Sociology in My Neighborhood pages

Thursday, March 21, 2013

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.

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