Choice Neighborhoods Initiative Coverage

NAHRO Comments on Choice Neighborhoods Proposal (Dec. 15, 2009)

HUD Unveils Choice Neighborhoods Legislation (Nov. 15, 2009)

HUD Unveils Choice Neighborhoods Legislation (Nov. 15, 2009)

NAHRO Comments on Choice Neighborhoods Proposal (Dec. 15, 2009)

NAHRO recently transmitted comments on HUD’s draft authorizing legislation for the proposed Choice Neighborhoods Initiative. NAHRO’s letter, sent on Dec. 4, expresses a number of concerns regarding the draft proposal and reiterates NAHRO’s support for continued funding for the HOPE VI program for FY 2010. Read NAHRO’s comment letter at www.nahro.org/choice-neighborhoods-initiative.

As NAHRO previously reported, HUD Secretary Shaun Donovan unveiled the administration’s legislative proposal to authorize the Choice Neighborhoods Initiative during a “Choice Neighborhoods Stakeholder Meeting” held at HUD headquarters on Nov. 10. The administration’s FY 2010 budget proposed eliminating funding for the HOPE VI program in favor of creating the new Choice Neighborhoods Initiative. The proposed program would be significantly broader in scope than HOPE VI both in terms of the entities eligible to apply for funding and the types of housing units that could be addressed using such funding. Entities eligible to apply for Choice Neighborhoods funding would include “local governments, public housing agencies, community development corporations, assisted housing owners, and other for-profit and non-profit entities.” Applications for funding would take the form of “transformation plans” outlining applicants’ strategy for “transforming a distressed neighborhood of extreme poverty into a mixed-income neighborhood with high quality, safe, affordable housing, economic opportunities, well-functioning services, quality educational opportunities, public assets, access to jobs, and public transportation.” See the Nov. 15 Monitor for NAHRO’s complete coverage of the draft legislative proposal.

Although the administration has characterized the Choice Neighborhoods Initiative as a “a celebration of HOPE VI,” NAHRO contends that the work of the HOPE VI program is unfinished, as a significant number of severely distressed public housing units remain in the inventory. NAHRO’s Dec. 4 comment letter therefore expresses concern regarding the absence of provisions in the current legislative draft guaranteeing continued funding to support PHAs’ efforts “to complete the important work of the HOPE VI program in a timely manner” and suggests that now is not “the appropriate time to end a dedicated source of funding intended to reposition severely distressed public housing units.” The letter also notes that HUD has thus far been unable to indicate publicly whether the Choice Neighborhoods Initiative would be administered by the Office of Public and Indian Housing, as is the existing HOPE VI program, or by the Office of Community Planning and Development.

While NAHRO is generally supportive of the Department’s commitment to devising a more comprehensive approach to achieving the transformation of neighborhoods of extreme poverty into sustainable, mixed-income neighborhoods, NAHRO suggests that Choice Neighborhoods legislation should “require as a condition for funding eligibility the active participation of the local PHA in the development of a transformation plan whenever a targeted neighborhood is located within the local PHA’s area of jurisdiction.” NAHRO also suggests that “any program intended as a successor to HOPE VI should be structured in such a way as to guarantee that a significant number of severely distressed public housing units are addressed each year.”

Given the scope of the proposed program, NAHRO is concerned that a $250 million annual appropriation will prove insufficient absent collaboration with and financial contributions from other federal agencies, including but not limited to the Departments of Transportation and Education. NAHRO’s letter notes that due to ongoing negotiations with the Office of Management and Budget, HUD is currently unable to provide information on what contributions, if any, from other agencies will be proposed as part of the administration’s FY 2011 budget.

NAHRO’s letter also encourages the Department to take steps to ensure that the final version of the legislative proposal provides rural communities and agencies with access to program funding. Under the draft proposal, the neighborhood eligibility requirements, particularly the requirement that neighborhoods be in proximity to “educational institutions, medical centers, central business districts, major employers, [and] effective transportation,” would seem to place rural communities and the PHAs that serve them at a competitive disadvantage. Other topics addressed by NAHRO’s comment letter include neighborhood eligibility under the draft proposal, and the draft legislation’s treatment of tenant- and project-based vouchers for replacement units.

As this edition of the Monitor went to print, congressional negotiators had finalized the FY 2010 HUD appropriations bill (see related article, pg. 1). The conference agreement provides $200 million for the HOPE VI program. Of this $200 million , the conference agreement authorizes HUD to set aside up to $65 million for a demonstration of the administration’s proposed Choice Neighborhoods Initiative. PHAs would be eligible to apply for both HOPE VI and Choice Neighborhoods funding under the terms of the conference agreement.

