s family self-sufficiency program. Program participation
    enables each household to receive up to $1,200 for training in various
    trades.
    Factors Contributing to
    Current Status
    According to housing authority officials, the primary factor contributing to
    delays at North Beach was resident resistance. To address resident
    concerns regarding relocation, a former executive director initially
    promised residents that the redevelopment would occur in two phases,
    which meant that they would not have to be relocated off-site. However,
    the housing authority later determined that this option would be too
    expensive, and that the residents would have to be relocated off-site so that
    redevelopment could occur all at once. The residents were not happy with
    this decision and were very reluctant to move out of their apartments.
    Funding shortfalls have also contributed to delays at the North Beach site.
    San Francisco’s original HOPE VI application requested $30 million to
    complete the revitalization of North Beach. Because HUD only awarded
    them $20 million, making up the difference has been difficult. The authority
    had to add 112 units to the plan in order to convince the city to provide $10
    million in funding assistance. According to housing authority officials, now
    that the project has been awarded $55 million in tax credits, the pace of the
    redevelopment should accelerate.
    Administering over $118 million in HOPE VI funds for five sites
    simultaneously has been challenging for the authority’s staff. The housing

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    Site Visit Summaries
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    GAO-03-555 HUD's Management of the HOPE VI Program
    authority has a history of management and financial problems that have
    affected its redevelopment efforts. HUD took over the housing authority in
    1996 after the Mayor of San Francisco requested HUD’s assistance. The
    authority had managerial problems, high crime at its public housing
    developments, and problems with the physical condition of its housing
    stock. After implementing new policies and procedures and reorganizing
    the housing authority, HUD returned it to local control in 1997. Several
    years after the housing authority was returned to local control, it developed
    financial difficulties and again sought HUD’s assistance. HUD continues to
    monitor and provide assistance to the housing authority.
    Another factor that delayed the North Beach redevelopment was
    environmental problems on-site. Half of the units contained lead paint and
    asbestos, and the site’s soil had some arsenic, mercury, zinc, and lead
    contamination (due to the site’s early industrial history). As a result, the
    city required additional environmental reviews before it gave its approval
    to begin construction.

    Appendix IV
    Site Visit Summaries
    Page 107
    GAO-03-555 HUD's Management of the HOPE VI Program
    Riverview and
    Lakeview Terraces,
    Cleveland, Ohio
    The Cuyahoga Metropolitan Housing Authority was awarded a $29.7
    million HOPE VI revitalization grant for Riverview and Lakeview Terraces
    in October 1996 (see fig. 23). Although the housing authority has completed
    relocation and demolition, the rehabilitation of units at Lakeview has been
    slow, and little progress has been made with the construction of new units
    at Riverview. The housing authority has been awarded two other HOPE VI
    revitalization grants: a $50 million grant in fiscal year 1993 for Outhwaite
    Homes/King Kennedy, which is complete, and a $21 million grant in fiscal
    year 1995 for the Carver Park site.
    Figure 23: Time Line for Riverview and Lakeview
    Note: This time line is based on GAO analysis of data provided by the Cuyahoga Metropolitan
    Housing Authority.
    '96
    1997
    1998
    1999
    2000
    2001
    2002
    2003
    2004
    2005
    2006
    2007
    Sources: GAO (except the left photo, which is printed with the permission of the Cuyahoga Metropolitan Housing Authority).
    October:
    Revitalization
    grant
    awarded
    January:
    Revitalization
    plan
    submitted
    June:
    Revised revitalization plan
    conditionally approved by HUD
    July:
    CSS plan
    approved by HUD
    November:
    Start of
    renovation
    at Lakeview
    October:
    Projected start
    of new on-site
    construction
    at Riverview
    October:
    Projected
    completion
    of renovation
    at Lakeview
    April:
    CSS plan submitted
    May:
    Demolition at
    Riverview completed
    October:
    Grant
    agreement
    executed
    June:
    Projected
    completion
    of new off-site
    construction
    Riverview and Lakeview prior to renovation.
    Vacant Riverview site; renovation under way at the Lakeview site.
    January:
    Revised revitalization
    plan submitted
    March:
    Relocation at
    Riverview completed
    June:
    Projected
    completion
    of new on-site
    construction
    at Riverview

