______________________________________________________________________________ HOPE VI AND MIXED-FINANCE REDEVELOPMENTS: A CATALYST FOR NEIGHBORHOOD RENEWAL Mindy Turbov Turbov Associates Valerie Piper Piper Advisory Services A Discussion Paper Prepared for the The Brookings Institution Metropolitan Policy Program September 2005 ______________________________________________________________________________ THE BROOKINGS INSTITUTION METROPOLITAN POLICY PROGRAM SUMMARY OF RECENT PUBLICATIONS * 2005 DISCUSSION PAPERS/RESEARCH BRIEFS The Electoral College Moves to the Sun Belt Credit Where It Counts: Maintaining a Strong Community Reinvestment Act Using Information Resources to Enhance Urban Markets Market-Based Community Economic Development Using the U.S. and U.K. Censuses for Comparative Research Public Housing Reform and Voucher Success: Progress and Challenges Space Available: The Realities of Convention Centers as Economic Development Strategy TREND SURVEYS Leaving Money (and Food) on the Table Step in the Right Direction: Recent Declines in Refund Loan Usage Among Low-Income Taxpayers ¿Tienes EITC? A Study of the Earned Income Tax Credit in Immigrant Communities The Price is Wrong: Getting the Market Right for Working Families in Philadelphia Job Sprawl and the Spatial Mismatch between Blacks and Jobs TRANSPORTATION REFORM SERIES On the Ground: Protecting America's Roads and Transit Against Terrorism Today’s Roads with Tomorrow’s Dollars: Using GARVEE Bonds to Finance Transportation Projects BROOKINGS/LSE COMPARATIVE URBAN ANALYSIS SERIES Americans and Britons: Key Population Data from the Last Three U.S. and U.K. Censuses * Copies of these and previous Brookings metro program publications are available on the web site, www.brookings.edu/METRO, or by calling the program at (202) 797-6414. ii ACKNOWLEDGMENTS The Brookings Institution Metropolitan Policy Program would like to thank the John D. and Catherine T. MacArthur Foundation for its support of this research project. Brookings would also like to thank the Fannie Mae Foundation for its founding support of the program and its work. The authors are grateful to the more than 60 practitioners, colleagues, and friends who shared their insight, data, and experiences. In particular, they would like to recognize the following people who gave generously of their time, opened their organizations to numerous queries and provided connections to other valuable resources: Mayor Jerry Abramson, Richard Baron, Tim Barry, Rhonda Brandon, Claudia Brodie, Renee Glover, Jennifer Head, Marlene Hodges, Willie Jones, Polly Kinslowe, Stanley Lowe, Jan Muckensturm, Dovie Newell, Egbert Perry, Michele Schauf, Christopher Shea, and Rick White. Their help proved invaluable to completing this project. The authors would also like to recognize the practioners and academics that participated in the July 23, 2003 conference to review and discuss the first draft of this paper and the case studies. The discussion proved extremely helpful and hopefully this paper accurately reflects the notable input of so many talented people. The authors are grateful to Tim Barry, Paul Brophy, Mike Goeke, Renee Glover, Jennifer Head, Stanley Lowe, Egbert Perry, and Christopher Shea for their willingness to read, fact check, and correct the various drafts of this report and the case studies. Thanks to Meg Sowell for providing maps and other support. Additional gratitude goes to Carol Bell for her early review and editing of this project. Very special thanks is due to Jonathan T. Schmidt, without whose help this project would have been impossible. He provided invaluable research and analysis of census data, tax assessments, and other indicators of neighborhood recovery. He skillfully created the charts and graphs for the case studies. His writing and editorial skills were so thoroughly tested that the authors wish to acknowledge Jonathan as a co-author of the case studies. Finally, the authors acknowledge their friends and colleagues at Brookings: Bruce Katz who identified the need for this report, and provided the guidance and leadership to turn it into a reality; Karen Brown assisted with the literature review and coordinated the team through the twists and turns of this endeavor; and Amy Liu whose focus, clarity, wisdom and leadership—especially in the final hours—have improved this report immensely. iii ABOUT THE AUTHORS Mindy Turbov is the president of Turbov Associates, a community development consulting firm. In this capacity she has worked on a number of HOPE VI projects as a developer and a consultant. Turbov has over 25 years of experience in the community development field as a developer, in local and federal government and with non profit organizations. Prior to creating her firm, she was a special