Public housing at a crossroads

The intersection of Merritts and Techwood streets in Atlanta was once so notorious as a den of drug dealing that motorists routinely ignored the traffic light rather than risk stopping.

Now, about seven years later, people park their cars on the street, walk their dogs, and jog along the sidewalks.

So what happened to change the neighborhood?

A blighted public-housing project was demolished and replaced by a new one, named Centennial Place. Where barracks-style buildings once dominated the scene, attractive town houses now stand. Low-income tenants with subsidized rents occupy about 60 percent of the neighborhood, with the rest going to middle-class residents who pay the going rate for an apartment.

The result: a safe, vibrant streetscape so different that four condominium high-rises were built nearby, and a tourist-attracting $200 million aquarium is in the works.

This isn't an isolated incident. Over the past decade, public-housing success stories have become more common. Government "projects" - towering, crowded hotbeds of crime and despair - have been replaced by attractive low-rise town houses in many communities.

These changes have been the result of HOPE VI, an innovative redevelopment strategy of the US Department of Housing and Urban Development (HUD). Both praised and maligned, HOPE VI nonetheless marked a turning point in public-housing history. But now it appears that HOPE VI won't be continued, and uncertainty about the next phase of public housing is cause for concern among those who worry that poor families will have even fewer options for housing than they do now.

Instead of building more public housing, the White House wants to create more opportunities for home ownership, especially among minorities. It also wants states, not the federal government, to play a bigger role in administering the existing public-housing voucher program, which subsidizes rents so poor people can afford to live in privately owned housing that otherwise would be out of their price range.

"Though HOPE VI has shown great promise, that promise has yet to be fulfilled," said Mel Martinez, HUDsecretary, in a congressional hearing last week. While acknowledging that the program, begun in 1992, has mostly been a success, he said HUD officials were concerned about its sluggish implementation.

The federal government has provided $5 billion for HOPE VI projects, but because of various delays, only about half of that has actually been spent.

Advocates contend that the slow pace of construction is understandable. Building a HOPE VI project requires a complex financing arrangement that includes both public and private money, and it takes time to put a deal together, says Kevin Marchman, who ran the program during the Clinton administration.

"It may be slow going," he says, "but once the housing is up and complete, people rave about it."

The problem with discontinuing the program, as many public-housing officials see it, is that HOPE VI's mission is unfinished. Hundreds of thousands of families continue to live in outdated, poor-quality housing.

To address this need, Mr. Martinez has hinted that HUD could be working on some sort of alternative plans to HOPE VI, which might be ready within a few months.

Behind the scenes, talk circulates about plans to introduce congressional legislation that would pick up on HOPE VI's theme of leveraging private investment for housing projects. Linking such legislation with education reform could also be part of the package, since good schools are closely tied to real estate values, and, by extension, urban renewal efforts.

In the meantime, it appears that HUD will encourage housing agencies to seek private financing (with HUD guarantees) to pay for repairs to what remains of the old-style high-rise public housing, and to tap more alternative funding.

HOPE VI is the latest in a series of HUD initiatives that bear the HOPE banner. While it has changed the face of public housing, it hasn't been uniformly successful. The biggest complaints about HOPE VI are that it has produced uneven results and displaced tenants.

The former, some respond, is simply the inevitable nature of local management disparities. The latter is the trade-off public-housing authorities had to make in order to develop better-quality subsidized living units.

Before HOPE VI began, says James Stockard, an official with the Cambridge, Mass., Housing Authority, public housing was protected by a one-for-one replacement statute, which meant no unit could be razed unless another took its place. The rule sounded good, but it meant that cash-strapped public-housing authorities were hindered in tearing down the old and building anew.

With HOPE VI, the one-for-one requirement was dropped, paving the way to replacing high-density apartment buildings with town houses and low-rise structures.

To date, roughly 58,000 public-housing units have been demolished under HOPE VI, with another 78,000 expected to fall. About 23,000 units have been built, with 85,000 more in the works. That's a loss of 28,000 total units.

