A Surprising Finding regarding HOPE VI

By 1993, HUD implemented HOPE VI as a national program "to eradicate severely distressed public housing." The DC Housing Authority has since received seven HOPE VI grants totally $6 billion, which dismantled public housing projects (including Arthur Capper Dwellings, Capitol View Plaza, East Capitol Dwellings, Eastgate Gardens, Ellen Wilson, Frederick Douglass, Sheridan Terrace, Stanton Dwellings, Valley Green) and created mixed-income projects with the majority of the former public housing residents displaced. Interestingly, in 1994, the first permanent bonds issued by the National Capital Housing Authority (NCHA) were due, meaning that $48 million dollars plus interest had to be paid to investors.   

The table below lists the long-term bonds sold by the NCHA to investors from 1954 to 1968. The sub-total shows the amount of long-term debt that would be due by 1994. By 2009, the NCHA would need to pay back the more than $124 million in long-term debt from the pre-1969 period. The information in the table comes from the DC Archives (DC Archives, National Capital Housing Authority, Legal Division, Minutes 1954-68 (Duplicate), 91-012 NCHP).

According to the official agreements with bondholders (Declaration of Trust), the NCHA could not sell this property during the 35-40 life of the bond. Did the NCHA bonds actually help protect public housing, at least for the 35-40 year period? In the 1990s, did the DCHA (the new NCHA) sell off parts of public housing to help pay for the over $48 million due to investors? Did the DCHA assume that, by paying off the bonds, the DCHA could then dismantle public housing, which displaced very low-income residents?

As a side point, by 1969, years before DC Home Rule, the NCHA had accumulated not only $124 million in debt but also debt in short-term bonds, and threatened to go into bankruptcy. In 1975, the new DC government inherited both this debt of over $124 million and public housing that had not been maintained, within the context of the fiscal crisis of the 1970s and 1980s experienced by urban areas worldwide.

Bond Issue	Year Issued	Maturity Date	Amount	Interest Rt
1st Issue	1954	1994	$11,420,000
2nd Issue	1955	1994	$7,020,000	2.500%
3rd Issue	1955	1994	$6,010,000
4th Issue	1958	1994	$10,505,000
5th Issue	1959	1994	$7,505,000	3.375%
6th Issue	1959	1994	$5,670,000	3.750%
Sub-Total			$48,130,000
7th Issue	1960	2000	$15,650,000	3.731%
8th Issue	1961	2001	$2,765,000	3.375%
9th Issue	1964	2004	$7,990,000	3.375%
10th Issue	1965	2005	$4,790,000	3.250%
11th Issue	1965	2005	$7,740,000	3.250%
12th Issue	1967	2007	$5,015,000
13th Issue	1967	2007	$5,250,000
14th Issue		2007	$10,075,000
15th Issue	1967	2008	$2,265,000	4.375%
16th Issue	1968	2008	$6,690,000
17th Issue		2008	$1,400,000
18th Issue		2008	$4,000,000
19th Issue		2009	$2,485,000
Grand Total			$124,245,000

  DC Archives, National Capital Housing Authority, Legal Division, Minutes 1954-68 (Duplicate), 91-012 NCHP.

P.S. If I correctly understand the CPI Inflation Calculator, $124 million in 1968 would have the same buying power as $828 million today.