FY 1998 - 2003 Strategic Plan
Strategic Objective #4
Reduce the isolation of low-income groups within a community
or geographical area
Another facet of the agency's commitment to broader housing affordability
is working to create housing opportunities for low-income citizens.
This spatial deconcentration is accomplished through the use
of tenant-based rental certificates and vouchers and the revitalization
of deteriorated neighborhoods.
To ensure housing opportunities are available, the Department
conducts periodic compliance and complaint investigations of recipients
receiving Federal financial assistance. When violations of the
Fair Housing Law are revealed, the Department enters into voluntary
compliance agreements with such recipients until a remedy has
The Department desires to recruit large numbers of private landlords
to participate in the Section 8 housing program and convince citizens
where Section 8 residences reside to see the Section 8 program
as a positive addition to their neighborhood rather than a negative.
Public and Indian Housing
Create income diversity in traditional public housing through
rent incentives to retain/attract working families and encourage
families to move to work or better work.
Mechanisms such as ceiling rents will permit PHAs to retain and
attract working families by setting ceiling rents that reflect
market value. Through the use of earned income disregards, PHAs
will create work incentives for newly-employed families by allowing
them to retain more of their incomes as they meet the "costs"
of transitioning from welfare to work. The use of site-based
waiting lists, where they can be implemented in full compliance
with all fair housing laws, will increase public housing's attractiveness
to working families by permitting them to choose where they live.
Replace the worst public housing with less dense, economically
integrated communities. This is the basic strategy behind
the HOPE VI program, which has been a catalyst for the transformation
of some of the country's worst public housing developments. In
addition, mixed finance development mechanisms also create mixed
income communities. In keeping with the transformation of public
housing and a reinvented HUD, financing partnerships are formed
with residents, housing professionals, local governments, for-profit
and not-for-profit organizations to form mixed-income communities.
Provide additional replacement housing resources through portable
Section 8 vouchers. Section 8 is the only program that enables
work-ready families to move to where the jobs are located in the
growth sectors of metropolitan economies. Movement of families
throughout the metropolitan area will support families' efforts
to transition from welfare to work.
Improve the Section 8 tenant-based assistance program to increase
private owner participation and portability throughout the metropolitan
area. One such strategy is the proposed merger of the certificate
and voucher programs. The merged program will be easier for HUD,
PHAs, and private owners to administer. Other proposed legislative
changes would make permanent program reforms that have been included
in recent appropriations acts such as ending "endless lease"
and "take one, take all".
Other strategies are covered by other strategic objectives, such
as: encouraging the middle class to stay in central cities through
homeownership incentives and increasing public safety.
Community Planning and Development
Since the Community Development Block Grant program covers not
only the poor, but moderate income families as well (80% of median
income of the area), it would have less tendency to concentrate
the poor in large low-income housing projects than would programs
which are restricted to serving the very poor. A majority of
CDBG housing projects involve homeowner rehabilitation, rather
than funding large scale housing projects.
The HOME Program is providing opportunities for both renters
and owners in a variety of locations through tenant based rental
assistance, assistance to new homebuyers, and location of projects.
Seventy eight percent of HOME units are located in census tracts
with poverty rates of less than 40%. New homebuyers receiving
assistance are located in tracts with poverty rates under 20%,
as are new construction rental projects.
The Department's Homeownership Zones initiative also addresses
this objective by attempting to attract homeowners with a variety
of incomes, as well as by providing a comprehensive approach to
All CPD programs, CDBG, HOME, Youthbuild, EZs and ECs, and homeless
programs include an element of empowerment which helps the poor
achieve a degree of upward mobility. Many Family Self-Sufficiency
programs in public housing and Section 8 are funded under the
CDBG program. Both temporary and permanent jobs for low and moderate
income persons are created under CPD programs. To the extent
that the incomes of families receiving services under these programs
are improved, they would have increased opportunity for residential
freedom of choice.
Finally, many cities such as Baltimore, Detroit, Cleveland and
Boston have gone through an important renaissance and urban revitalization,
assisted through CPD programs. This should have the secondary
impact of making the city a more attractive place for persons
of all incomes and reducing income concentration.
Although Housing has no stated program to reduce the concentration
of subsidized housing/preservation of assisted housing in suburbs
(like PIH demolitions), expiring subsidy contracts and prepayments
may produce this result. However, these would be due to financial
or market decisions by owners and not due to specific Housing
initiatives; nonetheless, counseling for persons relocated would
help to deter reconcentration.
