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STARTING OVER . . .and DOING IT RIGHT

Public Housing Transformation ProjectsThat Build Healthy Communities

Prepared for theFutures Forum on Public Housing Transformation

Chicago, February 26, 1999

by Mindy Turbovwith Patrick Barry

ST. LOUISMurphy Park mixed-income community(below) replaced this Vaughn high-rise

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This report resulted from a collaboration of manydedicated individuals. To acknowledge all of themwould be impossible. Narrowing the list, I wouldlike to thank the people who so generously dedi-cated their time, sharing ideas, debating conceptsand relaying the history of their work.

Dominique Blom and David Sowell of HUD’sOffice of Public Housing Partnerships providedgreat insight on the national perspective andhelped me narrow the field of case studies. Chris-topher Shea and Stanley Lowe of the HousingAuthority of the City of Pittsburgh, always in-sightful, forthright and candid, provided invalu-able guidance. Andrea Duncan and MichaelGodfrey of the Housing Authority of Louisvillespent hours providing me with the details of theirenormous revitalization project. Jim Brooks ofJames Brooks and Associates of Atlanta helpedrefresh my memory and fill in the details ofCentennial Place. Stephen Gronewald of theMinneapolis HUD office is an invaluable resourceas well as one of the finest examples of a publicservant. Ricardo Diaz, Steve Falek and the staff ofthe Milwaukee Housing Authority shared theirhospitality and commitment to getting people towork. Estella Alexander and Daniel Henson of the

Housing Authority of Baltimore City providedconsistent reminders of the importance of involv-ing residents. Aurie Pennick of the LeadershipCouncil for Metropolitan Open Communities andKale Williams of Loyola University’s Center forUrban Research and Learning answered my last-minute calls and pointed me in the right direction.Richard Baron and the staff of McCormack Baron& Associates shared their ideas, documents, slidesand enthusiasm for the changes taking place in St.Louis, Atlanta and other cities. I thank each ofthem for their support and encouragement, butmostly for the remarkable things they are accom-plishing to make our communities better places tolive.

Collaboration is one of the themes of this paper. Iwant to thank my collaborator Patrick Barry fordistilling dense data, multiple concepts and toomany words into an easy to read but information-packed document.

Finally, I want to express my deep gratitude to theFutures Forum and the John D. and Catherine T.MacArthur Foundation, in particular RebeccaRiley, for engaging me in this important debate onthe future of public housing in the Chicago region.

Mindy Turbov

Acknowledgements

The Futures Forum on Public Housing TransformationThe Futures Forum is a three-year-old publicdiscussion about the practice of communitydevelopment and how it can be improved. OnFebruary 26, 1999, the Futures Forum Subcommit-tee on Race and Regionalism convened 140Chicago-area residents to develop strategies forsuccessful public housing transformation in the

region. This report was presented to participantsto provide background information on redevelop-ment efforts around the country.

For more information about the Futures Forum,contact Barbara Beck at Local Initiatives SupportCorporation/Chicago, 312-697-6110.

Cover photos: McCormack Baron & Associates, Inc.

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STARTING OVER . . . and DOING IT RIGHT

New ways to provide public housing, and new challenges, too

With new partners and new resources,cities are building neighborhoodswhere the "projects" once stood

The broken housing towers that have scarredAmerica’s cities for decades are coming down.Political leaders and public housing residentsaround the country are taking advantage of newregulatory flexibility to radically reshape dozensof communities. Private money is being put towork; new partners are being recruited; contem-porary designs and private management arebecoming the norm.

Where “projects” once stood, neighborhoods arebeing built — real neighborhoods with bricktownhouses, working families, single-familyhomes and, finally, decent housing for low-income families.

The transformation of public housing began in theearly 1990s when Congress created HOPE VI, aflexible program to comprehensively addressentire public housing sites from bricks and mortarto social and employment programs. Congresshas appropriated about $500 million annuallysince 1993, and with bipartisan support, HOPE VIhas survived every budget-cutting effort.

The case studies in this report show that publichousing and its residents can be successfullyintegrated into a vast range of communities fromnew suburban developments to historic neighbor-hoods to former public-housing ghettoes.

Still, for every success there have been failures,delays and pitfalls. Rebuilding public housingrequires clear vision, political will, compromise,education, and inclusion of residents and neigh-bors. Bringing key players to the table and keep-ing them there for a complex, multi-year effortdemands leadership of the highest caliber, plus acollective ability to discuss and resolve issues ofracism, class distinction, poverty and disinvest-ment. Even success is difficult because it bringsmore issues to the forefront: displacement,gentrification, winners and losers.

Public housing in the last four decades has con-centrated the poor into tightly defined neighbor-hoods. Most new developments have tried tobreak that pattern by reducing the total number ofhousing units, adding market-rate rentals or for-sale homes, and relocating some residents withSection 8 housing certificates.

continued on next page

LOUISVILLEOne of the single-family home styles beingbuilt at the Park DuValle redevelopment site.

