Washington doesn’t know if people living in public housing are needy because local authorities who are supposed to verify income and stop fraud often aren’t interested making sure taxpayer money is spent properly.
Under pressure from lobbyists, HUD loosened regulations that had forced local authorities to collect evidence of income. Department officials also moved to let local authorities treat more federal cash as “fees” aimed at making a “profit” so that housing bureaucrats could be paid more, according to an investigation by HUD’s inspector general.
The policy of not bothering to make sure public housing is reserved for the poor began when President Obama appointed Sandra Henriquez as the HUD assistant secretary in charge of housing projects.
She told investigators that she hired Debra Gross, a former lobbyist for the Council of Large Public Housing Authorities, for the top policy job because she “wanted someone in that position who would regulate public housing with more emphasis on real estate rather than tenants” and “lessen HUD’s burdensome regulations.”
The Council is composed of officials from big city public housing authorities such as New York and Chicago. Such authorities are typically creatures of municipal governments.
The effects of the policy switch are visible at public housing projects, but are difficult to quantify because HUD doesn’t collect data on residents’ assets.
In Alexandria, Va., more than 90 percent of public housing units observed by the Washington Examiner have satellite TV dishes. New luxury cars, including Mercedes Benzes and Cadillac Escalades, with price tags starting at $73,000 can be spotted at any time.
At one housing project lot in a prime location steps from a subway station, a pair of high performance Ford Mustangs were seen parked side-by-side. One with custom wheels and vanity plates was a sporty red and emblazoned with the number 69. A new Dodge Charger with a luxury package and a custom paint job depicting human skulls was also observed.
Asked how HUD ensures that housing projects are reserved for people most in need and that abusers are ferreted out, spokesman Brian Sullivan said, “Almost 93 percent of tenants living in Project-Based Section 8 units have incomes less than $20,000.” The figures he cites are offered by the residents themselves.
Asked how those amounts were verified, he said it was up to localities. “I think we’re done here,” he said, bristling and barring further questions.
An assistant scheduled an interview with Roy Priest, the CEO of the Alexandria Redevelopment and Housing Authority. But when Priest learned that the topic was the enforcement of rules, he did not turn up for the interview. There was no answer to dozens of calls to his desk phone over the course of more than a month.
Chief among HUD’s priorities in recent years was changing the rules so that housing authorities no longer had to conduct electronic (or “enterprise”) income verification (EIV), but instead merely accepted residents’ claims that they were needy.
As a top HUD official, Gross “led the effort to remove or weaken some requirements that HUD cited as reducing improper payments. Most notably, HUD required [public housing authorities] to use its EIV system, which electronically matched tenant-reported income against income information provided by third parties,” the inspector general wrote.
While rules require some residents to perform community service, HUD tried to change a federal rule so that if residents said they had done the required work, their word would be accepted without anyone checking if it was true.
This baffled the inspector general, who found that checking residents’ income claims was not burdensome.
“Unlike the well-documented decline in improper payments because of mandated EIV use, industry opinions about this burden and its related costs remained unsubstantiated. HUD provided no evidence that reducing requirements would cause significant cost savings.”
Even though public housing is intended for the most needy people, there are no rules against the installation of high-cost amenities. HUD allows tenants install satellite dishes and in some circumstances HUD will pay for the installation of cable.
The federal government will provide “reimbursement for all reasonable out-of-pocket expenses … and the cost of reinstalling telephone and cable TV service” if residents are moved from one housing project to another, according to HUD regulations.
Robert Rector, who has worked on implementing poverty program reforms and is now a scholar at the Heritage Foundation, said that officials “don’t really verify who’s in those units, so if you’ve got a boyfriend who’s got a lot of disposable income, he can very well live in the unit.”
“The only way they’re going to crack down on them is if they get married,” Rector said.
At the James Bland Phase IV housing project in Alexandria, according to data provided to HUD by residents, every unit except one is occupied by single mothers.
Yet many middle-aged men can be observed entering and leaving apartments. One stood with a group of others in a parking lot, listening to music from a sports car, and said he lived in the complex and “earned” the car because he was “out there hustling.”
Average household income at the James Bland projects is $29,111, according to the self-reported data, yet because all major expenses, including rent, food and utilities, are paid for by the government, residents have more disposable cash than people with higher incomes, Rector said.
“There is virtually nobody in those units who is only getting housing,” he noted, referring to the constellation of means-tested programs.
Public housing, because of its limited supply, is distributed by the luck of the draw and involves long wait lists. Local authorities’ reluctance to verify income can result in individuals with little or no income being shut out while those with higher incomes remain.
“When you put housing on top of it, that’s another $10,000, so these are sort of the elite of the welfare clientele,” Rector said.