    Appendix IV
    Site Visit Summaries
    Page 108
    GAO-03-555 HUD's Management of the HOPE VI Program
    Background
    Riverview, completed in 1963, consisted of 143 family units and 501 elderly
    units (see fig. 23).
    5
    Lakeview, completed in 1932, contained 570 family units
    and 214 elderly units. Riverview and Lakeview are neighboring public
    housing sites, which collectively housed 715 elderly units and 713 family
    units. Riverview is on unstable ground, which includes numerous
    sinkholes. Both developments are located in the Ohio City neighborhood,
    home to the West Side Market, which has been in operation since the 1880s
    and attracts around 1 million visitors each year. Due to its age, the
    Lakeview units had many problems, including high lead levels, lack of
    parking, and obsolete underground plumbing and storm lines. In addition,
    the majority of the Lakeview units were one- and two-bedroom units, while
    the local demand is for three-bedroom and larger units.
    Revitalization and
    Community and Supportive
    Services Plans
    The total projected budget for the Riverview/Lakeview revitalization is
    about $112 million, which includes other public housing funds, other
    federal funds, equity from the sale of low-income housing tax credits, bank
    financing, and other local funds. The current revitalization plan calls for 95
    new public housing units, 240 rehabilitated public housing units, and 345
    new market-rate and moderate-income units. For Riverview, there are
    plans to construct 45 public housing units on-site and 50 off-site, to acquire
    54 off-site public housing units, and to construct 228 market-rate and 117
    affordable (tax credit) units. At the Lakeview site, there are plans to
    renovate 186 public housing units and a community center. There are also
    plans for site improvements, including the demolition of garage
    compounds.
    Of the $29.7 million in HOPE VI funds, the housing authority plans to set
    aside $5.8 million for community and supportive services. The goals of its
    community and supportive services plan, approved in July 2000, are to
    track and provide services to Lakeview residents and relocated families
    from Riverview, make all interested residents meet the qualifications for
    moving into the newly renovated units, and help Lakeview and Riverview
    residents make the transition from welfare to work.
    5
    The elderly units were modernized in March 1996 and are not included in the HOPE VI
    revitalization plans.

    Appendix IV
    Site Visit Summaries
    Page 109
    GAO-03-555 HUD's Management of the HOPE VI Program
    Current Status
    The renovation of the first 56 units at the Lakeview site is under way, and
    six units have been completed (see fig. 23). The demolition of the garage
    compounds and rehabilitation work are moving along as scheduled,
    according to the housing authority. The relocation of 98 households and
    demolition of 135 units is complete at the Riverview site (see fig. 23). The
    housing authority has also acquired 54 single-family homes in scattered
    sites, which are fully occupied, but the construction of new units is not
    scheduled to begin until October 2004. In June 2002, the housing authority
    received an award for its plan for the Riverview site from the Congress for
    New Urbanism. The housing authority is in the process of executing a
    development agreement.
    Case management activities are in progress for 343 Riverview and
    Lakeview residents. These residents participate in a range of activities,
    including entrepreneurial and employment training and educational
    programs. The housing authority is also in the process of implementing a
    new system for ensuring that residents can receive the job-training services
    that they need by using vouchers to purchase services.
    Factors Contributing to
    Current Status
    The housing authority was experiencing internal problems when the grant
    was awarded in 1996. The prior administration was not following
    appropriate procurement procedures, according to HUD officials, and the
    former executive director was ultimately convicted for theft of public
    funds, mail fraud, and lying about a loan. A new executive director was
    hired in late 1998, and the housing authority was finally able to focus on the
    HOPE VI grant in 1999.
    The project has also experienced delays due to cost constraints,
    consideration of community and resident input, and problems with the site.
    First, the housing authority requested $40 million to implement its
    revitalization plan, but it was awarded $29.7 million. As a result, it took
    time for the housing authority to obtain other funding. Next, the housing
    authority did not originally plan to put public housing back on the
    Riverview site because the land was sloping and unstable. Due to
    community and resident opposition to this plan, the housing authority
    agreed to put public housing units back on-site. Subsequent analysis by an
    engineering firm revealed that certain areas were stable enough for new
    construction. Similarly, while the housing authority originally planned to
    modernize 12 of the buildings at Lakeview, it later revised these plans to
    include modernization of an additional 66 row-house units.