Housing Authority of Louisville

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The strategy seems to work, but the questionremains: Are some neighborhoods being im-proved at the expense of others? Most redevel-oped sites require rigorous resident screening,criminal background checks and work require-ments. The least-able and most anti-social resi-dents are prevented from returning. Yet theymust live somewhere.

Of all America’s cities, Chicago faces perhaps thegreatest challenge in trying to redevelop its publichousing. Densely concentrated and severelydeteriorated, the Chicago Housing Authorityhousing developments are among the worst in thenation. Of CHA’s 40,000 units, approximately19,000 have failed HUD’s viability test. Most ofthose are likely to be demolished.

Some residents will move to new communities onthe same site, places like West Haven near the

Born of the New Deal in 1937, public housingwas a response to the most significant marketfailure in U.S. history: the Depression. Firstintended as temporary low-cost space foreconomically dislocated families, public hous-ing was expanded at the end of WWII into amajor construction program to jumpstart theeconomy. By the 1950s, it became a tool of slum-clearance and urban renewal, and from thereevolved into permanent housing for a mostlylow-income African-American population.

Developed outside of traditional market forces,public housing was located where land wascheap or on urban renewal land, with littleregard for customer satisfaction and neighbor-hood economies.

Long managed by highly regulated indepen-dent authorities that were asked to become

social service providers, public housing today isbeing returned to its original function as a realestate business. Housing authorities are focus-ing on the core business of developing, market-ing, managing and maintaining rental housing.Many are contracting with more-capable part-ners to provide social services.

Private sector involvement became possible inthe mid-1990s when HUD allowed housingauthorities to partner with private developersto create mixed-finance developments, includ-ing private ownership and management.

This attracted a host of new stakeholders, fromneighborhood residents and city and stateagencies to urban designers and developers,lenders, equity investors, major institutions andcorporations. This joining of many interests isredefining public housing in America.�

Result of market failure, public housing now includes private sector approaches

New ways, new challengescontinued from previous page

Henry Horner Homes, or the Orchard Parktownhomes near Cabrini-Green. Thousands ofother families will relocate throughout the region,in scattered sites, new developments and existingrental buildings.

Creating the mechanisms and partnerships tomake this transition a success is a challenge ofgreat magnitude — and also great promise. Publichousing redevelopment is a major civic opportu-nity to build healthy communities. �

The challenge in Chicago is hugebecause about 19,000 units failed

a viability test and must be replaced

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There are now many examples of public housingthat works. Though conditions are different inevery city and local resources vary, many projectsuse similar tools or approaches:

• Leadership and political will are essential.Overcoming multiple obstacles requires avision and perseverence. Most projects haveactive involvement of the mayor and other localleaders.

• New stakeholders are coming to the table.Community organizations, city government,state government, corporations and nearbyinstitutions are taking ownership in the rede-velopment process.

• Resident involvement and buy-in is crucial; itmay include surveys of residents, attendance atplanning and design meetings, employmentopportunities, small-business creation andyouth-scholarship programs.

• “New urbanism” design is embraced in manydevelopments because it helps rebuild commu-nity ties. Restoring streets and sidewalks,adding porches and back yards, creating dis-tinctive community centers all contribute to asense of neighborhood.

• Mixed financing uses private sector develop-ment tools to leverage additional privatedollars. Private financing brings rigorousunderwriting, oversight and project manage-ment.

• Mixed-income development, both rental andhomeownership, is intended to attract residentswith a range of incomes. Up-front subsidies,low-interest loans and homeownership coun-seling help working-class neighbors and formerpublic housing residents buy a home. Middle-income buyers are attracted with quality con-struction, amenities and locational advantagessuch as proximity to transit or job centers.

• Emphasis on employment is common. Resi-dents are told as they apply for housing that

employment, skills training or education areexpected. Work is encouraged through financialstructures such as rent ceilings; peer support;on-site job clubs, and sometimes through provi-sions in the lease.

• Amenities and quality construction are essen-tial to attract middle-income residents and buildself-respect among those moving from publichousing. Air conditioning, washers and dryers,swimming pools and Internet wiring are com-mon to successful projects.

• Reduced density is planned in, with the num-ber of units reduced by one-half or more insome cases. While one-for-one replacement is nolonger required by federal regulations, a cred-ible plan to avoid displacement, such as use ofrent vouchers, is essential.

As important as any of these: a clear strategy anda teamwork approach that assigns duties based onthe skills and resources of participants. �

MAKING IT WORK: Strategies and tools for redevelopment

Resident involvement in design of new develop-ments builds support for implementation.

