HUD HOLDS PUBLIC HOUSING AUTHORITIES ACCOUNTABLE FOR
SLOW PROGRESS ON HOPE VI DEVELOPMENTS
New measures will benefit families awaiting housing

WASHINGTON - The U.S. Department of Housing and Urban Development today notified five public housing authorities (PHAs) that they are in default of their HOPE VI Revitalization Grant Agreement for failing to meet project deadlines. As a result, these PHAs have 90 days to get their developments back on schedule or risk losing $1,000 daily.

Housing authorities in the following cities have missed the greatest number of self-imposed deadlines and were placed in default today: District of Columbia; Detroit, MI; Biloxi, MS.; Tulsa, OK; Wheeling, WV.

"Of the 193 total grants that have been awarded since 1993, only 22 developments are completed and more than half of the funding - $3 billion - remains in the pipeline," said Michael Liu, HUD Assistant Secretary for the Office of Public and Indian Housing. "This step shows HUD is serious in its efforts to monitor this program and hold all HOPE VI grantees accountable for moving their developments forward," he continued.

The agreement PHAs sign after receiving a HOPE VI grant states HUD has the authority to "disallow use of grant funds for all or part of the cost of the activity or action not in compliance."

HUD has placed a greater emphasis on meeting deadlines and completion of HOPE VI developments. HUD provided a grace period last year to allow PHAs to revise their existing development schedules based on their own determinations of when they would complete a milestone activity. These dates were "locked" and could not be modified.

Even though many grants are behind schedule, these grants have missed 10 or more key activities. Those activities may include hiring a developer, relocating residents, beginning and ending construction. The completion of these milestones indicate a grant is moving at an acceptable pace that will lead to timely completion. If a PHA does not meet these self-imposed performance measures during the next 90 days, $1,000 daily will be deducted from the original grant.

In its 2003 report Public Housing:  HUD's Oversight of HOPE VI Sites Needs to Be More Consistent, the U.S. General Accounting Office acknowledged HUD had taken appropriate steps to encourage grantees' adherence to deadlines, citing that the Department notified grantees March 2002 that ten key dates could no longer be changed in the quarterly reporting system after June 30, 2002.

Grants in default:

• The District of Columbia Housing Authority was placed in default for the Frederick Douglass & Stanton Dwellings. DCHA received a 1999 HOPE VI grant for $29,972,431 to demolish 650 public housing units and replace them with housing for 600 families. As of June 30, 2003, two replacement housing units have been built. DCHA needs to complete 16 missed milestones or risk being penalized $16,000 per day beginning February 4, 2004.
  
  
• The Detroit Housing Commission was placed in default for Jeffries Homes. DHC received a 1994 HOPE VI grant for $39,807,342 to demolish 1,471 public housing units and replace them with housing for 942 families. As of June 30, 2003, 297 replacement housing units have been built. DHC needs to complete 12 missed milestones or risk being penalized $12,000 per day beginning February 4, 2004.
  
  
• The Housing Authority of the City of Biloxi was placed in default for Bayview Homes and Bayou Auguste. The housing authority received a 2000 HOPE VI grant for $35,000,000 to demolish 195 public housing units and replace them with housing for 388 families. As of June 30, 2003, no replacement housing has been built. It needs to complete 11 missed milestones or risk being penalized $11,000 per day beginning February 4, 2004.
  
  
• The Housing Authority of the City of Tulsa was placed in default for Osage Hills. The housing authority received a 1998 HOPE VI grant for $28,640,000 to demolish 280 public housing units and replace them with housing for 446 families. As of June 30, 2003, no replacement housing has been built. It needs to complete 11 missed milestones or risk being penalized $11,000 per day beginning February 4, 2004.
  
  
• The Housing Authority of the City of Wheeling was placed in default for Grandview Manor and Lincoln Homes. The housing authority received a 1999 HOPE VI grant for $17,124,895 to demolish 328 public housing units and replace them with housing for 177 families. As of June 30, 2003, 43 replacement housing units have been built. It needs to complete 11 missed milestones or risk being penalized $13,000 per day beginning February 4, 2004.

HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities, creating affordable housing opportunities for low-income Americans, supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development as well as enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet.