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HUD’s Inspection System Gets a Poor Grade in Congressional Watchdog’s Report

The Government Accountability Office’s findings mirror those of an investigation by The Southern Illinoisan and ProPublica, which documented numerous cases in which substandard housing complexes received passing — and even glowing — scores from HUD.

Public housing development in Cairo, Illinois. (William Widmer, special to ProPublica)

This article was produced in partnership with The Southern Illinoisan, a member of the ProPublica Local Reporting Network in 2018.

The federal government’s system of inspecting taxpayer-subsidized housing is fundamentally flawed, and leaders at the U.S. Department of Housing and Urban Development haven’t taken adequate steps to fix it, according to a congressional watchdog report released Thursday.

The findings of the Government Accountability Office mirror those of an investigation by The Southern Illinoisan and ProPublica last year, which documented numerous cases in which substandard housing complexes received passing — and in some cases, glowing — scores from HUD. The news organizations built an online tool to allow users to look up the scores of taxpayer subsidized housing developments near them.

The GAO faulted HUD for failing to implement critical recommendations that senior staff made over two years ago to improve the agency’s inspection protocols, which are designed to protect low-income families living in federally subsidized housing and prevent landlords from gaming the system.

Those recommendations included changing the scoring system to place more emphasis on health and safety concerns facing tenants inside their units, shortening the time frame that property owners have to address emergency conditions identified during inspections, and creating a system to verify whether landlords are actually making promised repairs.

Emily Benfer, director of the Columbia Law School’s Health Justice Advocacy Clinic and a visiting law professor there, said the GAO report was a “call to action to HUD that they have to improve their administration and oversight of the conditions of their properties.”

About 2 million families live in apartments that are owned by local housing authorities or by private or nonprofit owners that enter into contracts with HUD in exchange for federal subsidies to offset rents paid by low-income families.

The Southern and ProPublica found that properties plagued by mice, toxic mold, peeling lead-based paint and other health hazards routinely passed HUD inspections; that landlords have learned how to game the inspection system; and that a flawed system of grading properties of vastly different sizes results in wildly inconsistent scores that call into question their usefulness in helping HUD monitor buildings in need of immediate federal intervention.

These system failures, coupled with years of cuts to programs that pay for repairs to public housing properties, have come into sharp relief in the southern Illinois towns of Cairo and East St. Louis. In both towns, complexes received passing scores as decades-old buildings deteriorated.

In East St. Louis, a young woman was shot to death in front of her toddler in her apartment complex after an intruder broke in through her unsecured first-floor window. Relatives said Alexis Winston had complained to the housing authority repeatedly about the fact that the window did not lock properly and was missing a security screen as commonly seen on others throughout the complex. The complex failed an inspection in 2017, just days before she died. It barely passed the year prior.

HUD told the GAO that it largely agreed with the findings and is working on a new inspection system to address issues raised in the report. “Consistent with our report, HUD recognized that after 20 years, its physical inspection process has become susceptible to manipulation,” the report said.

The agency also said that it plans to test a new physical inspection process in several eastern states this year. But “given its limited resources,” HUD will “be unable to simultaneously develop the new process and implement all of the recommendations to its current process,” the report said.

HUD has taken some smaller steps in recent years to improve the process, including directing inspectors in a July 2016 memo to mark down shoddy repairs such as using plywood to cover up holes in walls or ceilings. After this change went into effect, scores dropped dramatically for hundreds of apartments across the country.

HUD announced late last month that it is reducing the advance notice that inspectors provide to landlords about pending inspections from up to four months to a maximum of 21 days. Advocates were unimpressed, and inspectors and property owners raised questions about whether scheduling on such tight notice would work or ultimately result in further delays.

“Some of the changes we’re contemplating require more time to execute while other changes we can do more quickly,” HUD spokesman Jereon Brown said Friday. He noted that one of the 2017 recommendations of senior staff was to shorten the notification lead time about a pending inspection to three days if a property had failed its most-recent inspection.

“Other recommendations are still under consideration as part of a wholesale reexamination of the physical inspection system, many to be included in the upcoming demonstration and redesign,” Brown said. He said that HUD is proposing extensive changes to its inspection protocols to make them simpler and more reliable by focusing more on residents’ homes.

The GAO report faulted HUD for failing to conduct a comprehensive review of its inspection protocols for nearly two decades, and for poor training and oversight of contract inspectors. In response, HUD noted that it has made improvements, but that those efforts were derailed in recent years because staff was pulled off to assist the agency’s response to hurricanes.

HUD began exploring reforms in response to a scandal that came to light in 2015 involving a Memphis, Tennessee-based owner of dozens of federally subsidized properties across eight states. Several of his buildings were found to be in deplorable condition despite receiving passing scores; some also had not been inspected on time. The report noted that HUD had fallen significantly behind in inspecting some properties. Where delays may have been justified by weather emergencies or planned renovations, HUD had not properly tracked this information.

A team of HUD senior managers began meeting in the final months of President Barack Obama’s administration, and it finalized a series of recommendations the same month President Donald Trump was sworn into office. In addition to the primary ones about changing the inspection process, others included requiring that inspectors check for functioning carbon monoxide detectors and stricter enforcement when lead-paint inspection reports are cited as missing.

Inspections are HUD’s primary oversight tool. “But we can no longer accept those statistics as accurate,” Benfer said. She said there is no excuse for why the agency has not taken action sooner to address known shortcomings with its oversight systems.

Benfer was also critical of how long it has taken HUD to implement requirements for carbon monoxide detectors in public housing. Hundreds of people were evacuated from a public housing complex in Columbia, South Carolina, this winter after two men died from carbon monoxide poisoning in their 1930s-era apartment buildings. While South Carolina requires carbon monoxide detectors in rental units, HUD does not inspect for them. The building had passed all of its recent HUD inspections.

The loss of life, she said, was “completely preventable and due solely to HUD’s lack of policy requiring carbon monoxide detectors in federally assisted units.”

Brown, the HUD spokesman, called the deaths in South Carolina a horrible tragedy. He said that while nationwide changes to the agency’s inspection system are likely at least two years out, HUD expects to issue a new policy requiring carbon monoxide detectors in some federally subsidized units sooner than that.

Previous federal reports also have called into question HUD’s follow-through on enforcing lead paint inspection requirements. Thousands of children have been poisoned by peeling and chipping lead-based paint in apartments managed by New York City’s beleaguered housing authority.

The GAO report also raised concerns about how easy it is to game the inspection system. It noted that HUD is concerned that property owners have hired current or former contract inspectors who are intimately familiar with the system to help them prepare for an inspection. In some cases, they do this “by guiding owners to repair just enough to pass,” the report said.

Mike Gantt, senior vice president of The Inspection Group, a consultant and former inspector, said that he and many others have been sounding the alarm to HUD about problems with its inspection system for years. Gantt said HUD has sought to blame problems on contract inspectors, consultants and landlords, while failing to take responsibility for flaws in the system’s design.

The Southern and ProPublica, along with The Republican, a newspaper in Springfield, Massachusetts, documented a culture of score chasing that has allowed landlords to make cosmetic fixes and avoid addressing more serious health and safety problems facing tenants. In Springfield, a consultant recommended constructing a fake wall to hide a community room with an empty swimming pool to help the property pass its inspection. The wall was built; the property passed.

Molly Parker is an investigative reporter for The Southern Illinoisan. Email her at [email protected] and follow her on Twitter @mollyparkerSI.

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