Housing Authority of Louisville

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ATLANTAOlympics as leverage, downtown as lure: Mixed-income successCentennial Place in Atlanta doesn’t look likepublic housing. New apartments and townhouseshave architectural details reminiscent of a historicneighborhood. There are balconies, patios and totlots; Internet wiring, security systems, washersand dryers. Nearby are a swimming pool, newschool, new YMCA and historic Carnegie library.

What were once impenetrable, neglected super-blocks are now tree-lined streets just blocks fromdowntown. And everyone wants to live there.

It took the Olympic Games and a pioneeringprivate-ownership approach to reverse the for-tunes of the 1,081-unit Techwood and Clark-Howell public housing developments. Despiteproximity to Coca-Cola’s world headquarters,Georgia Tech College and Atlanta’s massiveconvention palace, the Georgia World CongressCenter, the 50-acre site with its worn-out build-ings and depressed population seemed an un-likely prospect for market-rate housing.

The naysayers were wrong. The first of fiveconstruction phases broke ground before the 1996Olympics. Though market-rate units were mixedalmost evenly among subsidized apartments,demand was so high that rents were raised twice.Original plans called for $900 market rents forthree-bedroom apartments. They’re now at $1,600.

When completed in 2000, the 900-unit develop-ment will have a household mix of 40 percentvery low income (“public housing”), 20 percentwith incomes under 60 percent of the median(using the Low-Income Housing Tax Credit) and40 percent at unrestricted rents. More than 350units are completed; 185 are under construction.Homeownership units are part of the mix.

Mixing finance first, then income levelsCentennial Place, known as a “mixed-finance”development, is privately owned and managed.Approved by HUD in 1994, the mixed-financeapproach uses public housing dollars to attractprivate investors that would not otherwise investin public housing. Mixed-finance projects aremanaged like market-rate developments; stan-dards remain high to retain market-rate tenants.

Private money, new stakeholderscreate an attractive communitywhere income levels are mixed

Attractive and close to downtown, rental unitsat Centennial Place are in high demand.

In each of the project’s first three phases, about $5million in federal Hope VI funds were combinedwith $4 million or more in private equity and afirst mortgage of about $4 million. The developerslease the land from the housing authority.

The private-sector orientation is central toCentennial’s success. Developers McCormackBaron & Associates, Inc. of St. Louis, a mixed-finance pioneer, and the Atlanta firm IntegralGroup, LLC, built and manage the properties withthe high end of the market in mind. Qualityconstruction, tough screening, attentive manage-ment and security were necessary to lureAtlantans to a former public housing site.

The “income-blind” approach means units areidentical inside and out; in fact, the units rented tolow-income families “float” depending on vacan-cies. This avoids concentration of one class oftenants in one section of the development.

Current status: demand remains high for both themarket-rate and subsidized apartments. �

McCormack Baron & Associates, Inc.

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Before andafter: Former

superblocks(right) have

been replacedby housing that

fits the urbanstreetscape.

MORE on ATLANTAMixed finance approach: morebuilding blocks, bigger impactAtlanta's Centennial Place is an example of how amixed-finance structure can improve the quality ofpublic housing. Centennial looks and operates likea private development even though it includespublic housing residents. Management is the samefor subsidized and non-subsidized renters, andunits are interchangeable, with none designatedonly for public housing.

Private sector discipline -- and dollars invested --help prevent complex deals from bogging down;most of the HOPE VI projects that are complete orunder construction used mixed financing. Thestructure also encourages each entity to stick to itscore business. Public housing authorities canprovide development capital, communicate withresidents and create training opportunities andsocial services. The private partners can attractinvestors, move quickly on management needsand market the development to new residents. �

Making a commitmentA memorandum of agreement requiredstakeholders to:• work together• meet regularly• commit resources they could.

Recruiting the stakeholdersAmong the active parties were resi-dents, Coca-Cola, Georgia Tech, Sprint,Public Schools, YMCA, and the AtlantaCommittee for the Olympic Games.

Olympics as deadlineThe 1996 games, with Olympic Villageacross street, provided impetus to makeit work. Housing was part of broaderdowntown redevelopment.

Getting residents on boardDeveloping trust took time, effort. Sometook vouchers and moved to other areas;those who returned made committment towork, school or training.

Building a new schoolStakeholders rejected plan to rehab alow-performing school, created newscience and math academy. GeorgiaTech designed curriculum. Coke employ-ees are tutor/mentors.

Library, YMCA, and moreYMCA, in historic building, offers childcare, family programming. AbandonedCarnegie-era library rebuilt, along withnew streets, sewers, water mains,sidewalks.

Private finance = oversightWith multiple investors, stakes are highto maintain quality; equity investors canmove faster than a housing authority tomake changes.

Contacts: Renee Glover, Executive Director, Atlanta Housing Authority, 404-817-7200; Egbert Perry, Managing Principal, IntegralGroup, 404-817-0500; Richard Baron, President, McCormack Baron Associates, 314-621-3400.

McCormack Baron & Associates, Inc.