NAHRO has long been on the record in support of continued funding for the HOPE VI program for FY 2010 and strongly recommended that the Choice Neighborhoods Initiative as proposed not move forward unless and until it is first carefully considered and acted upon by the appropriate authorizing committees of Congress, with the benefit of extensive input from relevant stakeholders.

CEO's Message: Examining the Choice Neighborhoods Initiative (Nov. 30, 2009)

The Department of Housing and Urban Development, and particularly Secretary Shaun Donovan, have done more in the last year to reach out to stakeholders, industry groups and the public at large than any group we have seen in recent memory. NAHRO can say with certainty that the Secretary and his team are very willing to engage in constructive and spirited discussions on every level. This openness is a welcome relief, as it makes for a productive dialogue that in most instances garners functional outcomes.

But there are initiatives currently under discussion at HUD that need more discussion and study before they take shape and eliminate needed programs: specifically, the Choice Neighborhoods Initiative. If HUD does succeed in implementing this initiative as proposed, it would bring about the end of the HOPE VI initiative that targets the repositioning of extremely distressed public housing developments.

The Obama Administration, through HUD, proposed this change, which greatly expands the array of participants, via their 2010 budget submission to Congress in February 2009. However, they did not unveil authorizing legislation until the beginning of this month (November). Under HUD’s legislative proposal, entities eligible to apply for Choice Neighborhoods funding include “local governments, public housing agencies, community development corporations, assisted housing owners, and other for-profit and non-profit entities.” Applications for funding would take the form of “transformation plans” outlining applicants’ strategy for “transforming a distressed neighborhood of extreme poverty into a mixed-income neighborhood with high quality, safe, affordable housing, economic opportunities, well-functioning services, quality educational opportunities, public assets, access to jobs, and public transportation.” In addition, successful Choice Neighborhoods applicants would be required to undertake certain mandatory activities using their grant funds. For more on what HUD’s proposal entails, visit our website at www.nahro.org/cni-resource-page.

HUD’s intent certainly has a great deal of merit, and can work as a model in the future. However, the timing is off for such an impressive undertaking. The list of distressed public housing is growing. Given more than a $30 billion backlog on capital needs spending and historical under-investment in this area, now is not the time to discontinue a dedicated source of funding.

The Choice Neighborhoods Initiative also does not contain any financial commitment to the effort from other federal agencies, such as the Department of Education, the Department of Transportation and HUD itself (through FHA and Community Planning and Development). Given that local governments and PHAs could apply directly and independently to HUD for funding under the proposed program, the lack of clarity around the management of the new program raises various concerns. It is unclear, for example, whether the Choice Neighborhoods Initiative would be administered by HUD’s Office of Public and Indian Housing, as with the HOPE VI program, or whether the proposed program would fall under the Office of Community Planning and Development, which currently administers most HUD programs for which local governments are eligible for direct funding.

More to the point, with little to invest, why rush to dilute or take away funds that have been extremely targeted towards public housing? HUD is on the right track in looking to bring holistic change to neighborhoods, but the housing and community development industry can benefit from having the Secretary be the convener and leader of a broader, government-wide effort to implement Choice Neighborhoods. In the interim, let HOPE VI continue to be the vehicle that allows public housing to transform neighborhoods and be the catalyst to more widespread change and choice in 2010 and 2011.

HUD Unveils Choice Neighborhoods Legislation (Nov. 15, 2009)

HUD hosted a “Choice Neighborhoods Stakeholder Meeting” on Nov. 10, during which Secretary Shaun Donovan unveiled the administration’s legislative proposal to authorize the Choice Neighborhoods Initiative first put forward in President Obama’s FY 2010 budget. NAHRO staff attended the meeting, which was also available for viewing as a webcast through HUD’s website. As this edition of the Monitor went to print, HUD had not yet posted an archive of the webcast to www.hud.gov/webcasts/archives/index.cfm.

The administration’s FY 2010 budget proposed eliminating funding for the HOPE VI program in favor of creating a new program called the Choice Neighborhoods Initiative, which would provide competitive grants for the “transformation, rehabilitation, and replacement needs of both public and HUD-assisted housing,” in addition to other activities designed to strengthen and transform surrounding neighborhoods. The proposed program would be significantly broader in scope than HOPE VI both in terms of the entities eligible to apply for funding and the types of housing units that could be addressed using such funding. The administration has proposed $250 million for the Choice Neighborhoods Initiative for FY 2010.

