This report tells a remarkable story: how the Clinton Administration, in partnership with public housing authorities (PHAs), assisted families, local communities and Congress, has transformed the public housing program.

The image of public housing has long been one of deteriorating buildings and crime-ridden neighborhoods. Although a small percentage of all public housing, the stark and dilapidated buildings of projects like Robert Taylor Homes in Chicago, Desire in New Orleans and Schuylkill Falls in Philadelphia provided highly visible symbols of what was wrong with public housing over the years. The perception of public housing and HUD was so bad that, despite the obvious need for housing assistance to serve additional families, Congress provided none from fiscal years 1994 to 1999. The House of Representatives passed legislation to repeal the public housing law and start over, and several in Congress called for the elimination of HUD.

Even though HUD and Congress could not agree on public housing legislation for several years, HUD began to institute reforms.

Major Efforts included:

• From 1993 to 1995, HUD began the reforms by stepping up technical assistance to and intervention in the management of poorly managed PHAs and by implementing the HOPE VI program Congress included in appropriations legislation.
• In 1995 and 1996, HUD worked administratively and under piecemeal appropriations laws to put together a strategy for public housing reform: demolish and replace the worst projects; facilitate and demand better management, especially of "troubled" PHAs; bolster security by demanding increased resident responsibility, as well as providing steady funding; and promote resident self-sufficiency, through incentives that reward work and linkages to vital supportive services.
• In 1997, Secretary Cuomo supplied a key missing piece by announcing the 2020 Management Reform Plan, which restructured HUD's operations to make HUD a more effective partner and included fundamental initiatives such as independent physical inspections of public housing.
• In 1998, after 6 years of legislative effort and with progress evident in public housing, Congress and the President agreed upon the Quality Housing and Work Responsibility Act of 1998, also known as the Public Housing Reform Act (PHRA). PHRA is the largest overhaul of the public housing and voucher programs in the programs' history.
• Together, Management 2020 and PHRA set a framework for lasting reform that is producing a dramatic turnaround in the public housing system.

This report details the extensive transformation that public housing has undergone-and is still undergoing-in the following areas:

Transforming the Credibility of HUD by restoring the public trust in the Department and HUD programs through

• A complete reorganization of HUD staff, programs, and management to streamline program delivery, allocate resources more efficiently and according to risks, require better local performance, and restore the public trust.
• Consolidation of duplicative programs and applications, creation of specialized centers to handle specialized functions, separation of enforcement from technical assistance duties for field staff, and provision of one administrative entity to assess housing from all HUD programs.

RESULTS: These reforms are allowing HUD to provide more timely, efficient, effective and even-handed service, so that well-performing PHAs can better serve their communities and poorly managed PHAs are promptly and effectively addressed.

Transforming Public Housing Stock by

• Providing more flexibility to demolish and replace dilapidated public housing, through repeal of the unworkable one-for-one rule that required each community to add a public housing apartment for each apartment demolished.
• Providing for full replacement of public housing, either with additional public housing units or vouchers.
• Providing large-scale funding for demolishing and replacing deteriorating housing and creating more livable communities through HOPE VI, which through 1999 has delivered $3.7 billion in grants to revitalize more than 120 neighborhoods nationwide.
• Leveraging private funds to create public housing in mixed-income communities, such as the Housing Authority of Kansas City did, using $5 million of their funds to leverage an additional $7 million in public and city funds to demolish the deteriorating Pennway Plaza and replace it with a new lower density community more in character with the surrounding neighborhood.
• Providing mobility counseling and other improvements to make vouchers affective as a replacement housing resource.
• Creating a flexible Capital Fund which can be used both for renovations and replacement housing, providing this resource by formula to all PHAs and providing specific funding under the formula for replacement housing.
• Providing additional PHA flexibility and HUD enforcement steps to shorten the required time for obligating funds.

RESULTS: As of 1993, there had been virtually no demolition of obsolete public housing. Virtually without exception, the legendary distressed projects, such as Robert Taylor Homes, Desire and Schuylkill Falls named earlier, Cabrini Green in Chicago, Hayes Homes in Newark, Allen Parkway Village in Houston, Techwood Homes in Atlanta and twenty others listed in the Report, remained unaddressed and with tenants living in horrendous conditions.

Now, all of the most notorious developments are being demolished and replaced or reconfigured and revitalized; the Report contains numerous vivid "before" and "after" photographs. Since 1993, approximately 100,000 obsolete units have been approved for demolition; about 50,000 of these have been demolished. Just as importantly, HUD has been able to provide replacement housing funding-additional public housing units or vouchers-for all of the units to be demolished. About 45% of the demolished units will be replaced with public housing and about 55% with vouchers.

The increased flexibility and emphasis on prompt commitment of capital funds also has succeeded-the amount of capital funds appropriated but unobligated by PHAs decreased from $4.5 billion in September 1996 to $3.5 billion in September 1999.

