The nation's 33rd president, Harry S. Truman, once said, “The only thing new in the world is the history you don’t know."
That assessment could be a fitting description of the U.S. Department of Housing and Urban Development's oversight failures.
As The Southern previously documented, HUD’s regular inspections of the Elmwood and McBride complexes in Cairo should have prompted federal housing officials to intervene much sooner to protect the health and welfare of hundreds of residents and their children in the face of obviously substandard conditions. Instead, wildly inconsistent and artificially inflated inspection scores revealed a defective inspection process that has allowed ramshackle housing to persist for years in Cairo.
Despite the cost of this failure — both the human suffering and financial loss — HUD has yet to offer a public explanation of how that happened in Cairo and what has been done to prevent something like this from happening elsewhere.
Since then, The Southern has asked HUD’s spokesperson, Jereon Brown, on several occasions whether the agency has conducted a heightened review of other public housing agencies throughout Southern Illinois given that it’s possible, and plausible, that some of the same contracted HUD inspectors, or HUD employees, were responsible for reviewing other public housing and federally subsidized, privately owned multifamily properties in the region.
“We have not reviewed all of your public housing in the region,” Brown said, in an emailed response several weeks ago. “We believe that Cairo is a rare case.”
But HUD’s own records reflect otherwise. As well, numerous stories popping up across the country of people living in dangerous and derelict public housing and federally subsidized multifamily complexes note that, in many cases, the buildings making headlines were reviewed by HUD inspectors and also given high marks for years.
And despite HUD’s many attempts to tweak its inspection protocols and process by which it reviews local housing authorities, it keeps happening. Cairo is only the latest in a long string of public embarrassments for the federal housing agency charged with overseeing billions of federal taxpayer dollars.
Scoring concerns widespread
Concerns about wildly variant and inconsistent scores that do not seem to match the reality of living conditions is not unique to this region. But Southern Illinois is as good of a case study as any as to the widespread and systemic failures of an oversight system that is overtaxed and largely ineffective at identifying problem properties that may present a health and safety risk to families.
Less than 10 percent of Illinois residents live in the lower third of the state. Yet, eight of Illinois’ 17 local housing authorities that Housing and Urban Development has recently labeled as troubled or substandard are located in the state’s lower 34 counties, according to The Southern's analysis of HUD’s latest Public Housing Assessment System data, which was released in January 2017.
As well, The Southern’s analysis indicates more housing authorities — regionally, as well as across the state and nation — may soon find themselves on HUD’s undesirable “troubled” and “substandard” lists, and more multifamily properties may be identified as failing, based on HUD's new guidance to inspectors effective Aug. 1, 2016, that was intended to identify shoddy repairs designed to cheat the inspection system.
This comes at a time when President Donald Trump is proposing massive cuts to HUD’s budget, and particularly to the portion funding public housing, and while the federal housing agency is flooded with responsibilities related to rehousing people displaced by fires in California and hurricanes that ravaged Texas, Puerto Rico, Florida and other regions of the country earlier this year.
Meanwhile, the vast backlog of capital improvement needs across the country are continuing to mount, and public standards of acceptability are rapidly changing with new education and awareness, for instance, about the extreme dangers of childhood lead poisoning. HUD has only so much capability to respond. When situations like the housing crisis in Cairo arise, HUD often becomes public housing enemy No. 1. But that's also a myopic view of a deeply layered and nuanced predicament for which the American public has shown little sustained interest in solving.
Newspaper seeks records
In an attempt to learn more about potential concerns locally, The Southern has sought via a public records request inspection reports from 1998 to present for 24 downstate Illinois housing authorities. That request of The Southern, filed about a month ago, has yet to be fulfilled.
In the meantime, U.S. Sens. Dick Durbin and Tammy Duckworth, D-Ill., made a similar request to HUD after The Southern raised concerns with congressional staff about other potential issues with physical assessment scores at regional housing authorities. Members of Congress are able to request information from government agencies outside of the FOIA process, and typically receive it much faster. They asked for HUD to produce the documents by Dec. 15.
