HUD Delayed Action on Crumbling Public Housing Because of Feared 'Political Repercussions'

CAIRO, Ill. — As public housing deteriorated in Illinois’ southernmost city, bureaucrats at the U.S. Department of Housing and Urban Development delayed stepping in because they wanted to avoid “political repercussions” and negative attention, according to a scathing audit released today.

HUD’s inspector general, the agency’s investigative arm, said HUD officials bickered over whether a series of internal reports dating back to 2010, citing widespread mismanagement and worsening conditions in apartment complexes in Cairo, were sufficient to seize operations of the Alexander County Housing Authority, which owned the buildings. HUD officials also worried whether the agency could afford to run the local authority if it did take it over.

As a result, some 200 children and their families languished in two 1940s-era complexes overrun with mice, toxic mold and lead paint. Parents sprayed Raid around their children’s beds at night to keep the roaches off them while they slept. The heating system was so inadequate they were forced to use their gas ovens in the winter to stay warm. The Southern Illinoisan has been chronicling poor living conditions in Cairo, mismanagement by the local housing authority, and HUD oversight failures since the fall of 2015, and had already reported most of the problems identified in the audit.

HUD “could and should have done more to oversee” the housing authority, the 28-page report said, based on interviews with two dozen HUD officials.

In February 2016, during the final year of President Barack Obama’s administration, HUD took possession of the local housing authority and appointed its own staff to run it.

Another year passed before HUD announced a plan to address the unsafe conditions at the complexes, known as Elmwood and McBride, which housed 400 people, about a sixth of the town’s population. Cairo is a predominantly African-American city of about 2,400 people that sits at the confluence of the Ohio and Mississippi rivers.

In April 2017, HUD officials shared the plan with residents: The complexes would be closed because the housing authority didn’t have the money to repair them.

HUD has offered families moving expenses and vouchers that subsidize rent in the private market. With few rental options available, most people have had to relocate to other nearby communities. Only seven families remain at Elmwood and McBride.

At the time of the closure announcement, a HUD spokesperson told The Southern Illinoisan that HUD was “stunned … at what we saw, not just in terms of the deplorable living conditions that we encountered but at the poor, even absent record keeping, the staggering backlog of critical repairs, all of this going to the very health and safety of the residents living there.”

The inspector general’s report, citing this quote, noted that the “deplorable” conditions at the housing authority “did not occur overnight” and that HUD was aware of many of the problems based on multiple assessments completed over six years.

In one extensive report from 2014, experts from across the agency identified serious and widespread failures at the local housing authority. Among them, HUD found that officials had inappropriately siphoned off $400,000 in funds earmarked for the management and routine maintenance of Elmwood and McBride to pay administrative salaries and benefits. The report also noted that conditions were significantly worse at the two complexes, comprised almost exclusively of African-American families, than at other more integrated properties. And HUD fair housing auditors found that the housing authority was paying black employees lower wages than white workers, even when black workers had the same or more experience, and were assigned more difficult tasks.

Even still, senior officials in HUD’s Office of Public and Indian Housing resisted the recommendations of staff in Chicago and other departments to take swift action.

Senior Public and Indian Housing officials told the inspector general that they were unaware of the 2014 report or its findings, but others contradicted that assertion and said they met with senior officials to discuss them.

“Although it may be too late to save ACHA,” the inspector general’s audit said, referring to the local housing authority, the report recommended that HUD take swift action to improve oversight of “troubled” housing authorities across the country. As of June, there were 50 with this designation, which is determined by a variety of HUD assessments. There are about 3,800 housing authorities nationally.

Rep. Mike Bost, R-Murphysboro, whose district includes Cairo, said the report portrays gross negligence on HUD’s part. “This is a case where HUD basically knew the problems were there, and chose not to react because of the embarrassment they might have had to face because it had gotten so bad. They let it continue to go down that path and now there’s no way to recover from it.”

The inspector general’s report also noted that over the years, there were several errors in how the housing authority’s properties and finances were graded by HUD. This delayed the agency’s push for corrective action, which is guided by a defined set of policies based on annual performance reviews, officials told the inspector general.

HUD’s contract with housing authorities includes a provision to take them over in emergency situations, including when the life, health and safety of residents is at imminent risk. HUD “should have exercised this authority sooner” and “we are concerned that the … officials we spoke with may not have been aware of” this option, the report said.

One official who isn’t named told the Office of Inspector General that it takes years to build a record sufficient enough to take a housing authority into receivership. That same official said the process “isn’t too mapped out.” Another said he was unsure of what precisely triggered receivership.

Though HUD has taken over about 20 housing authorities since 1985, including four in Illinois, a receivership manual was only recently created. The inspector general recommended that HUD take several steps to improve its oversight of troubled and at-risk housing authorities, including improving policies and training, and creating strategies to work across HUD’s departments when housing authorities are uncooperative.

In response to the report, Dominique Blom, HUD’s general deputy assistant secretary for Public and Indian Housing, wrote to the inspector general that the agency agrees with most of the recommendations.

The Office of Public and Indian Housing “also wishes to note the accomplishments made at the Alexander County Housing Authority” since receivership began to “correct deficiencies, substantially reduce the administration costs that threatened to bankrupt the agency and reposition the assets,” her letter said.

For their part, many residents say the forced move has disrupted their lives. The small local school district has lost about a fourth of its student population because of the housing crisis. As receiver, HUD has struggled to keep up with tasks as basic as keeping the grass mowed.

HUD spokesman Jereon Brown declined further comment.

Sens. Dick Durbin and Tammy Duckworth, both Illinois Democrats, said in a joint statement that there is “no question” that Cairo public housing residents “suffered through decades of neglect, inadequate oversight and outright discrimination.”

“The findings in the Inspector General report underscore what we’ve already known — HUD and the Alexander County Housing Authority failed the people of Cairo. HUD must enact policies to prevent this from ever happening again.”

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