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LOUISVILLELooking beyond public housing to address whole neighborhood

Public housing in Louisville, as elsewhere, wasrarely the focal point of a neighborhood redevel-opment strategy. Just the opposite. The HousingAuthority of Louisville (HAL) wasn't even at thetable for Empowerment Zone planning, eventhough it was the biggest landlord in the ParkDuValle community.

That changed when HAL approached Mayor JerryAbramson about a revitalization plan for theCotter and Lang Homes. The Cotter Homes wereone of the housing authority’s more troubleddevelopments in an otherwise high-performingagency. The isolated, barracks-style developmentof 616 units was scheduled for a major renovation.When the mayor and HAL leadership steppedback, they saw a bigger picture:

• Renovation costs were almost as high as newconstruction.

• The 500-unit Lang Homes across the streetneeded attention as well.

• A nearby 374-unit FHA development was inworse condition than Cotter and Lang.

• Surrounding vacant land, highways and indus-try provided little sense of community.

Prior to this rethinking, the prospect of Empower-ment Zone designation had led to creation of a100-person planning group to study the largerarea. The city was also creating a communitydevelopment bank to serve the West End, includ-ing the Cotter and Lang area. And the ParkDuValle Neighborhood Council, comprised of

Big-picture orientationand inclusive process lead tocatalytic redevelopment plan

residents and small business owners, was think-ing about larger-scale improvements.

All these factors suggested the potential for large-scale, catalytic change. So the city and housingauthority, working with state agencies, the cityredevelopment authority, public housing residentsand HUD, developed a full-scale plan. It called fordemolition of all 1,116 public housing units,acquisition and demolition of the FHA property,and creation of a mixed-income, mixed-financedevelopment with 613 rental units and 450homeownership units, both with varying degreesof subsidy. An additional 665 off-site rentals orSection 8 certificates assure housing is availablefor displaced residents.

HUD awarded $31 million in development fundsin 1995 and $20 million in HOPE VI funds in 1996.This was matched with $38 million in privateequity, $43 million in private debt and about $40million in other public funds.

Mayor Abramson chaired a policy board (andattended every meeting) that includes neighbor-hood residents, public housing residents, the HALexecutive director and two HAL commissioners.A project management team includes executivesfrom the city and housing authority along withdevelopers and nationally respected consultants.

The new Park DuValle neighborhood, to be builtin five phases, is now emerging. Phase I is com-plete, with 100 rental units including 59 for publichousing, 21 with rent subsidies and 20 at unre-stricted rents. Demand is strong. Phase II is underconstruction and the innovative homeownershipprogram is underway, with eight homebuildersand 30 different house designs. Some homes areselling for up to $250,000. �

Contacts: Michael Godfrey, Director of Planning and Development, Housing Authority of Louisville, 502-574-3415.

Factors for success• Active involvement of the mayor's office.• Authority is flexible, willing to change plans.• Historic trust between residents and authority.• Flexibility of HUD through regulatory changes.• Community-wide support via planning process.• State involvement with tax credits, legislation.• Involvement of community development bank.• Elaborate, time-consuming inclusion process.

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MORE on LOUISVILLE

Too big for one developer,project uses multiple actors

Park DuValle today (above) looks very different thanthe neglected neighborhood of the past. At right,Algonquin Terrace, a failed FHA development nextto Cotter and Lang that was demolished.

When Louisville leaders decided to demolish1,490 units of housing in the Park DuValle area,they realized the job would require not only goodplanning, but effective execution. The resultingproject involves many developers and partners.

The housing authority and city hired a nationallyrenowned urban design team to plan the site andset design standards. Thirty prototype houseswere designed and eight homebuilders (four ofthem minority-owned) were pre-qualified tobuild, market and sell the homes. A master landdeveloper manages the process.

Two developers are responsible for the mixed-income rental component, including financing,building, marketing and management. A non-profit agency provides homeowner counselingand training to public-housing-eligible families.

The development's 613 on-site rental units include280 for public housing, 173 for Low-IncomeHousing Tax Credit use and 160 at market rates.Of the 450 homeownership units, 153 are forfamilies under 80% of the median income; 105 forfamilies under 100%; 45 for families under 115%and 147 are unrestricted. �

Sources of fundingPublic FundsComp Grant $ 9,900,000CDBG 10,000,000Reprogrammed 14,880,0001995 Development award 31,400,000Hope VI 20,000,000Louisville General Fund 600,000Homeownership Zone 4,600,000Total Public sources $ 91,380,000

Private Equity 38,700,000Private Debt 43,720,000Program Income 4,700,000Total $178,500,000

Uses of fundingRental housing $ 82,400,000Homeownership 47,500,000Off site replacement 9,800,000Total housing units $139,700,000

Predevelopment andNeighborhood Recovery $ 38,800,000

Total $178,500,000Does not include Section 8 vouchers/certificates for replacement units

Contact: Kim Burse, President, Louisville Development Bancorp, Inc. (master land developer), 502-778-4000.

