The Washington Post
By Debbie Cenziper
June 8, 2011
Two key federal lawmakers are calling for a detailed accounting of more than 1,000 affordable-housing construction projects funded by the Department of Housing and Urban Development amid concerns about delayed and defunct development deals nationwide.
Rep. Randy Neugebauer (R-Tex.), chairman of the House Financial Services Committee's subcommittee on oversight and investigations, and Rep. Judy Biggert (R-Ill.), chairman of the panel's subcommittee on insurance and housing, sent a letter to HUD on Wednesday requesting budgets, construction schedules, completion dates and photos of construction sites for every major project funded before 2007.
The information would provide the most comprehensive look ever at the pace of construction in the HOME Investment Partnerships Program, which since 1992 has provided $32 billion in block grants to state and local governments for the creation of housing for the poor.
For years, the agency's inspector general has chronicled delayed and abandoned projects in cities across the country. A Washington Post investigation published last month found hundreds of troubled projects, including some in the District, Prince George's County and Montgomery County.
Because HUD does not track the progress of construction -- only how quickly its money is spent -- the agency often does not know when projects stall or die.
"It's like saying, 'Yeah, I know I wrote the check, but I don't know whether I received the goods that I purchased,' " Neugebauer said. "We're not talking about rocket science here. This is something that goes on in the real world every day. [HUD] doesn't have a process in place that actually tracks the project and the objective. They seem to know that they sent money to Texas or Alabama or New York, but past that, I'm not sure that they know much more."
In a written statement, HUD spokesman Neill Coleman said, "We've received the letter and will be responding to the Committee to help members more fully appreciate the value of the HOME program and just how wrong The Washington Post got this story."
HUD Secretary Shaun Donovan defended the program in a meeting Wednesday with Post staff members. He said it provides block grants to local jurisdictions, which are expected to track their projects. "Our job is not to monitor individual projects," he said. ". . . This is a fundamental choice that Congress made to create a block-grant program."
He added that monitoring more than 20,000 open construction projects nationwide would be a "huge cost to taxpayers . . . and it would duplicate a system that is already going on."
But HUD's assistant inspector general, James A. Heist, said in written testimony last week that "in some instances, no monitoring is occurring." He also said housing agencies self-report their progress "without a comprehensive review by HUD."
At a hearing last week before the House Financial Services Committee, HUD Assistant Secretary Mercedes Marquez and committee Democrats defended the program, with Marquez saying, "HOME's success rate during the recession actually outpaced the private market." A spokesperson for Rep. Luis V. Gutierrez (Ill.), the ranking Democrat on the insurance and housing subcommittee, said Wednesday that "Marquez was thorough, well-informed and forthcoming."
The Post investigation found a series of abandoned projects that were listed as open and ongoing in HUD's records, including one promised by a Prince George's County nonprofit that received $350,000 in 2005. The group received an additional $400,000 in 2005 for a second project, which also was never built. When told about the projects by The Post, HUD asked Prince George's County to return the funds.
"I was not satisfied with the answers that I got at the hearing and felt like HUD came to that hearing with, 'There's really not a problem here,' " Neugebauer said. "We're going to see if we can get to a point here where we're convinced that HUD has a handle on this."