    Appendix IV
    Site Visit Summaries
    Page 110
    GAO-03-555 HUD's Management of the HOPE VI Program
    Robert S. Jervay Place,
    Wilmington, North
    Carolina
    The Wilmington Housing Authority was awarded an $11.6 million HOPE VI
    revitalization grant for Robert S. Jervay Place (Jervay Place) in October
    1996 (see fig. 24). Relocation and demolition at Jervay Place are complete,
    but construction has been slow to start.
    Figure 24: Time Line for Robert S. Jervay Place
    Note: This time line is based on GAO analysis of data provided by the Wilmington Housing Authority.
    '96
    1997
    1998
    1999
    2000
    2001
    2002
    2003
    2004
    2005
    Sources: GAO (except the left photo, which is printed with the permission of the Wilmington Housing Authority).
    August:
    Projected completion
    of new construction
    Jervay Place prior to demolition.
    New homeownership units.
    October:
    Revitalization
    grant awarded
    April:
    First
    developer
    selected
    August:
    Grant
    agreement
    executed
    May:
    CSS plan
    submitted
    February:
    CSS plan
    approved
    by HUD
    October:
    Relocation
    completed
    November:
    Demolition
    completed
    December:
    Revitalization
    plan submitted
    April:
    Second
    developer
    selected
    October:
    Revitalization
    plan approved
    by HUD
    March:
    Start of new
    construction

    Appendix IV
    Site Visit Summaries
    Page 111
    GAO-03-555 HUD's Management of the HOPE VI Program
    Background
    Jervay Place, constructed in 1951, was made up of 30, two-story, brick
    buildings that housed 250 units on 14 acres of land (see fig. 24). The
    building configuration yielded limited defensible space for each dwelling
    unit and rendered the site vulnerable to criminal activity. The site needed
    renovation, lead-based paint removal, asbestos abatement, and
    modifications for the handicapped. In addition, the resident population
    consisted of young, welfare-dependent, single-parent families.
    Revitalization and
    Community and Supportive
    Services Plans
    The total projected budget for the Jervay Place revitalization is $33 million,
    which includes equity from low-income housing tax credits, other grants,
    and private debt. The revitalization plans called for 190 new units to be
    developed at Jervay Place and surrounding sites in four phases, excluding a
    phase dedicated to the implementation of community and supportive
    services. The construction phases are as follows:
    • construction of 14 for-sale or lease-purchase units on the original site;
    • construction of 60 units and a community center on the original site and
    40 off-site units;
    • construction of 44 for-sale or lease-purchase units on the original site;
    and
    • construction of 32 scattered site for-sale or lease-purchase units.
    Of the 190 new units, 71 would be public housing units, 29 would be
    financed with a combination of low-income housing tax credits and
    project-based Section 8, 28 would be lease-purchase units, and 62 would be
    other subsidized homeownership units. A 7,000-square-foot, commercial-
    retail space will also be constructed on-site, but the housing authority has
    not determined in which phase this will be done.
    Of the $11.6 million in HOPE VI funds, the Wilmington Housing Authority
    planned to set aside $1.5 million for community and supportive services.
    The focus of its service efforts would be transportation, job training and
    placement, education, health care, and child care. The housing authority
    also planned to establish partnerships with local schools and businesses.

