How does the Post choose which topics to investigate? What was it that caused the paper to focus on HUD? I'm interested in how these topics come up; is it just curiosity, or does something specific draw a reporter's attention to a particular area of the government? Do you monitor various subjects -- i.e. how do you not miss a potential story?
Great question. We decided to look at HUD-funded affordable-housing projects, particularly in the D.C. region, because so many families need homes here. Rents are among the highest in the country and the District has lost a lot of affordable housing because of condo conversions. There are empty lots and abandoned buildings all over the area, and we wanted to find out what happened and where the money went.
How many thousands of people work in that huge HUD Headquarters building? And what useful and effective work are all these people busy doing? Thank you for your amazing piece. I hope - as I am sure you do - that something drastically positive will come from it. Leo Keukens Santa Fe, NM
Thanks for your question and for your thoughts on the stories. Clearly, there are some highly competent people at HUD headquarters. They are proud of the HOME program, want it to work and have tried to make some changes along the way. Unfortunately, HUD often doesn't know when construction projects stall or die. The agency relies on local housing agencies to accurately report on the status of projects. In case after case, we found that local authorities weren't alerting HUD when construction projects ran aground. We found empty lots and abandoned buildings all over the country.
With so many houses standing vacant, why not focus on putting families into these houses? Housing revenues will increase. Schools will need teachers. Grocery and other local businesses will have customers. Neighborhoods will once again be alive!
That was actually one of the most surprising things that we found -- newly built, HUD-funded houses are sitting empty because housing agencies and developers haven't sold or rented them to low-income families. There were also incomplete houses, left behind by developers who couldn't finish the work. Housing agencies had not stepped in to complete the work.
I'm sure Republicans in Congress will use your report to argue for billions in cuts to HUD - from their point of view helping the homeless was a waste of money from the beginning. Once you add in the mismanagement of millions of dollars the case for signficiant cuts to HUD becomes stronger. Others will opt to fix the program. One quick fix would be to eliminate the requriement that 15% of block grant funds must go to local non-profits, even if they're not qualified to develop properties. Has anyone in Congress tried to address this previously?
I don't think the 15 percent issue has been addressed before. Clearly, some nonprofit developers have been successful, but many have not. We wrote about some of the troubling cases in the stories.
Politics aside, the HOME program has done a lot of good for a lot of people. In the story, we said that thousands of projects have been successfully completed. However, a lot of projects have been delayed, and HUD and many local housing agencies have few safeguards in place. Some experts have suggested to us that if HUD tightens up its rules and finds a way to track projects, the program can right itself.
Dear Ms. Cenziper, This problem is currently rearing its' ugly head in Buffalo, N.Y. The mayor, Byron Brown is defending his administration for how they handled the money that HUD gave to the poorer areas in Buffalo, New York. Non of these areas have received any asthetic or physical benefits from the money they were supposed to receive from HUD. What's ironic and very sad is that the mayor is an African-American and the people who voted for him are these same individuals who have not seen their neighborhoods get a much deserved "face lift". Shame on Mr. Byron Brown and other politicans who turn their eye on the poor. My question is why does this problem seem to be epidemic in nature. This problem with HUD funding in Buffalo, N.Y. has been occuring for over 30 years. Each time a new mayor steps into office, the results are the same-no accountability.
What an interesting tip. Thanks so much. I wonder what the mayor has to say? I'd love to hear more about this and any other problems in different cities. Please send tips my way...
Can you explain what the HOME program is, how it works, and what the money is supposed to be used for?
The HOME program was established two decades ago by Congress. Primarily, it provides gap-financing for developers who want to construct or renovate housing for the poor.
Did the foreclosure crisis, the bursting of the housing bubble, and the financial crisis that tightened credit markets have any effect on delays in HOME projects?
This is a great question -- thanks for asking.
Yes, clearly a lot of competent developers have had their projects held up by the economic crisis. Private financing has been hard to come by. But hundreds of projects that appear to be stalled or abandoned nationwide were launched years before the housing market melted down. These problems have been around for quite some time.
Oh my gosh I am so thankful you are telling the stories out there. I am a REALTOR in S. Florida and our customers have lost millions of dollars when the developers dragged their feet past their closing date and held their deposits, There are all kinds of mentalities out there, so again Thank You
Nice to hear from someone in South Florida. I've lived and worked there, and have heard about these types of problems before. Unfortunately, construction delays for HUD-funded projects affect every region of the country, from D.C. to New Jersey to California. Florida, too...
When you reported that an organization such as Kairos "received $400,000 in HUD funds in 2005 to develop apartments"..."Nothing was ever built", does that mean Kairos was only identified as an award recipient or does that mean Kairos actually received payment via check or wire transfer from HUD or a state/local agency?
In every case identified in our stories, HUD money was actually paid to the developer, meaning money was drawn and spent.
Looking at some of the dates involved, it appears that when housing prices were bubble-inflated (c. 2005), HUD financed the construction for affordable housing; when prices crashed, those projects were no longer economically viable. My question is -- does America really need those new houses to be built under current circumstances? Or did the bubble years motivate the construction of enough housing, that we should really just be focusing on getting people into them? (Obviously, though, getting the government's money back should be a priority.)
Thank you for this informative piece that demonstrates how many factors combined to cheat District residents out of safe, affordable housing. I am just stunned at the lack of due diligence on the part of a nonprofit whose sole purpose is to promote development. It seems to me that if the head of the nonprofit had simply Googled the company/individuals she was purchasing from, she probably would have found their convictions. When my husband and I bought our modest home, we researched the owners as much as possible to help with negotiations.
