Measuring job creation for HOPE VI: a success story for community development efforts

Abstract

One of the federal government’s largest housing programs over the past 20 years, HOPE VI, has reduced the concentration of poverty, changed the physical shape of housing, and provided supportive services. HOPE VI has leveraged government funds and private investments to achieve the goal of revitalizing neighborhoods throughout the United States. The sheer magnitude of the program has created much research on the effects of HOPE VI. However, little research has examined the impact HOPE VI has had on job creation. Using three economic multiplier models (preservation economic impact model, the economic impact forecasting system model, and impact analysis for planning), our analysis showed that HOPE VI helped revitalize two small Kentucky cities: Newport and Covington. In these two cities, our findings show a significant number of jobs generated by the creation of attractive, affordable housing. These findings suggest that policymakers should focus on job creation when planning programs like HOPE VI.

Keywords:

• economic multiplier
• HOPE VI
• housing
• job creation
• neighborhoods

Acknowledgements

The authors would like to thank the Department of Political Science and Public Administration and the Master of Public Administration program at the University of Southern Indiana, and the Department of Urban and Public Affairs and the Center for Sustainable Urban Neighborhoods (SUN) at the University of Louisville. Furthermore, they want to recognize Joshua Ambrosius, Russ Barnett, and David Simpson for their support. The Housing Authority of Covington and the Housing Authority of Newport (Kentucky) provided funding for research of these HOPE VI programs, and to IMPLAN of Minneapolis for technical support. Photographs were taken by John I. Gilderbloom.

Notes

The Center for Sustainable Urban Neighborhoods (SUN) at the University of Louisville received a grant from the Housing Authority of Newport and a grant from the Housing authority of Covington to conduct program evaluations of these HOPE VI projects.

1. Below are the definitions of key terms used for the IMPACT analysis, provided by Minnesota IMPLAN Group: Direct effect: The set of expenditures applied to the predictive model for impact analysis. It is a series (or single) of production changes or expenditures made by producers/consumers as a result of an activity or policy. These initial changes are determined by an analyst to be a result of this activity or policy. Indirect effect: The impact of local industries buying goods and services from other local industries. The cycle of spending works its way backward through the supply chain until all money leaks from the local economy, either through imports or by payments to value added. Induced effect: The response by an economy to an initial change (direct effect) that occurs through re-spending of income received by a component of value added. IMPLAN's default multiplier recognizes that labor income (employee compensation and proprietor income components of value added) is not a leakage to the regional economy. This money is recirculated through the household spending patterns causing further local economic activity. Labor income: All forms of employment income, including Employee Compensation (wages and benefits) and Proprietor Income. Total value added: The difference between an industry or establishments’ total output and the cost of its inter-mediate inputs. It equals gross output (sales or receipts and other operating income, plus inventory change) minus intermediate inputs (consumption of goods and services purchased from other industries or imported). Value added consists of compensation of employees, taxes on production and imports less subsidies and gross operating surplus. Output- Output represents the value of industry production. In IMPLAN these are annual production estimates for the year of the data-set and are in producer prices. For manufacturers this would be sales plus/minus change in inventory. For service sectors production equals sales. For Retail and wholesale trade, output equals gross margin and not gross sales.

Additional information

Funding

Housing Authority of Covington, KY [KY36URD002I109]; and Housing Authority of Newport, KY [KY36URD0151100].