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REAUTHORIZATION OF THE
HOPE VI PROGRAM

HEARING
BEFORE THE

SUBCOMMITTEE ON
HOUSING AND COMMUNITY OPPORTUNITY
OF THE

COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
FIRST SESSION

JUNE 21, 2007

Printed for the use of the Committee on Financial Services

Serial No. 110–44

(
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WASHINGTON

37–561 PDF

:

2007

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HOUSE COMMITTEE ON FINANCIAL SERVICES
BARNEY FRANK, Massachusetts, Chairman
PAUL E. KANJORSKI, Pennsylvania
MAXINE WATERS, California
CAROLYN B. MALONEY, New York
LUIS V. GUTIERREZ, Illinois
´
NYDIA M. VELAZQUEZ, New York
MELVIN L. WATT, North Carolina
GARY L. ACKERMAN, New York
JULIA CARSON, Indiana
BRAD SHERMAN, California
GREGORY W. MEEKS, New York
DENNIS MOORE, Kansas
MICHAEL E. CAPUANO, Massachusetts
´
RUBEN HINOJOSA, Texas
WM. LACY CLAY, Missouri
CAROLYN MCCARTHY, New York
JOE BACA, California
STEPHEN F. LYNCH, Massachusetts
BRAD MILLER, North Carolina
DAVID SCOTT, Georgia
AL GREEN, Texas
EMANUEL CLEAVER, Missouri
MELISSA L. BEAN, Illinois
GWEN MOORE, Wisconsin,
LINCOLN DAVIS, Tennessee
ALBIO SIRES, New Jersey
PAUL W. HODES, New Hampshire
KEITH ELLISON, Minnesota
RON KLEIN, Florida
TIM MAHONEY, Florida
CHARLES A. WILSON, Ohio
ED PERLMUTTER, Colorado
CHRISTOPHER S. MURPHY, Connecticut
JOE DONNELLY, Indiana
ROBERT WEXLER, Florida
JIM MARSHALL, Georgia
DAN BOREN, Oklahoma

SPENCER BACHUS, Alabama
RICHARD H. BAKER, Louisiana
DEBORAH PRYCE, Ohio
MICHAEL N. CASTLE, Delaware
PETER T. KING, New York
EDWARD R. ROYCE, California
FRANK D. LUCAS, Oklahoma
RON PAUL, Texas
PAUL E. GILLMOR, Ohio
STEVEN C. LATOURETTE, Ohio
DONALD A. MANZULLO, Illinois
WALTER B. JONES, JR., North Carolina
JUDY BIGGERT, Illinois
CHRISTOPHER SHAYS, Connecticut
GARY G. MILLER, California
SHELLEY MOORE CAPITO, West Virginia
TOM FEENEY, Florida
JEB HENSARLING, Texas
SCOTT GARRETT, New Jersey
GINNY BROWN-WAITE, Florida
J. GRESHAM BARRETT, South Carolina
JIM GERLACH, Pennsylvania
STEVAN PEARCE, New Mexico
RANDY NEUGEBAUER, Texas
TOM PRICE, Georgia
GEOFF DAVIS, Kentucky
PATRICK T. MCHENRY, North Carolina
JOHN CAMPBELL, California
ADAM PUTNAM, Florida
MICHELE BACHMANN, Minnesota
PETER J. ROSKAM, Illinois
THADDEUS G. McCOTTER, Michigan

JEANNE M. ROSLANOWICK, Staff Director and Chief Counsel

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SUBCOMMITTEE

ON

HOUSING

AND

COMMUNITY OPPORTUNITY

MAXINE WATERS, California, Chairwoman
´
NYDIA M. VELAZQUEZ, New York
JULIA CARSON, Indiana
STEPHEN F. LYNCH, Massachusetts
EMANUEL CLEAVER, Missouri
AL GREEN, Texas
WM. LACY CLAY, Missouri
CAROLYN B. MALONEY, New York
GWEN MOORE, Wisconsin,
ALBIO SIRES, New Jersey
KEITH ELLISON, Minnesota
CHARLES A. WILSON, Ohio
CHRISTOPHER S. MURPHY, Connecticut
JOE DONNELLY, Indiana
BARNEY FRANK, Massachusetts

JUDY BIGGERT, Illinois
STEVAN PEARCE, New Mexico
PETER T. KING, New York
PAUL E. GILLMOR, Ohio
CHRISTOPHER SHAYS, Connecticut
GARY G. MILLER, California
SHELLEY MOORE CAPITO, West Virginia
SCOTT GARRETT, New Jersey
RANDY NEUGEBAUER, Texas
GEOFF DAVIS, Kentucky
JOHN CAMPBELL, California
THADDEUS G. McCOTTER, Michigan

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CONTENTS
Page

Hearing held on:
June 21, 2007 ....................................................................................................
Appendix:
June 21, 2007 ....................................................................................................

1
43

WITNESSES
THURSDAY, JUNE 21, 2007
Cabrera, Hon. Orlando J., Assistant Secretary for Public and Indian Housing,
U.S. Department of Housing and Urban Development .....................................
Fox, Richard, Executive Director, Stamford Housing Authority .........................
Kelly, Michael P., Executive Director, District of Columbia Housing Authority ..........................................................................................................................
Koo, Doris W., President and Chief Executive Officer, Enterprise Community
Partners, Inc. ........................................................................................................
Montiel, Rudolf C., Executive Director, Housing Authority of the City of
Los Angeles ...........................................................................................................
Moses, George, Chairman, Board of Directors, National Low Income Housing
Coalition ................................................................................................................
Popkin, Dr. Susan J., Principal Research Associate, The Urban Institute ........
Stratford, Yvonne, former resident of Scott/Carver Homes, Miami, Florida ......
Woodyard, Charles, Executive Director, Charlotte Housing Authority ..............

7
24
25
39
21
37
35
36
22

APPENDIX
Prepared statements:
Cabrera, Hon. Orlando J. .................................................................................
Fox, Richard ......................................................................................................
Kelly, Michael P. ..............................................................................................
Koo, Doris W. ....................................................................................................
Montiel, Rudolf C. ............................................................................................
Moses, George ...................................................................................................
Popkin, Dr. Susan J. ........................................................................................
Stratford, Yvonne .............................................................................................
Woodyard, Charles ...........................................................................................
ADDITIONAL MATERIAL SUBMITTED

FOR THE

44
54
58
72
80
83
89
112
116

RECORD

Waters, Hon. Maxine:
Statement of the National Association of Home Builders .............................
NAHRO insert ..................................................................................................
Statement of the National Association of Realtors ........................................
Pearce, Hon. Stevan:
Response to question submitted to Hon. Orlando Cabrera ...........................

134
136
142
144

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REAUTHORIZATION OF THE
HOPE VI PROGRAM
Thursday, June 21, 2007

U.S. HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE ON HOUSING AND
COMMUNITY OPPORTUNITY,
COMMITTEE ON FINANCIAL SERVICES,
Washington, D.C.
The subcommittee met, pursuant to notice, at 2 p.m., in room
2128, Rayburn House Office Building, Hon. Maxine Waters [chairwoman of the subcommittee] presiding.
Present: Representatives Waters, Cleaver, Green, Clay, Sires;
Biggert, Pearce, Shays, and Miller.
Ex Officio: Chairman Frank.
Also present: Representative Watt.
Chairwoman WATERS. This hearing of the Subcommittee on
Housing and Community Opportunity will come to order. Good
morning, ladies and gentlemen. I would like to thank the ranking
member, Mrs. Judy Biggert, and the members of the Subcommittee
on Housing and Community Opportunity for joining me for today’s
hearing on Reauthorization of the HOPE VI Program. And I would
like to start by noting that without objection, Mr. Watt will be considered a member of the subcommittee for the duration of this
hearing. He is not here yet, but I expect he will be shortly.
Also without objection, all members’ opening statements will be
made a part of the record.
I am looking forward to hearing from our three panels of witnesses on the important issues related to the reauthorization of the
HOPE VI Program, including one-for-one replacement, the right of
residents to return to the new public housing development, monitoring of displaced residents, and the use of green building standards in revitalization efforts. Each of these are important issues for
the communities where HOPE VI projects are envisioned.
In 1989, the National Commission on Severely Depressed Housing found that 6 percent, or 86,000 units, of the Nation’s public
housing units were severely distressed. Residents of these units
also experienced higher rates of crime, high levels of unemployment, and lacked programs and services to help them obtain selfsufficiency.
In response to these findings, Congress created the HOPE VI
Program in late 1992. To date, 237 revitalization and 285 demolition-only grants have been awarded through the program. With
these grants, public housing authorities have demolished over
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2
130,000 of the Nation’s most severely distressed public housing
units.
Given the limited tools available to the Nation’s public housing
authorities to create quality affordable housing, HOPE VI has provided resources for Housing Authorities to revitalize public housing
units that are desperately needed by America’s poor families, including the elderly and persons with disabilities.
HOPE VI has also been an important tool for Housing Authorities to provide much needed services to support residents. In many
places, HOPE VI resources have been used to provide job training,
GED classes, and after school programs. It is clear that HOPE VI
is a major Federal housing program that needs to be revitalized
simply because of its potential for good and for transforming lives
and communities.
However, HOPE VI has had mixed results on the face of the Nation’s public housing. As severely distressed public housing developments are replaced with valuable mixed income communities,
residents have been displaced, public housing units have been lost,
and those units that are newly constructed have been restricted to
a limited group of public housing residents. Therefore, in reauthorizing this program, we need to consider the following facts of the
HOPE VI dynamic.
First, the HOPE VI Program has directly contributed to the loss
of over 30,000 public housing units. This is because the program
does not now require one-for-one replacement of hard public housing units. The HOPE VI Program should maintain our stock of
public housing units, not deplete it. As we consider one-for-one replacement of these public housing units, let us be clear that it is
not the intention of this subcommittee to resegregate or to reisolate
public housing residents into areas with high concentrations of poverty or areas that have suffered from historic racial segregation or
isolation. We are sensitive to this concern and are open to ways of
making sure that public housing units are rebuilt on a one-for-one
basis, and that residents have the right to return to those units in
a way that does not lead to an increase in the area’s poverty, segregation, or isolation.
Second, because of the lack of available units and sometimes too
strict screening criteria, families who want to return to the revitalized site are often unable to go back to the communities that they
called home. Even though these families are living in substantially
better housing in safer neighborhoods, those who are now using
Housing Choice Vouchers to rent their housing are having difficulty
in making ends meet. We must carefully consider the impact of
HOPE VI on these residents, especially those with poor health and
those who are hard to house.
Third, in some cases Housing Authorities have not properly monitored and tracked the whereabouts of their displaced residents. I
am pleased that Ms. Yvonne Stratford is here to personally testify
about her experience with this most troubling issue.
Fourth, another important factor to consider in any reauthorization of HOPE VI is the need for green building standards in future
HOPE VI projects. As energy prices and utility costs rise, we need
to all do our part to be more aware of the impact we have on the

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3
environment. It is only prudent that these new developments meet
these environmentally friendly standards.
Finally, any reauthorization of the HOPE VI Program must take
into account the underfunding of the Public Housing Capital Fund,
the recent underfunding of the HOPE VI Program, and the resulting increase in the number of severely distressed public housing
units. This is a program that should be reauthorized in an amount
sufficient to address the growing backlog in much-needed capital
improvements and to provide for one-for-one replacement of occupied public housing units.
The Department of Housing and Urban Development has asserted that the HOPE VI Program is too costly and too slow. However, my colleagues and I continue to believe that—in spite of this
and other issues—this program is worth reauthorizing.
Again, I look forward to hearing the witnesses’ views on this very
important program. And now I would like to recognize Ranking
Member Biggert for her opening statement.
Mrs. BIGGERT. Thank you very much, Madam Chairwoman, and
thank you so much for scheduling this hearing on the reauthorization of the HOPE VI Program. I think since 1993 there has been
a lot of progress that has been made in being able to replace some
of the most dangerous and dilapidated public housing in the country with what would be the mixed income communities. And while
I don’t think that there is any in my district, certainly Chicago is
a place that this has really been helped. I have to say that in one
of my former lives, or several of my former lives, having been in
the public housing in Chicago, for one, I was chairman of the Visiting Nurse Association of Chicago, and one of the things that we
did was to have—the visiting nurses did a lot of work in some of
the public housing, like Robert Taylor Homes. One of the things
that we—the way that we got board members was to have our
board members go out with these visiting nurses to visit with them
where they were. And so many of us spent time in the Robert Taylor Homes, in particular Cabrini-Green, the Rockwell Gardens. And
I think to have seen the changes that have taken place in those
communities has been astounding with the mixed level, and taking
away the huge building that was just the public housing, but to
have the mixed units. And I look forward to seeing that happen in
New Orleans, for example, where we have been down with our field
hearing to see how that could work, and how HOPE VI can really
bring a revitalization to those communities. It works in Chicago,
and I think it can work a lot of other places. And it has worked.
So I look forward to the hearing and to moving forward with the
reauthorization of the HOPE VI Program, and with that I yield
back my time.
Chairwoman WATERS. I thank you very much, Ranking Member
Biggert. I understand that you may have to leave for another hearing.
Mrs. BIGGERT. That is correct. I do have a markup.
Chairwoman WATERS. A markup, which is really more important,
so if you have to leave, we understand. And if there are other members who are present, they will have an opportunity to have opening statements prior to going to our witnesses. So thank you very
much.