Thanks for writing in about today's story, which focuses on a D.C.-funded nonprofit group that paid nearly $8 million for three rundown apartment complexes, then went under before any renovations were made. It was definitely a tangled, troubling deal.
In Galveston, having lost our huge number of Government housing, we are being forced by a concialtion agreement to rebuild all destroyed units on a barrier island- regardless of the actual demand, and in violation of many laws.Prior to Ike, we had more government housing per capita than most large cities in the country- we have limited jobs and limited transportation. Isn't this basically isolating a disadvantaged population and giving them no chance for success?
I'm hearing from a lot of readers in Galveston -- thanks for your questions and tip. Let's talk.
Are you interested in knowing more about developers involved in these transactions?
I appreciate your answer to the last question. Will you do a follow-up on the de-regulation, starting with HUD's Communicty Development Block Grant program, sponsored by Nixon, that promoted more hands-off by the feds and more local control? The HOME program lack of controls and HUD's lack of authority to exercise oversight, is an example, don't you think?
The HOME program, like CDBG, is a block-grant program and HUD generally expects local housing agencies to police their own projects. In some cases, that happens. But we found bad deals across the country, with housing agencies hiring troubled developers for projects that went nowhere. Unfortunately, HUD often doesn't know when a project is derailed. What are your thoughts? How does this get fixed?
As an affordable housing developer, I've been looking at the questions, especially regarding is there a need for the homes now. I believe most HOME money goes to rental developments, and affordable rental is even in more demand now than it ever was due to the Great Recession. I hope your series helps targets problems with this program, so that HOME money can be used properly; most of it is, fortunately, but your excellent article exposes defects that need to be fixed. Will you be doing a follow-up article on recommendations to fix the problems?
I appreciate your thoughtful comment. We have more stories planned and I would love to hear about any fixes that can or should be made.
From the stories, it looks like there are multiple points of failure in the program. HUD seems to want to rely on the cities/states for oversight, which is a mistake in the construction world. The cities/states giving money to non-profit developers that have no experience, and those non-profits getting taken for a ride by their contractors and property sellers. Is there any way to fix this, or does it need to get blown up and something fresh put in its place?
Some local housing agencies seem to do it right. They vet the developer, make sure there's enough money to start and complete the project, and follow it through until houses go up. I talked to a number of very competent HUD managers across the country and in this region (Alexandria, for example). I'm not sure what the answer is here, but it's clear that the program works in some communities.
Who were the lawyers who represented the District and the developement companies during these transactions? Fault should fall on them as well, no?
I think you're speaking about today's story on the defunct nonprofit group that spent millions on rundown apartment complexes, right? There were a lot of people involved in that deal: the nonprofit group, the D.C. Department of Housing and Community Development, a bank and a series of other nonprofit lenders. Everyone sort of threw their hands up when we asked what went wrong.
HUD should be eliminated, not just reduced. It combines welfare with corporate welfare and tax code complexity, and is a leading poster child of new deal government waste. Where in our constitution does it say the federal government should create or subsidize housing?
Please check on the management-by-intimidation style of this housing authority. Many seniors are truly living in fear, and complaints have been filed with the office of Congressman Ben Ray Lujan. Also, there appear to be some irregularities in how contracts for management and construction of new units were given on a pay-to-play basis.
Hello, I'm just wondering What's going to happen with HUD as a result of these investigations? What about the people that put their faith in this program,are they just l left out in the dark (meaning ...Will their complaints just be dropped or will there complaints be examined more closely? Thanks Charlene Wisconsin
Hi Charlene. Thanks for writing in. I'm not sure what the answer is here, but I think you raise a great question.
Was HUD's mismanagement common -- if unconfirmed and unreported -- knowledge, or did a particular document, encounter or tip-off launch this investigative project? What prompted your first reporting steps?
What was clear was that houses were not going up, both in the D.C. region and across the country. It was stunning to find so many empty lots and boarded-up buildings in neighborhoods that clearly need affordable housing. I remember watching children play next to one empty lot in Newark, N.J., where a developer was paid $50,000 in HUD funding but built nothing. An eight-year-old girl summed it up: "It's just dirt."
Thank you for shedding the light on these issues. I hope ultimately this will strengthen the HOME program, because it is a program that does work. No one likes government waste, but were you aware the HOME program has funded over 1 million units of affordable housing since it's inception?
Thanks for writing, and good point. We reported that HOME has funded the completion of thousands of projects. Clearly, the program has helped many people. The problem is that hundreds of current projects have faced massive delays despite millions of HOME dollars. HUD doesn't track the progress of construction, which allows these projects to languish for years.
Ms. Cenziper: Excellent journalism. Please keep on this. Will the Post be making available a list of the developments/projects that have been delayed or never started?
Thanks for writing. Did you see our interactive online maps? That will help you drill down on troubled projects in your area.
Have you considered investigating the volume of individual residents and businesses who have been permanently displaced by these development projects as a result of eminent domain or forced relocation? I live in Baltimore where thousands of condemnations each year go hand in hand with HUD funding under the guise of economic development, promising BOTH affordable housing AND the creation of jobs, yet neither are accomplished. You need to look no further than census figures to see what has actually happened as a result of this waste...businesses and residents have steadily fled the City for 20 years.
This is a great tip. Please send ideas my way at cenziperd@washpost.com. I'd love to hear from you. Enjoyed the chat today and please keep reading. We have more stories on the way.
