HUD Tallied Numerous Violations In NYC Public Housing. It Still Gave Passing Grades.

For months, federal housing officials and prosecutors have alleged that the New York City Housing Authority misled them about conditions, rendering federal oversight ineffective as conditions worsened.

New York City officials used “every trick in the book to conceal building violations from federal inspectors,” U.S. Attorney Geoffrey Berman alleged at a news conference this summer announcing a federal complaint against the authority.

Berman declared it a “cover-up.”

But inspection records from the U.S. Department of Housing and Urban Development suggest there’s more to the story. HUD officials were well aware of the severe mold, infestation and countless other health and safety violations inside New York City’s public housing units, according to a review of the two most recent inspection records for a dozen properties. The Southern Illinoisan obtained the records, which date from 2013 to 2017, from HUD in October through a public records request.

In most of the apartments reviewed, inspectors found severe cases of mold and mildew, broken and missing appliances, inoperable windows and doors, electrical system problems and water leaks.

Prosecutors alleged that the housing authority failed “to find and remediate peeling lead paint in its developments” and falsely certified to HUD it had done so. But the inspection reports were full of red flags had anyone taken notice, experts said: Most contained citations for paint peeling from walls and ceilings in old apartment complexes. In fact, some of the reports describe peeling paint as “systemic.” Lead poisoning can cause a range of physical and behavioral symptoms in children, and it can stunt development.

Last week, The Southern Illinoisan and ProPublica reported that HUD’s 20-year-old inspection system is flawed and ineffective. Persistently unsafe properties routinely pass their inspections, and decent ones fail. Scores can seesaw between passing and failing by 20 points or more from one inspection to the next, raising questions about their reliability.

Those same trends hold true in New York.

Many of the properties whose inspection reports were reviewed by The Southern received passing grades despite racking up hundreds of estimated deficiencies. (The reports represent about 5 percent of the 375 reports generated for New York City’s public housing complexes from 2013 to 2017.)

To settle the federal government’s complaint, New York City agreed to spend $2 billion over a decade on repairs. It also agreed to be overseen by a federal monitor under the terms of a consent decree. Last week, Judge William H. Pauley III rejected that plan, suggesting that a receiver with broader oversight powers was needed to address problems in some units that he said were “somewhat reminiscent of the biblical plagues of Egypt.”

Pauley noted that HUD has the ability to declare housing authorities in default of the contracts they enter with the agency in exchange for federal funding, and it can petition the court to appoint a receiver with broad powers or take them over.

“HUD is not blameless,” he wrote. HUD’s shirking of its responsibilities is “particularly striking, especially given all of the government’s allegations regarding the deplorable conditions” and the housing authority’s “attempts to pull the wool over HUD’s eyes.”

What ultimately happens in New York may have broad implications for other struggling public housing authorities across the nation, many of them in small and midsized cities. Like New York, they have aging public housing complexes that have gone for years without adequate funding for major repairs. Some need replacement, but there’s limited money for that as well.

Daniel Barber, who has lived at the Andrew Jackson Houses in the Bronx for 46 years, serves as president of the citywide council of public housing residents’ associations. He said HUD has been “lax for years on doing its part to hold” the housing authority accountable.

“HUD is just as much at fault as NYCHA, if not more,” Barber said.

Of the 27 units inspected at the Andrew Jackson property in December 2016, seven had severe mold, a dozen were cited for peeling paint and roaches were observed in two. The write-up for four of the units included the following fine print: “The point deductions” for this unit “exceed the number of points possible.”

In HUD inspection lingo, this is what is called “going in the hole.” Each inspected unit is only worth so many points (1.37 points each in the Andrew Jackson property), and while additional citations can be recorded, they do not affect the final score. The property consists of more than 1,700 units across about a dozen buildings. (HUD’s inspector assessed less than 2 percent of them.)

Because the inspection takes into account other aspects of each development — including its exterior and its water and electrical systems — the property passed anyway, scoring 70 out of 100 points.

The extreme nature of the poor conditions are such that it would have been impossible for them to go unnoticed, Barber said, even if the complex earned higher scores than it should have. “You would have to work really hard to not want to see it in order to claim you didn’t notice.”

All told, HUD failed about one in eight of New York City’s properties in 2015. It failed about one in four properties inspected in 2017, according to the department’s publicly available datasets. A NYCHA official said that HUD’s data is incomplete, and that the failure rate is closer to 20 percent. This spike in the housing authority’s failure rate followed national trends, though New York’s failure percentage is higher than the national average.

Dawn Dearden, spokeswoman for the U.S. Attorney’s Office for the Southern District of New York, declined to provide comment on whether HUD should shoulder some of the responsibility for the problems at NYCHA. Darryl Madden, a spokesman for HUD’s Office of Inspector General, which contributed to the federal investigation, likewise declined to comment on whether HUD shares responsibility for NYCHA’s problems.

