HUD’s inspector general takes on two of the worst public housing problems

The Office of Inspector General at Housing and Urban Development is boosting efforts to end sexual abuse and unsanitary conditions in HUD-backed housing. For details,  Federal Drive with Tom Temin spoke with HUD Inspector General Rae Oliver Davis.

Interview transcript:

Tom Temin And you’re doing a couple of things here. Let’s start with the sexual abuse. There was a horrifying case in public housing that the Justice Department just took care of. Tell us what happened. And is that in your sense, emblematic of what can happen in public housing?

Rae Oliver Davis Sure. Thank you for that question. We opened that matter in May of 2018, and it started out with just one agent and one victim. And we zeroed in on a New Jersey landlord. He had been receiving about $1.2 million in housing choice voucher HUD assistance annually. And what we discovered were allegations spanning about 15 years, allegations that included quid pro quo, sexual contact for rental assistance. If you do this, you can stay here. If you don’t do this, you might be evicted. Those sorts of things, pretty horrible conduct. We did work that with the New Jersey U.S. attorney’s office, you mentioned that, and they charged him in August of 2020. Then in March of 2021, the local New Jersey Union County prosecutors charged him with multiple counts of sexual assault and criminal sexual contact. So we had a number of things going on there. This resulted in a settlement, though, in about December of 2021 for $4.5 million, which is the biggest settlement DOJ had of this kind with this particular kind of conduct. About $4.3 million, Tom went back to the victims. And the big thing here, for my agency, is that this individual had to sell all of his properties. He had hundreds of units. He had divest himself of all of that. And he had to agree not to be a residential property landlord going forward.

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Tom Temin All right. So that was a particularly egregious case. But do you have the sense that it’s not the only one?

Rae Oliver Davis Absolutely. And unfortunately, we do not believe it’s the only one. It’s hard to put numbers on these things, I think, precisely because it’s difficult for people to come forward. I think, maybe until now, HUD beneficiaries who had suffered at the hands of this kind of misconduct didn’t even know that there was any kind of recourse or that it was a crime or a violation of the Fair Housing Act. So that’s something we’re really trying to do, is get awareness out to the public on this. But when we talk to HUD, when we talk to DOJ, we talk to the locals, we all get a sense that this is unfortunately quite pervasive. I said that that last case started with one victim, but sometimes we get up to 60 victims. So it’s out there, it’s a thing. So we’re really trying to combat this terrible conduct.

Tom Temin And what are you doing from the IG standpoint to help combat this?

Rae Oliver Davis We are partnering with just about everyone. There’s something here for all of government. It’s kind of a whole of government approach, all hands on deck. For us, working with our DOJ partners, getting bad actors out of the program. That’s what we do best, that’s what we want to do here. Each of these victims could potentially also have a fair housing claim. They have to bring that within a year. So we definitely make sure they’re on that path to filing that with the department, that’s something HUD can do. We work with the state and locals on these misconduct, criminal sexual conduct cases. And frankly, these start out, they can almost be a he said she said sort of thing. But by the time we investigate them, and we’ve got 60 victims, we really boost the state case against these bad actors as well. We also are driving complaints to our hotline. Like I said, right now, we fear that we have people that don’t even know that this is a crime or something they can do anything about. So we’re really trying to get the word out that way.

Tom Temin And you have some public service ads running, too, right?

Rae Oliver Davis We do. We have some public service ads running. There’s a video of me, hopefully educating people about what to look for. If your maintenance worker said this to you, if your landlord did this, just really educating potential victims on the conduct that we’re aiming to target.

Tom Temin And what about the HUD housing program officers themselves that actually do the payouts certify the landlords and run these programs?

Rae Oliver Davis Well, certainly that’s a good question. And we’re always looking to do oversight there. And this really is something where if we can get a conviction, if we can get a settlement like we had in that New Jersey case, we would then refer them for disbarment. So they wouldn’t be able to participate in any HUD or government programs going forward. That’s something we would work together with HUD to do.

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Tom Temin We’re speaking with Rae Oliver Davis. She is inspector general of Housing and Urban Development. And let me ask you about the other matter that you are concentrating on, and that is substandard conditions. I guess there’s still lead paint, even this many years after no lead paint in the market, and other problems with housing that are physical in nature and make for unsanitary, unhealthy conditions. What’s the extent of that and what are you doing about it?

Rae Oliver Davis Well, Tom, you hit the nail on the head and you listen to the news like I do. We hear every day about landlords who don’t hold up their end of the bargain. They get the housing assistance payments, but they’re not providing safe sanitary housing. It’s a big problem. Housing stock is old. There’s a capital needs backlog, I think you and I have talked about this before that contributes to the problem. The age of the housing stock contributes to the fact that there still could be lead in the property. So there’s a lot to do here. We are using our entire toolkit to really look at unit conditions on every level. We’re certainly looking at HUD oversight of the department itself. We’re looking at the inspection process. You and I think it talked about the [Real Estate Assessment Center (REAC)] inspection process before, that’s the main tool for looking at unit conditions. It’s been flawed for a while. It’s pretty complex. HUD has been looking to revamp it with new standards. There was a bit of a backlog during the pandemic. So we’re doing oversight there. We’re seeing how that implementation of the new standards are going, and have they really been able to attack the backlog and look at unit conditions in a timely manner? We’re looking at [Rental Assistance Demonstrations (RAD)] conversions, that’s been the department’s answer to aging public housing stock, give them access to equity, and perhaps the conditions will improve. We’re going to look at, are the conditions actually improving and certain rental assistance demonstration properties. We’re also looking at emergency health and safety issues. The timeline there is usually 24 hours to address those, we’re looking to see if HUD’s doing proper oversight of that. And then we’re doing targeted reviews beyond the HUD and program level. And we’re looking at entities. We see all the time HUD will finally abate a contract and basically have a landlord exit the program and they have to relocate tenants. So we’re doing some target reviews there as well.

