HUD announces $124 million for HOPE VI and $65 million for new 'Choice Neighborhoods' program

The federal HOPE VI program will disburse $124 million for five or six public housing redevelopment projects in the coming fiscal year, officials of the US Department of Housing & Urban Development announced today.

HUD also will give $65 million in grants through a new pilot program, Choice Neighborhoods, which will build on the accomplishments of the 17-year-old HOPE VI program.

Though the money available for HOPE VI in fiscal year 2010 falls well short of peak spending during the Clinton administration, allocations for HOPE VI are rising year by year. HOPE VI revitalization grants, which replace rundown public housing with mixed-income development in new or renovated buildings, grew from $88.9 million in 2007 to $97.2 million in 2008, to $113.6 million in 2009. That’s something of a turnaround for a program that the George W. Bush administration had once sought to phase out.

Over its history, HOPE VI has distributed $6.1 billion through 254 grants to 132 housing authorities in 34 states, the District of Columbia, and Puerto Rico, officials said in a conference call today. More than 111,000 units of new or renovated housing have resulted from the program, which uses new urbanist planning principles to produce developments that mix low-income people with households of somewhat higher income levels. HOPE VI developments have generally turned out to be much safer and more secure than the public housing they replaced.

Applicants have until Nov. 22 to submit applications for the new round of HOPE VI funds. The maximum grant will be $22 million. HUD Assistant Secretary Sandra Henriquez said the department will introduce several additional factors in evaluating the new applications: health; workforce and economic development; green jobs training; early childhood education; broadband Internet access; and green development and energy-efficiency.

The new Choice Neighborhoods demonstration grants will consist of $3 million in planning grants (a maximum of $250,000 each) and a separate $62 million in funds to “transform distressed neighborhoods and public and assisted projects into viable and sustainable mixed-income neighborhoods by linking housing improvements with appropriate services, schools, public assets, transportation, and access to jobs,” according to HUD.

“Even some of the best HOPE VI projects are islands of hope surrounded by a sea of need,” Henriquez acknowledged in a HUD press release. Choice Neighborhoods will consequently operate more broadly, she indicated, “investing in strategies to address interconnected challenges — housing decay, crime, lack of educational prospects and economic connections — that keep families and communities in severe distress.”

James Shelton, assistant deputy secretary of education, said the Department of Education will “work with HUD to ensure that there are great schools at the center of every Choice Neighborhood.” He emphasized the Obama administration’s strategy of having various federal agencies work together to tackle problems comprehensively.

HOPE VI has been criticized in some quarters because it didn’t build as many low-income units as it demolished. Henriquez pointed out that the Choice Neighborhoods initiative will insist upon a one-for-one replacement of any housing units that are razed. The replacements can be on the site of the existing development or elsewhere in the neighborhood.

HUD Deputy Assistant Secretary Carol Galante said the Choice Neighborhoods implementation grants will be awarded through a two-step process. Approximately 10 finalists will first be selected; they will they be asked to submit more detailed applications. This will avoid requiring all of the initial applicants to put so much effort into the process. The maximum award in the Choice Neighborhoods program will be higher than in HOPE VI and will be authorized for spending over five years.