    Appendix IV
    Site Visit Summaries
    Page 112
    GAO-03-555 HUD's Management of the HOPE VI Program
    Current Status
    Relocation, demolition, and 4 of the 14 phase one homeownership units
    have been completed, and construction of the next 5 units is under way
    (see fig. 24). For phase two, construction began in November 2002, and tax
    credits have been approved. For phase three, the housing authority is
    working on its homeownership plan. The final phase of construction has
    not begun. The housing authority estimates that all of the units will be
    complete in August 2005.
    HUD approved the housing authority’s community and supportive services
    plan in February 1999. The housing authority administers services through
    its family self-sufficiency program, through which case managers are
    assigned to work with individual households and match them with
    appropriate services. Case managers have worked with participants to
    assist them with their self-sufficiency goals, including working with
    residents to prequalify them to purchase the homes constructed in phase
    one. Residents who wish to return to Jervay Place must be enrolled in this
    program. As of January 2003, 62 of the 132 original residents were enrolled.
    Factors Contributing to
    Current Status
    The procurement of the initial development partner was legally challenged
    by one of the other bidders. According to HUD, a considerable amount of
    time was spent resolving this issue, and HUD’s Office of General Counsel
    ultimately determined the challenge was unfounded. However, the housing
    authority and the initial developer did not work well together, and the
    developer was released in July 1999. A new developer was hired in April
    2001, and HUD assigned an expediter—a private-sector expert in finance,
    real estate development, or community revitalization—to help move the
    project. Both the housing authority and the second developer had to work
    through resistance from the community and residents, who did not
    understand the plans because they were not involved in the planning by the
    previous developer and who were frustrated by the lack of progress at
    Jervay Place, according to housing authority officials. As a result of these
    issues, the housing authority did not submit its revitalization plan until
    December 2000. HUD approved the plan in October 2001.
    According to housing authority officials, revitalization also has been
    adversely affected by the city’s and HUD’s slow approval processes. For
    example, while the city informed the housing authority in August 2001 that
    its site plan had been approved, it was informed in December 2001 that the
    site plan should not have been approved because the setbacks, the space
    between the building area and the property line
    , were incorrect. As a result,

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    Site Visit Summaries
    Page 113
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    the site plans had to be changed and resubmitted to obtain the city’s
    approval. Similarly, housing authority officials stated that HUD’s slow
    approval process has contributed to delays. For example, it took HUD 5
    months to conditionally approve the revitalization plan. In addition,
    housing authority officials stated that they had to take out a line of credit to
    begin construction because HUD was taking too long to make the grant
    funds available. According to HUD, approval could not be completed until
    the housing authority fulfilled several conditions, including submission of a
    mixed-finance proposal, a revised implementation schedule, proposed unit
    designs, and a revised HOPE VI budget. In addition, the HUD grant
    manager assigned to the housing authority was responsible for closing six
    mixed-finance deals as well as reviewing new HOPE VI grant applications
    during this time frame.

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    Site Visit Summaries
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    Robert Taylor Homes
    B, Chicago, Illinois
    The Chicago Housing Authority was awarded a $25 million HOPE VI
    revitalization grant in October 1996 for Robert Taylor Homes B (see fig. 25).
    Relocation and demolition are complete, and approximately one-quarter of
    the planned units have been constructed. The housing authority’s scattered
    site program, which includes the development of any nonelderly public
    housing, has been under judicial receivership since 1987. The authority is in
    the midst of implementing a 10-year transformation plan, a $1.5 billion
    blueprint for rebuilding or rehabilitating 25,000 units of public housing—
    enough for every leaseholder as of October 1999—and transforming
    isolated public housing sites into mixed-income communities. The
    authority was awarded a revitalization grant for Robert Taylor A in fiscal
    year 2001 and has also received grants for the following sites: Cabrini-
    Green (fiscal year 1994), ABLA (fiscal years 1996 and 1998), Henry Horner
    (fiscal year 1996), Madden/Wells/Darrow (fiscal year 2000), and Rockwell
    Gardens (fiscal year 2001).

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    Figure 25: Time Line for Robert Taylor Homes B
    Note: This time line is based on GAO analysis of data provided by the Chicago Housing Authority.
    Background
    The Robert Taylor Homes consisted of over 4,300 units in 28 detached, 16-
    story buildings along Chicago’s State Street corridor, a 4-mile stretch of five
    different public housing sites (see fig. 25). It was the nation’s largest, most
    densely populated public housing enclave. The Robert Taylor Homes were
    divided into two subsites called Robert Taylor A and B. The fiscal year 1996
    HOPE VI revitalization grant is for Robert Taylor B, which was constructed
    between 1959 and 1963, and consisted of 2,400 units spread over 16 high-
    rise buildings. The surrounding neighborhood included many boarded-up
    '96
    1997
    1998
    1999
    2000
    2001
    2002
    2003
    2004
    2005
    2006
    Source: GAO.
    December:
    Projected completion
    of new construction
    Robert Taylor Homes prior to demolition.
    The Langston.
    October:
    Revitalization
    grant awarded
    August:
    Grant
    agreement
    executed
    January:
    Revitalization
    plan submitted
    June:
    CSS plan submitted;
    CSS plan approved by HUD
    January:
    Relocation completed
    March:
    Start of new construction
    October:
    Demolition completed
    December:
    Revitalization plan approved by HUD