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4
At this time I would like to recognize the chairman of our Committee on Financial Services, Mr. Frank.
The CHAIRMAN. Thank you, Madam Chairwoman. I am pleased,
once again, to be working with you, and I appreciate your leadership on important housing matters. I really believe that one result
of this Congress is going to be some very significant improvements
in the housing area, and your work has really been exemplary.
It is good that we are here reporting the bipartisan support for
HOPE VI. This Administration has kept trying to kill HOPE VI,
and I appreciate the fact that in a bipartisan way we have kept it
going. And not just kept it going, but we are going to be improving
it and working together. We even had an unusual degree, as you
know, Madam Chairwoman, of cooperation with the Senate. We
met with our colleague, Senator Mikulski. We know, too, that the
chairman of the Appropriations Subcommittee, my colleague, Mr.
Olver of Massachusetts, is interested in this, so we are determined
to go forward.
I do want to note that one of the things we are determined to
do is to correct a long-standing bipartisan, bicameral mistake—
tearing down more housing for poor people than we build. That is
something that began with the original urban renewal program,
and there has been this notion that is bizarre, but took root, that
if people are living in housing, people of low income are living in
housing that the rest of us don’t like, well, one of the nice things
we can do for them is to tear it down. And it is as if people thought
there were a lot of poor people who said, ‘‘You know what, I think
I will go live in a lousy house, because I don’t want to live in a nice
one.’’ What ought to be obvious to most rational people is that people will want to live in the best housing they can find and afford.
And if you are tearing down the housing they are currently living
in because it is not good enough for them, you are sending them
to worse housing, not better, because they have not voluntarily
given up better housing for where they are.
That is why starting with the hurricane bill, when the chairwoman took very important and very decisive action, and I was
glad to be supportive, we have set the rule that you should not,
through the government, tear down more housing than you are
going to build. Now that has to be done with sophistication. Part
of the point of HOPE VI is to avoid excessive concentrations of people, and we don’t want to recreate that. But it is clearly within our
ability to replace housing without recreating ‘‘ghettoization.’’ And
that is an important job, and that is very much reflected in the
hard work that is going on in this bill.
We are committed to a HOPE VI Program, and people have said,
well, you know, the HOPE VI Program is better for the communities. That is true. But I think again, we have had this error in
the past where some people have been allowed to say that we are
going to improve the community without focusing on improving the
lives of all of the individuals. I think we are going to show that
those two are perfectly compatible.
So I appreciate, Madam Chairwoman, the work you are doing
here, as in other bills. We are going to show that it is not preordained that we have to reduce the amount of housing for people
with lower incomes. In fact, we need to increase that, and this bill,

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5
I think, is going to accomplish that. So I am very glad that we are
going to be able to move on this, and people should know that this
is a serious effort.
We are having this hearing, and a lot of important drafting is
going on. I would think that we would be ready to vote on this bill
in committee in the month of July when we come back before we
adjourn for August. We know the Senate is eager to do it, and I
think we will be able to have a bill on the President’s desk by the
end of this year given the interest that is there. We also have an
assurance from at least the Appropriations Committee on this side,
but also Senator Mikulski, who is on the Appropriations Committee
on the Senate side. People should know that this is no idle exercise;
I believe this is a bill that is going to be passed and be funded.
Thank you.
Chairwoman WATERS. I would like to thank you, Mr. Chairman,
for all of your leadership and your support and the work that you
have done to bring us to the point where we are definitely talking
about one-for-one replacement. You have been very, very clear on
that and very strong on that, and I appreciate it.
I now recognize Mr. Cleaver for 3 minutes.
Mr. CLEAVER. Thank you, Madam Chairwoman. One of the
things I had planned to do today for this hearing, which you and
our ranking member are very visionary in calling, is the picture of
the housing unit, 405B Bailey, which I lived in. And the relevancy
of the picture of the housing project that I lived in is to demonstrate the value of HOPE VI, which I wish had been in existence
when I lived in public housing. One of the early mistakes was Pruitt-Igoe right down the street from Kansas City, which you are very
familiar with, Madam Chairwoman, in St. Louis. It was a mistake
because we piled poor people on top of poor people. And that in my
experiences just won’t work. I think we went past what HUD had
set as a goal, which was demolishing 100,000 units; I think we had
gone toward 150,000 units.
And I think with the one-for-one replacement that you support,
which I think many of the members on this committee support, it
is going to be critically important. I think when people move out
of public housing units, for us to make sure that we know where
they are going and that we follow them, keep up with them and
report on it. Because sometimes if we don’t do that, we are going
to lose track of people, and sometimes they fall through the cracks.
We have to be able, I think, to say that we know what happened
to the people who moved.
And the other thing is that I think one of the most controversial
things that I experienced as mayor is whenever we started—and
we did one of the first projects, one of the first 15 projects done in
this Nation, Guinotte Manor, you can see it from city hall, and one
of the problems is of course people organize in various parts of the
city to say we don’t want any HOPE VI projects coming into our
community. And I do think that there is a tiny piece of legitimacy.
I do think they ought to be dispersed all over the city. And I think
it ought to be done with great intentionality. And I think the direction we are going in is the right direction; I think there are a lot
of little nuances that we have to consider.

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And I appreciate the opportunity to be a part of this committee
and to follow your leadership. Thank you.
Chairwoman WATERS. Thank you very much. I recognize Mr.
Sires for 3 minutes.
Mr. SIRES. Thank you, Chairwoman Waters. I am happy to be
here to listen to the witnesses today on this program. I am somewhat familiar with this program, having been a local mayor, so I
have a unique perspective on this program. Its impact on the community is real and it is positive. Beyond the obvious impact of
cleaning up distressed public housing units and providing people
with housing, HOPE VI generates economic activity in the community, which I have seen firsthand. New housing brings new residents, brings new infrastructure, and business needs for those people. They shop and they dine and they invest in the community.
These new businesses hire employees from the area, who also have
a positive impact on the economy.
The benefits of this program do not impair. Research indicates
HOPE VI increases the per capita income of residents and decreases the unemployment rate. The same research shows that this
program decreases the number of households receiving public assistance and decreases violent crime in the surrounding community. I do not dismiss concerns that the program could be better
run or more efficiently, but I believe strongly that the program
should be reauthorized and strengthened, not cut.
I look forward to hearing from today’s witnesses, and I thank the
chairwoman for holding this hearing. Thank you.
Chairwoman WATERS. Thank you very much. I recognize Mr.
Green for 3 minutes.
Mr. GREEN. Thank you, Madam Chairwoman. I greatly appreciate your calling this most important hearing, and I also thank the
chairman of the full committee for his participation. The two of you
have absolutely made housing a priority for all of us, and I thank
God that you have done so. I am excited about the possibilities. I
am excited knowing that we will have an opportunity to extend
HOPE VI for a significant amount of time. I am excited because I
understand that HOPE VI brings hope to communities. It does
more than bring infrastructure, and buildings. It causes communities to have better employment rates. Crime seems to be impacted by virtue of HOPE VI. Persons seem to have a better sense
of community, and greater pride in the area. HOPE VI really does
provide hope. So I am interested in HOPE VI and excited about it.
I would add, as I close, that replacement is important to me,
right-of-return is important to me, and tracking is important to me.
I yield back the balance of my time.
Chairwoman WATERS. Thank you very much. Mr. Watt, do you
have an opening statement?
Mr. WATT. Madam Chairwoman, I am just honored to be here,
and to be allowed to sit in with your subcommittee. Unfortunately,
I didn’t have the opportunity to get on the subcommittee this time,
but it is not because of a lack of interest in these issues. And certainly I have a very, very heavy interest in the HOPE VI Program,
and I have always wondered why, when everybody has acknowledged the success of the program, that the President and this Administration have continuously tried to terminate it, when it is

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7
clear that the original goals of replacing and revitalizing communities in which distressed public housing was situated, the list was
made originally, and we are not anywhere close to being through
with completing that list. So I never have accepted the proposition
that the Administration has tried to advance that HOPE VI has accomplished its mission. It can’t be accomplished until those identified public housing communities that were in distressed condition
are replaced and revitalized.
So I am just thankful to be here, and I thank the chairwoman
of the subcommittee, and the chairman of the full committee, for
their leadership on this issue, and I look forward to working with
them to come out with a good reauthorization bill and, as importantly, to keep the pressure on the appropriators to find the money
to actually fund the programs at a level that will have significant
impacts in the local communities.
Thank you. I yield back.
Chairwoman WATERS. Thank you very much, Mr. Watt. And I
would like to thank you for all of the work that you have done on
HOPE VI. I know that it is a priority interest that you have
worked on for quite some time, and I appreciative your getting us
to this point where we can have a reauthorization bill that takes
into consideration all of the things that you have learned needed
to be addressed.
With that, now I would like to introduce our first panel, which
consists of the Assistant Secretary for Public and Indian Housing
for the U.S. Department of Housing and Urban Development, Mr.
Orlando Cabrera. Assistant Secretary Cabrera, I would like to
thank you for appearing before the subcommittee today. And without objection, your written statement will be made part of the
record. You will now be recognized for a 5-minute summary of your
testimony.
STATEMENT OF THE HONORABLE ORLANDO J. CABRERA, ASSISTANT SECRETARY FOR PUBLIC AND INDIAN HOUSING,
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Mr. CABRERA. Thank you, Madam Chairwoman, Ranking Member Biggert, and members of the subcommittee. Madam Chairwoman, I ask that my written testimony be accepted and entered
into the record.
Chairwoman WATERS. Without objection.
Mr. CABRERA. Thank you. My name is Orlando Cabrera, and I
am Assistant Secretary for Public and Indian Housing at the Department of Housing and Urban Development. Thank you for inviting HUD to present its views on issues relating to the HOPE VI
Program. Our written statement sets forth many of our thoughts
on the HOPE VI Program. This oral statement will focus on hope
for HOPE VI.
No HOPE VI deal gets done simply on its own as a Federal
grant. Many other levels of financing need to be brought into the
HOPE VI transaction for that transaction to work and to produce
housing. We believe that HOPE VI is hard enough to use and, if
the program would be reauthorized by Congress, that the path to
success is greater simplicity and not additional complexity.

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For example, many States struggled in their policy decision on
how to treat HOPE VI deals because of the complexity of HOPE
VI deals that prolong the development process, causing the low income housing tax credit to go stale, if you will, thereby hurting
States in two ways.
First is lost opportunity; namely, HOPE VI transactions historically demand a lot of tax credits, and so other low income housing
tax credit units were not built because a tax credit was committed
to the HOPE VI transaction.
And second, often, and particularly early on, the HOPE VI Program applicant was a PHA with scant or no development experience, meaning that the allocation would go unutilized or underutilized because of capacity issues. The good news is the second prong
has been remedied in many instances. PHAs have become better
applicants and better economic partners. Unfortunately, the first
prong has not progressed much. One reason for that is that HOPE
VI deals are very complex. As was previously noted, no HOPE VI
deal can be funded on its own.
One thought we would suggest in the process of your consideration of the HOPE VI legislation is that simplicity, wherever possible, be the mantra, and to remember that every time something
outside of a housing context is added to a HOPE VI deal that deal’s
viability decreases because its costs are increasing. We would suggest that encouraging certain policy prerogatives would make
sense, but that such policy prerogatives be accompanied by answering the following questions.
If we add this requirement, will it make a HOPE VI transaction
less viable because it has added costs? And has adding the policy
prerogative made the HOPE VI transaction less competitive when
it is postured for competition for tax credits, private activity bonds,
and/or, if one would want to delve this far down, other State subsidy? This is what we suggest would help the viability of HOPE VI.
My written statement sets forth many of the issues that have
most hampered HOPE VI. If and when Congress acts to reauthorize HOPE VI, we believe the approach proffered in this testimony
would add value to the program, and accordingly offer it respectfully.
Thank you once again for your invitation to testify before the
committee. I would be happy to answer any questions you may
have.
[The prepared statement of Assistant Secretary Cabrera can be
found on page 44 of the appendix.]
Chairwoman WATERS. Thank you very much. Members, we are
going to go right to the questioning. I understand that votes will
be taken up on the Floor very shortly, and when we finish this
round of questioning, there may be time to break. Did I hear that
they had called the vote? So how many minutes do we have? We
have 10 minutes left? I think I will start with my questions, and
then we will break and go to the Floor following that.
Mr. Secretary, I would like some discussion from you on one-forone replacement. What do you really think about it? What has been
your experience in the past? What difficulty do you see with oneon-one replacement? And do you support it?

