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demolish 96,200 public housing units and produce 107,800 new or renovated housing units, 56,800 of which will be affordable to the lowest-income households (through September 2007, 88,100 units had been demolished but only 64,300 new units had been constructed under the HOPE VI program). The Bush administration repeatedly proposed to end the program, arguing that it is too costly and that most of the severely distressed stock has now been demolished. Advocates for low-income households have been especially critical of the program because it has displaced original residents and reduced the total stock of housing with deep, project-based sub- sidies. Nonetheless, bipartisan congressional support has sustained the HOPE VI program, although at much lower levels of annual funding than during earlier years.20

Legislation to reauthorize and revamp HOPE VI has been under discussion for several years, and in Jan- uary 2008, the House of Representatives approved the HOPE VI Improvement and Reauthorization Act of 2007 (H.R. 3524). This bill calls for more help for families using vouchers to relocate (especially those with serious personal and health problems), a contin- ued commitment to mixed-income redevelopment, full replacement of all public housing units demolished with either public housing or project-based vouchers, and production of some replacement housing in low- poverty areas (Sard and Staub 2008). The Senate ver- sion of reauthorization is similar in many respects, but it does not include the requirement that every unit of public housing demolished must be replaced. Advo- cates for the extension of HOPE VI are divided about whether the 100 percent replacement requirement is necessary or whether it might make some redevelop- ment projects financially infeasible. As of September 2008, HOPE VI reauthorization legislation is not expected to be enacted in 2008 but will probably be reintroduced in the next Congress.

The Moving to Work demonstration (MTW) was enacted in 1996 to allow a limited number of PHAs to experiment with “deregulation.” More specifically, selected PHAs could request waivers of federal statutes and rules governing both public housing and vouchers in order to design and test new approaches for reducing program costs, encouraging economic self-sufficiency of residents, and increasing the housing choices of low-income families. Some participating PHAs were also granted the option of

pooling three major streams of funding from HUD— public housing operating funds, public housing modernization funds, and voucher subsidy funding.

Currently, 27 PHAs participate in MTW.21 Many have experimented with strategies for encouraging work and economic advancement among assisted households (including both public housing and voucher families) by imposing work requirements, changing the way rent subsidies are calculated, and even limiting the number of years a family can receive assistance.22 Much of this experimentation reflects an assumption that the standard subsidy calculation (which requires households to contribute 30 percent of their income toward rent) discourages work by “taxing” every additional dollar of income and by buffering the effects of a drop in earnings. For exam- ple, several PHAs completely severed the link between income and rent contribution, establishing flat rents or “stepped rents,” whereby a household’s rent con- tribution is set at a flat amount in the first year and then increased by predetermined amounts on a schedule that spans several years. Other PHAs continued to calculate rent contributions as a percent of income but modified their procedures to delay rent increases or exclude some income from the rent calculation. Many agencies required all households to pay a min- imum rent contribution, regardless of how low their incomes fell, with minimum rents ranging from $25 to $200. And several PHAs required residents to engage in some kind of work or training activity as a condition of occupancy (Abravanel et al. 2004).

Eight PHAs actually imposed time limits on housing assistance, arguing that this approach creates the strongest possible incentive for residents to increase their work effort and that it also spreads scarce assistance resources to more needy households over time. The very limited information available about the effects of these policies on residents suggests that they motivated some but paralyzed others, and that many families lacked a clear understanding of what it would take to be able to afford housing in the private mar- ket (Miller et al. 2007).

Unfortunately, although a considerable amount is now known about what PHAs did with the flexibility allowed under MTW, almost nothing is known about whether they produced better (or perhaps worse) outcomes for families than standard federal poli- cies. Although MTW is called a demonstration, it was neither designed nor implemented with rigorous

Federal Programs for Addressing Low-Income Housing Needs


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