In their letter to HUD Secretary Ben Carson, the senators noted that a recent article published by The Southern Illinoisan revealed “unusually high inspection scores for the Elmwood and McBride public housing complexes in Cairo, Illinois during years your agency now acknowledges that the buildings were deficient and substandard.”
“In fact, the U.S. Department of Housing and Urban Development (HUD) has now deemed these complexes to be so unsafe and unsanitary that your agency is proceeding with plans to forcibly relocate residents,” the letter to Carson continued. “HUD’s inspectors gave these 73-year-old buildings scores that are typically expected of brand new apartments, despite a continuous stream of complaints from residents about substandard conditions.”
Their letter continued, “We are concerned that these inaccurate and inconsistent inspection reports are not unique to Cairo but, in fact, are symptoms of a far-reaching oversight deficiency in the Southern Illinois region.”
The Southern noted to Brown that Cairo’s housing complexes are not the only ones in the region to have been assigned scores by HUD inspectors that made big swings from one year to the next or seemed unusually high — based on the age of the complexes — in the Southern Illinois and Metro East areas during the past almost two decades.
Many aging complexes in the region have consistently scored in the 90s even though Brown said it’s unlikely that housing complexes would score that high unless they are new construction, recently remodeled or under new management — things that do not apply to the vast majority of the region’s complexes. In response to numerous follow-up questions about the inspection and scoring process for public housing and federally subsidized multifamily complexes, Brown has repeatedly declined comment on this specific topic beyond his initial statements.
Questions raised elsewhere, too
The Southern isn’t the only media outlet asking questions. This summer, a story out of Henrico County, Virginia, titled “CBS 6 investigation finds HUD passes Section 8 complexes in disrepair” noted that raw sewage on the ground, stairs in disrepair, and boarded-up windows were just a few of the code violations cited by a county inspector, despite the fact that HUD had given the property a decent passing score of 75 on a 100-point scale (60 and above is considered passing).
According to the report, the county’s deputy manager told the reporter that “it’s not a place anybody should live” and stated at a public meeting that “there’s a problem with the system” by which HUD grades properties. The article quotes an unnamed HUD spokesperson who told the reporter that the inspection process is designed to identify problems that need to be addressed, and that HUD recognizes it is not perfect and that changes have been made over the years to improve the process.
HUD began tracking housing authorities’ performance and providing corrective action for those performing poorly in 1979. The present system the agency uses for inspecting complexes was rolled out beginning in the late 1990s, close to 20 years ago. When problems arise, the issues are particular but the overarching concerns expressed about HUD's oversight function largely the same.
On July 20, 1992, a headline in the New York Times read “Public Housing Ills Lead to Questions about H.U.D.” The story was about the federal housing agency taking over day-to-day control of the Philadelphia Housing Authority “after 13 years of documenting stunning mismanagement.” At the time, that marked the eighth takeover in the department’s history. The takeover “comes as serious questions are being raised about its supervision of the Government’s $6.2 billion-a-year public housing program, and in particular, its monitoring of 21 large urban housing agencies, including Philadelphia's, that it considers troubled” the Times reporter wrote 25 years ago.
On Feb. 22, 2016, the Alexander County Housing Authority in rural Southern Illinois became HUD's 19th takeover. The prior fall, the HUD Office of Inspector General issued a report critical of HUD’s oversight of very small and small housing authorities where there were common violations of requirements.
Those violations were the result of a lack of appropriate training and HUD's ability to provide technical assistance because it was stretched too thin, in some cases, and in others, allowed for criminal activities by executive directors and others to go undetected.
In a recent emailed statement to The Southern, Senate Judiciary Chairman Chuck Grassley, R-Iowa, said “HUD needs to pay attention to small and large housing authorities alike. Smaller housing authorities, like the Alexander County Housing Authority, feel the impact of HUD’s failure to conduct proper oversight much more than larger housing authorities, which have larger budgets and housing stock.”
HUD seeks to fix system -- again
The latest significant changes to the physical inspection process for properties went into effect on Aug. 1, 2016, via notice issued last year by HUD telling Uniform Physical Condition Standard inspectors to note "non-industry standard inferior repairs" as deficiencies. The directive came on the heels of reports of woefully inadequate housing in Florida and other southern states managed by Memphis-based Global Ministries Foundation that drew the ire of politicians.