Housing Authority of Louisville

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ST. LOUISSchool upgrade, corporate partners boost community prospects

Public housing transformation,with support from private sector,

is turning around a troubled school

COVAM stands for Carr, O’Fallon, Vaughn andMurphy Park, the four neighboring housingdevelopments; its board includes residents fromeach development, the school principal andrepresentatives from non-profit and for-profitpartners including developer Richard Baron.

Baron was instrumental in the creation of COVAMand reconstitution of the school. His firm ownsthe 635-unit O’Fallon development and hasworked for the Carr Square complex. He knewquality of local schools plays a big role in familydecisions to choose a neighborhood and to stay aschildren reach school age. Corporate investors,already stakeholders in Murphy Park, agreed andinvested heavily in the school. Southwestern Bellgave $750,000; others included McDonnellDouglas, A.G. Edwards and Nationsbank.

The school has attracted 272 neighborhood chil-dren, up from 80 the previous year when mostwere bused in. There is a new principal, strongdiscipline, new curriculum, state of the art tech-nology, heavy parental involvement and im-proved teacher training. The school board recentlyagreed that the nearby middle school will alsobecome site-based managed in partnership withCOVAM. �

Public housing has been reinvented over and overon the north side of St. Louis near the George L.Vaughn housing projects. A block away, the Pruitt-Igoe housing towers were demolished in 1973,early recognition of the failures of U.S. publichousing policies. Residents at the nearby CarrSquare and Cochran Gardens fought for andcreated the first resident-management corpora-tions in the country.

The makeover of the 656-unit Vaughn area is asimilar breakthrough. A new mixed-financedevelopment, The Residences at Murphy Park, isbeing built by private developers with input fromthe public housing residents who will live there.The development includes tot lots, green space, achild-care center and outdoor pool. A transformedlocal elementary school is the cornerstone of therevitalization strategy.

Murphy Park pioneered the mixed-finance publichousing development with amenity-rich apart-ments designed to appeal to market rate rentersbut to be leased as well to public housing and tax-credit-eligible families. The townhouses featurecarpeting, air conditioning and washers anddryers. They are the work of McCormack Baron &Associates, which has similar projects in Atlanta,Kansas City, San Francisco and elsewhere.

What sets the project apart is the public-privatepartnership forged at New Jefferson School, thefirst “site based managed” school in St. Louis. Theschool was rehabbed before the 1998-99 schoolyear thanks to $2 million in corporate funds raisedby a non-profit organization, COVAM.

Contacts: Richard Baron, McCormack Baron, 314-621-3400; Ann Meese, Principal, New Jefferson Elementary, 314-231-2459.

Improving the environmentfor families and childrenwas key to the MurphyPark strategy; the develop-ment includes a newschool and child carecenter.

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BALTIMOREPolitical will, strategic plan end era of high-rise segregationIn 1993 the Housing Authority of Baltimore City(HABC) set out to change the face of publichousing. Recognizing opportunities in the newflexibility at HUD, the authority examined itsentire portfolio and asked a basic question: how tomake “neighborhoods” out of “projects”?

The most troubled developments were LafayetteCourts, Lexington Terrace, Murphy Homes andFlag House Courts, four high-rise-and-townhousedevelopments circling the downtown. Combined,they had 2,700 units. They became the top priority.

All four suffered from crime, gang activity andhigh vacancies. All were laid out in superblocksthat made management and crime preventiondifficult. All had their own schools and werecompletely isolated from their neighborhoods,though each was walking distance from a majorinstitution. The American Civil Liberties Unionhad filed suit on behalf of residents, demandinglower density and replacement housing.

Mayor Kurt Schmoke and authority commissionerDaniel Henson, with support from the state, asked

City used new HUD flexibilityand millions from state government

to rethink its entire inventory

HUD to consider comprehensive redevelopmentwith a cost of about $300 million (HOPE VI totals$125 million; the rest is state, city and private).

Calling for demolition of all units, the plan drewimmediate fire from residents, but careful plan-ning, many meetings and a flexible, evolvingapproach brought residents on board.

The program kicked off with a bang -- implosionof the six towers at Lafayette Courts and immedi-ate construction of what residents had asked for: atypical Baltimore neighborhood of brickrowhouses with backyards. Moving quickly wasimportant to show the authority would createwell-designed replacement housing, good servicesand a quality living environment. RenamedPleasant View Gardens, the development receivedthe 1997 American Institute of Architects’ awardfor excellence in urban design.

Efficient relocation was also a priority to buildtrust and minimize disruption to families. Resi-dents met regularly with HABC staff and amongthemselves as the different developments movedforward. Amenities at the first site include a child-care center, police sub-station and a Boys andGirls Club with computer lab. The Greater Balti-more Medical Center operates an adjacent com-munity health center.