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Mr. CABRERA. I do not support one-for-one replacement of public
housing units for the reasons already articulated. It would actually
be counterproductive in terms of the original legislative intent of
HOPE VI. The original legislative intent of HOPE VI was to avoid
concentration, and that might produce concentration.
That said, one-for-one replacement of affordable units, I think, is
a viable thing. What does affordable units mean? Affordable units
is something that I believe in this industry, and those who produce
units for low income Americans, they would categorize in the following way: Units that are produced using low income housing tax
credit that serve the bandwidth between 0 and 60 percent of area
median income, units that are produced by the private activity
bond program that do the same thing, and units that are produced
by State programs that do the same thing. That would broaden the
pool, and preserve the original intent of the legislation. But I don’t
believe that would be the only thing. One of the things that I think
would help would be—and this is not the subject matter of this
committee, but I offer it just as a thought; I testified to this 2
weeks ago—would be to create a different indicia of ownership for
units that are market rate in nature than those that are affordable
in nature. And the reason is because at that point you can better
strip away and attract capital into HOPE VI deals, and frankly
into other affordable deals in order to make them more viable.
The big challenge with HOPE VI comes when you deal with units
that are public housing in nature, and for those that develop, that
means those that are subject to an annual contributions contract,
is that it requires a deep operating subsidy. Just building those
units is not enough. You have to also figure out how all of the moving parts are going to function. They don’t function well if they are
all ACC units for a variety of reasons.
So our suggestion would be to amplify the term not one-for-one
replacement of public housing units, but one-for-one replacement of
affordable units, which from a policy perspective largely accomplishes the same thing.
Chairwoman WATERS. And I want to be clear about the affordable units that you are alluding to, that would come under the definition of one-for-one replacement. You are talking about affordable
units that are built by other entities, State housing agencies, etc.,
who would be considered providing units for one-on-one replacement, but they would not be public housing units?
Mr. CABRERA. No, let me clarify it another way.
Chairwoman WATERS. Okay.
Mr. CABRERA. A public housing authority, when it undertakes a
HOPE VI, with or without a partner, is essentially acting as a developer. So the first presumption in the statement that I made is
that the public housing authority is the developer or a co-developer.
They are the owner. The next presumption is that the unit that is
developed is being developed with some kind of pot of money. It is
either being developed with capital fund money, HOPE VI money,
with low income housing tax credit, or private activity bonds, or
some State money, or HOME, if that were possible in this deal.
And so the developer, the public housing authority, would automatically under statute be obligated to offer those units for a period of time. The period of time under the tax program is 15 years

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for those folks at 0 to 60 percent of AMI. Most folks undertaking
development under those circumstances don’t usually get a 15-year
affordability period in this climate. Those resources are very scarce.
They are very valuable. And most housing finance agencies that allocate the low income housing tax credit are demanding much
longer periods of affordability.
So what you are doing is preserving units that are affordable
that meet the spectrum of affordability that I think we are all concerned about, accomplishing the objective of HOPE VI, and making
sure—and this is for those who develop the most critical part—
making sure the units actually get built.
Chairwoman WATERS. And then these units would be managed
and supervised by the housing authority?
Mr. CABRERA. Or whoever the housing authority contracts with,
yes. Housing Authorities also contract with private—
Chairwoman WATERS. I know, but the idea is that they would
still be under the supervision of the housing authority, with all of
the services that go along with them.
Mr. CABRERA. Yes. They would be the owner.
Chairwoman WATERS. All right. Thank you very much. At this
time I think what we are going to do is we are going to break. I
would like to ask you, Mr. Secretary, if you have about another
half hour?
Mr. CABRERA. Yes.
Chairwoman WATERS. Thank you very much. We will come back
as quickly as we complete this set of votes on the Floor, and complete your panel. We have members here who have some questions
for you. And then we will move onto the second and third panels.
I appreciate your patience.
Mr. CABRERA. My pleasure, Madam Chairwoman.
Chairwoman WATERS. Thank you very much.
[Recess]
Chairwoman WATERS. The subcommittee will come to order. I
would like to thank you, Mr. Cabrera, for remaining. We were a
little bit longer than we thought we would be.
I have completed my questions, and I would now like to go to Mr.
Shays, who is going to serve as our ranking member.
Mr. SHAYS. Madam Chairwoman, I am happy to wait, because I
think some of my colleagues have been here and have heard the
testimony. So I am more than happy to wait and it will give me
a chance to catch up, so if one of your colleagues wants to go.
Chairwoman WATERS. That is fine. We will go right down to Mr.
Cleaver for questions.
Mr. CLEAVER. Thank you, Madam Chairwoman. Mr. Cabrera,
thank you for being here. There are a number of issues I would like
to raise, but let us focus on the unspent funds. The question of
whether or not those unspent funds should be made available has
been the subject of a great deal of discussion. What is the most recent figure for the amount of HOPE VI unspent funds? And what
are the plans for those funds that HUD has put forth or made—
perhaps I am begging the question—has HUD made any plans for
the unspent money?
Mr. CABRERA. Of the $5.8 billion that has been granted through
the HOPE VI process, as of June 9th of this year, $1.4 billion re-

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mains unspent. And of the $1.4 billion, approximately $500 million,
in fact, over $500 million—almost $600 million—are for grants that
were issued between 1994 and 2001. When I was confirmed, that
number was actually $2.4 billion. And so in the last approximately
18 months, the focus for the Office of Public Housing Investment,
which is essentially the body within Public and Indian Housing
that deals with HOPE VI, has been encouraging grantees to move
forward as quickly and as efficiently as possible. That will continue. The act does not provide much room for HUD to do what one
might want to be done.
I have been asked previously by this committee on this issue
why, for example, we couldn’t recapture, and the issue is we don’t
have the authority to recapture, and that might be one of the
things that the committee may want to think about.
Mr. CLEAVER. Well, that was one of the questions that I have for
you was whether or not this committee needs to reprogram those
dollars, those unspent dollars, and reprogram in terms of complying with what I think the spirit of this committee is in terms
of one-for-one replacement.
Mr. CABRERA. I think my visceral reaction would be sure, you
can do that. Here is the problem. There are grants currently, and
there is always—each grant you have to deal with individually.
There are some grants, for example, that have been the subject of
a lot of litigation, and they tend to slow up the development process. So trying to say you are going to recapture them is kind of
tough. For those grants where there has been no movement at all
and there has been no litigation, I would say sure. For those that
have actually had pretty valid reasons not to move forward, I
would say absolutely that this committee should probably think
about giving the Secretary the authority to revisit that, and I
mean, one of the things that we would propose, I suppose, or one
that could be proposed that could be recaptured and put back into
a pot and then be reallocated.
Mr. CLEAVER. What is your best estimate, and I will conclude,
your best estimate, Mr. Secretary, of the dollars that are not being
contested or in litigation?
Mr. CABRERA. Congressman, I can’t give you that information
right now because I don’t know it. But I am happy to have that
research and provide that answer to you for the record.
Mr. CLEAVER. Well, the total would be, I think, important if this
committee is going to take some kind of action.
Mr. CABRERA. No. I agree but I just don’t know, can’t answer the
question.
Mr. CLEAVER. If you could get that—
Mr. CABRERA. Absolutely.
Mr. CLEAVER. Thank you.
Chairwoman WATERS. Thank you. Mr. Pearce, for 5 minutes.
Mr. PEARCE. Thank you, Madam Chairwoman. Mr. Cabrera, I
would like to focus not on the unspent funds but on the spent
funds. If we get a sense—on your testimony, page 2, you are talking about $10 billion over the life of the project and $5.8 billion as
of June 9th. What is the difference in those two figures? What is—
Mr. CABRERA. Congressman, may I have a moment? I am trying
to refresh my recollection.

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Mr. PEARCE. The note probably just says, amount and type of financial assistance. You were awarded $5.8 billion in HOPE VI revitalization funds, and then HOPE VI grants received $10.3 billion.
Tell me a little bit about the difference in those. Which means
what?
Mr. CABRERA. ‘‘Other sources’’ is a reference to any and all subsidy that was used in order to develop, so that could include private activity bonds, and low income housing tax credits.
Mr. PEARCE. Excuse me. So $10.3 billion is actually the figure of
dollars cost?
Mr. CABRERA. The leverage number, yes, that is the leverage
number of what was drawn in.
Mr. PEARCE. Now when I am looking at what we got for that,
these numbers up in the top paragraph on the second page, 63,885
households that relocated, 87,000 adult supportive services, 62,000
employment preparation, is that correct? Is that—
Mr. CABRERA. The original legislative intent of HOPE VI was the
demolition of public housing.
Mr. PEARCE. I just want to know about your numbers, not the
law. I want to know if these numbers are what occurred for $10
billion. These numbers.
Mr. CABRERA. Congressman, yes. This is one of the things that
occurred.
Mr. PEARCE. So if we were to go back to page 1, and we read that
the four areas are household relocation, units demolished, units
completed, and units occupied. If those are the four areas that you
are basically dealing with, then we have a summation, that it cost
us $10 billion to get 63,885 households relocated, 87,235 support
services, 62,000 employment preparation placement programs,
11,600 enrolled in homeownership counseling. Did we get anything
else for the money that we have spent?
Mr. CABRERA. Well, I don’t think it is $10.3 billion.
Mr. PEARCE. Okay. Fine. Let’s just use $5.8 billion then. I don’t
care what number we use. I want to see what we get for what we
have spent. That figure seems to be dismally small.
Mr. CABRERA. I don’t know if I was unclear. But the $5.8 billion,
it was leveraged to be $10.3 billion inclusive of all that.
Mr. PEARCE. So $5.8 billion is the—
Mr. CABRERA. $5.8 billion, excuse me.
Mr. PEARCE. That is still a very large expenditure to counsel
11,600. Is that the period of 10 years? How long did we counsel
them?
Mr. CABRERA. That depends on the grant agreement in terms
of—
Mr. PEARCE. This is a summation of the whole program, right?
Mr. CABRERA. It is a summation of the general parameters of the
program.
Mr. PEARCE. How many years of counseling are involved to get
11,600 homeowners counseled?
Mr. CABRERA. It would depend on the grant agreement. Not all
components of HOPE VI include homeownership counseling.
Mr. PEARCE. You don’t think that is an accountability that you
probably ought to know?
Mr. CABRERA. Well, I am sure we can answer the question.

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Mr. PEARCE. But you as a manager, you don’t care how many
people get counseled? We have 300 million people in the country
and we counsel 11,000. I don’t know how many poor people we
have, but we have a significant number. And we counsel 11,600
people. We are spending billions of dollars here. I am not sure what
we are getting. If you would like to tell me what we are getting
that substantiates—I think we appropriate money and we expect to
get things out that are valuable. We offer services.
Mr. CABRERA. Well, Congressman, you said I could use my
metrics. $5.8 billion essentially demolished 150,000 public housing
units and rebuilt approximately—
Mr. PEARCE. If I do the math, 5 million divided by 78,000, divided by 64,000, and I know that it is not the only thing it is used
for, but let’s just take it if it were, that is $78,000 to demolish each
one, which is a very high figure. I know the $5.8 billion—
Mr. CABRERA. We also built 503,000 units.
Mr. PEARCE. Thank you, Madam Chairwoman.
Chairwoman WATERS. Thank you. Mr. Clay for 5 minutes.
Mr. CLAY. Thank you, Madam Chairwoman. And Mr. Cabrera,
welcome back to the committee.
Mr. CABRERA. Thank you.
Mr. CLAY. Let me say that HOPE VI has been a slow vehicle for
revitalizing public housing. I do not agree, however, with the notion that the program should be abolished. The HOPE VI program
has yielded many positive results in redeveloping communities. St.
Louis is one example. I do have questions about the implementation of the program, and my first pertains to the City of New Orleans.
My understanding is that funds are disallowed for community
and supportive services or human capital services in New Orleans.
We have kids walking around with guns in their belts, and their
parents are working and living in Houston or Dallas or some other
city. These same kids saw the system fail them and were traumatized watching deaths occur all around them during the terrible
storm and the tragedy there. Do you not agree that counseling is
needed for these kids?
Mr. CABRERA. Congressman, I think the amounts or the moneys
that you are referring to are Community Development Block Grant
moneys and not HOPE VI moneys. Those moneys that are being allocated—I hate giving this answer but it is the only one I can legitimately give. I don’t have an idea of what the parameter is for
the allocation of that money or the use. So within the context of
the Community Development Act of 1974, if that is what it requires, I really can’t speak to that. I don’t think that is HOPE VI
grant money though.
Mr. CLAY. But not asking you to do anything that is not consistent with the law, but also looking at what the immediate needs
of a community are.
Mr. CABRERA. Congressman, I don’t maintain that you are telling
me to or asking me to. What I am saying is I can’t answer the
question because it is a wholly different program that is not under
the public—
Mr. CLAY. The funds are allowed for services in cities other than
New Orleans. And without these services, don’t you think that

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14
these efforts are doomed for failure in a couple of years because of
the lawlessness and crimes that are committed?
Mr. CABRERA. In the case of HOPE VI, there is a CSS component, which is community supportive services, and that basically
deals with many of the issues that you were just talking about,
homeownership counseling, other elements that go with the HOPE
VI grant, in the HOPE VI program. That already happens. That
happens nationwide. That has not been disallowed in the case of
New Orleans. New Orleans has a HOPE VI, and it wasn’t disallowed then.
So the reason that I am answering in the way that I am answering is because the funds that you are alluding to are funds that are
outside of Public and Indian Housing, and I honestly just don’t
have knowledge of those programs to give you any kind of indication one way or the other.
Mr. CLAY. Okay. Hypothetically then, if the HOPE VI is approved to revitalize the destroyed areas, then those funds can also
be used—
Mr. CABRERA. That is already the case. That is the case nationwide now. It was the case in New Orleans and Florida.
Mr. CLAY. Right now?
Mr. CABRERA. Yes. That is already happening. It has been happening for quite a while.
Mr. CLAY. Okay. Thank you. I yield back, Madam Chairwoman.
Chairwoman WATERS. Thank you very much.
Mr. Miller.
Mr. MILLER. Thank you, Madam Chairwoman. Mr. Cabrera, I enjoyed your talk. And when you said the authority—you don’t have
the authority to recapture many units, to guarantee one-for-one. I
looked at your statement and you say that the Department is open
to suggestions on how to redefine public housing revitalization in
a matter that is cost effective and efficient in terms of producing
units. And I think a lot of times we put ourselves in a box. Now
I admit my colleagues—I think HOPE VI has worked, but it has
taken a long time to bring very few units on the marketplace. And
if you look at the situation, we understood that there are a whole
lot of nonprofits out there that are building public housing, and
there is a growing role of these nonprofit developers because they
can leverage private money into communities either as well or better than PHAs, but PHAs are the only ones who are currently competing for HOPE VI funds. Don’t you think there, instead of only
using HOPE VI rehabilitated parts of the community owned by
PHA, can’t we take and look on as an integrated approach where
cities, nonprofit housing developers can include a larger area
around those PHAs to bring more units online, that we don’t have
a displacement problem as we do when we are trying to tear down
units that a PHA owns and put people out and then bring them
back when it is completed. We can do better than a one-to-one. We
could actually come back with a two-to-one because you bring additional units in by using HOPE VI dollars to supplement what they
can leverage in the private sector, guaranteed units to be served
for the same purpose as the PHA.
What is your opinion on that?

