[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]
PHA OVERSIGHT: HOW SCANDALS
AND MISMANAGEMENT HARM
RESIDENTS AND TAXPAYERS
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON HOUSING AND
INSURANCE
OF THE
COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTEENTH CONGRESS
SECOND SESSION
__________
MAY 22, 2024
__________
Serial No. 118-93
Printed for the use of the Committee on Financial Services
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
56-520 PDF WASHINGTON : 2026
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HOUSE COMMITTEE ON FINANCIAL SERVICES
PATRICK McHENRY, North Carolina, Chairman
FRENCH HILL, Arkansas, Vice MAXINE WATERS, California, Ranking
Chairman Member
FRANK D. LUCAS, Oklahoma SYLVIA R. GARCIA, Texas, Vice
PETE SESSIONS, Texas Ranking Member
BILL POSEY, Florida NYDIA M. VELAZQUEZ, New York
BLAINE LUETKEMEYER, Missouri BRAD SHERMAN, California
BILL HUIZENGA, Michigan GREGORY W. MEEKS, New York
ANN WAGNER, Missouri DAVID SCOTT, Georgia
ANDY BARR, Kentucky STEPHEN F. LYNCH, Massachusetts
ROGER WILLIAMS, Texas AL GREEN, Texas
TOM EMMER, Minnesota EMANUEL CLEAVER, Missouri
BARRY LOUDERMILK, Georgia JAMES A. HIMES, Connecticut
ALEXANDER X. MOONEY, West Virginia BILL FOSTER, Illinois
WARREN DAVIDSON, Ohio JOYCE BEATTY, Ohio
JOHN W. ROSE, Tennessee JUAN VARGAS, California
BRYAN STEIL, Wisconsin JOSH GOTTHEIMER, New Jersey
WILLIAM R. TIMMONS, IV, South VICENTE GONZALEZ, Texas
Carolina SEAN CASTEN, Illinois
RALPH NORMAN, South Carolina AYANNA PRESSLEY, Massachusetts
DANIEL MEUSER, Pennsylvania STEVEN HORSFORD, Nevada
SCOTT FITZGERALD, Wisconsin RASHIDA TLAIB, Michigan
ANDREW R. GARBARINO, New York RITCHIE TORRES, New York
YOUNG KIM, California NIKEMA WILLIAMS, Georgia
BYRON DONALDS, Florida WILEY NICKEL, North Carolina
MIKE FLOOD, Nebraska BRITTANY PETTERSEN, Colorado
MICHAEL LAWLER, New York
ZACHARY NUNN, Iowa
MONICA DE LA CRUZ, Texas
ERIN HOUCHIN, Indiana
ANDREW OGLES, Tennessee
Matthew Hoffmann, Staff Director
------
SUBCOMMITTEE ON HOUSING AND INSURANCE
WARREN DAVIDSON, Ohio, Chairman
MONICA DE LA CRUZ, Texas, Vice EMANUEL CLEAVER, Missouri, Ranking
Chairwoman Member
BILL POSEY, Florida NYDIA M. VELAZQUEZ, New York
BLAINE LUETKEMEYER, Missouri RASHIDA TLAIB, Michigan
RALPH NORMAN, South Carolina RITCHIE TORRES, New York
SCOTT FITZGERALD, Wisconsin AYANNA PRESSLEY, Massachusetts
ANDREW R. GARBARINO, New York SYLVIA R. GARCIA, Texas
MIKE FLOOD, Nebraska NIKEMA WILLIAMS, Georgia
MICHAEL LAWLER, New York STEVEN HORSFORD, Nevada
ERIN HOUCHIN, Indiana BRITTANY PETTERSEN, Colorado
C O N T E N T S
----------
Wednesday, May 22, 2024
OPENING STATEMENTS
Page
Hon. Warren Davidson, Chairman of the Subcommittee on Housing and
Insurance, a U.S. Representative from Ohio..................... 1
Hon. Emanuel Cleaver, Ranking Member of the Subcommittee on
Housing and Insurance, a U.S. Representative from Missouri..... 3
STATEMENTS
Hon. Steven Horsford, Member of the Subcommittee on Housing and
Insurance, a U.S. Representative from Nevada................... 4
Hon. Maxine Waters, Ranking Member of the Financial Services
Committee, a U.S. Representative from California............... 103
WITNESSES
Mr. Bill Slover, Principal, AVCO Interests, and Former Chair of
the District of Columbia Housing Authority (DCHA) Board........ 4
Prepared Statement........................................... 7
Mr. Matt Doherty, Former Executive Director, Atlantic City
Housing Authority (ACHA)....................................... 87
Prepared Statement........................................... 89
Mr. Georgi Banna, General Counsel and Director of Strategic
Initiatives, National Association of Housing and Redevelopment
Officials (NAHRO).............................................. 91
Prepared Statement........................................... 93
APPENDIX
ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD
Hon. Warren Davidson:
Statement from Representative Van Drew from New Jersey....... 122
Hon. French Hill:
Representative French Hill's letter to Secretary Fudge dated
September 7, 2023.......................................... 123
Dr. Kimberly McClain's October 6, 2023 follow up letter to
Representative French Hill................................. 126
Representative French Hill's letter to Secretary Fudge dated
January 12, 2024........................................... 129
Dr. Kimberly McClain's January 30, 2024 follow up letter to
Representative French Hill................................. 131
HUD'S responses to Representative French Hill's letter dated
February 27, 2024.......................................... 132
Hon. Maxine Waters:
The Council of Large Public Housing Authorities (CLPHA)...... 135
Hon. Steven Horsford:
Grand Opening of Hafen Village............................... 137
RESPONSES TO QUESTIONS FOR THE RECORD
Written responses to questions for the record from Mr. Matt
Doherty
Representative Maxine Waters................................. 141
Written responses to questions for the record from Mr. Georgi
Banna
Representative Maxine Waters................................. 142
Representative Sylvia Garcia................................. 143
LEGISLATION
H.R. 6550, to require the Inspector General to produce an updated
report on the status of the New York City Housing Authority.... 144
PHA OVERSIGHT: HOW SCANDALS
AND MISMANAGEMENT HARM
RESIDENTS AND TAXPAYERS
----------
Wednesday, May 22, 2024
U.S. House of Representatives,
Subcommittee on Housing and Insurance,
Committee on Financial Services,
Washington, DC.
The committee met, pursuant to notice, at 10:02 a.m., in
room 2128, Rayburn House Office Building, Hon. Patrick McHenry
[chairman of the committee] presiding.
