Inspector General finds HUD not imposing oversight on troubled housing authorities - Affordable Housing Online

Inspector General finds HUD not imposing oversight on troubled housing authorities

By on February 25th, 2020

Tagged As: Affordable Housing News

Carolyn B. Mosby Senior High-Rise, managed by the Gary Housing Authority in Gary, IN. The Gary Housing Authority is one of 18 troubled PHAs not referred for HUD takeover after not meeting requirements. Photo by

HUD’s Inspector General issued a report finding that troubled Public Housing Agencies (PHAs) have not been referred for HUD management takeover, despite being required by law and regulations. Without additional oversight, poor living conditions for low-income renters served by these troubled PHAs – commonly known as housing authorities – could stagnate or get worse.

HUD does an annual assessment of PHA performance using the Public Housing Assessment System. PHAs are rated on the quality of physical conditions at their properties. They are also rated on their financial condition and management. If a PHA scores less than 59% on its assessment rating, it is labeled a “troubled” PHA. This means it may have dilapidated buildings, mismanaged finances, or both.

There are 18 troubled housing authorities identified in the report that should have been referred after not meeting either the 1 or 2-year recovery requirements. These PHAs are:

  • Alexander County Housing Authority in Illinois
  • Gary Housing Authority in Indiana
  • Bridgeport Housing Authority in Connecticut
  • Irvington Housing Authority in New Jersey
  • Hoboken Housing Authority in New Jersey
  • Alexandria Housing Authority in Louisiana
  • Emery County Housing Authority in Utah
  • Floydada Housing Authority in Texas
  • Gallup Housing Authority in New Mexico
  • Highland Park Housing Commission in Michigan
  • New Iberia Housing Authority in Louisiana
  • New Rochelle Housing Authority in New York
  • Peekskill Housing Authority in New York
  • Pontiac Housing Commission in Michigan
  • San Francisco Housing Authority in California
  • Tulia Housing Authority in Texas
  • Village of Hempstead Housing Authority in New York
  • Wicomico County Housing Authority in Maryland

Once a PHA is given a troubled rating, a HUD team works with the local agency to assess where the problems lie and come up with a recovery plan. The PHA then enters a recovery agreement with HUD. The recovery agreement spells out the goals that the PHA must meet, and at the end of the agreement, the PHA must receive a passing assessment score.

A PHA has a maximum of two years to correct its troubled status. If it fails to significantly improve, HUD can find it in default of the recovery agreement. At this point, staff in HUD’s Office of Public and Indian Housing (PIH) may place the PHA under administrative receivership. This means that HUD takes possession of the PHA and its assets. HUD appoints one or more HUD staff, or an outside contractor, to serve as the receiver. The receiver manages and operates the PHA’s daily housing operations and financial affairs.

The Inspector General found that PIH staff have not referred troubled PHAs to the PIH Assistant Secretary for HUD takeover. Without this referral, these PHAs could remain troubled for a long time. This can put low-income residents served by troubled PHAs in danger as properties deteriorate or the agency mismanages its funds. The Inspector General identified 18 PHAs that had been troubled for two or more years.

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One problem identified in the report is that the current process does not allow HUD to measure PHA performance before the deadlines set in the law. But the report also notes that PIH is creating a new process to refer troubled PHAs for receivership. When The Inspector General reviewed the draft process, some other problems were found. The new process would allow the Assistant Secretary more recovery options than the law and regulations allow. In addition, the Inspector General found that PIH’s staff training on how to treat troubled PHA cases did not fully comply with the law. It is hard to hold staff accountable when the training is flawed.

Finally, the law requires that HUD send Congress an annual report on troubled PHAs. PIH has not submitted its troubled PHA report to Congress for at least 11 years. Without the transparency provided by the Congressional report, it is hard for the public to know what is being done to help troubled PHAs and their residents.

HUD’s Inspector General made a number of recommendations to improve the process for dealing with troubled PHAs. First, troubled PHAs who do not meet their two-year recovery requirements should be referred directly to the PIH Assistant Secretary. There should not be a delay in HUD taking over long-term troubled agencies. The Inspector General also recommended that referrals only suggest recovery options that are allowed by the law and regulations.

In addition, it was recommended that training be updated and provided to PIH staff so that they know what actions to take when a troubled PHA fails in its recovery plan. As a final recommendation, the Inspector General said that HUD must begin submitting its annual troubled PHAs report to Congress as required by law.

Why should this matter to low-income renters? Housing authorities provide housing to vulnerable renters with the lowest incomes in our communities. No one wants HUD to take over a locally controlled agency. But whether the housing has deteriorated because of neglect, mismanagement or corruption, residents are still left in unsafe conditions. And HUD’s annual report to Congress is important, because it allows the public to see now the department is working to improve troubled PHAs.

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Chris Holden

Chris Holden, Affordable Housing Online's Senior Housing Analyst, has been in the affordable housing field for 25 years. Originally from Keene, New Hampshire, he has worked as a researcher, policy analyst, lender, trainer and real estate developer. He also taught political science at Keene State College. He is focused on making housing policies more accessible for low-income renters.