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Mr. CABRERA. Congressman, to a large degree that is what happens now. What happens within the context of a HOPE VI is there
is a HOPE VI component and generally there are other phases to
it where you have other subsidies that folks use to develop units.
Mr. MILLER. But only with PHAs.
Mr. CABRERA. I think if I understand your question correctly,
and please correct me if I am wrong, what you are saying is why
are PHAs the only applicants for HOPE VI grants?
Mr. MILLER. Why can’t a nonprofit come in and compete for those
HOPE VI dollars on a competitive basis? One could look and say
yes, it is a reasonable approach, and they could use those dollars
and use private funds that they borrow or that they have to create
more units.
Mr. CABRERA. I think the reason is because public housing authorities are State creatures, they are not Federal creatures, and
they own their own real property. They actually own title to them.
Most PHAs that compete for HOPE VI grants, whatever the grant
might be, whether it is demo only and demo and construction, they
are usually now these days joint venturing with someone, and that
joint venture usually does contain either a nonprofit or for profit.
Some PHAs are developing on their own, but at the end of the day
the net result I think that you seek is actually already occurring,
and that has mostly occurred since 2002.
So I think there is another reason for that, and that is that
PHAs are property managers on the whole. They are not, as I call
them, natural developers. That sounds more organic than it is intended. But at the end of the day, what we are beginning to see
is PHAs are in many cases developing development capacity.
So the short answer is, anything that could be done to encourage
development by PHAs in conjunction with the private sector, I
think, would be a good thing.
Mr. MILLER. But what would be wrong with a nonprofit that
builds and retains housing for the same purpose a PHA does—and
you know these are not the same individuals—that I have seen
some in the marketplace out there do phenomenal amounts of
housing with very few Federal dollars invested, yet those units are
restricted for a certain purpose, and the nonprofit manages those
units.
Mr. CABRERA. The distinction would be in the case of those units,
usually they are single asset entities owned by a nonprofit for a for
profit. And that is the exact distinction here. These are public
housing-owned—public housing authority-owned property using
public housing money that is going to support the units that are
being built.
Mr. MILLER. But if you could do the same things on properties
contiguous to PHAs in the same neighborhoods that need revitalization, then you could have a nonprofit come in to compete for the
same dollars and generate additional units, in many cases rapid
fashion. I see people behind you going like this and panicking because it is a new thought that takes it out of government directly.
But there is a guarantee on those units that they are going to be
serving the people we need to serve. Why wouldn’t we do that?
Mr. CABRERA. My sense is that the people who are doing that are
doing it for a reason, and it is not an issue of government and pri-

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vate sector. The issue is that once those units are built, there is
an ACC placed on them, or there is an affordability component to
them. In the case of those units that have an ACC placed on them,
it means they are receiving operating funds under section 9 of the
Housing Act of 1937. Those aren’t funds that nonprofits can compete.
Mr. MILLER. But you can do that without receiving those operating funds the private sector is doing today. Madam Chairwoman,
I think we should look at opportunities to help people in need in
these neighborhoods. We need to bring additional units on, too. I
think this is a viable opportunity for us to at least research it and
check it out and debate it further.
Mr. CABRERA. Madam Chairwoman, may I be indulged for a
minute to explain something really quickly? The Congressman
wasn’t here when we addressed this. One of the things I mentioned
earlier, Congressman, was that the issue for anybody trying to develop affordable units is to define affordable units. So for purposes
of this, what you are thinking is exactly correct in our view, which
is, you want to create a wider menu of what affordable units are.
So they are going to be units that are going to be financed on the
operating side, not the construction side, with annual contribution
contracts and those that won’t. Those that do tend to serve folks
of 0 to 30 percent—usually really a little more—of area median income. And those that don’t, those tend to be low income housing
tax credit units, and those are the units that you were referring to
that are around the development. The issue becomes as part of the
development plan when you are doing phased development, that
that be married well. And as I understand you, that is what you
are proposing.
Mr. MILLER. I propose that we can do what a PHA does through
the private sector, and I will talk to the chairwoman later when I
have more time. Thank you.
Chairwoman WATERS. Thank you. Mr. Green.
Mr. GREEN. Mr. Miller, would you like for me to yield a minute
to you?
Mr. MILLER. I appreciate that. I have heard this debate so often,
and I have heard members on my side say that HOPE VI didn’t
work. I think HOPE VI worked. I think we just were not creative
enough with the concept of HOPE VI to make it work today. And
if we look at what has happened with the HOPE VI Program, so
few units are developed and many of them are developed so slowly
that people on both sides are saying, something is wrong here. We
have to—we have an opportunity with the program that we have
seen benefit from but the benefit is not being created as rapidly as
we should be. In some cases it is because we have restricted what
we have before us to so few people rather than going out and being
creative because I have watched this industry change with the nonprofits in recent years, and I have seen more and more nonprofits
being started by good people trying to serve the same people that
PHAs are trying to serve, and they are doing it with far less government dollars than we ever dreamt about doing it with, and they
are managing these units, they are keeping these units online and
they are maintaining these units, and it is working. And all I am
saying is from our perspective, if we are looking at a HOPE VI Pro-

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gram, we are trying to create opportunity for depressed areas and
for people to have affordable housing in these areas like PHAs do,
why not look at options available around those PHAs that the private sector would love to get involved with, and let’s see if there
is some way that we can do a situation where it is a partnership,
you know, HOPE VI coming into some funds, lenders are coming
in with some funds but we are creating lenders out there that are
serving the people we would like to serve.
Mr. GREEN. I reclaim my time.
Mr. MILLER. I would be happy to yield back. Thank you, sir.
Mr. GREEN. Let’s go to the right to return, Mr. Secretary. What
is your opinion with reference to the right to return in terms of
persons having to have employment?
Mr. CABRERA. Again, Congressman, it already exists. The right
of return for someone who is in public housing already exists for
those who are relocated subject to Federal law. And Federal law
says if something happens in the interim, if you are a convicted
felon between the time that you were relocated and the time you
come back, then you cannot relocate. But aside from that, the opportunity to relocate for those who choose to relocate exists, and in
fact in most cases folks do relocate back to the HOPE VI developed
unit.
Mr. GREEN. My understanding is that in some units persons are
not allowed to return unless they have employment. You can leave
without employment but you can’t come back unless you have employment.
Mr. CABRERA. I don’t recall that being a component, and I am not
going to say that is not the case, but that is not my understanding.
If it is the case, I am happy to answer that as being a possibility.
But I don’t recall that being the case.
Mr. GREEN. Finally, with reference to the demolition only grants.
Mr. CABRERA. Congressman, you mean the community service
component? Or do you mean actual employment?
Mr. GREEN. No. No. Actual employment.
Mr. CABRERA. Okay.
Mr. GREEN. But let’s come to the demolition only grants. Your
thoughts on those, please.
Mr. CABRERA. Most PHAs that are undertaking a HOPE VI
grant I believe would say that—and you will have one PHA come
up in just a little bit. I think they would say that demolition only
is an indispensable part of HOPE VI because very often they can—
all they really need is help demolishing an obsolete development,
and they will use other pots of money to develop units there, not
necessarily HOPE VI money. And the reason that they think that
or they want that is because it is a much faster development for
them. HOPE VI and marrying HOPE VI with different pots of
money tends to add time to development. Time, adding time to development is what kills developments. That is what makes developments not go up. So essentially limiting or actually prohibiting
demo only would be an imposition to public housing authorities trying to develop affordable units generally.
Mr. GREEN. Thank you. I think my time has expired. I yield
back.
Chairwoman WATERS. Thank you very much. Mr. Shays.

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Mr. SHAYS. Thank you. Mr. Green, you were so generous with my
colleague. I am not going to use my full 5 minutes. Would you like
to ask another question?
Mr. GREEN. I thank the gentleman, but I yield back.
Mr. SHAYS. Thank you for your graciousness. I just wrestle with
one thing. I understand it takes a long amount of time with the
HOPE VI grant. But in the end, isn’t the product pretty impressive?
Mr. CABRERA. When it gets built.
Mr. SHAYS. So what is the negative of it taking long? Is money
getting wasted?
Mr. CABRERA. No. People are unwilling to invest. The negative
is that when you have a HOPE VI grant and then you have a PHA
compete for tax credits, because of the rules in section 42 of the Internal Revenue Code, you only have so much time to get your last
unit, not your first unit, your last unit placed in service. You only
have so much time to get your first takedown. It is a very time constrained system. So most housing finance agencies really don’t
have a lot—they don’t have the warm fuzzies about HOPE VI because they consume a lot of tax credit and they don’t get product,
which means they have lost the opportunity to develop a unit
somewhere else. And what winds up happening if you don’t use
your tax credits is they wind up in a national pool, and they can
be distributed to all the other States except you.
Mr. SHAYS. The people who are putting out, if they don’t want
it, no one makes someone apply for a HOPE VI. So if it takes
longer and they risk losing tax credits, it is still, you know, as
grownups their decision. But it gives them an option.
Mr. CABRERA. The party that is losing—the party that is losing
most there isn’t—well, it is the PHA that doesn’t get the unit, and
it is also the folks in the community who don’t get a unit. That is
who loses really the most. But one important part—
Mr. SHAYS. Somebody is getting it. It is not like from a national.
Mr. CABRERA. No, no. Someone is getting it somewhere else.
Mr. SHAYS. Yes. But they are. And the community is willing to
take the risk because the payback is so significant. I mean, for me,
I have seen—and admittedly, maybe some communities benefit
more than others. But we have seen part of Stamford, Connecticut,
transformed by Federal dollars and private dollars. We are seeing
kids basically—and when they see someone driving a Mercedes or
BMW for a deal, it is not a drug deal. It is they are going to UBS.
We are having young kids be in a facility that has not just moderate income or upper moderate income or—we are seeing some
pretty wealthy people staying at an exact same unit. We are seeing
kids in swimming pools who are swimming right next to someone
who is paying market rent, and making a significant sum of
money. So I look at the result and I say, this is awesome. You are
telling me it takes time. Then I respond and say, yes. It takes time.
And then some lose, and the community, and it goes somewhere
else. But the community is willing to take that risk.
Mr. CABRERA. No, not the HOPE VI goes somewhere else. The
other resources that are married to the HOPE VI.
Mr. SHAYS. I understand. That is their decision.

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Mr. CABRERA. No, Congressman. But that is the problem. If you
have one area of Connecticut that absorbs an enormous amount of
tax credits, that means someone else in the State of Connecticut—
Mr. SHAYS. You are talking about a different issue. You are talking about it takes a lot of tax credits. That is a different issue than
saying that—I think it is a different issue, isn’t it?
Mr. CABRERA. No. I think that is one of the issues. I think one
of the things that I suggested earlier when I provided my oral
statement was, the issue here would be simplicity and ease of marriage with the other—
Mr. SHAYS. Well, let me just with the remaining time I have,
let’s deal with simplicity, let’s deal with making this program better. But I would tell you on a scale of 1 to 10, these HOPE VI
grants have been a 10 for the community. I have been in public life
for 32 years, and it is one of the best programs I have seen, despite
the fact it may take longer than what you or I want.
Mr. CLEAVER. Mr. Shays, would you yield for a moment?
Mr. SHAYS. Absolutely.
Mr. CLEAVER. I know that you didn’t mean to imply that drug
dealing and public housing are synonymous. But as a resident of
public housing who can stand up, you know, on national TV and
say I have never used drugs and never worried about being—
Mr. SHAYS. Let me be clear, and if you would indulge me, because I want to be very clear. In our public housing, we basically
had poor folks. We didn’t have people who worked, they were basically not working, and kids were being raised by parents who did
not have regular jobs. So no, I said pretty much what I meant, at
least in our area. But we have transformed it, and we have public
housing integrated with market-rate housing and it has made a
world of difference.
Chairwoman WATERS. Thank you very much.
Mr. Watt?
Mr. WATT. Madam Chairwoman, I have one question. Is the Department planning to support the reauthorization of HOPE VI?
Mr. CABRERA. No. Congressman, when I started the oral statement, I essentially said that the Administration does not support
the reauthorization of HOPE VI. But in light of the fact that this
Congress is considering it, these would be some thoughts that we
had.
Mr. WATT. I yield back. Thank you.
Chairwoman WATERS. Thank you very much. Mr. Secretary, we
would like to thank you for your patience and for your presence
and for your participation. The Chair notes that some members
may have additional questions for you, which they may submit in
writing. Without objection, the hearing record will remain open for
30 days for members to submit written questions to this witness
and to place responses in the record. This panel is now dismissed,
and I would like to welcome our second panel.
Thank you very much.
Mr. CABRERA. Thank you very much.
Chairwoman WATERS. I would like to introduce our distinguished
second panel, and I will start with our first witness, someone whom
I know, Mr. Rudy Montiel, executive director of the Housing Authority of the City of Los Angeles. Since his appointment as execu-