Present: Representatives Davidson, Fitzgerald, Garbarino,
Flood, Lawler, De La Cruz, Cleaver, Waters, Tlaib, Pressley,
Horsford, and Pettersen.
Chairman Davidson. The Committee on Housing and Insurance
will come to order.
Without objection, the chair is authorized to declare a
recess of the committee at any time.
This hearing is entitled, ``The Public Housing Authority
Oversight: How Scandals and Mismanagement Harm Residents and
Taxpayers.''
Without objection, all members will have 5 legislative days
within which to submit extraneous materials to the chairman for
inclusion in the record.
I will now recognize myself for 5 minutes for an opening
statement.
OPENING STATEMENT OF HON. WARREN DAVIDSON, CHAIRMAN OF THE
SUBCOMMITTEE ON HOUSING AND INSURANCE, A U.S. REPRESENTATIVE
FROM OHIO
Today's hearing is about a familiar topic: the ongoing
challenges of providing housing to our constituents. That has
frequently been explored in our previous eight housing
hearings, but today we will look at the problem from a
different angle. As you can tell from its title, ``PHA
Oversight, and How Scandals and Mismanagement Harm Residents
and Taxpayers,'' today's hearing will focus on why so many
local housing agencies fail to do the job we pay them to do,
namely, competently running our Federal housing programs. This
not only hurts residents and wastes taxpayer resources, it is
also an actual violation of Federal law. It does not suggest or
aspire to, it does not just encourage, but it actually requires
public housing authorities to provide ``decent, safe, and
sanitary housing.'' That is the obligation, but instead of
successes, too often we get horrible stories about
incompetence, mismanagement, and overt criminal fraud.
Some recent headlines from the Washington Post: ``D.C.
Overpays Landlords Millions to House the City's Poorest,'' from
February 2023. ``D.C. Residents Face Long Housing Aid Delays as
3,100 Vouchers Sit Unused,'' from October 2023; or how about
this from The Press of Atlantic City, ``Atlantic City Housing
Authority Still Struggles With Heat,'' in November 2023; or
``Public Housing Tenants Beg City Council for Action on
Atlantic City Housing Authority,'' from December 2023; and
elsewhere, ``FBI Searches the Office of Nonprofits Connected to
Little Rock Housing Authority,'' from the Arkansas Times in
January 2024. ``Corruption, Sewage, Apathy: A Federal Watchdog
on What He Saw at NYCHA,'' the New York Public Housing
Authority from the New York Times in March 2024; or who could
forget this from the New York Post: ``Seventy Current and Ex-
NYCHA Workers--New York Public Housing Authority workers--
Cuffed in Historic Decade-Long $2 Million Bribery and Extortion
Bust,'' from February 2024. I believe that is the largest-ever
bust for bribery in the history of our country.
These troubling reports all seem to have a few things in
common. First, they all involve well-known public housing
agencies in prominent places like Washington, DC, Atlantic
City, and other places, but it happens in small towns. I talked
to a mayor in Toledo who is dealing with the same kinds of
problems. Second, alarms have been sounded about these failures
multiple times to little effect. In fact, two of our witnesses
today, Mr. Slover and Mr. Doherty, even lost their jobs for
sounding these alarms. Third, local officials often ignore
these problems, and when they do reach out, Housing & Urban
Development (HUD), which oversees these public housing
authorities, often does too little too late or sometimes
nothing at all to reform these terrible abuses.
Today, we are here in an attempt to correct some of that
and to give a platform to at least two former public housing
authority employees on why some failing public housing
authorities are so resistant to reform. We welcome their
testimony, and I hope to see us use it to reinforce what should
be an obvious point. If you have a broken public housing
authority, one that is mismanaged or even corrupt, there simply
is no amount of new money that you can pour into it and expect
a different result. It is like pumping gas into a car with a
broken engine or maybe more like pouring whiskey on an
alcoholic. You are not going to get anywhere until you fix the
underlying problem.
Thankfully, there are men like Mr. Slover and Mr. Doherty
who are willing to go on record and talk about why we must fix
our public housing authorities, and we have a Congressmen, like
our colleague, Jeff Van Drew from New Jersey, who reached out
to us about the problems in Atlantic City, and, frankly, others
who have reached out about problems in their areas. They
continue to fight for their residents and for the people who
are dependent upon a safety net for a time to do what we are
paying for--decent, safe, and sanitary housing--and I look
forward to this hearing today. I look forward to hearing what
our whistleblowers have to say and collaborating with our
colleagues to address these problems. I yield back.
I now recognize the ranking member, Mr. Cleaver, from
Missouri, for 4 minutes for his opening statement.
OPENING STATEMENT OF HON. EMANUEL CLEAVER, RANKING MEMBER OF
THE SUBCOMMITTEE ON HOUSING AND INSURANCE, A U.S.
REPRESENTATIVE FROM MISSOURI
Mr. Cleaver. Thank you, Mr. Chairman, and I appreciate the
fact that you called this hearing today. I would first like to
point out that this is a hearing that is very personal to me. I
grew up in public housing myself. I know the subject
academically and experientially. I understand what it means for
a family to have access to housing that is safe, decent, and
affordable.
HUD assists nearly 5 million households through tenant-
based vouchers, project-based subsidies, and the provision of
public housing administered through public housing authorities.
Public housing has helped stabilize millions of families,
including mine, who would otherwise lack access to affordable
housing or be forced into homelessness. In the face of a
worsening housing supply and affordability crisis, it is more
important than ever that we preserve public housing programs
and, to be clear, when the housing provided to an American
family is either unsafe or indecent, it is unacceptable.
Two months before I was sworn in as mayor of Kansas City,
the Housing Authority of Kansas City, Missouri was placed into
Federal receivership where it stayed for 20 years. It was a
terrible, terrible period because we were not in charge of the
housing authority, and even though the problems occurred under
my predecessor, the issue was clear. We had a problem, and it
was not being dealt with, and even receivership made it
difficult, contentious, costly, and lengthy; so, I am very
familiar with the challenges public housing authorities face.
I would like to conclude by making two points. One-two
percent of public housing authorities right now today during
this hearing are troubled, and while there are high-profile
cases for the average resident in public housing, it is the
chronic underfunding of public housing that is having the
largest direct impact on their lives. This includes a capital
needs backlog of over $60 billion with a ``B,'' but also
includes underfunding the Agency in a way that, identified by
the HUD Inspector General (IG), inhibits the capacity of the
Agency to deliver on its growing mission and program
responsibilities. We should not minimize the impact of budget
cuts on the conditions, accessibility, and capacity to properly
administer public housing. It is the responsibility of the
public housing authority to ensure that their housing programs
are properly managed and the responsibility of HUD to hold
public housing authorities accountable.