Rae Oliver Davis And you mentioned Lead, absolutely. We’re looking at Lead from the HUD perspective. Does Lead have a plan for holding [Public Housing Agency (PHA’s)] accountable? Are they making sure the Lead-safe housing rule is being enforced? And then we’re looking at high risk properties? We’re looking at the Philadelphia Public Housing Authority. We just did an audit there where we found they didn’t have any documentation whatsoever pre 2019 on lead disclosure. So we couldn’t say for sure whether tenants were even being notified there were lead in the property. So for us, the big takeaway here is if you don’t have the right controls at the program level, at the partnership level, so the participant level, then that leaves you vulnerable to bad actors. So that’s where we come in, it’s another part of our toolkit. We just had a case in Indiana where a contractor took hundreds of thousands of dollars in exchange for doing repairs and renovations, didn’t ensure that any of that was done with, let’s say, practices in mind. And we already had a child in that unit with lead blood poisoning. So we’re doing things like that as well.

Tom Temin Do you also look into the finances of operators of this housing, to understand, is what they’re getting sufficient? Is there money left over? Do they put away capital expenditures such that they can maintain the properties? Because often, rent controlled types of properties tend to be often the least cared for.

Rae Oliver Davis That is something we were discussing everyday, Tom, and it’s a really good question. For instance, like I mentioned, a property in Pepper Tree right now where we’re doing some research. So we haven’t actually opened anything there, but we’re looking at what happened there. We have properties that just aren’t being maintained. So what’s happening to the funding around that? And we’re looking at how is HUD overseeing that as well? Are they looking at the financials? So often with these RAD conversions, they have to put forward a financial plan. So what happens there? How is that successful? How is it not.

Tom Temin A RAD conversion means what? Rental assistance Demonstration.

Rae Oliver Davis Well, it’s really complex. There are many different avenues for RAD, but essentially it’s the answer to this capital needs backlog and public housing. So it could be a public housing authority that wants to convert to RAD. There are other properties that convert to RAD too, but essentially it’s the answer to getting the properties back in better shape and better condition.

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Tom Temin It doesn’t turn them into condos or anything like that.

Rae Oliver Davis I am not aware of it turning over to condos. But like I said, it’s really complex and there are many different avenues.

Tom Temin All right. And while the IG is doing all of this investigative work, again, I have to ask, where are the housing program people in HUD, outside of the IG’s office, but in the HUD program offices?

Rae Oliver Davis These are good questions, and I’ve cited several examples of our oversight of HUD in these areas. And a couple of things. First of all, we just partnered with HUD, we did a civil remedy against a landlord for $1.2 million. That’s a good partnership for us to do with HUD. I want to see more of that. I want to push for more of that. We’re going to commit those resources. I have to say, there are areas where HUD still could improve lead compliance. I cited several examples there. We really want them to be able track lead in the housing authorities. But to be fair, Tom, there’s 3300 housing authorities. So we have to talk about the capacity of HUD. In order to carry out their mission, they have to deal with tens of thousands of partnerships, and they have to do oversight of those partnerships. So we have to acknowledge the capacity issue there as well. There’s some areas, where I should point out has made progress. When we talk about lead and hazards, that’s not the only hazard. We have contaminated sites, we’ve done work around that before. They have a plan in place now to assess properties who are close to contaminated sites and do environmental reviews, that’s because of our recommendations and our work. They’re very close to a departmental wide policy on radon, something that would address testing and mitigation where they find radon, that’s also part of one of our evaluations. So there’s some areas where they’ve made strides, certainly.

Tom Temin And I guess, just getting back to the lead paint, because it’s emblematic of this. The fact that lead paint was banned, I think, more than 40 years ago. That’s testimony to the age of a lot of the public housing. And if there are still lead paint there that attests to the lack of capital investment in it, if you still have window panes and window sills that have lead paint on them.

Rae Oliver Davis That’s right. That’s absolutely right. We find that lead dust, lead paint chips is definitely one of the vulnerabilities when it comes to having children in public housing. And the old stock, certainly.

Tom Temin And then you’re also getting some wind in the sales from Congress, it looks like, for these efforts. There was a hearing not long ago.

Rae Oliver Davis Oh, absolutely. Yes, they did a hearing. And we get questions from our congressional stakeholders all the time about this. I just had a hearing on the Hill in advance of the secretary’s budget hearing, and I got questions about these issues. Yes, all these initiatives.

Tom Temin So it’s ongoing, no end really in sight.

Rae Oliver Davis We’re going to keep putting resources to it. One of the things we hope to see, especially in the sexual misconduct area, is deterrence, that’s a win for us, too. I think, initially with these PSA’s and its focus, we hope to see more complaints, more people coming forward because we want to raise awareness where maybe there hasn’t been. But in the long run, we’ll be doing data analytics, will be seeing where to commit our resources. But deterrence is also a win for us, definitely, especially in the sexual harassment arena.

Tom Temin And by the way, do you ever do site visits?

Rae Oliver Davis We do. That’s an important part of the process. A few years ago, we did kind of a systematic review in certain cities of housing conditions. I mentioned a few audits that were in the process of launching, those will be boots on the ground. When I say we’re going to look at the unit conditions, we’re going to go out and look at the unit conditions. That’s definitely what we’re going to do. We don’t do the inspections, that is a HUD REAC inspire inspection process. That’s not us. But certainly, in conjunction with our oversight work being on site, seeing what there is to see, talking to people is certainly very important.

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