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20
tive director at the end of 2004, Mr. Montiel’s leadership has been
instrumental in the financial turnaround of the Housing Authority
of the City of Los Angeles. Under his guidance, the Housing Authority has turned a $25 million operating loss at the end of 2004
into net operating income in 2005. Prior to coming to Los Angeles,
he successfully led the Housing Authority of the City of El Paso for
3 years. His strong private sector experience includes engagements
with Fortune 500 companies such as General Motors, Delphi, and
the IT group. He is a licensed professional engineer in Texas and
sits on the boards of the Housing Authority Insurance Group, the
Public Housing Authority Directors Association, the Council of
Large Public Housing Authorities, and the Hispanic Engineers National Achievement Awards Corporation.
Thank you, and welcome, Mr. Montiel.
Mr. MONTIEL. Thank you, Madam Chairwoman.
Chairwoman WATERS. Mr. Watt, I see there is someone here you
may want to introduce, Mr. Woodyard.
Mr. WATT. Thank you, Madam Chairwoman. I am pleased to be
able to introduce Charles Woodyard, who is the CEO of the Charlotte Housing Authority, which is in my congressional district. I am
hesitant to say all of the good things I could say about him for fear
it will expose him on a national basis, and he will be secreted away
from us to some other part of the country. But I will say that he
has his bachelor of arts degree in political science and his master’s
degree of public administration from the University of North Carolina at Chapel Hill. He has been in public service for 20 years: 13
of years with the City of Charlotte; 2 years prior to that with the
City of Greensburg, which is also in my congressional district on
the northern end. And he has been with the Charlotte Housing Authority for 7 years, first as vice president for planning and development, and then as chief operating officer in November of 2000, acting chief executive officer in April of 2002, and finally, chief executive officer since October of 2002. We are honored to have him. He
has done a great job, and been an important part of my congressional district and our local community, and we welcome him here.
I appreciate the chairwoman allowing me the honor of introducing him.
Chairwoman WATERS. Thank you very much. And now Mr.
Shays, I understand that you have someone that you would like to
introduce.
Mr. SHAYS. Thank you, Madam Chairwoman. I would just like to
welcome Richard Fox, who is the executive director of the Stamford
Housing Authority. He was the assistant executive director in
Trenton, New Jersey, the executive director in Carteret, New Jersey, and the executive director in Plainfield. Since 1980, he has
been in this business and was educated at my alma mater at New
York University Grad School of Public Administration and Rider
College and he has just been a wonderful addition to the Fourth
Congressional District in Stamford. He has made me a real believer, he and his team, in HOPE VI grants. I am delighted,
Madam Chairwoman, that you invited him to testify.
Chairwoman WATERS. Thank you very much. And the next gentleman on our panel with us today is Mr. Kelly, who is executive
director of the District of Columbia Housing Authority, and I do

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21
know that he is a member of the same organization as Mr. Montiel,
the Council of Large Public Housing Authorities, and I have had
an opportunity to interact with him, and had the opportunity to
speak before that group not so long ago, and I welcome him here
today.
Thank you very much. All right, Mr. Montiel. We will start with
you. You may proceed with your testimony for 5 minutes.
STATEMENT OF RUDOLF C. MONTIEL, EXECUTIVE DIRECTOR,
HOUSING AUTHORITY OF THE CITY OF LOS ANGELES

Mr. MONTIEL. Madam Chairwoman, Ranking Member Biggert,
and members of the committee, thank you for the invitation to
speak before this House subcommittee on such an important issue
as HOPE VI reauthorization. What I would like to do first of all
is sketch a broad vision of the affordable housing crisis that we
have in Los Angeles today, and then lead into how HOPE VI reauthorization, and the activities that we would like to pursue in Los
Angeles, would help address that situation.
First, some general remarks about Los Angeles and the affordable housing crisis; it is arguably the most challenging in the
United States. Skyrocketing rental costs—a majority of Angelenos
families today spend more than 40 percent of their income for rent.
Increasing population—whereas many cities in the Nation have actually reduced in size in the last decade, Los Angeles continues to
grow. Today, there are over 4 million people living within the City
limits. Lengthy commutes—Los Angeles is known for traffic, and
those lengthy commutes have impact not only on quality of life but
on quality of life for the people who live in the City, vis-a-vis pollution and other aspects. Occupancy rates—the recent USC Casden
forecast on the multifamily situation in Los Angeles shows us that
today in Los Angeles, the City is occupied at 97.5 percent in every
submarket. That means that Los Angeles is full from a rental housing market, whether it is Brentwood to Boyle Heights and from
Westwood to Watts. Against this backdrop, the City of Los Angeles
has 8,000 public housing units, a very small public housing inventory when compared to much smaller cities throughout the country.
And we have those in primarily 16 large family sites, although we
also have some senior units.
Interestingly, the situation, the physical condition of our public
housing stock shows that we have about a $500 million backlog in
deferred capital needs. But this only speaks to the easy part of resolving our public housing situation, and that is fixing the buildings, fixing the real estate. That is really the easy part. The much
tougher problem is how do we transform the lives of the roughly
8,000 families who live in public housing today? Our occupancy
rate is 99 percent plus. And we are talking about the opportunity
for HOPE VI to represent filling that vital self-sufficiency gap for
those families trying to fight their way out of poverty against incredible obstacles.
Let the numbers tell the story. Residents of public housing in Los
Angeles make on average about 18 percent of area median income
in one of the wealthiest cities in the country. Some public housing
communities have an unemployment rate of 85 percent. Graduation
rates from high school are less than 50 percent, and the children

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who live in public housing face some of the most daunting challenges when it comes to their personal safety.
There is inadequate health care, inadequate child care, and inadequate elder care, in our public housing. But there is hope. And we
believe that we have a window of opportunity today in Los Angeles
to begin a citywide redevelopment effort, but we will definitely
need HOPE VI to make it a success.
Our mayor, Antonio Villaraigosa, is an ardent proponent of
transforming public housing. The councilmen and women with
large public housing developments in their districts are very supportive of redevelopment. And even our congressional representatives will support redevelopment if it is done right. And what does
that mean? In Los Angeles it means that we redevelop with mixed
income and mixed use. It means a one-to-one public housing replacement.
Yes, this is challenging. Yes, this will require additional subsidy
and additional capital moneys. But it is the only right thing to do
in a city that has only 8,000 public housing units to serve a population of 4 million. Transit-oriented where possible. We have public
housing developments that are within walking distance, of very
short walking distances of the green line, the blue line, these are
Metro lines, and would be ideal places for transit-oriented development. What does right mean? It means that residents in general
will not face forced relocation and will have the right to return
after redevelopment.
It means significant investment in jobs. Yes, you may have local
hiring agreements. You want to have the opportunity to hire as
many local residents as you can, working closely with the unions
to get these young men and women into apprenticeship programs.
It means family self-sufficiency and homeownership opportunities.
It means partnering with educational organizations to improve the
educational quality as well. And finally, it means for our City, redeveloping not just on the south side but also on the east side. The
leadership of our board of commissioners and Chairperson Bea
Stotzer, the board has set the bar high.
Chairwoman WATERS. I am sorry. Your time is up.
Mr. MONTIEL. Thank you.
Mr. SHAYS. She is tough.
Chairwoman WATERS. Not really.
[The prepared statement of Mr. Montiel can be found on page 80
of the appendix.]
STATEMENT OF CHARLES WOODYARD, EXECUTIVE DIRECTOR,
CHARLOTTE HOUSING AUTHORITY

Mr. WOODYARD. Good afternoon, Chairwoman Waters, Ranking
Member Biggert, and members of the subcommittee. First, allow
me to thank you for the opportunity to give testimony on the benefits of the HOPE VI Program and to present compelling reasons
why the Program, with some refinement, should continue.
The HOPE VI Program’s original mandate of eliminating distressed units of public housing across the Nation and replacing
them with mixed income communities represents a formidable
task. Add to that task the additional goal of deconcentrating poverty, plus eliminating urban blight, and you have a complicated

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public policy goal that impacts real people and the health of American cities.
To the extent that cities are a collection of people and commercial economies that thrive or suffer as a result of market forces and
government intervention, HOPE VI can be seen as an attempt to
grow and stabilize America’s economy. To the extent that cities are
a collection of diverse people, diverse cultures, and children who
are the foundation of the country’s future, HOPE VI can be seen
as an attempt to raise the minimum standard of living for more
Americans.
Whatever your take on HOPE VI as a public policy might be, it
is important to understand that the public policy must also have
a measurable impact on the lives of Americans and the health of
American cities. With this in mind, it would be helpful to understand the nature of Charlotte, North Carolina and how HOPE VI
is used as a growth strategy, a community building strategy, a way
to impact the self-sufficiency efforts of very low income families.
Charlotte’s real estate market is one of the most vibrant in the
country. Unemployment is low, home prices are rising rapidly despite the national trend, but income increases are not quite keeping
pace with housing and energy cost increases. The result is that
over 11,000 very low income families in the community either live
in substandard housing or pay more than 30 percent of their income for housing.
In short, Charlotte is suffering from growing pains. A major catalyst for the idea of a new way of providing affordable housing as
a growth strategy was the City’s first HOPE VI grant. Earle Village was a 400-plus unit public housing complex in the heart of uptown Charlotte. This low income housing community dominated the
entire quadrant of the uptown area and was a major source of
crime, the perception of crime, the lack of housing development in
uptown and the suppression of property values in uptown. The
award of the City’s first HOPE VI grant meant that mixed income
housing and mixed use development would be the norm for development in our City. The HOPE VI site was transformed into a diverse community with different housing types and incomes nearly
along the entire spectrum of incomes.
The next logical question then is what happened to all those families in Earle Village and the other families in HOPE VI communities? The Charlotte Housing Authority has received four HOPE
VI revitalization grants and one demolition grant for a total of over
$122 million. The five communities directly impacted by the HOPE
VI grants total over 1,500 units of severely distressed crime-ridden
apartment homes that were breeding grounds for social disorder.
The HOPE VI grants eliminated those distressed communities and
replaced them with 13 mixed income family communities, 5 public
housing senior communities and 474 Section 8 vouchers. These new
communities contain 1,366 public housing units, 974 affordable
moderate income units, and 978 market-rate rental units, along
with 85 homeownership units that were developed on the original
HOPE VI sites for former public housing families. All told—and
this is the transformation summary—1,531 housing opportunities
for 30 percent AMI and below families were transformed into 1,729

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housing opportunities in mixed income environments or Section 8
vouchers in neighborhoods of the family’s choice.
I mentioned earlier that Charlotte was experiencing growing
pains. And according to our own local research, the affordable
housing problem in Charlotte impacts low income families more
than any other income level. The need for 11,000 additional units
in Charlotte for families earning at or below 30 percent of AMI is
the only income level in the City that demonstrates a shortage of
units. In a city with this demography, one-for-one replacement is
essential public policy. Charlotte’s Housing Authority is subjected
to tremendous local pressure to commit one-for-one replacement
when vitalizing our community under HOPE VI. And as a part of
the community’s initiative, we are replacing more than one-for-one.
[The prepared statement of Mr. Woodyard can be found on page
116 of the appendix.]
Chairwoman WATERS. Thank you very much. Mr. Fox.
STATEMENT OF RICHARD FOX, EXECUTIVE DIRECTOR,
STAMFORD HOUSING AUTHORITY

Mr. FOX. Thank you, Madam Chairwoman. My name is Richard
Fox, and I serve as the executive director of the Stamford Housing
Authority. My testimony today is in support of the renewal of the
HOPE VI Program. I would like to thank Chairman Barney Frank
and Chairwoman Maxine Waters as well as Ranking Members
Baucus and Biggert for the opportunity to speak today. I would
also like to thank and commend Representative Christopher Shays
for his commitment to the HOPE VI Program and for the actions
he has taken to ensure its continued success.
Stamford Housing Authority is a progressive medium sized public housing authority located in a city of 120,000 residents in southwestern Connecticut. In its evolution as a successful sponsor and
developer of mixed income housing, the Stamford Housing Authority and the community that it serves have benefited substantially
from the HOPE VI Program. This program has enabled the authority to create various development models that are uniquely suited
to the needs of the City.
Based upon my experience with the program, I would like to
offer comments on two features of the proposed reauthorization, the
right of return provision and one-for-one replacement provision.
The Stamford Housing Authority believes that the right of return
for residents of the original site is an important program element.
However, returning residents should have a one-time opportunity
to reoccupy the development, providing they meet locally established rehousing criteria. Once a resident has selected his/her housing option, a person on the waiting list who does not have housing
should be offered the opportunity to move into the subject property.
In addition, it is important to recognize that residents often wish
to make other housing choices which may be of benefit to them, as
well as to the broader community.
The Stamford Housing Authority has achieved success with assisting public housing residents to become first-time home buyers.
We anticipate placing more than 150 working families into their
own permanent homes. This transition serves a dual benefit by also

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making the rental unit available to a new family, thus freeing up
a unit of affordable housing.
Stamford’s landmark one-for-one replacement ordinance, passed
in 2001, grew in large part out of a local affordable housing crisis
and was precipitated by resident fears of displacement. The Stamford Housing Authority helped to craft this ordinance, and by
standing alongside residents successfully promoted its passage. The
Stamford one-for-one replacement initiative was instrumental in
building essential trust and cooperation between public housing
residents and the Stamford Housing Authority, enabling us to become a successful HOPE VI practitioner.
We feel that the provision of one-for-one replacement should receive consideration in any proposed bill. However, it should not be
required of every HOPE VI development. A community may not
support a HOPE VI development that must have one-for-one replacement, thus foregoing an opportunity for the residents. This
provision should be fully vetted in the community. A one-for-one replacement requirement on all HOPE VI developments will mean
that individual HOPE VI grant amounts need to be significantly increased in order to maintain the desired mixed income nature.
While increasing the number of public housing replacement units,
we would need to add market-rate units. This will require more
land and financial resources. The need to acquire property for offsite development will add complications and potential delays to already complex projects.
In any event, a requirement to increase the number of replacement units must include the ability to deliver them through nonACC funding mechanisms such as project-based Section 8 units.
Replacement units should further the objective of deconcentrating
poverty consistent with fair housing laws.
The overwhelming success of the HOPE VI Program has been to
promote mixed income communities wherever practical. The Stamford Housing Authority is in support of the reauthorization of
HOPE VI through 2015. It is perhaps the best program in the Nation for addressing the accumulated capital needs of the public
housing program, which was estimated at $20 billion in a study
commissioned by HUD. By leveraging Federal funds with private
and other public capital, usually on a four-to-one basis, HOPE VI
has proven to be an effective catalyst in the redevelopment process.
Thank you.
[The prepared statement of Mr. Fox can be found on page 54 of
the appendix.]
Chairwoman WATERS. Thank you very much. Mr. Kelly.
STATEMENT OF MICHAEL P. KELLY, EXECUTIVE DIRECTOR,
DISTRICT OF COLUMBIA HOUSING AUTHORITY