assistant to HUD Secretary Henry Cisneros with primary responsibility for creating the mixed-finance HOPE VI program. Valerie Piper is the president of Piper Advisory Services, a redevelopment consulting firm and the executive director of the Center for Urban Redevelopment Excellence at the University of Pennsylvania. Piper was a member of the Chicago Housing Authority’s senior management team that developed CHA’s Plan for Transformation and set in motion numerous mixed-income public housing redevelopments. She also assisted with creation of the mixed-finance development program under HUD Secretary Cisneros. Comments on this paper can be sent directly to the authors at [email protected] or [email protected]. The views expressed in this discussion paper are those of the authors and are not necessarily those of the trustees, officers, or staff members of The Brookings Institution. Copyright © 2005 The Brookings Institution iv EXECUTIVE SUMMARY Across the United States, attractive mixed-income developments and revitalized neighborhoods are being created where distressed public housing once stood. One of the drivers of this transformation has been the U.S. Department of Housing and Urban Development’s HOPE VI program. By leveraging other public and private dollars, the HOPE VI program has converted the nation’s worst public housing projects into the foundations of healthy neighborhoods, providing quality affordable housing while attracting new market activities and radically changing the urban landscape. Despite the program’s progress, however, it is under assault. The ten-year HOPE VI program was set to expire in 2003. In the subsequent two fiscal years, the Bush administration proposed to eliminate HOPE VI, but Congress restored funding at extremely reduced levels. This year seems to be a repeat: The program was once again slated for termination but with funding projected to be approved at an historic low. The future of HOPE VI remains tenuous. This report aims to inform these federal deliberations while also setting the broader discussions about public housing reforms in a neighborhood context. Specifically, this study examines the HOPE VI program’s effectiveness in jump-starting wholesale neighborhood improvements, with HOPE VI funding as the catalyst for attracting other capital to financing large- scale neighborhood redevelopment. Using four case studies—redevelopment projects in Atlanta, Louisville, Pittsburgh, and St. Louis—this paper explores the role and impact HOPE VI has had in rebuilding neighborhood economies. Overall, the authors find that: • HOPE VI and mixed-finance redevelopments have been able to bring market activity and quality of life back to long-neglected neighborhoods. Early evidence shows that there have been discernible market improvements in these formerly distressed neighborhoods, from the time of pre-redevelopment to as late as 2004. Household incomes in each of these case study projects grew at a faster pace than that of their city or region, after redevelopment. Unemployment and workforce participation rates have improved. Crime levels have dropped dramatically, as much as 93 percent in Atlanta’s Centennial Place. Where revitalization efforts focused on school quality, student test scores dramatically improved. Finally, these redevelopments were able to attract and retain residents with a broad range of income levels while still serving public housing families. With market-rate renters and homebuyers getting a foothold in these renewing neighborhoods, property values and new investments have also soared in these more viable, mixed-income communities. v • Improvements in HOPE VI developments and the surrounding neighborhoods were the result of well-planned and coordinated urban revitalization plans. While the specifics of each project may vary, lessons learned from the case studies show that there are consistent themes that ensure a successful project. Among other things, sustained leadership to shape the vision for the revitalization effort, and for the larger neighborhood, was critical. Coordination between housing authorities, city governments, and other public agencies is also crucial, as well as continuous engagement with existing public housing residents. New stakeholders also helped to sustain and enhance community improvements over time. Additionally, and notedly in St. Louis, public housing redevelopments that respond to marketplace realities within a holistic neighborhood plan attract and boost credibility with private sector partners, investors, and philanthropies, facilitating the leveraging of public dollars. Beyond bricks and mortar, providing the integration of services the middle class expects, and low-income families need, into the revitalization effort is key. Such