HUD troubled properties

HUD's Troubled "Troubled Properties" policy needs reform
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More attention to HUD troubled properties
National Low Income Housing Coalition reports: "On September 27, Senator Marco Rubio (R-FL) introduced the HUD Inspection Process and Enforcement Reform Act of 2016. This bill aims to protect low-income residents from dangerous living conditions while holding HUD accountable for prosecuting negligent property owners. This bill would require property owners to comply with maintenance deadlines and would establish independent audits of HUD inspections."  This new bill appears to be a supplement to an earlier bill on the same topic  which was proposed by Senators Rubio and Nelson of Florida in reaction to the deplorable performance of Global Ministries Foundation. 

What's a HUD "Troubled" property? HUD's risk assessment procedures are complex and critically flawed. Reliance on outdated systems that are not rigorously applied leaves the Department's response to troubled properties in a shambles.
  • HUD's physical inspection system (REAC) is overwhelmed and out of date. Property owners have learned to "game the system" to assure passing grades. Senator Rubio's press release notes "...too many housing facilities are getting a passing grade even though any bystander can see they are not fit for anyone to live in."
  • HUD's Management Operations Reviews (MORs) have only just begun this year, after having been suspended. Many properties have not had an MOR for five years. HUD "found" the funds to resume MORs after the Global Ministries scandals hit the news.
  • Financial performance is not available to the public and other information (like vacancy) is hidden behind the "FOIA wall"...a cumbersome process of getting public information through the Freedom of Information Act. Rubio's latest bill would permit an independent auditor to review owner financial statements.
  • There are no "boots on the ground" because of Multifamily Transformation and limited scope, short term contracts with contractors that monitor property performance.
Most likely a HUD property is "troubled" when HUD reads about it in the newspaper. That's what spurred the recent hearings by the Senate Banking Committee. Tenants and local officials described years of fruitlessly reaching out to HUD, before they went public and got the attention of the media and the Senators.

RHINO rates fixing these problems as one of the fundamental mid-range needs for the next HUD Secretary. Right now HUD seems to be in deep denial. HUD officials declined to participate in the Senate Banking Committee hearings last month, and they failed to respond to a detailed plan of action submitted by the National Preservation Working Group (NPWG) after specifically requesting the group's help. Some housing advocates worry that Senator Rubio's new bill will force HUD to "voucher out" failing properties, rather than preserve them. To prevent relocation, some local advocates have been mounting efforts that use state receivership laws to wrest failing properties out of the hands of failing owners. 
posted October 9, 2016

 
What's News?
October 3, 2016 NLIHC Marco Rubio Introduces HUD Inspection Reform Bill
On September 27, Senator Marco Rubio (R-FL) introduced the HUD Inspection Process and Enforcement Reform Act of 2016. This bill aims to protect low-income residents from dangerous living conditions while holding HUD accountable for prosecuting negligent property owners. This bill would require property owners to comply with maintenance deadlines and would establish independent audits of HUD inspections. Rubio believes auditing inspections are necessary for holding HUD accountable and will result in firing incompetent landlords and inspectors.


February 13, 2016 Commercial Appeal Memphis Unrelenting hell regular companion of the poor
HUD said GMF had "failed to maintain units in a decent, safe and sanitary manner." Now those residents will have to relocate within the next couple of weeks — adding more stress to the lives of those already saddled with poverty, marginalization and societal indifference.

November 17, 2015 Nonprofit Quarterly Troubled Property in Cincinnati, Troubled Policy at HUD
There seems to be a larger “troubled properties” problem at HUD. The agency keeps getting caught by surprise when troubled properties that are well known to tenants and local officials end up on the front pages of local newspapers. It appears that HUD’s system for identifying “at risk” properties has broken down and, according to some HUD officials, the agency is unsure how to fix the problem. Sources of the problem include faulty inspection protocol, a five year suspension of Management Operations Reviews (MOR), a lack of “on the ground” awareness of local conditions, a slow roll-out for a sound property disposition protocol, and a “don’t ask, don’t tell” culture among HUD staffers.





 Notes & Links


(NPQ, Nov 2015)


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