Mr. KELLY. Good afternoon, Chairwoman Waters, Ranking Member Biggert, and other members of this very important subcommittee. My name is Michael Kelly, and I am executive director
of the District of Columbia Housing Authority. I am also the vice
president of the Council of Large Public Housing Authorities, the
vice chairman of the National Organization of African Americans
in Housing, and I serve on the Housing Committee of the National
Association of Housing and Redevelopment Officials. I am honored

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to have an opportunity to join you today to discuss the housing authority here in the District’s HOPE VI efforts.
As a housing authority, our core mission is to care for and manage 8,000 units of public housing and administer over 12,000
vouchers. We carry out this mandate with the quiet confidence that
only skill and the many years of collective experience bring. Given
the substantial funding cuts to the National Public Housing Program, the District of Columbia has to struggle to maintain basic
property management services to our clients. We are most thankful
to your leadership and the leadership of Congress for securing additional resources for public housing this year, and I ask for that
support to continue.
The housing authority is fortunate to have six HOPE VI grants
totaling over $160 million. These grants have leveraged an additional $695 million in other public and private funding. These sites,
combined with our other redevelopment efforts, have generated
about $2 billion worth of economic development, and we have increased the number of low income families served at these sites
from about 2,400 in 1995 to over 4,000 today. Of our six HOPE VI
sites, two are complete, one is 50 percent complete and occupied,
and three are in various stages of construction.
Every HOPE VI plan includes a community of support of service
program designed to meet the unique needs of our households. Our
approach to supportive services had a real impact on the economic
and social well-being of our families. Many have received job training and job opportunities, some are now homeowners, and families
now live in a safer, more livable environment.
There is one common thread that runs throughout each of our
sites, and it is the fundamental reason for our success in the District in HOPE VI, and that is the participatory approach to redevelopment. From the first days of our planning process, the housing
authority places a premium on the input and realtime feedback of
our residents and the community.
For example, before submitting our HOPE VI application for
East Capitol, we held over 100 community meetings and resident
training sessions. Our process is transparent and inclusive. We encourage thoughtful discourse and we are responsive to the needs of
the community. Our residents also play a role in determining the
re-entry criteria at each of our sites. Each HOPE VI site has a government steering committee composed of key stakeholders, including the residents. This committee opines on many policy issues, including the re-entry criteria. This criteria covers areas such as
credit, criminal activities, and basic tenant activities, such as the
payment of rent and housekeeping habits. While the criteria has
been slightly different for each site, the common goal has been creating parameters that will promote the return of former residents,
while still cultivating a healthy and vibrant community.
Several years ago, the District Housing Authority decided to
build back every unit of low income housing we demolished. This
commitment to one-for-one replacement was first manifested in our
Capper/Carrollsburg site, which is near the new baseball stadium
here. We will be able to achieve the one-for-one there because of
the value of the land, given its location, the City’s aggressive housing market, and our capacity to greatly expand the density of the

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site which we need to truly create a truly mixed income community. The HOPE VI grant will pay for the replacement of the public
housing units.
We are fortunate to bring these units back, but it is important
to note that this policy may not be possible at other HOPE VI sites
throughout the country, given the potential weaker market conditions, impediments to replacement of housing, and HOPE VI grant
amounts.
Our job is far from over, though. The housing authority has embarked on an aggressive plan to reposition our developments to be
viable into the future. We secured over $80 million 2 years ago in
bond funding to address the long-term maintenance and system
needs at 31 of our sites. But despite our successful HOPE VI efforts
and this bond modernization work, there are at least 14 sites, 14
developments that still have comprehensive physical and social
needs. We simply do not have the money to revitalize these sites,
so the need for HOPE VI continues.
Madam Chairwoman, I am sure you have seen HOPE VI sites
throughout the country, particularly those piloted by my able colleague from Los Angeles, who is here today. But I invite you and
your staff and other members of this committee to tour the housing
authority sites right here in the District as you consider the reauthorization program that has changed the landscape of urban
America.
Thank you again for this tremendous opportunity to testify before you. I request that my written testimony be submitted for the
record, and I am available to respond to any questions that the
committee may have.
[The prepared statement of Mr. Kelly can be found on page 58
of the appendix.]
Chairwoman WATERS. Thank you very much. I would like to
begin the questioning by first stating—rather than starting with a
question, I would like to state that resident involvement is very,
very important to me and to a number of other members of this
committee. And I am very pleased to hear Mr. Kelly talk about the
100 meetings or so that they held prior to your development of the
HOPE VI project.
I would like to ask each of you about resident involvement. Do
all of you feel the same way? Do you have other ways by which you
have accomplished making sure the residents are involved?
If so—Mr. Fox, what do you do?
Mr. FOX. We started with, of course, a series of hearings prior
to the application in the neighborhood, and soliciting residents who
live in the complex—neighbors and also the political representation
of the neighborhood—and we actually had them participate in committees that helped in the design of HOPE VI, consultation about
the architectural aspect, consultation about the management plan,
and consultation about how we would effectively also lobby together for funds, State funds to help the HOPE VI Program. We
have State funds in it.
Chairwoman WATERS. Thank you very much.
Let me just get to Mr. Woodyard before my time is up.
Mr. WOODYARD. Thank you. We do all of those things, Madam
Chairwoman. And we also have the residents participate in the de-

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sign charrette, where they have given us great ideas on how to design the community from a public safety standpoint, child care
standpoint, a transportation standpoint, and an economic development standpoint.
We also have currently on our board—our resident representative is a member of our latest HOPE VI community, and she has
been invaluable in giving us feedback about our revitalization efforts.
Chairwoman WATERS. All right. Let me just quickly ask about
some of these local requirements for getting back into the HOPE
VI developments. What is this about credit checks? Is that true?
Mr. WOODYARD. That is one of our requirements.
Chairwoman WATERS. Why do you require a credit check?
Mr. WOODYARD. We have a requirement for a family self-sufficiency program in our HOPE VI sites, and we actually repair a
family’s credit. We help repair the credit if they do not meet the
credit requirements initially.
So typically what we do is put the person in a credit repair program, and before they get back into our communities—it could take
a year or two, and we may have to relocate the family more than
one time, but we get them ready to get back into the community.
Chairwoman WATERS. Why is it important for you to do that?
Mr. WOODYARD. We believe that public housing is transitional.
And one of the things that we found out about our private partners
is that the mixed income approach works better when we have
families actively engaged in self-sufficiency activities.
As a matter of fact, we have had a good success rate with repairing credit, and we have—
Chairwoman WATERS. Do you think that you are keeping people
out who may not be able to get in for a year or two while you do
the repair?
Mr. WOODYARD. They will be living in public housing.
Chairwoman WATERS. Let me just ask you this. There are people
who perhaps, you know, lose their jobs—
Mr. WOODYARD. Yes.
Chairwoman WATERS. —and they may have been working, they
may have been middle class. They fall on hard times. They need
public housing because they have fallen on hard times, and usually
when you fall on hard times, you can’t pay your bills—
Mr. WOODYARD. Right.
Chairwoman WATERS. —and you have to, you know, get yourself
back together. So they need public housing.
How is it that someone who may be in difficulty, who has fallen
on hard times, can’t pay their bills, needs to get into public housing, how is it you keep them out because they can’t pay their bills
right now?
Mr. WOODYARD. We don’t keep them out of public housing. They
are in public housing or have a Section 8 voucher, but in order to
return to a mixed income HOPE VI community, we attempt to help
them repair their credit.
Chairwoman WATERS. Does anyone else do that?
Mr. FOX. We do something different.
Chairwoman WATERS. What do you do?

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Mr. FOX. What we designed with the residents association is a
Family First Program which—a key component of it is education,
where we let residents know all of the educational facilities.
Chairwoman WATERS. But do you let them in with bad credit?
Do you check their credit first?
Mr. FOX. No. They are already residents. They are already residents.
Chairwoman WATERS. Well, that is the right of return. But what
I am hearing is, in this so-called ‘‘right of return’’ they may be
stopped in your project, Mr. Woodyard, because they don’t have
good credit.
Is that true with you, Mr. Fox?
Mr. FOX. No. They are not stopped from coming in, but we do
have an educational program—
Chairwoman WATERS. Okay.
Mr. FOX. —to try to improve it. Also to make the family aware
of what educational facilities are available for children.
Chairwoman WATERS. That is good.
Mr. Kelly, in your project, if someone who is sitting on the panel
to determine whether or not the people can get back in the HOPE
VI, do they all have good credit?
Or what happens if they fall on hard times and their credit is
bad? They are sitting in judgment. How do they do that?
Mr. KELLY. Well, the credit repair effort begins on day one. It actually begins early on. Much as there is the participatory approach
in the design effort, the community supportive service component
begins long prior to the actual building being done.
So the timeframe is such that we recognize—we tell everybody
on the front end, this is a new dawn. We are really looking for folks
to take advantage of the convenience and supportive service component of it, and credit repair is an important component of it.
No one is displaced by bad credit. And the credit standard that
we have here is actually lower than the credit standard that our
private partners have in the same development.
Chairwoman WATERS. All right. I am going to have to cut you off
now. My time is up.
And I am going to go to Mr. Shays.
Mr. SHAYS. I am happy to yield to one of my colleagues, and then
I will be happy to go.
Chairwoman WATERS. All right. Would you like to go, Mr. Cleaver?
Mr. CLEAVER. Thank you, Madam Chairwoman. Mr. Cabrera is
gone, but maybe your expertise can assist me.
I looked at the HOPE VI statute, and it says if a guarantee
under this section does not proceed within a reasonable timeframe,
and there is a determination of the Secretary, the Secretary shall
withdraw any grant amount under this section.
It goes on and says, the Secretary shall redistribute any withdrawn amounts to one or more other applicants eligible for assistance under this section. And my understanding from the Assistant
Secretary was that wasn’t possible. Maybe I just didn’t read this
in a way that wouldn’t confuse me.

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So I am wondering, in your PHAs, have you spent all of your
HOPE VI money that was allocated? And if not, do you have any
idea of what has happened to it?
Mr. WOODYARD. Congressman, we have spent all of our original
grant, which was a 1993 grant. The other three grants that are revitalization grants are on schedule, and our funds are being expended according to the schedule that we agreed to with HUD. So
we are not in danger of having any funds recaptured.
Our latest grant, the latest guidelines say that you have 4 years,
and we are on schedule and actually a little under budget in our
expenditures right now.
Mr. KELLY. If I can, sir, a recognition: I think it is important for
the committee to note that from the time of appropriations to the
time of award to the time the housing authority is actually getting
the dollars, there is quite a bit of time that runs where the authority doesn’t even have the dollars to deal with it. So I just want to
add that to the discussion, the research, when you talk about the
timeframe of it.
And if I can, one other important note for the committee’s consideration, the District of Columbia Housing Authority was under
some criticism for not meeting a timeline benchmark at one of our
sites. And our position was, that is okay, because we were dealing
with a very humanistic approach to relocation. And if we were to
be dinged by HUD because of an arbitrary benchmark on time, it
was something—we felt it was something worthy.
Because, I tell you, at the end of the day, there were no lawsuits.
We had an opportunity for folks who wanted to return to express
that opportunity, for the community buying into it; and at the end
of the day, that is much more valuable than arbitrary timeframes.
Mr. FOX. Let me mention that we are meeting all of our benchmarks, and meeting them on time. However, it is a substantial
challenge to meet them because we are juggling about five grants
at one time.
You bring on the HOPE VI Program, you have to get the tax
credit within the cycle of the State tax credits. You also have to
apply for debt with your housing finance agency. You are working
with the city to bring on grants, and they have timetables. And you
are also working with homeownership programs and with syndicators.
All those items have to be balanced—and deliver the construction
on time, and still facilitate excellent communications with the
neighborhood; and that sometimes—by having those excellent communications and not going faster than the people are ready for, for
the next phase, that can slow you down.
But even with all of that, we have been able to meet our benchmarks, stay on time, expend the money, and be in the correct
phases.
But it is a challenge in the HOPE VI Program, because you are
leveraging the HOPE VI money, which may be around $20 million,
two, three and four times which, in private industry that isn’t always done. But we in public housing, remarkably, are quite often
able to leverage our money three and four times in the real estate
community at large. That is excellent.

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Mr. MONTIEL. Congressman, in Los Angeles we only have one
open grant, and we are about halfway done with that. The other
grants have been closed, finished out.
Mr. CLEAVER. Mr. Miller is not here now, but he had mentioned
or suggested that there were private developers who would be anxious to do this. We did four HOPE VI projects in Kansas City when
I was mayor, and maybe I overlooked the private developers who
were beating on the door to get in.
Are you finding that the private developers are hounding you
about participation?
Mr. FOX. We have found that we have had excellent participation
with private developers where we have been the asset manager,
and also where we have jointly been co-developer. And I want to
say that we have also had nonprofits actually put proposals in to
us to do a certain phase of the development where, under our asset
management, they will manage the property and receive certain
fundings; so that there is a partnership already in the public housing program with private developers and with nonprofits.
Chairwoman WATERS. Thank you very much.
Mr. Shays?
Mr. SHAYS. Thank you. I would like to ask each of you to add
to the Secretary’s testimony any response to any questions, anything that each of you would like to just highlight as something
you agree or disagree with, to start.
Mr. MONTIEL. I think what I agree with, Congressman, is that
in Los Angeles, we will have nonprofit and for-profit partners, and
we will seek to triple the number of units by adding a workforce
and market rate component to our public housing component.
Mr. WOODYARD. The only thing I would add is a partial answer
to Congressman Cleaver’s question, and that is that there are not
private developers clamoring to do HOPE VI without a public housing authority partner.
And that is a segue to this comment: that the body of regulations
and bureaucracy associated with the HOPE VI grant process is extremely complicated. It is not just the financial mechanism. So the
idea of jumping through the regulatory hoops is something that
most private sector partners do not want to do, and we would suggest that the program be simplified.
Mr. SHAYS. Thank you.
Mr. FOX. I heard the Secretary say that this program should not
be funded. I find that hard to understand. With HUD’s own study
of a $20 billion backlog of modernization needs in the public housing of America and HUD’s own study, out of the 80 million renters
in America, 5.9 million, as reported in the New York Times the
other day, are distressed in that they live in substandard housing
or housing where they pay more than 50 percent of their income.
This is an excellent model to go forward and have a housing production program in America.
Could I point out to the Congressmen and Congresswomen today
that we don’t have a production—a housing production program for
affordable housing in America other than the tax credit program.
Mr. SHAYS. Thank you.
Mr. Kelly.

