How one D.C. housing project went wrong, and what happens next

Jan 30, 2012

A plan in D.C. to turn three vacant apartment buildings into badly needed homes for troubled young men was marred by unchecked spending, delays and lax oversight from District housing officials. Now, with more than $5 million in city funding spent, the project is in the hands of a new developer with a long and troubled track record.

Read the story, then chat with Post reporters Debbie Cenziper and Nikita Stewart about what went wrong and what happens next. Submit questions and comments now.

Read: D.C. housing deal shows much spent but less accomplished

Hi everyone -- thanks for joining us.

The Post today published an investigation on a $5.5 million affordable housing project that ran aground and now faces an uncertain future. It appears to be one of the most troubled projects funded in recent years by the D.C. Department of Housing and Community Development. City council members are already calling for investigations. 

The project involved a nonprofit group supported by former Mayor Adrian Fenty, which promised to turn three distressed apartment buildings into independent housing for at-risk young men. The project spiraled after that, with business going to friends and associates. When Peaceoholics had trouble finishing the job, the housing agency put the project in the hands of a contractor from Maryland with a long and troubled record.

Now, the fate of the project is up in the air.

We're happy to take your questions.

Debbie and Nikita




I am wondering about the "what happens next"? Are you familiar with "recovery homes"? Many of them seek out homeless and drug and alcohol dependant people. Often they go to AA meetings to recruit people. They get the people to live at a home designed for the occupants to help each other get out of drug and alcohol dependency. They operate with people pooling their public assistance checks or whatever money they have. Some of the houses are good, the operators understand dependancy and they help people. Others are bad, they take the money and run, cram people into the rooms, and the houses become drug dens themselves. What I want to know in the "what happens next" stage, as these homes are likely going to increase if there aren't enough housing alternatives available, is what DC plans to do to see that the good recovery homes continue operating while the bad ones get shut down?

At the property in Northeast, many of the tenants were placed there by the Transitional Housing Corporation, a faith-based organization that helps homeless families. THC and a city agency were aware of the tenants' complaints about the property and had set up a meeting between the landlord and tenants to resolve issues. After we questioned THC and had placed calls to Hagler, he moved to fix many of the problems at the apartment building.

Why did you not highlight the fact that the current mayor cut the peaceaholics funding that would have supported the projects debt service? Why do you not highlight the challenges of affordable housing? What city regulations state that coworkers can't do business together?

This project struggled right from the start.

Peaceoholics had never developed affordable housing. It had no construction experience and no loans from private lenders to get the work done.

Still, the housing agency delivered nearly $5 million in funding, with what appears to be very little oversight after that.

It's true that two city agencies that promised to support the project withdrew their support after Vincent Gray became mayor. But much appears to have gone wrong before then -- and after.

In terms of coworkers doing business together, the city is now evaluating this question. We'll see what happens.

Is this a matter for the attorney general's office, or is too early to tell?

Mayor Vincent C. Gray said in an interview today that it's too premature to send to the Attorney General's Office. He said his administration has referred the matter to the Office of the Inspector General and will make a determination after the findings.

The U.S. Department of Justice needs to investigate why the U.S. Department of Housing and Urban Development continues to provide most of the funding for D.C.'s housing agency. This city agency has been riddled with funding schemes involving ex-cons AT LEAST as far back as Mayor Anthony Williams' administration. It's like a candy store for criminals -- all at taxpayer expense. And WHY hasn't oversight by the D.C. Council ever stopped all of this money-throwing at substandard projects? Exactly WHO in positions of authority in the D.C. government is getting the kickbacks that allow all of this to continue? - Post commenter Kathy8

Thanks for your question.

The district's housing agency in recent years has funded a string of ill-fated affordable housing projects. We've written about several of them, prompting investigations by HUD.

This latest project, however, was largely funded with local housing money.

The City Council ultimately has authority to review and approve locally funded deals, but in this case, the course of the project was altered under the noses of council members.

We have more stories coming. If you have any thoughts, tips or suggestions, we'd love to hear from you.


Why do they not practice the transparency they preach? If contracts are put up for public bid and approval in full view , with a path for the public to oppose obvious conflicts and known past corruption then much less of these Acorn and Solyndra and bribdge to nowhere debacles will happen, right?

One of the things that likely went wrong in the Peaceoholics project is that there was no competitive bidding. John E. Hall, the new director of the housing agency, said competitive bidding at the time was not required but it should have been.

Thanks for your comment.

Was it difficult to get information from government officials/agencies? Given the dynamics of much of this happening under a previous administration, how cooperative was/is the current administration?

When we called the housing agency about this, officials responded immediately and appeared to give us every record they had in hand. Of course, we appreciated the speedy response and the willingness to share records.

The problem is that housing officials appear to be struggling to figure out exactly what happened themselves. There's a new administration in the housing agency, and this deal started four years ago.

We're still waiting to see if fundamental documents exist -- property appraisals, draw requests, receipts, invoices etc.

Council member Jim Graham has requested most of this already, but has so far received very little.


Because the Post never reports on succesful projects by this agency and others, there is a false perception that the entire DC Government is corrupt or incompetent. There really is no context, but suffice it to say, DC succesfully implements millions in construction projects under budget and without incident. Never gets reported. That being said, anyone who awarded millions to the Peaceholics--for anything--should have had his or her head examined. - Post commenter PepperDr

This a frequent criticism of journalists, in general.

As a taxpayer, one would hope potholes get fixed and trash gets picked up. When those basic services aren't provided, there's a story. We would hope funds are spent correctly and with oversight. When that doesn't happen, we feel obligated to report it. 

Yes, we can do a better job of reporting some of the good work that dedicated government employees do. We'll be on the lookout for extraordinary accomplishments.

Why didn't this issue come up in DC Council oversight hearings? Was there really only one hearing on this matter way back in 2010? What happened in the interim?

There was a hearing, but many of these issues did not come to light. This took a thorough inspection of deeds and records. Council member Jim Graham began asking more questions in October. And Council member Michael Brown says he, too, had questions. This scrutiny was taking place behind the scenes; not in a hearing. The Department of Community Housing and Development was gathering records and questioning employees.

Enjoyed chatting today.

If you have tips or suggestions, please email or

We would love to hear from you.

Debbie and Nikita


In This Chat
Debbie Cenziper
Debbie Cenziper joined The Washington Post as an investigative reporter in June 2007 after working for more than five years at The Miami Herald. "Forced Out," her first series at The Post, was awarded Harvard University's 2009 Goldsmith Prize for Investigative Reporting. Cenziper was also awarded the 2007 Pultizer Prize for local reporting for her year-long investigation on affordable housing corruption in Miami, which led to the arrest of three developers and a federal takeover of the county housing agency. In 2006, she was named a Pulitzer Prize finalist in explanatory reporting for her series exposing dangerous breakdowns in the nation's hurricane-warning system. She has reported on numerous subjects including public education, prescription drug abuse and mental health care. Cenziper grew up in Philadelphia and graduated from the University of Florida in 1992.
Nikita Stewart
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