HUD has faced repeated criticism for giving passing scores to deteriorating properties, and the agency has long been aware of weaknesses with its property assessment system. HUD Secretary Ben Carson has pointed to “rogue” contract inspectors who he said did not properly follow protocols. And in a statement he shared on Twitter in October, Carson said the department is working to design a new inspection system that is more focused on the physical conditions within housing units and that places a greater emphasis on lead-based paint hazards and mold.

Despite properties failing at a higher rate in New York, HUD still issued the housing authority an overall “standard” performance label in 2016, the most recent year available. That’s because the agency’s assessment system for housing authorities also factors in reviews of financial and management practices. The housing authority achieved high marks in these other categories, offsetting its poor performance inside of its units.

This month, HUD notified the housing authority that it had received an overall grade of 85 out of 100 points for the 2016 fiscal year, the highest it had achieved in four years.

Cathy Pennington, executive vice president of operations for NYCHA, said she could not comment directly on the allegations in the federal complaint, but she acknowledged that the housing authority has had problems and made mistakes. Aging buildings need billions of dollars in repairs, she said. But Pennington said the high overall score demonstrates that the housing authority is strong administratively, by HUD’s own standards.

Asked how that squares with the federal government’s claims that squalid conditions were primarily due to mismanagement, Pennington said “it does kind of present a disconnect” and deferred to HUD.

HUD spokesman Jereon Brown said the score of 85 represented an “incomplete designation” because the housing authority’s actions “were designed to intentionally undermine HUD’s inspection regimen.” He declined to comment on whether HUD shouldered any responsibility for not acting sooner on the problems in New York.

Pennington said when public housing properties fail inspections, HUD does not offer additional resources to bring them up to standard or to deal with deferred repairs or structural problems.

For its part, HUD has faulted New York for not embracing other options to fund repairs, such as leasing buildings to private developers under a special program the department calls the Rental Assistance Demonstration. On Monday, Mayor Bill de Blasio announced a plan to generate nearly $13 billion in funds to repair about a third of the housing authority’s units, though that still falls well short of the $32 billion in short-term repair needs.

In rejecting the proposed consent decree, Pauley wrote that when Congress bestowed broad oversight powers on HUD, including the ability to appoint receivers and take over housing authorities, it expected the agency to use them. In the past, the department has used drastic remedies to successfully reform other public housing agencies, he wrote, specifically naming HUD’s takeover of the Chicago Housing Authority in the 1990s. Illinois, in fact, has had more experience with HUD receiverships than any other state. The department only recently ended its administrative receivership of the East St. Louis Housing Authority, the first and longest in the agency’s history. HUD also has taken over the housing authorities of Springfield and of Alexander County.

In Chicago, the receivership lasted from 1995 to 1999. Then, as HUD returned control to local officials, it also loosened the reins and gave Chicago housing officials more flexibility and less oversight than is typical.

Under a promise by then-Mayor Richard M. Daley to oversee an ambitious remaking of public housing, the city started tearing down its buildings, including the notoriously troubled Cabrini-Green and Robert Taylor Homes. The latter was then the largest public housing complex in the nation.

Years later, that promised “transformation” plan is reaching its end. Residents who were displaced were provided vouchers to rent in the private market, but many landlords refused to accept their rental subsidies. They also were promised they could return when new apartments were built, but the housing authority did not keep up-to-date contact information for many of them.

Today, there are 17,000 fewer family public housing units than there were two decades ago, and the city is grappling with an affordable housing shortage, said Jawanza Malone, executive director of Kenwood-Oakland Community Organization, a grassroots nonprofit in Chicago. In 2017, about 30 percent of Chicago’s public housing properties failed their inspections; none failed in 2015. Chicago’s failure rate last year was higher than New York’s failure rate by about 5 percentage points, an analysis of HUD data shows.

Adrianne Todman, CEO of the National Organization of Housing and Redevelopment Officials, which represents housing authorities, said that whatever action HUD and the courts take in New York City, officials must be mindful to ensure that does not affect oversight and funding for the nation’s other roughly 3,800 housing authorities.

Todman isn’t the only one raising concerns. HUD’s Office of Inspector General said in a report this summer that some HUD officials believe they lack the financial resources and staff know-how to manage housing authorities in receivership. The report specifically addressed why the agency waited so long to take over the Alexander County Housing Authority despite documenting years of unsafe conditions in apartments in Cairo, Illinois’ southernmost city, and alleged mismanagement and civil rights violations by local officials.

“I’m not sure that HUD has the capacity to take on meaningful receiverships,” Todman said. “I think they have spent the last several years trying to turn the keys back over to local governments.”