I received an update this morning from the Agency on the
status of engagement with troubled public housing authorities.
We all have understanding concerns. There is a bipartisan
agreement that some of the failure we see at the public housing
authority is unacceptable. I appreciate that this hearing is
asking for the IG to provide and update this subcommittee on
the NYCHA, but I think we can do more than take HUD and HUD IG
recommendations and drive improvements, and I am interested in
hearing from all the witnesses on how we can support the Agency
in achieving its mission. I yield back.
Chairman Davidson. I thank the ranking member. The chair
now recognizes the gentleman from Nevada, Mr. Horsford, 1
minute for an opening statement.
STATEMENT OF HON. STEVEN HORSFORD, MEMBER OF THE SUBCOMMITTEE
ON HOUSING AND INSURANCE, A U.S. REPRESENTATIVE FROM NEVADA
Mr. Horsford. Thank you, Chairman and to the ranking
member, for holding this hearing, and thank you to our expert
witnesses for appearing before the committee. I agree with my
constituents who feel that the rent is too damn high and that
our public housing authorities have a vital role to play for
21.6 million American households spending over 30 percent of
their monthly income on rent. These are the vital issues that
we need to address today, not only the access to vouchers and
landlords who are refusing to accept them, but the impact that
it has on veterans, single households led by women
predominantly, and families who are trying to get into
affordable housing. I look forward to our full robust hearing,
and I thank the witnesses for being here today.
Chairman Davidson. I thank the gentlemen. Today we welcome
the testimony of Bill Slover. Mr. Slover is a principal at AVCO
Interests and former chairman of the District of Columbia
Housing Authority Board. We also welcome Matt Doherty. Mr.
Doherty is a former executive director of the Atlantic City
Housing Authority. We also welcome Georgi Banna. Mr. Banna is
general counsel and director of strategic initiatives at the
National Association of Housing and Redevelopment Offices,
NAHRO.
We thank each of you for taking time to be here. Each of
you will be recognized for 5 minutes to give an oral
presentation of your testimony. Without objection, each of your
written statements will be made part of the record.
Mr. Slover, you are now recognized for your opening
remarks.
STATEMENT OF MR. BILL SLOVER, PRINCIPAL, AVCO INTERESTS, AND
FORMER CHAIR OF THE DISTRICT OF COLUMBIA HOUSING AUTHORITY
(DCHA) BOARD
Mr. Slover. Thank you. Chairman Davidson, Ranking Member
Cleaver, and members, thank you for the opportunity to discuss
the impact failing public housing authorities have on housing
access. My name is Bill Slover, and I have over 30 years of
experience in public and private sectors. Today I will focus on
my 10 years of service in the D.C. Housing Authority Board,
emphasizing the challenges I faced, the rampant waste, fraud,
and abuse I saw, and the recommendations for reform.
DCHA's mandate is broad and critical, housing over 18,000
families with an annual budget of $500 million. When I was
appointed chairman in 2009, my goal was to increase access to
quality housing for DCHA's clients. Immediately recognizing the
need for fundamental change, I called for greater
accountability and improved operational and financial
management. My efforts faced quick resistance, resulting in my
swift removal as chair, ending my term without tangible
progress. Rejoining the board in 2015 as the advocate
representative, one of two independent seats on the Board, I
again pushed for efficiencies reform, better financial
stewardship from a more protected perch.
Despite my best efforts, the Agency's decline was
accelerating. By the fall of 2021, having exhausted all other
avenues, I reached out to HUD for help, resulting in a scathing
review published in September 2022, highlighting DCHA's
systematic failures through 80-plus findings that left no part
of the Agency unscathed, validating my concerns.
HUD identified five principal issues contributing to DCHA's
failure: inadequate oversight, poor management, lack of
expertise, to name a few. In short, the Agency was failing on
all fronts. Rather than addressing HUD's findings
collaboratively, the mayor and the city council's solution was
to disband the independent board that rang the alarm bells,
replacing it with 100-percent of mayoral appointees without a
single public hearing. This drastic response removed all
independent voices from the Board, sending a loud and clear
message to anyone and everyone that any attempts to get in the
way of the city's agenda would not be tolerated, and that even
independent seats on an independent agency's board could be
eliminated very easily, leaving little doubt who was in charge.
Eighteen months later, there is no evidence of reform.
Recent news highlights continued mismanagement in use of
algorithms of all things to determine rental rates. The need
for decisive intervention has become more acute. Millions of
dollars continue to be wasted, and HUD continues to be slow to
cure. Despite my experience, I am a strong believer in Public
Housing Authorities (PHAs). The structure is there. We need
better leadership. Through PHAs, HUD is the largest owner and
operator of multifamily real estate in the country. It is
important to remember that HUD does own these public housing
units and directly funds housing subsidy payments, and because
of that, they have a fiduciary obligation to make sure that
PHAs maximize the value of those resources. HUD does not seem
to understand this. Their hands-off funder approach has failed
far too long. How HUD has run its PHAs is nothing short of
total failure. In far too many instances, it has been allowed
to go on for far too long.
How long have we been talking about HUD's failures? It is
simple math. If a housing agency is inefficient, spending more
money on basic operations, fewer people get housed, negatively
impacting the entire housing space, costing more money, less
production. Translation: failure. HUD needs to reform its
management of PHAs as the current process is failing far too
often. Absent this, no amount of money pumped into PHAs will
result in measurable progress, increased access to housing.
Money will not solve what is a failure of execution compounded
by lack of oversight and accountability and leadership.
HUD should do three key things before providing any
additional funds to PHAs. HUD must revamp its management of
PHAs, creating a structure that tracks results and triggers
intervention as soon as an agency gets off track; act like the
fiduciary that it is; change the governance structure. PHA
governing bodies need to be held directly accountable to HUD
rather than local municipal leaders. HUD is conceding its
fiduciary of billions of taxpayer dollars to local governments,
which is no way to exercise fiduciary responsibility and have
resulted in very poor outcomes. Demand qualified leaders until
PHAs can execute the basic core functions of running a real
estate company, they will continue to underperform. PHAs are
complex operating businesses and need to be run as such.
I hope my experience can help inform this committee as it
considers how to best allocate taxpayer dollars toward our
Nation's housing challenges. PHAs represent a unique
opportunity for the Federal Government to participate in the
housing crisis. Real reform could have a meaningful impact on
so many people. We owe it to them to try. We need to take stock
in why housing costs are so high and production is so low and
begin to make the market corrections needed. HUD needs to be
held accountable for the money they deploy.