The Nov. 10 meeting provided the Department with an opportunity to publicly release its own version of Choice Neighborhoods Initiative authorizing legislation. The full text of the proposal is available online at /huds-cni-discussion-draft.

Under HUD’s legislative proposal, entities eligible to apply for Choice Neighborhoods funding include “local governments, public housing agencies, community development corporations, assisted housing owners, and other for-profit and non-profit entities.” Applications for funding would take the form of “transformation plans” outlining applicants’ strategy for “transforming a distressed neighborhood of extreme poverty into a mixed-income neighborhood with high quality, safe, affordable housing, economic opportunities, well-functioning services, quality educational opportunities, public assets, access to jobs, and public transportation.”

Successful Choice Neighborhoods applicants would be required to undertake certain mandatory activities using their grant funds, including:

• rehabilitation, preservation, and/or demolition and replacement of severely distressed housing projects;
• activities that promote economic self-sufficiency of residents;
• activities that demonstrate that each resident who wishes to return to the revitalized on-site housing in the neighborhood or to replacement housing outside of the neighborhood, can return;
• appropriate service coordination, support services, mobility counseling and housing search assistance for displaced residents;
• resident involvement in planning and implementation of the transformation plan;
• tracking of residents relocated during redevelopment throughout the life of the grant or until full occupancy of replacement housing, whichever is longer; and links to certain local education efforts.

Other eligible activities include:

• construction, acquisition or rehabilitation of affordable housing that incorporates energy efficiency design principles;
• partnering with local educators, and engaging in local community planning to improve the quality of educational opportunities;
• work incentives, including incentives using rents, escrow deposits for assisted housing residents participating in the Family Self-Sufficiency program, designed to help public and assisted housing residents access jobs and move towards self-sufficiency;
• partnering with employers and for-profit and non-profit organizations to create jobs and job training opportunities;
• relocation assistance, including Section 8 tenant-based rental assistance and supportive services for families that are displaced;
• endowments, reserves, or revolving loan funds for ongoing operating and capital needs and for resident services;
• see the legislative proposal for a complete list of required and additional eligible activities.

Other highlights of HUD’s legislative proposal:

• For the purposes of the proposed program, “affordable housing” includes public housing, HUD-assisted housing for which rents are based on income, and private housing in which the Secretary requites the owner or purchaser of the project to maintain affordability and use restrictions.
• The program would require one-for-one replacement of public or assisted housing units. Grantees would be permitted to replace up to half of the public housing or other assisted dwelling units that are demolished or disposed of with tenant-based vouchers in housing markets where there is an adequate supply of affordable rental housing in areas of low poverty.
• The demolition or disposition of severely distressed public housing under the program would be exempt from the provisions of Section 18 of the U.S. Housing Act of 1937.
• The legislative text includes no provisions guaran-teeing that a minimum amount of Choice Neighborhoods funding will go to PHAs or toward the revitalization of severely distressed public housing units. Applicants are not required to partner with PHAs but would be judged in part on the extent to which their transformation plans emphasize “collaboration with the local government or a public housing agency, or both.”

Several questions concerning the administration’s proposal remain unanswered. For example, given that local governments and PHAs could apply directly and independently to HUD for funding under the proposed program, it is currently unclear whether the Choice Neighborhoods Initiative would be administered by HUD’s Office of Public and Indian Housing, as is the existing HOPE VI program, or whether the proposed program would fall under the Office of Community Planning and Development, which currently administers most HUD programs for which local governments are eligible for direct funding. Also unclear is whether or in what amounts other federal departments (Education, Transportation, etc.) would contribute funding to support Choice Neighborhoods undertakings.

As they work to finalize the FY 2010 HUD appropriations bill, congressional negotiators are wrestling with whether to continue to provide funding for HOPE VI or adopt the administration’s recommended approach. The Senate-passed version of the FY 2010 HUD funding bill does not include funding for HOPE VI, instead providing $250 million for Choice Neighborhoods, with at least $165 million reserved for public housing agencies. The House-passed version of the bill includes $250 million for HOPE VI and no funding for Choice Neighborhoods. NAHRO supports continued funding for the HOPE VI program for FY 2010. For more information on NAHRO’s outreach to House and Senate appropriators on this and other matters, see our Direct News coverage at www.nahro.org/members/news/2009/090925.cfm.