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Mr. KELLY. If I can echo my colleague’s comments of a moment
ago, it is worth it. The Secretary talked of simplicity, and I totally
concur.
The Secretary also referenced the community-supported service
component of it. That is critically needed, especially in light of the
loss of the Public Housing Drug Elimination Program funding. And
here in the District and, I think, across the country, the capital
grant dollars—not enough; the development program—not in existence.
Without this program, there is still very much a gap between
what we have done and what we still need to do. And I think—
the colleagues that I have across the country have now developed
the expertise, we have developed the relationships with the private
development community in terms of respect and the ability to do
this stuff. And we really just need to have a program like HOPE
VI reauthorized to get it done.
Mr. SHAYS. The thing that just kind of confuses me a bit is that
my Republican colleagues talk about how we should have the private sector, and we don’t want a government program running
things. And this is this magnificent program that marries everyone
together and eliminates what I think is the worst part of the traditional public housing, where we just warehouse the poor.
And so at every level it would seem to me that instinctively my
Republican colleagues would be the most enthusiastic about this
program. Besides that, they are not saying the program doesn’t run
well, they are not saying there is a lot of waste; they are just saying that it takes too long. That is their one criticism.
So I appreciate all of you staying with it, and I yield back my
time.
Chairwoman WATERS. Thank you very much.
Mr. Green?
Mr. GREEN. Thank you, Madam Chairwoman.
It seems to me that the Administration doesn’t want a HOPE VI
Program. They would like to have a Hope Zero Program, because
zero is the amount of money that they proposed to allocate for the
program. And that is very unfortunate, it really is, because I think
by most standards this program has been a success. And most of
the people who are where the rubber meets the road would like to
see the program continue and expand upon the program.
I question where the Administration acquires its intelligence
such that it concludes that this program is not worthy of continuation. It really is something that baffles me.
But the good news is, we have a chairman who believes in the
program, and we have a subcommittee chairwoman who believes in
the program. I am just grateful that these persons are in place, and
hopefully, with them, we will move forward in a positive direction.
Now, having said that, Mr. Woodyard, and I appeal to you, because when the Chair addressed the question of credit, I too was
baffled as to how is it that a person can be creditworthy for a Section 8 voucher, but not creditworthy for a HOPE VI dwelling. I
don’t see the connectivity.
I don’t see the nexus between the credit and living in the HOPE
VI project.

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Mr. WOODYARD. For Charlotte, HOPE VI is synonymous with an
effort to move towards self-sufficiency. So by its very nature, in our
City, once you become a nonsenior resident of a HOPE VI community, you have made a commitment to, in 5 to 7 years, move up and
out of public housing. So it really is a push to move people toward
self-sufficiency.
Now, if the credit ratio doesn’t meet our standards, or whatever
the index is for credit doesn’t meet our standards, we work with
them strongly for credit repair. So their credit may be okay for
public housing in a 100 percent public housing community or a
voucher community, but you have not committed to, in those cases,
a movement toward self-sufficiency.
So we work with you, because at the end of the day, we have a
Homeownership Institute for our families; and we have a success
rate that we are very proud of—when people graduate from our institute, and are living in a HOPE VI community, they are mortgage-ready and going to buy homes. So that is our goal, not just
to house them, but also to move them out of public assistance.
Mr. GREEN. And you have statistical information to validate a
success ratio that you—
Mr. WOODYARD. I do. It is not in my written testimony, but I can
provide that.
Mr. GREEN. I would be interested in seeing your statistical information, the empirical data that supports your contentions.
Mr. WOODYARD. Yes.
Mr. GREEN. Now one more thing. I understand that some housing projects require persons to be employed before you can re-enter
as well. If you have such a requirement, would you kindly extend
your hand into the air?
Mr. Woodyard, let us talk about the employment facet.
Mr. WOODYARD. It is actually the same answer as the credit repair answer.
Mr. GREEN. All right. Thank you, Madam Chairwoman. I yield
back.
Chairwoman WATERS. I am sorry, we were back here commenting on the credit problem. So I am going to move to Mr. Watt
now for 5 minutes.
Mr. WATT. Thank you, Madam Chairwoman. And I really would
like not to take 5 minutes, but I do want to explore one aspect of
what we are trying to do, something that Mr. Fox and Mr. Kelly
touched upon in their comments; and I know that it is an issue
that all of us are wrestling with. That is the issue of one-for-one
replacement.
I think Mr. Fox and Mr. Kelly both indicated that it may not be
possible in every one of these to provide for one-for-one replacement. I am not sure that I think that is an option. But I do want
to assure them that we are very seriously concerned about how this
one-for-one replacement issue plays out.
We know that, for example, in Charlotte, if we play it out in the
way that would require constructing the one-for-one low-income replacement unit in every community that is a HOPE VI community
we would run afoul of some litigation that has taken place there,
because the courts have prohibited—because of concentrations of
public housing, they have prohibited constructing more public

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housing in some sections of our city until that is spread around,
which is consistent with our public policy to spread poverty and
public housing around to other parts of the community.
It is not because people don’t want it in their backyard, it is because we know that we have to force some people on the opposite
side of town to take it in their backyard, whether they want it or
not.
We know that, as either Mr. Fox or Mr. Kelly indicated, it is also
a function of the amount of the HOPE VI grant and the size of the
project, because if you are taking out 100 public housing units, it
may be easier to put 100 public housing units back in a 500- or
400-unit development, HOPE VI development. But if you are able
to put back in only 100 units, all you have done is reconcentrated
poverty, and that undermines the original objective.
So I am not sure we can get where Mr. Fox and Mr. Kelly said
we might need to get on this as a public policy issue, where you
don’t require one-for-one replacement. I think a number of us are
absolutely unequivocally committed to that.
But it may be possible to define one-for-one replacement in different ways, not necessarily in the HOPE VI redevelopment itself,
in a larger community context, maybe some consideration of Section 8 vouchers in appropriate circumstances. But the wording of
that has to be very carefully crafted, and maybe, in some extreme
circumstances where a housing authority could justify not doing
one-for-one replacement, some kind of waiver system that once
they demonstrated that it is entirely impossible or inconceivable to
do one-for-one replacement in a reasonable timeframe.
But the bottom line is, I have invited a number of people to try
to craft language that encapsulates all of those things. And I hope
you will be actively encouraging people within the next day or so
to give us that language, because we are at a critical juncture in
this process now. And it gets more difficult to change the language
once it is in a bill and the bill has been introduced than it is to
try to get it right in the original bill.
So I hope you all will aggressively push to come up with some
language that would meet all of the considerations that I have just
outlined to you here, and invite you to do that.
I thank the chairwoman and I yield back.
Chairwoman WATERS. I thank you very much, Mr. Watt. And I
would like to thank our panel for coming today and providing us
with such valuable information. I want to thank you for your patience also.
And I think Mr. Watt’s advice about getting information to us
that you think would be important to make this a stronger bill is
very important. Let me just add a little bit of a warning on this;
and that is that one-for-one, as Mr. Watt said, is extremely important to many of us. And number two, I don’t think that I am working hard on HOPE VI just for people who are employed and have
good credit. So be careful with that. Thank you.
Some members may have additional questions for this panel
which they wish to submit in writing. Without objection, the hearing record will remain open for 30 days for members to submit
written questions to these witnesses and to place their responses
in the record. And thank you again.

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On our next panel, we will have Dr. Susan Popkin, principal research associate at the Urban Institute; Ms. Yvonne Stratford of
Miami, Florida—Ms. Stratford is the leader of Low Income Families Fighting Together, and a former resident of the Scott/Carver
Homes Public Housing Development, a HOPE VI grant site—Mr.
George Moses, chair of the board of directors of the National Low
Income Housing Coalition; and Ms. Doris Koo, president and CEO
of Enterprise Community Partners. So, without objection, your
written statements will be made a part of the record, and you will
now be recognized for a 5-minute summary of your testimony.
With that, we will go to our first witness, Dr. Susan Popkin.
STATEMENT OF DR. SUSAN J. POPKIN, PRINCIPAL RESEARCH
ASSOCIATE, THE URBAN INSTITUTE

Dr. POPKIN. Chairwoman Waters, and members of the committee, thank you for inviting me to testify at this hearing on the
proposed reauthorization of the HOPE VI Program.
My remarks today are based on findings from the Urban Institute’s HOPE VI Panel Study. This research is the only national
study of outcomes for HOPE VI families, and addresses basic questions about where residents move and how HOPE VI affects their
wellbeing overall. This study has tracked the experiences of a sample of about 900 residents from five developments across the country that were slated for redevelopment in 1999 and 2000; I am
going to give you some of the highlights.
First, most of the residents in our study have not yet moved
back. The largest number, 43 percent, have received Housing
Choice Vouchers. Another third have moved to traditional public
housing developments. Some of those are still in their original development. And only 5 percent are living in mixed income communities. These sites are not yet complete, and the number of returning residents will likely increase over time. But there are simply
fewer public housing units for them to return to, and some sites
have imposed screening criteria that exclude some former residents.
On the positive side, many of the residents who have moved on
are satisfied with their new housing, and are not interested in returning. Voucher movers and those in mixed income communities
report substantial improvements in housing quality and are living
in lower poverty neighborhoods. They are living in conditions that
are far safer than their original developments.
Nearly all of them reported big problems with crime and drug
trafficking before they moved; only 16 percent of them report such
problems now. These improvements in safety have had a profound
impact on their quality of life. They can let their children play outside, they are sleeping better, and are feeling less worried and anxious overall. There is no question that the enormous improvement
in safety and reduction in fear of crime has been the biggest benefit
for most moves.
Children who have moved to these safer neighborhoods are also
doing better in important ways. However, those who have been left
behind in traditional public housing, especially teenage girls, are
struggling and increasingly likely to be involved in delinquent behavior.

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While residents who have moved with vouchers are doing well
overall, many are having trouble making ends meet, and are struggling to pay their utilities. Poor health is an extremely serious
problem for these residents. They suffer conditions like hypertension, diabetes, and depression at rates more than twice the average for black women nationally. And the death rate of HOPE VI
residents far exceeds the national average for black women, with
the gap increasing dramatically at older ages. Residents’ health
problems impede their ability to work.
Because of these barriers, we find HOPE VI had no impact on
employment rates overall. Indeed, helping residents manage their
health challenges could be a more effective self-sufficiency strategy
than job training or job placement alone.
Hope IV did not increase homelessness. Less than 2 percent of
these residents experienced homelessness at some point during the
4 years that we tracked them. Another 5 percent were precariously
housed, which means they were doubled up with friends or family.
These figures are comparable to those from other studies of public
housing populations.
And, finally, HOPE VI is not a solution for the hard-to-house—
families who are coping with problems such as mental illness, severe physical illness, substance abuse, poor work histories, and
criminal records. Hard-to-house families are more likely to end up
in traditional public housing than the private market, and so are
little better off than they were before HOPE VI revitalization.
Housing authorities should offer meaningful relocation counseling to help residents make informed choices and should provide
long-term support to help more families succeed in the private market or return to mixed income housing. Housing authorities should
provide effective case management and better supportive services
for the most vulnerable residents—children, the elderly, and those
with health problems—during and after relocation.
In conclusion, HOPE VI has done much to improve the living
condition of many former residents, but there are still tens of thousands of public housing units that are severely distressed. The families who live in these developments face the same daily fears and
threats as those in the Hope VI Panel Study who have not been
able to move on. These findings clearly indicate the need to continue to fund revitalization of the remaining stock of distressed
public housing.
[The prepared statement of Dr. Popkin can be found on page 89
of the appendix.]
Chairwoman WATERS. Thank you very much.
Ms. Stratford?
STATEMENT OF YVONNE STRATFORD, FORMER RESIDENT OF
SCOTT/CARVER HOMES, MIAMI, FLORIDA

Ms. STRATFORD. I would like to thank Chairwoman Maxine Waters, Ranking Member Biggert, and the other members of the subcommittee for inviting me to testify on HOPE VI.
My name is Yvonne Stratford, and I am a resident of Annie Coleman’s Public Housing Project in Miami, Florida. I have been living
there for 5 years. I am here as a LIFFT member—Low Income
Families Fighting Together—a nonprofit organization and grass-