I will leave one last thing. DCHA is considered a high-
performing agency by HUD, and in the report that the HUD did,
they indicated that if it were not considered a high-performing
agency, it would be in receivership. I will just leave you with
that, so thank you.
[Prepared statement of Mr. Slover follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Davidson. It is an interesting data point. Thank
you, Mr. Slover. Mr. Doherty, you are now recognized for your
opening remarks.
STATEMENT OF MR. MATT DOHERTY, FORMER EXECUTIVE DIRECTOR,
ATLANTIC CITY HOUSING AUTHORITY (ACHA)
Mr. Doherty. Thank you. Thank you, Chairman Davidson and
Ranking Member Cleaver for having me today, along with the
other members of the committee. Thank you for allowing me the
opportunity to present a firsthand account of the corruption
and mismanagement I encountered at the Atlantic City Housing
Authority, ACHA, which has grievously impacted the lives of the
most economically vulnerable Americans. It is critical to
acknowledge that ACHA is not just the housing authority, it is
also the largest slumlord in Atlantic City. If they were a
private concern, they would have been put out of business a
long time ago.
After my service as mayor in Belmar, New Jersey from 2011
to 2018, and subsequent role as executive director of the New
Jersey Casino Reinvestment Development Authority in Atlantic
City, I was appointed as executive director of the ACHA in May
2023. Unfortunately, I was fired in September 2023 for exposing
the deeply ingrained corruption within the ACH board and its
vendors. I witnessed and spoke out against systemic corruption
and financial misconduct by the board and its vendors. The
leadership under chair, Stephanie Marshall, and treasurer,
Geoffrey Dorsey, has cultivated an environment ripe with
corruption that has directly contributed to the degradation of
living conditions for the residents.
I observed mismanagement involving approximately $7.4
million allocated to no-bid contracts, which brought about very
limited improvements. There were instances of invoices being
paid for uncompleted work, purchase orders with no contracts or
scope of work, contracts that were never bid out, and bids that
were rigged, exemplifying a severe disregard for procedural
norms regarding procurement. The procurement process at the
ACHA violated their own written procurement policy. A simple-
to-understand instance involved a $1,200 invoice for the labor
to install three window air conditioning units under a no-bid
contract, which I rejected. The manager who requested the work
also refused to approve the invoice because they believed it
was fraudulent. Despite this, the board overrode my decision
and proceeded with the payment.
This corruption has dire consequences for the residents,
especially concerning their basic living needs. Over the last
two winters, ACHA has failed to provide consistent heating and
hot water, and we anticipate similar failures in the coming
2024-2025 winter season. This neglect stems from a
misallocation of funds diverted away from essential services to
corrupt dealings by the Board. Procurement processes have been
manipulated to benefit the Board members, removing all
oversight from the executive director's office. This was
structured through the appointment of an external contractor,
Jerry Volpe, who was instructed by Board resolution to report
directly to the Board, further enabling their unchecked control
over financial transactions. Additionally, the Atlantic City
Council, which is supposed to oversee the ACH Board, has shown
a lack of will to act and hold hearings.
I have spoken about the fraudulent activities at the ACHA
with various law enforcement officials, including New Jersey
State Police, HUD's Office of Inspector General, the FBI, and
assistant U.S. attorneys. While I understand and appreciate the
need for them to conduct a thorough and comprehensive
investigation that supports charges leading to convictions,
this process is inherently time consuming. Given the urgent
needs of residents who are suffering under the current
management, I strongly recommend that HUD immediately assume
control of the Board and the management of the Authority.
Congressman Van Drew has also spoken about this as well. The
residents cannot afford to wait for the criminal justice system
to take action against the Board members.
In addition, I would propose a few simple recommendations
for HUD that include, first, implement strict oversight
mechanisms that empower HUD to audit and, if necessary, remove
corrupt housing authority board members and ban vendors who
commit fraud. Second, ensure that HUD and its Office of
Inspector General have unrestricted access to all housing
authority records and communications, such as emails, to
facilitate transparency and prevent further abuses. The level
of corruption at ACHA is not merely a breach of ethical
standards, but a critical failure that inflicts real harm on
the community. It is crucial that HUD takes immediate and
forceful action to dismantle these corrupt practices and
reinstate integrity and effective management at the Atlantic
City Housing Authority.
Thank you for your attention. I look forward to your
questions and the opportunity to assist in any way possible in
these reformative efforts.
[Prepared statement of Mr. Doherty follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Davidson. Thank you, Mr. Doherty. Mr. Banna, you
are now recognized for your opening statement.
STATEMENT OF MR. GEORGI BANNA, GENERAL COUNSEL AND DIRECTOR OF
STRATEGIC INITIATIVES, NATIONAL ASSOCIATION OF HOUSING AND
REDEVELOPMENT OFFICIALS (NAHRO)
Mr. Banna. Chairman Davidson, Ranking Member Cleaver,
Ranking Member Waters, and members of the committee, thank you
for the opportunity to testify today about the performance of
our Nation's public housing agencies. My name is Georgi Banna,
and I serve as general counsel and director of Strategic
Initiatives for the National Association of Housing and
Redevelopment Officials, NAHRO. NAHRO has worked for over 90
years to ensure that all families have access to safe, secure,
affordable housing in strong, resilient communities. In my
roles at NAHRO, I have had the pleasure of working with NAHRO's
2,500-member housing agencies, and there are more than 26,000
incredible housing and community development member officials
nationally. NAHRO members administer more than 3 million homes
for more than 8 million people.
Public housing agencies--PHAs--overwhelmingly administer
the public housing and Housing Choice Voucher Program
successfully and are responsible stewards of Federal taxpayer
dollars. The public housing assessment system provides a
comprehensive evaluation of an agency by measuring their
physical, financial management, and capital fund conditions.
HUD's latest data shows that 73 percent of PHAs receive a high
or standard performer designation. Only 5 percent were
designated as troubled.
PHAs are local governmental entities that represent the
communities that they serve. More than 1.6 million people live
in public housing, and more than 5 million people are housed
through the Housing Choice Voucher Program. Public housing
provides critical housing to families, seniors, and individuals
with disabilities, including over half a million children. The
vast majority, approximately 77 percent, of families receiving
housing assistance earn less than 30 percent of the area median
income. Only 4 percent of assisted families rely on welfare as
a major source of income.
