How We Made Things Work

Flexibility and Ingenuity

Editor's note: This article is extracted from the Atlanta Housing Authority's 15-Year Progress Report. The complete report can be found here. "How We Made Things Work" is the second installment of a five-part series.

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There was no question two decades ago that something had to change with Atlanta's public housing. After winning the bid to become the 1996 Olympic Games host, Atlanta was compelled to remedy the awful conditions at its obsolete housing projects. That was especially true at Techwood/Clark Howell Homes adjacent to the Georgia Tech campus and directly across the street from the proposed site for the Olympic dormitories. If those projects had been left standing, Techwood/Clark Howell would have been center stage while the world was watching its best athletes compete. So, the thinking in the early 1990s was to do a thorough renovation of the projects.

"I knew that would never be enough, not in a million years," says Egbert Perry, CEO of the Integral Group, which eventually would become a private partner to AHA in transforming many of the sites of former housing projects. To put it bluntly, the situation was so bad that all that we were doing was grooming young men for prison and young women for public housing. There was no way to change the population without a fundamental change in our thinking towards housing."

The dysfunctional projects had become dead ends for people segregated by economics and race, cut off from mainstream society. World-famed Atlanta architect John Portman, who designed AHA's Antoine Graves high rise for senior citizens more than 40 years ago, regrets seeing the building torn down but he understands the structure is now obsolete.

"What worked in the 1960s doesn't work today," he says. "I guess one of the first things to start to think about is how the project will be used by the tenants, and what could we do in public housing to make it not just a storage unit for people, but to create a lifestyle, to create something that goes beyond just a shelter. That was the basis of our approach to Antoine Graves."

In September 1994, the catalyst for transformation arrived at AHA in the person of Renee Lewis Glover, an attorney who had agreed to become CEO of the agency. She assembled around her an informal "kitchen cabinet" whose mission was to find breakthrough solutions to problems that had festered for decades.

"The beauty of it was that none of us were part of the system," says Carol Naughton, who joined Glover's staff as legal counsel. The law firm Naughton had left had no ties to public housing. CEO Glover had been a corporate attorney. Perry was a successful developer of mainstream residential communities. All brought a fresh perspective to old problems.

Perry explains: "It doesn't make sense to go to 100 percent public housing because we've been there, done that, and it didn't work. So why try to re-create it? We were never in the business of developing public housing communities, we'd never done one, never desired to do one, but the concept of creating a healthy and sustainable community that had a mix of units for lower income families seamlessly integrated into the development made sense."

With this group's first battleground being Techwood/Clark Howell Homes, the vision for the future began to crystallize. Congress had given some flexibility to local housing authorities under a program called HOPE VI, first enacted during the administration of President George H.W. Bush and then expanded under President Bill Clinton and his secretary of Housing and Urban Development, Henry Cisneros.

"We knew HOPE VI was out there encouraging the demolition of the most distressed housing projects," Perry says. "The first time that was actualized was at Techwood/Clark Howell. The solution wasn't to renovate. We proposed that the whole thing come down."

HUD Secretary Cisneros agreed, and that HOPE VI was the answer. The program provided much-needed deregulation, covered much of the non-financeable cost of the developments and created a platform for dramatically reshaping approaches that no longer worked. It was uncharted territory.

"We felt that not only could we make great improvements to the city, but even more important, we had a strong belief that we could break the cycle of poverty for those who have been held as economic captives in the housing projects for so many years," says Hope Boldon, CEO of the Integral Youth and Family Project, which using Hope VI funding provides more than five years of coaching to assist relocating public housing residents transition smoothly into society's mainstream.

For Centennial Place to come into being, everything -- all the historical baggage that public housing carried in 1995 -- had to be rethought. The pockets of racially, economically and socially isolated poverty could only be replaced with fresh thinking and new ways of getting an old job done.

The changes included the revolutionary approach of using public-private partnerships to create the new communities. The communities were to be made up of residents from a broad range of incomes (minimum wage to white collar executives), and the new communities would have a variety of uses – rental housing, home ownership, retail and commercial space, schools and recreational facilities.