In September 2016, The Florida-Times Union wrote that during a Senate hearing, Florida’s senators, Republican Marco Rubio and Democrat Bill Nelson, questioned how HUD inspectors gave Eureka Garden Apartments in Jacksonville and other Global Ministries Foundation complexes high marks even though they visited and saw obvious problems, “including soaked carpet, mold on vents and exposed wiring.”
The Times-Union quoted HUD's Brown as saying that the agency’s inspection process was “under review internally” and “we believe the changes we’re implementing will significantly improve the quality of the inspections.”
“Every part of the process, from inspector training to consistent, accurate scoring is being reviewed,” Brown said, as quoted by The Times-Union more than a year ago.
HUD’s Real Estate Assessment Center updated its inspection protocols and guidance again this October. Brown has recently told The Southern Illinoisan that in addition to improvements made to the inspection process, HUD also is in the process of hiring more career inspectors who will work directly for HUD. Most inspectors that perform the physical property assessments are hired via a reverse auction process, which also has been recently questioned by lawmakers.
Brown also has said that the agency implemented a tracker that flags score variances and when they are noticed, a career quality inspector does another inspection to verify the score. HUD also has been restricting contractors with noted poor performance, though he has declined to say whether any of those restricted contractors ever inspected properties in Cairo or elsewhere throughout Southern Illinois.
Early scores trend downward
In the spring, HUD released a batch of scores for multifamily properties — some of which were assessed by HUD inspectors under the new guidelines issued late in the summer of 2016. Mike Gantt, senior vice president of The Inspection Group, a compliance consultant not aligned with HUD, crunched the numbers to see what affect they were having on the private market, which he represents.
He analyzed collective national scores for multifamily properties for August 2016 to January 2017, and compared them to scores from August 2015 to January 2016. It’s not a perfect apples-to-apples comparison for a couple of nuanced reasons, but it hints at an alarming trend.
According to Gantt’s analysis, the number of failing properties (those scoring below 60) increased by 125 percent. Properties scoring between 60 and 79 — a passing category but one that could signal risk — increased by 38 percent. Meanwhile, properties scoring 90 or above dropped almost 30 percent.
Gantt said he’s of the opinion that HUD’s changes did not address the problem it set out to correct from the Global Ministries Foundation fiasco. In fact, he said, it simply covered up HUD’s failures to address a systemic problem with its inspection protocols that fluctuate with such frequency — year-to-year among complexes themselves, and across the country — that they are virtually meaningless.
Yet, the public pays a large price to fund this process. As well, it is meant to help HUD ensure that taxpayer dollars are serving their intended purpose of providing safe and adequate housing for people with low incomes.
“The problem is, there is no reason to believe that these scores are more accurate or that they more effectively discern between good and bad properties,” he said. “Because they actually abandoned the measures that were designed to assure objectivity, and adopted a policy that allows far greater confusion over what is and is not a legitimate defect, there is every reason to suspect that this just arbitrarily lowered scores, so that we are detecting a few more bad properties but misidentifying many more good properties as bad.”
Various sources put the number of local housing authorities across the nation at between 3,200 and 3,800. Including private multifamily properties, Housing Choice Vouchers, Tenant Protection Vouchers, and other programs, HUD subsidizes roughly 5 million households in the U.S.
The physical inspection process for public housing and multifamily properties is the same. HUD also assesses housing authorities annually, in most cases, and assigns a score on a 100-point scale that considers four performance factors: management, financial conditions, capital programs, and the physical condition of properties.
A look at Illinois' scores
In Illinois, there are two housing authorities listed as “troubled” of the roughly 36 nationwide with that designation, as of the latest information available on HUD’s website. That nationwide number has been reduced significantly from just a few years back, though that's more likely because of changes to the way housing authorities are assessed than great improvements in the conditions for public housing residents across the country.
In Illinois, the housing authorities HUD has classified as troubled are the Alexander County Housing Authority and the Aurora Housing Authority, which is located about 40 miles west of Chicago. The Alexander County Housing Authority has had that dubious distinction since 2013. The Aurora Housing Authority received it for the first time in 2016 after substandard designations in 2014 and 2015.