PHAs effectively provide housing assistance to millions of
Americans despite consistent underfunding of HUD programs. A
significant amount of America's current public housing stock
was built between the 1950s and the 1970s. In 2010, HUD
conducted a national public housing capital needs assessment
that determined that the total backlog of public housing
capital funding was $26 billion. The report also determined
that Congress would need to appropriate $3.4 billion per year
to meet all public housing capital needs, but the backlog
continued to grow. NAHRO now estimates that the Capital Fund
backlog is over $90 billion, and although Capital Fund
appropriations have increased in recent years with all-time
highs in 2022, they have not once reached the annual capital
need amount of $3.4 billion established 14 years ago. Providing
adequate annual appropriations is critical to ensuring that
aging public housing units remain decent and safe, leading to
the long-term sustainability of this essential program.
During the recent coronavirus disease 2019 (COVID-19)
pandemic, PHA served as invaluable community hubs providing
food, healthcare, and other necessities of daily life. PHAs
embraced new technologies and modes of operation to ensure that
residents were still well served. Many PHAs quickly and
successfully implemented new waivers that provided broad
flexibilities and created new processes to ensure the health
and safety of their residents. For example, many PHAs did their
first remote video inspections and virtual eligibility and
annual income examinations that allowed them to safely monitor
unit conditions and serve the residents. When provided the
appropriate tools and flexibilities to respond through local
community needs, PHAs quickly adapt to ensure their residents
are provided critical services.
As I conclude, I ask Congress to take the following steps
to support the success of PHAs. One, increase investments in
affordable housing programs. Congress should fully fund public
housing, Housing Choice vouchers, project-based rental
assistance contracts, and community development programs to
guarantee that all families have access to safe and secure
housing. Second, streamline Federal regulations. Although some
guardrails are necessary to ensure statutory compliance, they
must allow for efficient and cost-effective operation of
housing programs so that agencies can better address the unique
needs of their community. Finally, demonstrate congressional
support for local flexibility. Congress must ensure that
housing authorities have the necessary flexibilities to meet
local needs effectively, acknowledging the importance of local
expertise and community engagement in the affordable housing
sector.
Thank you again for this opportunity to testify, and I look
forward to any questions that you may have.
[Prepared statement of Mr. Banna follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Davidson. Thank you, Mr. Banna. Before we proceed
to questions, I now recognize the ranking member, Ms. Waters,
for 1 minute for an opening statement.
STATEMENT OF HON. MAXINE WATERS, RANKING MEMBER OF THE
FINANCIAL SERVICES COMMITTEE, A U.S. REPRESENTATIVE FROM
CALIFORNIA
Ms. Waters. Thank you very much, Mr. Chairman. I am pleased
that we are having this hearing today. I am one who has worked
very hard to do everything that we can to improve public
housing. As a matter of fact, I have legislation that first
showed up in Build Back Better, and I have the Crisis Response
Act that would provide $65 billion to address the backlog of
public housing repairs that threaten residents' lives.
We know that when poor people are piled on top of each
other with not the proper resources and the deterioration that
has taken place, there are going to be problems. If you would
contact me, I will work with your representative to see what we
can do about following up on the concerns, but I do not want to
demonize all public housing. As you have said, I guess the
larger percentage of them are operating successfully. It is
only about 5 percent that we have these problems with. We
should work on correcting them but not on demonizing them. I
will yield back the balance of my time.
Chairman Davidson. I thank the ranking member. I also ask
unanimously consent to read into the record a statement from
Representative Van Drew from New Jersey.
Without objection, ``The Atlantic City Housing Authority
has failed the people of Atlantic City. The Authority has
squandered millions of taxpayers dollars through illicit no-bid
contracts that failed to deliver any results. Mr. Doherty's
testimony is a damning indictment of the illegal practices that
left our most vulnerable residents in cold, infested, and moldy
apartments. We must ensure that this never happens again. I
concur with Mr. Doherty's recommendations for greater oversight
and accountability, and that HUD assume control of ACHA. I
thank the House Financial Services Committee for working with
me to set up today's hearing and shine a light on this
appalling crisis.''
[The information referred to can be found in appendix.]
Chairman Davidson. We will now turn to member questions, so
I now recognize myself for questioning.
First of all, I would like to thank again Mr. Slover and
Mr. Doherty for coming before us today. It takes a lot of
courage to face down, essentially, a system or a machine of
local government and public housing agencies to get your
stories told. We are interested in hearing from both of you in
your own words exactly what happened and why, and, frankly,
thanks for having the moral courage to risk your livelihoods to
do the right thing.
Mr. Doherty, when you first became aware of the
mismanagement problems in the Atlantic City Public Housing
Authority, what actions did the local governments take to
address the problem and what was the result?
Mr. Doherty. When I first became aware of it was really
within the first couple of weeks of being there. I simply asked
for a list of vendors, and there was no list. I was met one
morning by two detectives from New Jersey State Police who
asked how vendors were being selected. I said I had no idea, I
just got there, but when I contacted the chair of the Board and
let her know that there were two detectives from the State
police, which is quite alarming when you show up to work, her
and the treasurer, Geoffrey Dorsey, called me back, and Mr.
Dorsey informed me that I do not talk to the police. That is
when I knew that the Authority was heading in the wrong
direction, telling----
Chairman Davidson. When did things get bad enough that HUD
became involved?
Mr. Banna. HUD became involved when I started sending them
purchase orders. I sent them one purchase order that had no
contract, was never bid, for $200,000 that had no scope of
work, and it was not done during any emergency period. I sent
it to them, and it literally went into a black hole. I followed
up and they said we would be asking for additional information,
and nothing ever came of it.
Chairman Davidson. Do you think they would have even done
that if you had not pressed the matter?
Mr. Doherty. No.
Chairman Davidson. That is disappointing. Mr. Slover, as
you were pointing out that the D.C. Public Housing Authority
gets a passing grade and higher praise than that by HUD, it
sort of reminds me of a school system where everyone gets an A
or you can pass people on to the next grade because they are
proficient in math or reading, and then when they graduate,
they cannot read or do math. I think that is the concern with a
lot of D.C. public housing authorities. I sent a letter in
December to HUD Secretary Fudge on what I called the
``unacceptable and inhumane conditions of the D.C. Public
Housing Authority.'' Public housing authorities do have this
obligation under law to provide ``decent, safe, and sanitary
housing,'' so it is not debatable. Why do you think public
housing authorities and HUD are not upholding the law?
Mr. Slover. That is a great question. It is hard to
understand what the answer to that could be because we
basically have 6,000-plus public housing units left in the
District of Columbia. I think everybody wants to talk about how
housing authorities are underfunded. I think that is the
continued sort of comment--``underfunded, underfunded,
underfunded.'' My point is when you are wasting millions and
millions and millions of dollars, as an example, the capital
budget for D.C. Housing Authority is $32 million. The amount of
money that makes it to capital projects was $2 million in 1
year because all the money gets scraped away. It gets used for
pet projects, for the police force, for other things, and so it
is gross mismanagement and failure to understand what the
mission of the Agency is and being dragged by local
jurisdictions who want a different outcome. They are not so
interested in zero to 30 percent of area mean income. They are
interested in supporting their own housing desires, but they do
not have the resources to do it. So they use the local agency
to do it, and what does not get served is the clients and
residents of public housing. They become a secondary thought.
