A Brief Look at the Early Implementation of Choice Neighborhoods

A Brief Look at the Early Implementation of Choice Neighborhoods October 2013 Rolf Pendall Leah Hendey Prepared for: The Annie E. Casey Foundation Prepared by: The Urban Institute 2100 M Street, NW ● Washington, DC 20037 Copyright © September 2013. The Urban Institute. This research was funded in part by the Annie E. Casey Foundation. We thank them for their support but acknowledge the findings and conclusions presented in this report are those of the authors alone, and do not necessarily reflect the opinions of the Foundation, and should not be attributed to the Urban Institute or i ts trustees. Permission is granted for reproduction of this file, with attribution to the Urban Institute. 1 Introducing Choice Neighborhoods The Choice Neighborhoods Initiative (Choice) aims to redevelop distressed assisted housing projects and transform the neighborhoods surrounding them into mixed-income, high-opportunity communities. Choice, first funded in 2010, replaces and expands on HOPE VI, the US Department of Housing and Urban Development’s (HUD’s) long-running program to replace or rehabilitate distressed public housing. HOPE VI made three important contributions that inform the design of Choice. 1. HOPE VI resulted in the construction of hundreds of mixed-income housing projects that helped reduce extreme neighborhood poverty. It helped build new relationships among public housing authorities (PHA), city and county governments, and private-sector builders, property managers, and investors in diverse settings (e.g., Atlanta, Baltimore, Chicago, Denver, St. Louis, Seattle, and Tucson). The solutions had to account for differences in original project design, surrounding neighborhood conditions, and housing market strength. 2. HOPE VI reflected and reinforced the diversification of the nation’s portfolio of housing assistance. Public housing units were demolished and replaced with a mix of new public housing units, tenant-based assistance, low-income housing tax credit (LIHTC) units, unsubsidized units, and other federal, state, and local subsidy. This diversity of subsidy types also helps reinforce income mixing. 3. HOPE VI provided many important lessons and examples of how to involve and protect vulnerable tenants during and after the redevelopment process. Many of these households need not only affordable housing but also supportive services (Buron et al. 2002; Popkin, Levy, and Buron 2009). PHAs and service providers involved in HOPE VI developed deep case management and relocation expertise and built lasting partnerships to provide services. Choice maintains HOPE VI’s emphasis on public-private partnerships and mixed-financing for replacing or rehabilitating assisted housing. Choice also extends eligibility beyond public housing to privately-owned, federally subsidized developments. It requires that grantees build at least one subsidized replacement housing unit for every unit demolished in the target development, except when objective measures indicate that the local housing market is too weak to warrant full replacement. It also continues HOPE VI’s emphasis on protecting tenants during the redevelopment process and heightens aspirations to give existing tenants the opportunity to live in the redeveloped project upon completion. Unlike HOPE VI, Choice provides funding for neighborhood improvement projects. It also extends the goal of partnership by creating or strengthening partnerships among organizations, agencies, and institutions working throughout the neighborhood to build affordable housing, provide social services, care for and educate children and youth, ensure public safety, and revitalize the neighborhood’s commercial opportunities and infrastructure. 2 HUD selected the Urban Institute (UI) and MDRC to collect baseline data and conduct an implementation evaluation of the Choice implementation sites funded in fiscal year (FY) 2010 and 2011. Among many methods of data collection, the UI team will conduct a household survey of tenants in the target development and residents of the surrounding neighborhood, made possible with supplemental support from the Annie E. Casey Foundation. The evaluation will offer an early look at the first years of a new program, documenting progress, problem-solving, and building evidence about how innovations in Choice are creating new opportunities and challenges for HUD, the Choice grantees, and their communities. This brief draws on the evaluation’s interim report submitted to HUD and focuses on providing background information about the first five implementation sites and their transformation plans (Pendall, et al. 2013). It highlights early observations about implementation progress and challenges that will be explored in depth in a baseline report, expected in 2014. Beyond this work, HUD hopes to fund additional data collection after the Choice implementation in the sites is complete and the neighborhood investments have taken root. The