The plan has evolved considerably with eachphase. While Lafayette was 100 percent publicallyfunded (the state paid for off-site replacementsand a 110-unit senior building), the LexingtonTerrace phase includes private financing anddevelopers. Additional private participation andexpanded homeownership is anticipated at theMurphy Homes, which have been demolished.Planning for Flag House Courts calls for retaildevelopment and a business incubator. �

Contacts: Estella Alexander, Associate Deputy Director, Housing Authority of Baltimore City, 410-396-8213.

The Baltimore plan had seven clear goals:1. Reduce on-site density by 60 percent.2. Create communities of choice, including

homeownership options and economic integration.3. Leverage public and private resources.4. Stress self sufficiency of residents and community.5. Develop economic opportunities.6. Improve property management, including use of

private managers.7. Replace units off-site in small-scale developments.

Housing Authority of Baltimore City

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MILWAUKEEJobs first, because a community that works is a healthier one

In the early 1990s, Hillside Terrace was the worstpublic housing development in Milwaukee -- sobad that only one of 200 families on the publichousing waiting list agreed to move in.

Designed with 540 units in isolated “super-blocks,” the garden-style development with itscommon hallways and limited vehicle (includingpolice) access had become a prized outlet for drugdealers. Factories and offices were nearby, butonly 17 percent of households included wageearners.

Today, 60 percent of Hillside families includewage earners and the long waiting list includes 50working families. The low-rise buildings are stillthere -- except for 119 units demolished to restorethe street grid -- but extensive rehab, privateentrances and greenery give Hillside an entirelydifferent feel. Replacing drug lookouts on thecorners are residents hustling to work or to classesat nearby Milwaukee Area Technical College.

The shift began in 1993 when Milwaukee appliedfor the first round of federal HOPE VI funds.Architectural changes were a key strategy, includ-ing touches like adding back porches and hidinggarbage carts behind decorative brick. The wholepackage, including peaked roofs, carpeted unitsand new appliances, ran $93,000 per unit.

But the real change came in mindset. “We had totreat residents with respect, not like second-classcitizens,” says Ricardo Diaz, the Milwaukee

Housing Authority’s executive director, remem-bering four years of meetings with residents,every Monday morning. “And we made it clearthat we wanted people to work, because a com-munity where people are working is a healthierone.”

The employment push, with political backing allthe way up to Mayor John Norquist, included twohousing authority job developers, skills trainingand a work-friendly rent structure. It was helpedimmensely by a labor market so tight that em-ployers gave public housing residents a first andsometimes second chance. Another factor wasWisconsin’s strict -- some would say punitive --welfare-reform program. It started years earlierthan in most other states and encouraged publichousing residents to take advantage of the hous-ing authority’s employment incentives and on-sitesocial supports (see related stories, over).

Hillside is a functioning community today be-cause a lot of things were done right: effectivenew-urbanism design, solid property manage-ment, strong social services (using skilled outsidepartners) and good resident relations. But jobsmade the difference. �

Hillside Terrace was isolatedand troubled. Now 60% offamilies are working.

Once-isolated Hillside projectsare rewoven into city grid --

but real boost comes from wages

Milwaukee Housing Authority

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MORE on MILWAUKEE

‘Service-rich’ approach -- with partners -- supports changeLining up good partners is a key factor in many transformation projects. Some authorities have chosena mixed-finance structure, with private developers sharing ownership and/or management. TheMilwaukee Housing Authority, known for its strong management, kept that role for itself but recruitedmany partners to implement what it calls a "community-building model."

The authority has on-site service providers at each of its developments. At Hillside Terrace, partnersinclude the Black Health Coalition (health services), Boys and Girls Club (education, recreation, youthdevelopment), Center for Child and Family Services, Inc. (alcohol and drug-abuse services), Day CareServices for Children (child care and Head Start), Milwaukee Area Technical College (computer learn-ing lab, adult skills), Milwaukee Community Service Corps (on-the-job training for 18- to 23-year-oldswith unions and contractor firms), Maximus (TANF coordinating agency that provides welfare-to-work services), and the Women's Business Initiative Corp. (entrepreneurship classes).

Common-sense management

• Broken windows are fixed and graffitiremoved quickly to maintain sense of order

• Garbage dumpsters, once outside frontdoors, are now hidden behind masonry.

• HUD gives the Milwaukee authority highmarks for management practices: above 90on the PHMAP evaluation.

Partnerships for support services

• Family developments have on-site child-careand a YMCA or Boys and Girls Club.

• Black Health Coalition runs on-site clinic.

• Job training, entrepreneurship programs,computer learning lab encourage careers.

• Drug and alcohol abuse counseling.

Return-on-investment mindset

• Average household income increased 30% to$13,206 while AFDC (TANF) savings totaled $1million between 1996 and 1999.

• Maintenance, utility and graffiti removalcosts are expected to decrease.