Chairman Davidson. Yes. Thank you, and I think the number
of unused, unoccupied units here in DC really sounds the alarm.
I think the other thing we did not mention is the voucher
system because the public housing system was not working as
well, so we have areas that have used some of these very
effectively, and even that system has failed. I just cannot
stop thinking about 70 current former employees of NYCHA,
single largest public housing authority in the Nation, arrested
in a massive Federal sting operation. Charges involve more than
$2 million in bribes taken over 10 years, nearly one-third of
NYCHA's developments. The New York Times called it ``the
largest number of Federal bribery charges the Department of
Justice (DOJ) has ever handled in a single day.'' These arrests
follow the conviction of 12 vendors who pled guilty in 2021 to
paying bribes to NYCHA employees.
If you look at the reporting on this; we need to give far
more attention to it. I look forward to the future testimony of
our inspectors general, and I now yield 5 minutes to the
ranking member from Missouri, Mr. Cleaver, for 5 minutes.
Mr. Cleaver. I want to make sure that I am clear in the
ambiguity in what I say. If somebody is stealing money, they
ought to go to jail. I do not care if it is public housing or
public bathrooms, they go to jail. I am always, and I said to
myself this morning in the shower I was not going to take
anything on a personal level because I lived in public housing,
and then I ran a public housing at least for 2 months before it
went into receivership. I know how it runs and I know how it
operates, and I do not think anybody that I know is going to
say, ``Well, let us keep the corruption going in public
housing.'' Nobody is going to say that but let me also be
clear. Funding does matter, and for us to suggest that funding
does not matter, it just does not compute because if housing is
collapsing in and there are problems in public housing that
cannot be fixed otherwise, those problems do exist.
I mean, I do not think anybody living in public housing got
equipment when they started knocking down walls and tearing up
furnaces. Those things get old and they have to be replaced,
and they often are not replaced because there is not enough
money. I am not telling you what I heard. I am not telling what
I read in a sociology book. I am telling you what I have seen
and experienced. I lived in 405, Unit B, for 7 years, and the
people who lived there wanted to live under the best
circumstances they could because that is what we want to do in
our country. Right now, Mr. Banna, what tools do we have in HUD
that you are aware to deal with these issues?
Mr. Banna. Thank you for the question, Ranking Member.
There are mechanisms in place for oversight of housing
authorities. There is the Public Housing Assessment System,
which does evaluate housing authorities at various levels and
provides a score. It does not look at the condition of the
properties. It looks at their financial condition, their
management condition, and their capital fund conditions. Those
mechanisms are in place, and agencies receive scores on,
generally, an annual basis, and based on those scores,
continued and additional oversight, if necessary, is provided
by HUD. There are mechanisms in place that currently do provide
that oversight from the HUD level to the local housing
authority.
Mr. Cleaver. Mr. Doherty, so I am assuming that the
problems you noticed or that there were in your community with
public housing, once it was brought to the attention of
officials, that the proper law enforcement agencies were
brought in and that any other problems existing in public
housing in terms of how people lived, that was also addressed.
Mr. Doherty. Thank you for the question. Law enforcement
was brought in, but what unfortunately happened is while law
enforcement is actively seeking evidence to prosecute, at the
same time, people are suffering. If HUD Office of Inspector
General (OIG) could communicate with HUD and say, look, we have
an active investigation and we think this is going somewhere,
that should trigger something in HUD to say, all right, let us
take a look at this authority and take it over so that people
no longer have to suffer through terrible living conditions.
I will give you one example. Last year, because the
procurement process was so terrible, there was no extermination
for roaches and mice for about 7 weeks during the summer. Now,
if you have lived in public housing and you do not exterminate
for that long, particularly in the summer months, you know that
you are going to get a terrible infestation. There were people
living in those conditions, young families, seniors, children
living in deplorable conditions because the procurement was so
inadequate and was done improperly. Again, law enforcement is
involved, and they should be involved, but I think it is time
that HUD takes it over and improves the conditions of the----
Mr. Cleaver. With what money?
Mr. Doherty. Pardon me?
Mr. Cleaver. You said it would be time for HUD to take it
over. With what money?
Mr. Doherty. I would say HUD should take over the
governance of the Board----
Mr. Cleaver. I know. Okay. With what money?
Mr. Doherty. Sir, the Board is----
Mr. Cleaver. I appointed a board. I know how it is. I want
to know what money is going to be used to make the improvements
necessary.
Mr. Doherty. I do not have an answer to that question, sir.
Mr. Cleaver. Thank you, Mr. Chairman.
Chairman Davidson. The gentleman from Wisconsin, Mr.
Fitzgerald, is now recognized for 5 minutes.
Mr. Fitzgerald. Thank you, Chair. I want to talk about the
city of Milwaukee. HUD reports in December 2022 and April 2023
showed the Housing Authority of the city of Milwaukee was at
risk for fraud and abuse and allegedly mismanaged millions of
dollars. In May 2023--that may be some of the dollars we were
just talking about--HUD deemed some of the Housing Authority's
programs, including the Section 8 Program, ``troubled.'' In
recent years, residents have come forward and expressed
complaints about bedbugs, rat infestations, apartment break-
ins, and mold. For its financial conditions, the Housing
Authority scored zero of 25 points. The physical conditions of
its properties, too, received a poor grade, scoring just 26 of
40 points.
HUD recently ordered the Housing Authority to hire an
outside agency, the Department of Neighborhood Services, to run
inspections of the Housing Authority's more than 4,000 units.
HUD also ordered the Housing Authority to bring in an outside
vendor to help the Section 8 office go through every single
participant in the Housing Choice Voucher Program and make
corrections if needed. While leaving the Housing Authority as
the administrator, which is key in this discussion, I think,
after that, Department of Neighborhood Services (DNS) had the
ability to fine and hold the Housing Authority of the city of
Milwaukee accountable.
Mr. Slover, Mr. Doherty, you have both mentioned so far
today kind of a need for more direct accountability to HUD. Let
me ask you first, Mr. Slover, is this a situation where HUD
should have stepped into the Milwaukee situation sooner, and is
this typically what you see in other larger metropolitan areas?
Mr. Slover. No, absolutely, HUD needs a quicker trigger.