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roots organization of public housing and other low-income residents
in Miami.
LIFFT members have a very personal experience with HOPE VI.
I am one of many members who lived in Scott/Carver Public Housing Project, an 850-unit project that was demolished in 2003 as
part of a HOPE VI project. My family was one of the first ones to
be forced out.
As a result of our experience with the Scott/Carver HOPE VI
Project, we have very serious concerns with the program. Our
HOPE VI Project is supposed to better our lives, but it has failed
us. It failed the 1,178 families who were moved out. Many were
made homeless, and no new public housing has been built. I have
still have not been able to return home. After all of us were relocated in 2002 and 2003, the building was demolished, and nothing
was built for years.
The Scott/Carver HOPE VI Project is only going to replace 80 of
850 units of public housing, so many people cannot go back. As you
can see, the HOPE VI Program did not work for us.
But the new leaders of the Miami-Dade Housing have changed.
They have agreed with LIFFT’s suggestions. I am glad that they
are working with us, with the former Scott/Carver residents. They
are putting the people back into houses.
What we learned from HOPE VI in Miami allowed us to make
suggestions for a better HOPE VI around the United States. First,
LIFFT believes that HOPE VI must require replacement of all public housing units with new public housing. Second, we believe that
the residents who lived there before should be able to return without new requirements. Third, we believe that the homes should be
rebuilt in phases, and people should be able to move back in over
time. Also, replacement houses should be built before all housing
is torn down, so that families are not lost while they are waiting
to return to their neighborhoods. Finally, we believe that the residents who do take Section 8 should get a lot of help in relocation.
We understand that the committee is considering these requirements, and we want to thank you and urge you to include them.
Thank you again for inviting me to testify, and I would be happy
to answer any questions that you have.
[The prepared statement of Ms. Stratford can be found on page
112 of the appendix.]
Chairwoman WATERS. Thank you very, very much.
Next we will hear from Mr. Moses.
STATEMENT OF GEORGE MOSES, CHAIRMAN, BOARD OF
DIRECTORS, NATIONAL LOW INCOME HOUSING COALITION

Mr. MOSES. Good afternoon. I would like to thank Chairwoman
Waters, Ranking Member Biggert, and the rest of the subcommittee for inviting me here today.
My name is George Moses, and I am chairman of the board of
directors for the National Low Income Housing Coalition. The Coalition is dedicated solely to ending the affordable housing crisis. I
have served as board chairman since 2006. I am also on the board
of directors of the Housing Alliance of Pennsylvania, which is a
statewide housing organization dedicated to homes within reach for
all Pennsylvanians, and I am a member of the Southwestern Penn-

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38
sylvania Alliance of HUD Tenants. That is a tenant organization
that provides good information to project-based housing coalitions
and also public housing communities.
I am here today to talk about the HOPE VI Program in Pittsburgh, Pennsylvania. There are three HOPE VI Projects in Pittsburgh. The two I will reference are called Aliquippa Terrace, now
known as Oak Hill, and Bedford Dwellings, now known as Bedford
Hill, both located in the historic Hill District of the City of Pittsburgh.
The residents at the beginning were not engaged in the planning
process. The housing authority already brought a plan to them and
said, let’s do this plan. They were told that there would be no onefor-one replacement, and if they took a Section 8 voucher, they
would not be able to return to the property. In the case of Aliquippa Terrace, now known as Oak Hill, 400—let me say that
again—400 persons vanished. They don’t even know where they are
to this day.
And furthermore, the Oak Hill Resident Council had just sued
the Housing Authority of the City of Pittsburgh to complete the
HOPE VI deal that was promised in 2000. Therefore, we approached the possibility of reauthorization of the HOPE VI with
considerable caution.
We very much appreciate the subcommittee’s intentions to improve the HOPE VI Program, and we will work with you to make
that happen. I lived in project-based Section 8 housing on and off
from 1990 until last year. One of the places I lived was Federal
American Properties, located in the East Liberty section of Pittsburgh. The owners of these properties were from Fort Lauderdale,
Florida. We called them absentee landowners.
After being frustrated in attempts to organize those residents to
stand up and fight for their rights, I moved. That hurt, and it was
a big mistake. We were viewed by many officials—property owners,
managers, and local HUD—as a bunch of complainers. When the
property eventually fell into complete disrepair, HUD foreclosed
and sold to a nonprofit. The nonprofit they sold it to was not the
nonprofit that the residents had selected to buy the property and
be their partners.
When this project is completed, there will be a number of units
rebuilt, but not in the amount that were there when the project
was foreclosed upon. There is a shortage of over 10,000 housing
units in the City of Pittsburgh, as I speak.
People in public housing have experienced the same things that
these people have experienced, not being part of the process, not
being given good information about housing choices, no one-for-one
replacement, and not being able to return to the development. The
National Low Income Housing Coalition urges a major reform to
the HOPE VI Program, and I have outlined those in my recommendations and the testimony I submitted.
We believe that resident participation is crucial to the process,
and it must begin at the beginning, before the plan is even submitted. We believe that there should be one-for-one replacements,
because if you take a Section 8 voucher in Pittsburgh and you try
to move to a nonracial-impacted neighborhood, you can’t. You are
therefore forced to move back to another racial-impacted neighbor-

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39
hood, limiting your choices, and the ability of your kids to move on
to a better life. Overall, public housing is in desperate need of additional funding.
I originally came here yesterday to participate in a rally for more
capital and operating funds for public housing authorities, and
many people came from the State of Pennsylvania, as well as all
over. The rally was intended to urge and gather more funding for
public housing operating and capital funding.
I thank you for giving me the opportunity to speak to you today,
and I will be available for questions afterwards. Thank you.
[The prepared statement of Mr. Moses can be found on page 83
of the appendix.]
Chairwoman WATERS. Thank you very much.
Ms. Doris Koo.
STATEMENT OF DORIS W. KOO, PRESIDENT AND CHIEF EXECUTIVE OFFICER, ENTERPRISE COMMUNITY PARTNERS, INC.

Ms. KOO. Thank you, Chairwoman Waters, and distinguished
members of the House Financial Services Committee for the opportunity to speak before you today. My name is Doris Koo, and I am
president and CEO of Enterprise Community Partners.
We are a national nonprofit that brings development capital and
expertise into helping build low-income housing. In the last 25
years, we have built 215,000 units of housing, investing about $8
billion in grants, loans, and equity. Our investment portfolio includes more than 20 HOPE VI developments across the country.
Before I joined Enterprise, I was deputy director of the Seattle
Housing Authority, and we took on four HOPE VI developments of
our public housing complexes. Seattle Housing Authority was
unique in the sense that we were one of the few housing authorities that voluntarily committed to one-for-one replacement housing
and full residents opportunities to return. We replaced all of the
housing that had been torn down since 1994. Every one of them
had been replaced, both on and off-site, in scattered sites, in partnership with the private sector, nonprofit sector, and faith-based
developers. We leveraged $135 million in HOPE VI dollars into
$600 million in private investment.
We are now trying to do the same and replicate these principles
and best practices in New Orleans with a partner to rebuild the
Lafitte Public Housing. As you have heard, HOPE VI is a principle,
but the implementation is subject to the skill set and the commitment of housing authorities all around the country. So it will be
advisable to have in the reauthorization some stronger policy guidance on four principles, and I can sum them up as follows: equity;
opportunity; sustainability; and preservation.
The first principle has to be ensuring equity and fairness in the
redevelopment. Residents must be full partners in the HOPE VI
process before, during, and after. They must have access to adequate and appropriate support services, from relocation counseling,
health care, job training, child care. They be must be apprised of
their choices, housing options, and provided an opportunity to return if they so choose. And to the greatest extent possible, residents must be given the assurance that they have the ability to

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40
come back to a vibrant community, as opposed to in those situations that we heard, scattered to other impacted communities.
Secondly, opportunity. We feel that from our experience that
schools serving these communities’ children must be of high quality. We know that better schools attract families to neighborhoods
and boost property values. But better schools are needed for our
own public housing residents, who need that opportunity to get up
and out of poverty by accessing quality education. Again, in some
of the HOPE VI projects that we have taken on, we have included
an alignment with local public housing and local school systems so
that you work in sync to support both improved schools as well as
improved communities.
Third is the question of sustainability. HOPE VI promises to create mixed income viable and sustainable communities. They provide the best possibility for incorporating design, support services,
as well as long-term green building practices. Energy costs rise
very high and fast, especially for low-income households, who
spend a disproportionate amount of their income on paying energy
bills, and also suffer disproportionately illnesses such as asthma
and lead poisoning.
If you think of HUD’s energy budget, it is $4 billion in utility allowances every year; 10 percent of its budget is spent on utility allowance. If we can just save 5 percent of that spending, in 5 years
we would have saved a billion dollars of new investment for onefor-one replacement housing. I can talk more about those examples
that we have, but we have at least two HOPE VI projects that are
done, fully compliant with green standards.
Finally, the whole question of preservation and one-for-one. Onefor-one must not be done to further impact concentration of poverty. So the principle of one-for-one is to preserve affordability as
opposed to just the physical location of units. We have good examples that we can share with the committee how to replace affordable units in partnership with others throughout the city and in
different developments.
So, in conclusion, these four principles—equity, opportunity, sustainability, and preservation—must be embedded in policy recommendations and strictly adhered to as we reauthorize the HOPE
VI Program. And we strongly recommend full reauthorization of
the HOPE VI Program with these principles embedded. Thank you
very much.
[The prepared statement of Ms. Koo can be found on page 72 of
the appendix.]
Chairwoman WATERS. Thank you very much.
I appreciate the time that you have put in today and your patience. Let me begin again with a statement.
It has taken me some years to basically believe that HOPE VI
was going to be the kind of program that I could support. I have
always been worried about HOPE VI, and at times I thought that
it was a program that was designed to get rid of so-called ‘‘problems’’ in public housing, to thin out public housing and to basically
have a development that is problem free and would make life a lot
better for the public housing authorities.
I have since come to believe that we can make HOPE VI work.
And it is not simply the way I thought of HOPE VI in the begin-

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41
ning. I am committed to the proposition that we can have HOPE
VI, and it can be the kind of a program and development that
should do what was intended for people who are low-income, people
who are in need of support from their government, people who may
not be working, people who may have had some problems in the
past, people who want to get their lives together. And I think that
whether we are talking about public housing as we know it, or
HOPE VI, we should not lose sight of the mission for public housing.
I think that none of it works without the support services, and
we have not had the support services in public housing that are
needed traditionally. And HOPE VI certainly holds out great possibilities for having that kind of support.
But again, I am going to reiterate—and my public housing directors, I really want them to hear this—I am not about to work to
develop letter-perfect HOPE VI Programs that house employed people and people with good credit and people with no problems, because maybe they don’t need public housing in the way that people
who are unemployed, who have had some problems, and who have
bad credit may need public housing.
So I have some real problems with what appear to be regulations
or policies that are being developed at the local level about who can
and who cannot live in HOPE VI projects. And I am wondering
whether or not we are going to have to spend some more time writing into our bill some protections against some of the policies and
practices that I am hearing.
One of the things I am sure I am going to try and do is to write
more specificity into resident involvement. It seems to differ all
over the place. And some people think resident involvement is a
public meeting where you have as many people as you can get to
come out, and you kind of tell them what you are going to do, and
then you just go about your business and do it.
Other people believe that it is a series of meetings, with as much
involvement as you can get, that it is not a one-time thing, that
it is really involving people in design and other kinds of policies,
and I tend to believe that.
I am not one who is fooled by hand-picked resident councils or
boards that are the favorites of the directors who do what they are
told. I am really, really—I know the difference. I have worked with
public housing long enough to know that.
So I am really thinking about what we can do to develop some
guidelines for some real resident involvement. And of course I will
be talking with my colleagues about the elimination of some of the
policies that others will argue that the residents would like to
have.
I just think that requiring good credit before you can live in
HOPE VI projects flies in the face of trying to help people when
they need you most. So I just want to say, so that word will get
out that Maxine Waters said some things, and that some people
may not like it, and there are going to be problems, and all of that.
But I do wish to be as honest and as frank as I can possibly be
about my very strong feelings about some of that.
And having said that, I have gone way over my time, and I will
call on Mr. Cleaver.

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Mr. CLEAVER. Madam Chairwoman, thank you. The hour is late,
and I know some of you have better things to do than to talk to
me, and it won’t hurt my feelings.
But if we had sufficient time—and I think we are going to have
a vote in few minutes—Ms. Koo, I would really like to have some
discussion with you about the greening of HOPE VI. And actually—I mean, we need to—I hope PHA chairs will start becoming
intentional about hiring green PHA directors. If we don’t do that—
I mean, one of the criteria ought to be, you know, in the qualifications ‘‘green thumb.’’ I mean, if we don’t have a green thumb director in 2007, it means that the poorest people are going to live in
the most costly units for energy, and the Federal Government is a
participant.
So I thank all of you for all of the time and effort you put into
coming here to be with us. It is very helpful as we are trying to
formulate this legislation. And I will, for good or bad, be with
Chairwoman Waters in this legislation. Thank you.
Ms. KOO. Thank you, sir.
Chairwoman WATERS. I would like to thank you very much. And
I thank again this panel for being here. I know that some members
may have additional questions for this panel that they will submit
in writing. And without objection, the hearing record will remain
open for 30 days for members to submit written questions to the
witnesses and to place their responses in the record.
I would like to now say to you, please feel free to contact me, or
to contact our staff. We want to work with you. We want your
ideas. We want your input. And let’s see if we cannot work together
to get a bill that will help satisfy the concerns from different ones
of us. I thank you very much for being here.
We need unanimous consent to submit all of the written statements into the record. With that, the panel is dismissed. And
thank you very much.
Ms. STRATFORD. Excuse me. Could I give you this? Because there
is some stuff that I did leave out of here. Because as of now we
are still finding people. We found the people, my organization.
They lost 116 people—
Chairwoman WATERS. Okay.
Ms. STRATFORD. —the county. And we had to go in the street and
find those people.
Chairwoman WATERS. Well, that is exactly what we want to prevent. And we don’t want the kind of policies, like I said, that are
designed to lose people, to thin it out, or to get rid of people. So,
yes, leave your statement with us, and we will put it in the official
record. Thank you very much.
[Whereupon, at 5:31 p.m., the hearing was adjourned.]

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APPENDIX

June 21, 2007

(43)

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