Single Family counseling grants go to providers of comprehensive
counseling services who are also capable of doing fair housing
counseling. More importantly, cooperative agreements under the
counseling program permit nonprofits to sponsor homebuying
and homeownership classes conducted by Single Family staff. These
classes educate first time buyers in the opportunities and responsibilities
of homeownership and allow underserved populations a greater opportunity
to purchase where they wish.
Mixed Income Communities
In keeping with the transformation of public housing and a reinvented
HUD, partnerships are formed with residents, housing professionals,
local governments, for-profit and not-for-profit organizations
to form mixed-income communities.
Housing's new Multifamily mixed income program underwriting procedures
are only applicable where FHA credit enhancement is combined with
PIH HOPE VI funds to finance a mixed income community on an old
public housing site (see section on HOPE VI).
Among the Department's recent efforts to develop policy and standards
with regard to this objective are a study on "The Location
and Racial Composition of Public Housing in the United States"
and a report to Congress on "Promoting Choice in HUD's Rental
Assistance Programs." Other recent or on-going work on this
objective include the Moving to Opportunity Demonstration, and
a major study of housing discrimination. These are important
baselines for assessing future performance to achieve this objective.
PD&R will continue to conduct studies related to performance
measurement. Currently underway is the Moving to Opportunity
Demonstration, which will show the effects of deconcentration.
Also underway is an assessment of the effects of public housing
desegregation efforts. PD&R expects to begin a major study
of housing discrimination, which will show progress in eliminating
barriers to deconcentration.
Linkage to HUD 2020: Management Reform Plan
Handled by both Housing and PIH, financial documentation for
the Section 8 rental assistance voucher program has been neither
centralized nor easy to obtain. A key element to improving Section
8 processing is the creation of a Section 8 Financial Processing
Center for both Housing and PIH. Currently, Housing and PIH have
two very distinct methods for processing payments: Housing uses
a monthly voucher system based on actual subsidy needs, while
PIH uses an annual budget projection, with adjustments made upon
receipt of year-end statements. Unifying these processes will
benefit both business lines. Functions will include budgeting,
payment scheduling, contract reservations and revisions, financial
statement revisions, rent calculations and income verification.
PIH will also consolidate special (non-funded) applications and
processes for its unique programs in a single Special Applications
Center. Those applications are: demolition/disposition, designated
housing, and 5(h) homeownership. Consolidating these discrete
functions will maximize staff effectiveness and increase program
accountability. Consolidation will also eliminate current duplication
of efforts in the field. The center will standardize application
processing and use staff specifically trained for evaluating and
processing these applications.
For other reforms which will impact on this objective, see the
Linkage Section under Objective #3.
The revitalization of neighborhoods is discussed in detail under
Strategic Objective #1. Community revitalization, however, will
not necessarily reduce isolation of income groups, unless there
is an explicit and successful effort to attract residents with
a variety of incomes. In part because of factors, such as high
taxes, high rates of crime, poor schools, and density, many people
do not wish to live in central cities. These factors, over which
HUD has little control, thus greatly affect its ability to promote
economic integration. This is a sensitive issue: not only do
inner city minorities fear that they are going to be displaced
by white middle class by a process of "gentrification"
but many suburban communities oppose those with rental assistance
moving into their neighborhoods.
Through tenant-based rental certificates and vouchers, persons
of low-income are provided with the opportunity to move to better
neighborhoods. Many prefer to remain at, in or near Central Cities.
The final choice remains with the individual. Rents and factors
related to housing production in more affluent neighborhoods tend
to be higher than elsewhere. Assisting households to live in
less impacted neighborhoods, whether through a supply or demand
side subsidy, costs more than simply providing housing assistance.
The desire to subsidize more units, rather than to provide units
in a variety of neighborhoods, is an external factors related
to this objective.
The political landscape also is a key external factor. Section
8 tends to be administered by jurisdiction-based housing agencies.
This can impose administrative barriers to people who wish to
move from high poverty areas in one jurisdiction to low poverty
Please see also the section on External Factors under Objective
How annual performance goals support the achievement of this
Defining annual performance goals for this objective is particularly
difficult. We can utilize census data to measure the percent
of Section 8 families (with children) who are living in low poverty
census tracts. However, as discussed under External Factors,
the choice remains with the individual. We can measure amount
of counseling and number of revitalization projects completed,
but ultimately, outputs will define our level of commitment, but
not achievement. Measures of our success would include the number
of low-income and minority families participating in the Departmental
Regional Opportunity Counseling Program located outside areas
of high poverty and minority concentration. As HUD's strategic
planning process evolves, we will continue to address this issue.