They wait way, way, way too long, and by the time they get
there, the damage is so bad that it is really hard to unwind,
and then they do not even do it then.
Mr. Fitzgerald. Very good. Mr. Doherty, would conditions
that I just described in Milwaukee be more likely to be
improved if the Authority or its vendor were held accountable
directly to HUD?
Mr. Doherty. No. If there were more accountability and more
enforcement, I think you would see improved living conditions
for the residents in public housing.
Mr. Fitzgerald. Then, the question to both of you, how can
Congress, how can those of us sitting in this room right now
kind of refocus the accountability of public housing agencies
to HUD for greater accountability for tracking and the
reporting and the achieving results because what I think many
Members of Congress find frustrating is this problem is so
massive across the country right now. It is hard to figure out
what can we do to specifically target something.
Mr. Slover. I will take a shot at that. There are 3,000
public housing agencies in the country. Again, it is the
largest real estate operating business in the country. The
largest private landlord is you. You are right there, but you
do not run it that way. You run it as if you are sending money
and do not really care what happens. I do not want to say
``care,'' but there is no demand for a return on the
investment. There are plenty of models out there. There are
franchise models, there are business models, there are many
models of accountability. When someone checks into the Days Inn
in Austin, Texas, they know how much that room rate was, and
they know what their profit was. The technology exists.
This government and this Agency, HUD, does not want to know
that level of information because then we have to really
start--Accountability is a really difficult thing, and it is
going to be a very difficult road, but we have to start because
the results are just ineffective. Again, it is not a money
problem. It is an execution problem. There is a saying out
there, 20 percent idea, 80 percent execution. We do not have
any execution capacity within this vast enterprise.
Mr. Fitzgerald. Very good. Mr. Doherty, do you have a
comment on that front?
Mr. Doherty. I think Bill handled that really well, so I do
not want to answer.
Mr. Fitzgerald. Very good. Thank you. I yield back.
Chairman Davidson. I thank the gentleman. The chair now
recognizes the ranking member from California, Ms. Waters, for
5 minutes.
Ms. Waters. Thank you very much. I would like to direct
this question to Mr. Doherty. You were the mayor. Did you have
an appointment to the Board when you were mayor?
Mr. Doherty. Yes, ma'am.
Ms. Waters. How many appointments did you have?
Mr. Doherty. Just to be clear, I was mayor of my town in
Belmar, but I served as the executive director for the Atlantic
City Housing Authority. When I was mayor in Belmar, I had one
appointment to the Board.
Ms. Waters. You had how many appointments?
Mr. Doherty. One appointment as the mayor.
Ms. Waters. One appointment, and so who selects the head of
the Housing Authority? What is your understanding of how one
gets to be the director, the head of a housing authority?
Mr. Doherty. Yes, ma'am. In New Jersey, under State
statute, every housing authority has 7 members. Five are chosen
from the Council, one from the mayor, and one from the
Department of Community Affairs, which, ultimately, is the
Governor. Those--
Ms. Waters. How is the executive director?
Mr. Doherty [continuing]. Those 7 do a search for an
executive director, and the Board appoints an executive
director by resolution.
Ms. Waters. Does the mayor have any responsibility in that
appointment at all? Is the City Council involved with that
appointment, or is it simply done by the Board of the Housing
Authority?
Mr. Doherty. By the Board of the Housing Authority.
Ms. Waters. So, knowing what you know, would you propose to
change the way the makeup of the Board takes place and involves
the City Council and the mayors more?
Mr. Doherty. No. The mayor and council only appoint the
Board, and they have oversight over the Board as well.
Ms. Waters. I beg your pardon?
Mr. Doherty. The Council appoints 5 members of the Board,
and they have oversight for the Board, so it is a whole----
Ms. Waters. Okay; so, that is the City Council?
Mr. Doherty. Yes ma'am.
Ms. Waters. Okay, tell me, when you were mayor, what you
did working with the City Council to deal with the issues that
you are bringing here today.
Mr. Doherty. Again, ma'am, when I was mayor in Belmar, we
had a very small housing authority, only 46 units, all seniors.
I was the executive director at the Atlantic City Housing
Authority, two completely different towns.
Ms. Waters. Okay. That is different, but even when you were
mayor, what did you do in this small town working with the City
Council and the mayor about the oversight of public housing?
Mr. Doherty. Fortunately, in Belmar, we had a very well-
run, public housing authority. There was minimal oversight. We
worked together. They were not in a troubled status. They
performed well.
Ms. Waters. So, because that was well run and having been
the executive director of another, you saw the difference?
Mr. Doherty. Yes, ma'am.
Ms. Waters. The difference that you saw has been discussed
with, worked with the mayor and the City Council?
Mr. Doherty. Everything has been brought up to the mayor
and City Council, yes, ma'am.
Ms. Waters. Not just brought up, but the City Council as a
vote, and they have some authority, and they have some
responsibility. What did you do, working with the City Council,
the elected officials, about the problems of the housing
authority that you were executive director of?
Mr. Doherty. I both spoke privately and publicly at an
Atlantic City Council meeting and asked them to hold hearings,
and they had refused.
Ms. Waters. Did they hold the hearings?
Mr. Doherty. No, ma'am.
Ms. Waters. When they did not hold the hearings, what did
you do?
Mr. Doherty. I kept pushing as much as I could. I talked
with the Congressman who represents Atlantic City, Jeff Van
Drew. I reached out to our United States senators, including
Bob Menendez, who himself has also called for HUD to take over
the Atlantic City Housing Authority, and now I am here in front
of you today, ma'am.
Ms. Waters. Given the knowledge, both from a mayor's
standpoint and from executive director's standpoint, what do
you advocate in terms of helping to get better oversight and
supervision? What is your advice?
Mr. Doherty. On a micro scale, when it comes to the
Atlantic City Housing Authority, I advocate for HUD to take
over the Board and management of the Authority immediately, and
on a grander scale, for HUD to have more oversight and also to
have more authority into housing authorities. One of the things
I have learned through this process, which was quite eye
opening and makes no sense to me, is that HUD, including HUD
Office of Inspector General, have no authority to look at
emails on housing authority servers. These housing authority
servers are paid for by HUD with Federal dollars, and they are
not granted access to those email servers.
Ms. Waters. Thank you. I yield back.
Chairman Davidson. I thank the gentlewoman. The gentleman
from New York, Mr. Lawler, is now recognized for 5 minutes.