"What I think was noble in the new concept under Renee Glover's leadership," says developer Herman Russell of Atlanta-based HJ Russell & Company, one of the nation's largest minority owned construction firms, "is having reduced the percentage of public housing and having introduced a new concept of mixed-use living."

As AHA's revolutionary concept moved forward, eventually all that remained of Techwood/Clark Howell was the dirt on which the housing project once sat. What grew on the landscape, the mixed-use, mixed-income Centennial Place made the turf unrecognizable as the same area that had blighted Atlanta just a few years earlier.

The key was mixed-income housing developed by public and private partners – in the case of Centennial Place, AHA was the sponsor, public investor and co-developer and Atlanta-based Integral and St. Louis-based McCormack Baron Salazar were the private developers, bringing both know-how and private investment. Seeding the project was a $42.5 million HOPE VI grant, leveraged by $150 million in private investment.

Mixed-income communities as a wholesale replacement for public housing was so novel that tenants at the old projects adopted a "show me" attitude. Meeting after meeting were face-offs between the tenants and AHA CEO Glover and her aides and the private developers. AHA officials agreed that each step of the process needed the support of those most affected, the agency's tenants. No tenants of the projects were tossed out of housing – many moved into the mixed-income communities and others used housing assistance vouchers to move into homes of their choice. The people most affected – the former public housing residents – were convinced. When in recent years AHA asked tenants at the remaining public housing if they wanted the projects razed, more than 90 percent said, "Yes!"

In the mixed-use, mixed-income communities such as Centennial Place and Villages at East Lake, former public housing tenants lived side by side with others whose income was often far higher than theirs, affording a view of life denied them for decades. A core belief was that everyone if held to the same high expectations and standards can enrich the lives of their neighbors by sharing cultural wealth and lifestyle examples.

"The mixed- income model doesn't work if market rate families or people with choice don't come," Integral CEO Perry says. "You have to develop, design, build and manage to the highest standard possible by producing a product that people of choice would want to consume."

Revitalization of the old public housing projects into these new amenity-rich communities is a way to spread the good news of opportunity and growth. By scraping the landscape clean and building market-rate mixed-use, mixed-income communities and setting and enforcing high expectations and standards, life has been and will continue to be improved for those living there and for anyone considering living within them. Beyond just the former sites of the housing projects, whole areas of Atlanta have blossomed because the blight of public housing has been erased. Revitalization is particularly striking in Midtown Atlanta in and around Centennial Place. The growth of Georgia Tech, the relocated World of Coca-Cola, the Children's Museum and the Georgia Aquarium to just name a few, show how AHA's beliefs, begun 15 years ago in the shadow of poverty, have manifested themselves into a brighter present and a glowing future.

Success breeds success. In the case of AHA's programs, Centennial Place was the cornerstone for what was called the Olympic Legacy Program, which employed the same development and financial model and principles to revitalize other obsolete housing projects.

"Centennial Place gave us the opportunity to do East Lake," says Cecil Phillips, chairman of the AHA board of commissioners.

The first four Olympic Legacy Program projects were Techwood/ Clark Howell Homes, East Lake Meadows, John Hope Homes and John Eagan Homes. Eventually 16 distressed public housing projects were revitalized under the banner of the Olympic Legacy Program leveraging HOPE VI and non-HOPE VI public housing development funds. Since then, $220 million from those funds have been leveraged to about $3 billion in private investment in the new communities and their surrounding areas.

AHA wasn't perfect at the beginning. "We constantly had to assess what we were doing and make refinements and mid-course corrections, as needed, to do our work better," AHA CEO Glover says. "Our yardstick wasn't how many buildings we put up, but how much better the communities and neighborhoods became and how many of the lives of AHA-assisted families had improved ."

AHA is constantly piloting new ways to integrate AHA families into the larger Atlanta community. PBRA was designed to leverage the pre-recession private sector real estate development activity taking place throughout the City of Atlanta by providing a renewable, long-term rental subsidy to a private owner, which agreed to rent a percentage of its apartments to persons who earned minimum wage up to 60% of the metropolitan area median income. There are more than 35 PBRA arrangements with private owners in the Atlanta area, adding to the list of mixed-income communities in the city.

