The Uncharted, Uncertain Future Of HOPE VI Redevelopments

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Abstract

HOPE VI supports demolishing large, dilapidated public housing and replacing it with smaller-scale, more appealing properties. What makes this feasible (mixed financing; private-sector entities; and mixed-income, mixed-tenure complexes) also creates conditions that challenge and can undermine long-term sustainability. Sustainability has not yet been assessed and whether it should or can be assessed has been questioned. With input from housing practitioners and insight from a trial exploration of two HOPE VI redevelopments, this report demonstrates the need for, and feasibility of, conducting an assessment that can assist both private owners and public agencies in sustaining this valuable resource.

Introduction

The HOPE VI program—administered since 1992 by the U.S. Department of Housing and Urban Development (HUD)—has generally been effective in supporting the demolition of many of the largest, most dilapidated, and highly concentrated public housing developments in the nation and replacing them with smaller-scale, visually more appealing, mixed-income properties. Public investment in HOPE VI has been substantial; the private investment has been even greater. While the importance of a program that redevelops dilapidated and obsolete housing is generally acknowledged, more than a decade and a half after the program's initiation it is not a foregone conclusion, or otherwise obvious, that properties redeveloped under it can be sustained over time.

Sustainability is not simply a function of the redevelopment underwriting or financing that is utilized or the architectural attractiveness of the buildings that result, but also of significant challenges inherent in the program. The latter derive from the public-private relationships that are involved and the mixed-income and mixed-tenure character of the redevelopments. These features are, on the one hand, program strengths but, on the other, challenges to project management and financial stability. As such, a proper third-party assessment of HOPE VI redevelopments is essential to identification of sustainability obstacles—before they become intractable and a public liability. Given the features of HOPE VI, the appropriate question is not whether a sustainability assessment is needed but how it should be done.

With support from the John D. and Catherine T. MacArthur Foundation, the Urban Institute informally partnered with the University of Maryland's Graduate Programs in Real Estate Development to consider the assessment challenge. Based on input from housing practitioners and insight gained from a trial exploration of the experiences of two redeveloped properties, this report presents the case for developing and initiating an independent, third-party assessment of redeveloped HOPE VI properties as a way to help their owners and public agencies sustain this valuable resource.

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