HOPE VI: Market Means/Public Ends

Abstract

In 1992, Congress enacted HOPE VI, a demonstration program that evolved within a few years into an ambitious plan to replace distressed public housing projects with attractively designed mixed-income housing communities. HOPE VI attempts to learn from the public housing mistakes of past decades. It seeks to reduce the concentration of very poor, minority families; create racial and economic diversity; blend projects architecturally into the adjacent community; ensure full participation of public housing tenants and other community residents in planning and implementation; and provide ongoing services to support family self-sufficiency. Through HOPE VI, HUD has moved aggressively to re-invent public housing by requiring PHAs to retain private developers, leverage public subsidies with private investment, and enter the private real estate marketplace. The use of new financing structures, combined with efforts to evaluate the reasonableness of builders' profits, developers' fees, and syndication costs, has led to complex negotiations among HUD, public housing authorities, private developers, and public housing resident organizations, as each seeks to advance its own interests. This article describes the evolution of HOPE VI over its first six years and its recent authorization as part of the Housing Reform Act of 1998. It examines the historical and intellectual sources of HOPE VI's ambitious and often conflicting goals. It also explores the issues that HUD and PHAs must face in harnessing market means to achieve public ends, including the difficulties of marketing mixed-income housing built on sites formerly occupied by distressed public housing.