Transforming Public Housing Management to assure that PHAs attend to basic housing conditions and strive for management excellence by

• Creating the Public Housing Assessment System (PHAS), an evaluation system that for the first time includes independent property inspections, comprehensive financial assessments, and direct input from residents. This replaces an evaluation system under which a PHA could be rated a "high performer" even if the living conditions of its residents were substandard, and which was largely self-certification (with two thirds of PHAs self-certifying as high performers).
• Providing more flexibility for good managers, and financial and other incentives for excellent performance. The Capital Fund (which is used for modernization activities) and the Drug Elimination Program are now formula-driven, to allow more PHAs easier and more predictable assess to funds. The Capital Fund also presents PHAs with a "performance reward" of an additional 3 percent of funding if they are designated as high performers under PHAS (in later years, the reward will be raised to 5 percent). Other important program consolidations, notably consolidation of the Section 8 certificate and voucher programs and obtaining local input through an annual PHA Plan, have been implemented. Additionally, to recognize those PHAs that are using creativity and innovation to provide the best service to their residents, HUD created the Best Practices award initiative, highlighting hundreds of PHAs' outstanding programs. HUD also published guidance for PHAs that want to use private companies to manage public housing.
• Establishing Troubled Authority Recovery Centers (TARCs) to provide concentrated technical assistance to troubled PHAs. This continues the concentrated technical assistance and more proactive intervention with respect to troubled PHAs that began in the mid-1990s.
• Seeking and now implementing a statutory mandate that PHA management be put into receivership if the PHA remains troubled for 2 years, thus ending a system where intervention to correct poor management was subject in each case to negotiation and uncertainty.

RESULTS: PHAS and some of the flexibility and incentives for good management are just going into effect now, but they are already resulting in increased management attention to residents' living conditions. The program consolidations will help all PHAs

After many years and even decades of inattention, historically poorly managed PHAs in a number of large cities including Atlanta, Chicago, Detroit, Philadelphia and Washington, D.C. have made enormous improvements and were no longer rated "troubled" under the old evaluation system.

Of the initial 57 PHAs transferred to the TARCs in 1998, 42 have left troubled status. Eighty-three percent remained in TARCs for less than a year, and the average time in troubled status of recovered PHAs last year declined from 18 to 9 months.

Transforming Safety and Security in Public and Assisted Housing to help public housing residents attain the safe and secure place to live that all of us desire, by

• Implementing One Strike and You're Out, which encourages PHAs to take screening and lease enforcement actions necessary to keep criminals out of public housing and demands that residents adhere to their lease requirements. Recent HUD and Congressional initiatives also have introduced elements of One Strike to the voucher and project-based assisted housing programs.
• Providing predictable amounts of Public Housing Drug Elimination Program (PHDEP) funds, by 5-year formula allocations rather than annual competitions.
• Promoting the involvement of all key stakeholders in resident security efforts, including the police, providers of services that help prevent or provide alternatives to crime and other community groups, as well as PHAs and their residents.
• Addressing the tragedy of gun violence in these communities through gun buybacks and by Secretary Cuomo leading negotiations that resulted in an agreement with Smith & Wesson to increase gun safety and responsible marketing. Some of the key provisions of the Smith & Wesson agreement include new design standards to make guns safer and new sales and distribution controls.

RESULTS: One Strike and You're Out has been implemented in the vast majority of PHAs, and HUD has heard its effects from police, judges and community groups as well as PHAs and residents throughout the Nation. For example, in Greensboro, North Carolina, implementation of the One Strike policy and collaboration with the local police department resulted in a decline in the crime rate in five target public housing developments of 57 percent; the city's crime rate climbed 14 percent during the same period.

The Report documents successes of the Drug Elimination Program and of community involvement in violence prevention, which will be enhanced further by PHAs' ability to plan on a steady stream of Drug Elimination funds.

So far, gun buybacks have taken more than 17,000 guns off the streets, and 85 communities have received funding under the initiative. The Smith & Wesson agreement has led more than 400 local governments to join Secretary Cuomo in agreeing to purchase guns only from manufacturers that adopt similar agreements.

The real results of all of these efforts will be lives saved and communities made acceptable places to live again.