• Community center rents offices, meetingspace, kitchens to cover some costs.

Emphasis on employment

• Job developers help residents get jobs at$7 to $12/hour; part-time and temp jobsease transition into workforce.

• "Wall of work" features photos of workingresidents and where they are employed.

• All can earn $2,000 before rent is raised;ceiling rents keep units affordable; rentreductions after job loss are discouraged.

Contacts: Steve Falek, Associate Director, Housing Authority of the City of Milwaukee, 414-286-5681; Ann Wilson, Director, HillsideTerrace Resource Center (and long-time resident leader), 414-224-8810.

Building Community

"It used to be 'the projects.' Now it's a neighborhoodwhere the ice cream truck comes around."

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An early mistake taught lessonthat community partners

and a good plan go a long way

PITTSBURGHLeadership, partners and planning revive historic neighborhood

Contacts: Christopher Shea, Director, Special Projects and Planning, Housing Authority of the City of Pittsburgh, 412-456-5239.

HACP partnered with MCC and the Urban Rede-velopment Authority, using MCC's plan as thebasis for a HOPE VI application. A $7.5 millionHOPE VI grant and $5.9 million in other publichousing funds leveraged $3 million in privatedebt, $15 million in tax credit equity and $1million from URA. Murphy called the package“the best public housing investment HUD evermade in Pittsburgh.” What made it work?

• A whole-neighborhood approach includingtaking control of the troubled Section 8 buildingsand folding in economic development, gangintervention and adult education. Public housingresidents, involved with MCC for years, have twoslots on the organization’s board.

• A homeownership component attracts newresidents and helps current residents with up to$40,000 per buyer in second mortgage funds (0percent interest for 99 years). Homeowner educa-tion covers maintenance and home care.

• High design standards, due to historic districtdesignation, required that architectural detailsmatch the character of the neighborhood.

•Private partners bring an investor’s oversight todevelopment and management.

• Aggressive case management is tied to thepublic housing lease and managed by MCC.Schooling, skills training and work opportunitiesare pushed hard. “You can choose to do any-thing,” said HACP executive director StanleyLowe, “but you cannot choose to do nothing.”

Manchester is becoming healthier. Property valuesare up 13 percent. Crime is down 18 percent. Andthe eyesores are gone. �

One of the first things Tom Murphy did after be-ing elected Mayor of Pittsburgh in 1994 was namehimself chair of the housing authority. It was onthe brink of receivership, had high vacancies, longwaiting lists, soaring crime and a history of poormanagement. It fostered disinvestment in everyneighborhood that touched public housing.

The Housing Authority of the City of Pittsburgh(HACP) had received one of the first HOPE VIgrants for its plan to rehabilitate the AliquippaTerrace development. The less-than-radical $32million proposal called for thinning out thedevelopment, adding porches and peaked roofs,and providing modest social services. Murphythought he could do better.

But residents were furious when he scrapped theplan in favor of demolition and mixed-incomedevelopment. Months of fighting followed andcountless hours were spent on damage controland rebuilding relations. Murphy learned a fewlessons. Get resident buy-in early. Nurture localpartners. Make sure your plan is a good one.

Aliquippa redevelopment is now under construc-tion as new mixed-income development withprivate partners, but only because of lessonslearned on a second project in Manchester.

The Manchester community on Pittsburgh’s northside was the first African-American community tobecome a nationally registered historic district. Awell-established community organization, theManchester Citizens Corporation, had just up-dated a master plan that identified troubledhousing as an impediment to a healthy commu-nity. Scattered through the community were 108public housing units in three-story walkups and95 defaulted Section 8 units owned by HUD.

Profile108 units demolished; 238 to be built

86 public housing rentals64 tax credit rentals46 market rate rentals42 for-sale homes w/subsidies

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Profile:• Eight sources of financing.• Base of regional cooperation.• Part of larger development including retail,

single-family homes, townhouses, rental andassisted elderly housing.

• Near transit hub, highway interchange andregional mall.

• Units are identical; public housing "floats"with vacancies.

• Lures for small developers.

Crown Ridge inMinnetonka is a 64-unitrental development withsix public housing units,40 rent-restricted tax-credit units, and 18 atmarket rates. It is thefirst subsidized housingfor developer CSM Corp.

Not in my backyard. That rallying cry has been abarrier to effective public housing developmentfor decades, even in liberal Minnesota. But in thelast three years, 130 units of public housing havebeen built or are under construction in suburbsaround the Twin Cities, and 100 more units arescheduled. The beauty of it: neighbors can’t tellwhich units are public housing because they lookjust like market rate units next door.

A 1992 lawsuit against the Minneapolis PublicHousing Authority and HUD charged that publichousing in the city was improperly concentratedin areas with low-income and high-minoritypopulations. HUD settled in 1995, agreeing tofund construction of 770 units in non-impactedareas -- 670 of them in the seven-county suburbanring -- along with 900 Section 8 certificates andvouchers plus $2.5 million for housing counseling.