This has left some former tenants without housing, either temporarily or permanently. The quality of relocation assistance has come under fire, although efforts have been made to improve it. Every dislocated resident sits down with a caseworker to consider the options: transferring to other public housing, seeking temporary housing until new housing is available, or moving into the private housing market, using vouchers.

"Many former residents now live in better housing in less poor neighborhoods," an Urban Institute report states. "But evidence also indicates that a substantial proportion of families are struggling to find housing in the private market [with vouchers] and that a large number face serious barriers to making the transition out of dilapidated public housing."

Susan Popkin, a senior researcher with the Urban Institute, says people who elect to use vouchers don't always understand what it means to step beyond the safety net of public housing, especially in cities where rooming houses have largely disappeared and decent, affordable housing is hard to come by.

While the National Low Income Housing Coalition has been critical of HOPE VI on the displacement issue, it doesn't advocate ending the program.

"It's taught us some really good lessons on design and community building," says Sheila Crowley, coalition president. "It shows us that it's possible to build and operate really nice public housing. I think there's much to build on."

When done well, HOPE VI projects have been able to attract significant private investment. In Atlanta, for example, the local housing authority estimates that for every $1 of federal investment in its five HOPE VI developments, local private and government interests have spent $8.

In the Georgia city, HOPE VI was the tool used to clean up the urban landscape and build 780 mid-rise town-house-style units. "It has helped reignite belief in the core city," says Renee Glover, executive director of the Atlanta Housing Authority.

Ms. Glover points proudly to Centennial Place as an example of the exciting possibilities for replacement housing and the way a better form of public housing can impact a city.

The development was built on the site of the old Techwood-Clark-Howell Homes, the first federally funded public housing in the US.

Atlanta's 1950s-era housing projects were intended to create a buffer between white and black neighborhoods. Middle-class citizens of both races fled these concentrations of poverty for the suburbs. But now, thanks to pleasing new designs and a commitment to mixed-income occupancy, people are returning to the inner city. All the properties are fully occupied, and rents for unsubsidized tenants have been raised five times due to demand.

To date, no national studies of the social impacts of HOPE VI's efforts to mix income groups have been made.

The strategy, many observers believe, is useful in deconcentrating and blurring the lines of poverty.

It also helps to create communities in which those who are struggling financially have role models of success, says Mr. Marchman, executive director of the National Organization of African Americans in Housing. "When you intersperse market-rate and [subsidized] public housing, there is a healthy environment of working families, people getting up and going off to their jobs."

Mr. Stockard says that networking may be the most beneficial aspect of intermingling low-income residents and those who are better off, since people looking for jobs often learn about them from talking with working neighbors.

Another advantage of mixed-income housing is that middle-class residents provide an economic base essential to creating the sort of amenities needed in a community. They don't have to wait until they receive welfare or Social Security checks to patronize grocery stores, dry cleaners, and other businesses..

The key in making HOPE VI-style mixed-income housing work, Stockard says, is good management, which enforces the rules and doesn't abide bad tenants. "In a rental property, you don't really care what your next-door neighbor's income is," he says. "What you care about is how your neighbor behaves."

Whatever the future holds for HOPE VI, which introduced so many innovations, Glover of the Atlanta Housing Authority, is convinced the initiative has "helped lay out a blueprint" for large-scale, public-private urban redevelopment partnerships. The key, as she sees it, is for the government to be willing to stick out its financial chin.

"To revitalize one of these large public-housing communities, you've got families who must be relocated, properties to be demolished - you've got to deal with the costs for which there is no economic return," she says. "The role of the public sector is to take the risk that the private sector wouldn't otherwise take, to provide the first dollars in."

Even though the maximum size of HOPE VI grants has shrunk from $50 million to $20 million per project, they're still sizable enough to make a difference, says Christine Siksa of the National Association of Housing and Redevelopment Officials.

But without those funds, she says, public housing authorities aren't in a position to do much more than patch and repair aging housing.