Of the scores available online that HUD released in January 2017, there are 11 housing authorities across the country that HUD had given lower overall scores than the Alexander County Housing Authority. It's difficult to make an exact comparison because the years available for review vary by local housing authority and some of the available scores may be outdated.
If HUD's most recent data had included the ACHA's 2016 fiscal year assessment score of 27, it would have ranked as the worst performing local public housing authority in the nation -- by 11 points. What makes the comparison challenging, however, is that HUD's hyper involvement in Cairo may be driving down that score as the agency becomes more aware of problems it would not otherwise have noticed given that it's own employees have been fulfilling the role of day-to-day management for 21 months. The newspaper obtained the ACHA's most recent assessment in a separate request.
Of the 15 additional Illinois housing authorities labeled substandard, the seven located in the lower third counties of the state are the countywide housing authorities of Perry, Jackson, Pope, Franklin, Marion and Wayne, as well as the East St. Louis Housing Authority. There are several other regional housing authorities on the cusp of a substandard designation.
These housing authorities received this designation on the basis of their failing scores in either management or financial categories. Management deficiencies cited by HUD can include high vacancy rates, slow collection of rent payments or a backlog of owed bills. If scores of public housing complexes are driven downward by HUD's new inspection protocols, that could put more local housing authorities on HUD's radar as at-risk, if it hasn't already. Weighted physical inspection scores of properties make up 40 percent of a local housing authority's overall performance score.
As well, The Southern learned via a Freedom of Information Act request that HUD’s Midwest office based in Chicago recently conducted an on-site review of the Mount Vernon Housing Authority, based on HUD’s risk assessment of the local agency’s Housing Choice Voucher program. According to HUD’s response to The Southern’s FOIA, the review is not ready for public release.
Of note, some of HUD’s most recent assessment scores are listed as “unaudited” — including Aurora’s most recent one landing it on the troubled list — and 2017 scores have not been made available, meaning some of these designations could have changed between now and then. There is a process by which housing authorities can contest their rankings.
If they do not, or are unsuccessful in improving their scores, the HUD office with jurisdiction over PHAs with substandard scores are required to implement a corrective action plan to address deficiencies.
For housing authorities designated as troubled, HUD is required to notify the agency of its status and the housing authority has one year to improve its performance by at least 50 percent of the difference between the most recent performance measurement and the measurement necessary to remove its status as troubled.
If a housing authority is still designated troubled after two years, the law directs HUD to petition for the appointment of a receiver for housing authorities with more than 1,250 units. For those managing fewer than 1,250 units, HUD is required to either petition for the appointment of a receiver or take possession of the local agency, according to HUD’s “Compilation of Basic Laws” February 2017 edition.
The ACHA was designated substandard by HUD in 2004 and 2005, and again in 2012 before receiving the troubled label in 2013.
On April 10, federal housing officials announced they were going to relocate 400 people, about 185 families, from two failing complexes known as Elmwood and McBride. About 70 families have moved so far, and about 115 families still remain.
On the private side of the equation in Illinois, 47 privately managed, federally subsidized multifamily properties have had both failing scores of 60 or less and high-performing scores of 90 or more over a period of five or so years, HUD records indicate. The terms for privately managed, federally subsidized multifamily properties specify that after two failed inspections the company's contract with HUD can be voided. HUD can pressure management or ownership changes in an effort to improve the properties, or provide tenants with vouchers and assist them in relocating.
HUD has not released any more scores of multifamily properties this year after the initial release in the spring. The agency has not released any property inspection scores for public housing complexes since the new rules went into effect. “The public housing data would logically follow a very similar pattern,” Gantt hypothesized.
If that’s the case, it could mean that HUD is sitting on a slew of new housing authorities with troubled and substandard designations, as well as many more failing multifamily complexes, both of which require HUD’s intervention as outlined by law and administrative regulations. At a time when the agency is stretched thin by disaster response and pending budget cuts, it also could mean that a widespread housing crisis — and public relations nightmare — is bubbling just below the surface.
This story has been updated since it was originally published.