A history of regional cooperation and smartgrowth policies helped the region respond to thischallenge. Equally important is an intricate pro-gram of incentives and streamlining that bringsprivate developers into the fold. Four layers of

A lawsuit got things rolling;cooperation and a mixed-income

approach make it work

government are involved, but the developmentsuse the mixed-finance model. Most units underthe Metropolitan Housing Opportunities Programare privately managed and privately owned.

• Permits and planning are expedited by theMetropolitan Council of the Twin Cities, whichhas authority over mass transit extensions, waterand sewer expansion, Section 8 administrationand regional planning.

• Affordable-housing policies are tied in via thestate’s Livable Communities Program. It provides$10 million annually to the Metro Council to addaffordable housing into suburban developments.

• Streamlined financing, managed by the Minne-sota Housing Finance Authority, includes low-income housing tax credits if developers include10 percent public housing, expedited reviews andapprovals, and access to gap financing throughthe Family Housing Fund.

• Help on legal work and regulations is providedby HUD staff to lure participation of small-scaledevelopers that might otherwise become mired ingovernment minutiae.

The results are hard to spot among Twin Citiessubdivisions because the program stipulates only10 percent of a project can be public housing, with30 percent of those for local residents. Residentsdisplaced by demoliton get first priority. �

MINNESOTASuburban homes near job centers, and working families next door

Contact: Stephen Gronewold, Chief Counsel, U.S. Dept. of Housing and Urban Development, Minneapolis, 612-370-3000.

Mixed-Finance Guidebook, HUD

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CHICAGO

‘Gautreaux’ program: Pioneering model for integrationNot often viewed as a city to emulate when itcomes to public housing, Chicago neverthelessdefined the standard for providing choice toresidents of public housing.

The Gautreaux Assisted Housing Program, oper-ated by the Leadership Council for MetropolitanOpen Communities for 22 years until September1998, taught the nation how to help public hous-ing families escape concentrated poverty andsegregation to begin new lives in desegregated,often suburban, communities.

Sometimes called “mobility counseling,” theGautreaux approach used a one-day registrationperiod for interested families, followed by motiva-tional counseling, assistance with the housingsearch and ongoing supportive services duringand after the move. Lessons learned underGautreaux — and documentation of healthyoutcomes for moving families — have shapeddozens of mobility programs around the country.

The program takes its name from the pioneeringcivil rights lawsuit filed in 1966 on behalf of CHAresidents and families on the CHA waiting list,including resident and civil rights leader DorothyGautreaux. The suit charged that CHA’s place-ment of virtually all of its projects in black neigh-borhoods was a violation of Title VI of the 1964Civil Rights Act and the equal protection clause ofthe Constitution.

The courts determined in 1969 that the CHA hadintentionally discriminated and violated the law.After years of legal wrangling, HUD agreed to agroundbreaking remedy: a metropolitan-widerent subsidy program to provide housing oppor-tunities, mostly in the suburbs, to public housingresidents. A subsequent consent decree stipulatedthe program would end when 7,100 families wereplaced, a goal reached last year.

Litigation similar to the Chicago lawsuit hasresulted in 12 other mobility programs around thecountry; in addition, five cities are using theMoving to Opportunities model created by HUDin 1994, and 16 participate in a regional mobility

program sponsored by HUD. A small number ofpublic housing authorities have their own mobil-ity counseling programs.

Connecting a resident to housing in the privatemarket is far less expensive than rehabbing orbuilding new housing. Costs for counseling,search assistance, followup and landlord outreachrange from $1,400 to $2,800 per family placed.Ongoing rent assistance comes from Section 8vouchers, which cover the difference betweenmarket rents and 30 percent of family income.

A series of studies by the Northwestern Univer-sity Center for Urban Affairs and Policy Research(James Rosenbaum et al) showed this investmentoften brought significant social and economicbenefits. Comparing families that moved to thesuburbs with those who moved to integrated orpredominantly African-American city neighbor-hoods, the studies found that suburban motherswere more satisfied with the quality of theirchildren’s schools and with police services.

Children fared better in suburban schools after aninitial adjustment period, and parents who movedto the suburbs were about 13 percent more likelyto find employment than their city counterparts.Though some city and suburban families experi-enced race-related harassment, social integrationwas not a major problem for most families. �

Counseling and housing searchhelp residents find apartmentsin non-segregated communities

Contact: Aurie Pennick, President, Leadership Council for Metropolitan Open Communities, Chicago, 312-341-5678.

What is Section 8?Section 8 of the Housing and Community Develop-ment Act of 1974 is a direct rental subsidy pro-gram. It enables households to pay just 30 percentof their income for rent in private apartments. TheSection 8 certificate or voucher assures the landlordthat the federal government will pay the differencebetween the tenant portion and fair market rent.