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    Site Visit Summaries
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    buildings, vacant lots, and a few small businesses. However, the site also is
    near bus and train services and a technical vocational school.
    Revitalization and
    Community and Supportive
    Services Plans
    In addition to the revitalization grant for Robert Taylor B, the Chicago
    Housing Authority was subsequently awarded a $6.3 million HOPE VI
    demolition grant in fiscal year 2000 and a $13 million HOPE VI demolition
    grant in fiscal year 2001. The total projected budget for the Robert Taylor B
    revitalization is $113 million, which includes other public housing funds,
    other federal funds, conventional debt, and equity from the sale of low-
    income housing tax credits. The revitalization plans call for the demolition
    of 762 units and the construction of 251 public housing units in scattered
    off-site locations throughout the surrounding neighborhoods.
    Of the $25 million revitalization grant, approximately $1.5 million has been
    budgeted for community and supportive services. The community and
    supportive services plan was submitted and approved in June 1998. The
    plan states that the housing authority will provide case managers to
    monitor families’ progress in meeting goals established in self-sufficiency
    plans. The plan also allowed for the housing authority to use a Boys and
    Girls Club to deliver self-sufficiency activities until a community center
    was constructed in 1998. The services provided would include a
    combination of employment; education; and family services, such as child
    care and health care.
    Current Status
    As shown in figure 25, a 116-unit site, referred to as The Langston, has been
    constructed and is at capacity. Twenty-nine of these units are public
    housing units and are occupied by former residents of Robert Taylor A and
    B. The remaining units are a mixture of tax credit and market-rate units.
    Construction of a second site, referred to as The Quincy, is also complete.
    The Quincy has 107 units, including 27 public housing units, which are fully
    occupied. The remaining units are also a mixture of market-rate and tax
    credit units. In February 2003, HUD approved the combination of the 1996
    grant for Robert Taylor B with the 2001 grant for Robert Taylor A for
    planning and implementation purposes as well as the extension of certain
    grant agreement deadlines affecting the 1996 grant. As a result, while the
    housing authority is still obligated to complete 195 more public housing
    units under the 1996 grant, these units will be developed as a part of a new
    three-phase Robert Taylor Master Plan. Construction on the first phase of
    this plan is scheduled to begin in late 2003.

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    Site Visit Summaries
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    The housing authority is currently in the process of revising its community
    and supportive services plan to incorporate its service connector program,
    in which case managers work individually with residents to provide either
    necessary services or refer them to the appropriate providers. The housing
    authority is in the process of locating the original residents, finding out
    whether they are using any supportive services through the housing choice
    program, and determining what services they need. According to the
    housing authority, the primary service provided to the original residents
    has been relocation assistance. In addition, the Charles Hayes Family
    Investment Center opened in September 1998 adjacent to the original site,
    offering a one-stop source for computer training, job placement, medical,
    and other supportive services.
    Factors Contributing to
    Current Status
    The revitalization of Robert Taylor B has been slowed by tension early in
    the relationship between the Chicago Housing Authority and its receiver
    and by the need for the plans to comply with the Gautreaux consent
    decree. In 1966, African American residents of the Chicago public housing
    community filed suit against the housing authority for creating a segregated
    public housing system. In response, the court issued a judgment that
    prohibits the housing authority from constructing any new family public
    housing in a neighborhood in which more than 30 percent of the occupants
    are minorities (limited areas) unless it develops an equal number of units in
    neighborhoods where less than 30 percent are minorities (general areas).
    In 1987, the court appointed a receiver for Chicago’s scattered-site
    program, which includes the development of nonelderly public housing.
    According to a housing authority official, the first delay at Robert Taylor B
    occurred because the housing authority did not develop its revitalization
    plan with the input of the receiver. The housing authority submitted the
    plan to HUD in January 1998, and 9 months later HUD inf