Transforming Resident Self-Sufficiency and Reducing Isolation by moving beyond just bricks and mortar to complement welfare reform by

• Requiring PHAs to seek cooperation agreements with welfare agencies and other local organizations that can provide more opportunities and services to help public housing families succeed.
• Implementing new rent policies that reward work, such as earned income disregards and ceiling rents.
• Supporting welfare reform and residents moving from welfare to work through such new programs as the Section 8 Welfare-to-Work voucher program, which allows eligible families to find affordable housing closer to employment opportunities and supportive services, and existing programs such as the Family Self-Sufficiency (FSS) program, which is now integrating with local welfare-to-work initiatives. The FSS program is especially important to Section 8 voucher recipients, and is used by more than 40,000 of those families. In addition, HUD's Resident Opportunities and Self Sufficiency (ROSS) program grantees must augment their HUD resources with in-kind services or cash from other community organizations, thus providing larger service commitments for their residents. Finally, public housing and voucher rents no longer would counteract a family's loss of welfare income in the event the family committed fraud or refused to participate in self-sufficiency programs.
• Developing initiatives to "bridge the digital divide" to ensure public housing residents are given the same tools to become computer-literate and technologically proficient as the rest of the community. As part of the strategy to bridge the digital divide, HUD is requiring PHAs winning FY 2000 HOPE VI revitalization grants to adapt the Neighborhood Networks Initiative to their projects. This initiative involves establishing Neighborhood Network Centers, which provides on-site access to computers and training resources designed to help hundreds of residents improve computer technology skills.
• Requiring that PHAs pursue deconcentration in their admissions policies, so that developments are not segregated and isolated from the rest of America by income, and racial concentrations are addressed. The Public Housing Reform Act provides PHAs flexibility in admitting higher income households to public housing; poverty deconcentration efforts are designed to ensure that policies of admitting higher income families will be used in developments where a broader income mix is most needed, and not just exclude the poorest applicants from certain developments.

RESULTS: The cooperation efforts agreements and other PHA efforts to reach out for services should ensure that more of the billions of dollars of welfare funds that states have will reach public and assisted housing residents. The initiatives also encourage PHAs to use established supportive service providers and concentrate their efforts on managing their property, rather than becoming deliverers of supportive services.

The rent policies will make going to work more attractive, and ensure that working families do not promptly leave public housing because rents become higher than for other comparable apartments.

The Report illustrates various successes of HUD's programs to leverage supportive services for public and assisted housing residents. With respect to Neighborhood Networks, 30 of HUD's HOPE VI family sites have fully functioning computer laboratories and 81 additional HOPE VI sites are planning to include such laboratories in their revitalization plans.

The deconcentration rules are just being finalized, but the law has resulted in increased PHA attention to this concern.

Transforming Native American Programs to improve Indian housing by

• Working with Congress to pass the Native American Housing Assistance and Self-Determination Act of 1996 (NAHASDA), which recognizes Indian tribes' status as sovereign nations and creates a flexible block grant assistance program to provide funds directly to Indian tribes and Alaska Native Villages for housing, self-sufficiency, and safety activities. The legislation was an important affirmation of tribal self-governance because it provided funding directly to Indian tribes rather than Indian housing authorities (IHAs) for housing, self-sufficiency, and safety activities. With tribes now responsible for performance of housing programs, they are released from cumbersome and inappropriate public housing rules, provided great flexibility and encouraged by HUD to do long-range planning for the first time.
• Putting in place the necessary monitoring and technical assistance system. NAHASDA also increased tribal accountability by requiring Annual and 5-Year Indian Housing Plans. HUD staff will review the Plans and visit at least 20 percent of grantees each year. HUD is also providing technical assistance directly, through various conferences on topics such as crime prevention, homeownership and economic development. On-line training is also available through HUD's Office of Native American Program's web site; the remote location of some reservations make access to on-line training particularly important.
• Receiving Presidential attention to highlight the enormous need for assistance. President Clinton's visit to Pine Ridge was the first Presidential visit to a reservation since 1927.
• Collaborating with Congress to provide essential increased funding. The appropriation for Indian Housing Block Grants increased 24 percent between FY 1997 and 1998, the first year after NAHASDA's enactment. In FY 1999, funding increased by another 3 percent. President Clinton's FY 2001 budget request provides for an additional increase from the FY 2000 level.

RESULTS: For the first time the tribes now will have the opportunity, and the flexibility, to design and implement housing programs that address their unique needs. In addition, the new funding system reaches a larger number of Native American communities and allows for a more comprehensive range of activities. Prior to NAHASDA, approximately 190 Indian Housing Authorities received HUD funding; by 1999, 527 tribes were receiving NAHASDA funds.

Conclusion and Vision for the Future: The transformation of public housing systems is well under way. In addition to the changes visible locally, Congress' renewed confidence in HUD and its programs contributed to the appropriation of 110,000 desperately needed incremental vouchers in the past two years, after a 4-year gap.

The vision for the future for public housing and vouchers includes no more Cabrini Greens or troubled PHA management; full replacement of demolished public housing; funding to serve substantial additional families; every apartment decent, safe and sanitary; outstanding management of public and Indian housing; public housing at least as safe as other housing and the voucher program contributing to neighborhood stability; the programs offering opportunities toward self-sufficiency which are used by virtually all families who need them; full deconcentration; and HUD as an effective partner. We have made great strides in pursuit of this vision and working together, we will fulfill the promise of the reforms.

Content Archived: January 20, 2009