"PBRA gives AHA-assisted households a broader array of choices," says Joy Fitzgerald, AHA Chief Operating Officer for Real Estate Operations. "It is an efficient tool for expanding housing opportunities."

Slightly different – but with the same goal of giving families more choices – is a program that could only be implemented with the regulatory autonomy that AHA's success has won from HUD by being designated a MTW Agency. Typically, HUD pegs voucher rent subsidies based on a metropolitan-wide average of apartment rents. This ignores the wide disparities in neighborhoods quality, amenities and characteristics. It also has the unintended consequences of distorting rents and pushing voucher holders into lower-income neighborhoods. With its regulatory autonomy, AHA has divided Atlanta into numerous sub-market areas, aligning the voucher subsidies to be comparable with the neighborhoods' prevailing rents.

The impact of sub-market rent alignment has been significant. Today, AHA families live in neighborhoods that, on average, are 27 percent more affluent than the neighborhoods surrounding the housing projects, according to a recent analysis based on tenant ZIP codes.

In 2003, AHA became what HUD calls a Moving to Work, or MTW, agency. MTW is a very broad program of local autonomy reflected in an agreement negotiated and executed by HUD and the MTW Agency. Granted to only about 30 public housing authorities across the nation, AHA's MTW Agreement allows it to use private-sector real estate principles and local strategies to meet Atlanta's affordable housing needs and, in most cases, don't fit into more rigid federal guidelines.

AHA's MTW Agreement allows for single block grant funding, which takes in operating funds for low-income housing, authority over Section 8 voucher budgeting, and capital funds. In this way, the money can be used for eligible MTW activities as set forth in AHA's HUD-approved MTW Plan.

AHA upped the ante for personal responsibility when, in 2004, as part of MTW, imposed work requirement for non-elderly, non-disabled adults in order for them to receive housing assistance. At that time, 16 percent of those adults were working. Only three years later, more than 80 percent of households met the requirement. MTW is a factor in AHA's success and it can lead to economic independence and home ownership, as public housing was originally intended.

Just as independence has meant opportunities for AHA, it has also created new areas of work. Long-term family centered coaching and counseling families moving out of the projects and into mainstream housing has become a major endeavor – one in which AHA has invested about $27 million over the last decade, utilizing professional firms primarily Integral Youth and Family Project and Families First. Similarly, AHA's Service Provider Network includes organizations that can help in such areas as credit counseling, domestic violence, home ownership, faith-based resources and substance abuse treatment.

AHA's motive for such programs is simple. "We have got to stop losing generations of people just because they're temporarily poor," says Renee Glover.

When Glover began her work, one of her strongest allies was the then-secretary of HUD, Henry Cisneros. Although he left HUD in 1997 – just as AHA was beginning to see the fruits of HOPE VI – Cisneros has followed progress in Atlanta. His praise is strong. "A combination of people coming back to sites, market homes, for sale, schools both at the East Lake charter school and Centennial Place in the center city, and Section 8 for individuals and the aggregation of Section 8 to create additional new kinds of subsidy-based apartments, using all of those strategies, assisted housing in Atlanta is not what it was before and it's a model for the country," Cisneros says.

"Atlanta has done the best job of any city in the country of using a variety of strategies, not just HOPE VI but improvement and modernization funds, private investment, and slowly transformed the entire system."

Michael Dobbins, former commissioner of planning for the City of Atlanta, has witnessed that transformation. "For many, many years we'd sort of developed and cultivated and repeated what I think has always been a myth, that somehow lower income people, and middle income people and upper income people can't live with each other," he says. "The reality is the initiatives AHA has implemented have been absolutely vital to what I think has been a really successful overall program to revitalization and reinvestment in the city."

Looking back, the process has been one of inventing solutions to problems, assessing the success of the solutions, modify the programs, and then tackling new problems with more innovations. "The truth is we were making it up as we went along," Perry remembers. "We really didn't know what we were doing, I mean that seriously. We knew how to develop, but we were doing something that was totally outside the box because we were trying to transform communities beyond the physical and the financial and integrate a human outcome in ways that hadn't been done before."

Next: "What We Learned."