Mr. Lawler. Thank you, Mr. Chairman. Housing affordability
is a serious crisis in our Nation right now. We are well over
6.5 million units underbuilt at the moment with mortgage rates
at multidecade highs, limited supply, and continued supply
chain and construction issues. For many, it is the most
difficult time to purchase a home in a generation. These, among
other factors, have forced many potential home buyers into the
rental market, driving up rental demand and prices with it.
This topic is critical, which is why we need to be working
together as elected officials, government agencies, nonprofit
organizations, local stakeholders, and key figures from
industries like real estate development and construction and
insurance. At such a crucial time with so many families
struggling to get by, so many vulnerable and low-income
Americans are relying on access to decent, safe, and sanitary
housing from public housing authorities.
The New York City Housing Authority, NYCHA, is by far the
largest public housing authority in the Nation, consisting of
almost 180,000 apartments. As such, it received over $2.8
billion of Federal funding in 2023 through a range of different
Federal programs. Yet despite the funding and all the money
poured in from the State and local sources, NYCHA has exhibited
a complete and total failure to adequately house New Yorkers.
Go to many of these locations or read the reports from
advocates about the horrific conditions of many of the
Authority's units: reports about mold, apartments freezing cold
during winter and scorching hot during summer, infestations of
pests and rodents, and a host of life-threatening safety
violations. Meanwhile, as the chairman alluded to, NYCHA just
saw the largest number of Federal bribery charges the DOJ had
ever handed out in a single day resulting from millions in
bribes. This is from a Housing Authority that already has a
Federal monitor resulting from their failure to adequately do
their job, and while NYCHA may be arguably the biggest and
baddest offender, these issues are reflected nationally in
public housing authorities.
Mr. Slover, HUD is the Federal Agency tasked by statute
with funding and overseeing public housing agencies and has
many tools to conduct supervisory and enforcement actions. Do
you believe HUD was properly overseeing DCHA or responsive to
issues that have been known and reported on for many years or
even prior to the audit report?
Mr. Slover. Actually, I am the one who had to call HUD
because I spent over 3 or 4 years elevating issues, getting the
Board to discuss them, getting articles written in the
Washington Post and every other newspaper in the city. I
finally reached out to HUD and basically begged them to come
in. They came in 9 months to issue their report, and, again, a
year and a half later, there is no meaningful reform at the
Agency, and again, it is still considered a high-performing
agency. Absolutely, funding it makes zero sense that an agency
that has a 25 percent vacancy rate, 25 percent collection rate,
they have a vacancy of 25 percent.
Mr. Lawler. In your opinion, are there additional
authorities or tools that Congress should consider in order to
compel HUD to act sooner and more effectively with respect to
troubled PHAs?
Mr. Slover. I think the problem is, as I articulated in my
testimony, that HUD does not consider themselves a fiduciary.
We keep talking about oversight, oversight. This is not an
oversight matter. This is management. Oversight would lead you
to believe that they are just there to make sure everything is
okay. This is an operating business. I do not think the
government runs any other operating businesses. Maybe the U.S.
Mint. They make money. They sell it, right? This is an
operating business. That is the thing that I do not think is
resonating here.
It is almost like you have to, I hate to use the word
``authority,'' to manage an authority problem, but it is almost
like you have to take these public housing agencies out of HUD,
spin them out into something that has accountability. It is its
own Profit and Loss (P&L). If I am going to give you X billion
dollars, I want to see what the result is.
We do not have that today. We have the technology, we have
the ability, but there is nobody who wants that information
apparently. Everybody wants to talk about housing
affordability. We are not even talking about affordable housing
here. We are talking about subsidized housing. They are very
different things. We cannot even get our subsidized housing
correct. Imagine what affordable housing problems we have and
do subsidize.
Mr. Lawler. To that end, can you just briefly in the time I
have left share some examples of how families living and
housing provided by DCHA have been impacted from a health and
safety perspective?
Mr. Slover. I am currently a receiver for the D.C. Superior
Court. I have a thousand units in Washington D.C. I run through
receivership. The D.C. Housing Authority properties are all,
without question, in worse condition. The business is not run
well. The capital budgets are not spent well. We overspend on
the Voucher Program. We do everything possible to----
Chairman Davidson. The time of the gentleman has expired.
Mr. Slover [continuing]. and not manage this process.
Chairman Davidson. The gentleman's time has expired. The
gentleman from Nevada, Mr. Horsford, is now recognized for 5
minutes.
Mr. Horsford. Thank you, Chairman and Ranking Member. As a
country, the National Multifamily Housing Council estimates
that we need to build an astounding 4.3 million new apartment
units in the next 10 years to keep up with demand. That is only
to keep up. Even at that pace, we would not even begin to deal
with the shortfall that renters face today. Yet in the face of
this daunting challenge, our public housing authorities remain
dedicated to expanding affordable housing resources to all who
need it. Now, I understand that the other side might want to
focus on what does not work, but I would like to focus on what
does and use it as a model for replication.
The Nevada Rural Housing Authority has been using unique
public-private partnerships to bring safe, clean, and
affordable apartments to portions of the State in rural Nevada
that have faced decades of neglect.
I ask unanimous consent to enter into the record of MOAPA
Valley Progress article from April 30 titled, ``Grand Opening
of Hafen Village.''
Chairman Davidson. Without objection.
[The information referred to can be found in the appendix.]
Mr. Horsford. Also, I would like to share one of the
resident's experience, June Jones, who moved into a 1-bedroom
apartment at Hafen Village. She said, ``It is so peaceful here
and quiet. I do not have to worry about traffic or crime or
overcrowding. I am just so glad to be here.'' This is part of a
96-unit project, the largest to date to be built by the Nevada
Rural Housing Authority. It offers 1-, 2-, and 3-bedroom units
ranging from 680 square feet to over 1,100 square feet. The
units feature patios and balconies, attractive kitchens and
baths, beautiful flooring, extra storage space, and air
conditioning. The common spaces offer picnic areas, a dog park,
a community garden, children's playground, computer lab,
library, laundry room, fitness facility, and an entertainment
space with kitchen.
It is not just an apartment, it is a home. It is a home
with dignity, and they have done it the right way. It was only
made possible, though, through years of work by our State's
housing authority, community banks, developers, various
nonprofits, and essential funding from the Federal Home Loan
Bank of San Francisco. It was their shared commitment to
providing rural Nevadans an affordable and safe place to call
home that made this partnership work. This is who we should
have testifying today.
Mr. Banna, as we have had consistently and adequate funding
at the Federal level to increase the construction of affordable
housing, we have seen an increase in PHAs that are turning to
innovative and new partnerships to serve their residents. In
your experience, how can effective partnerships, both with
private developers and local municipalities, maximize a public
housing authority's ability to deliver new, affordable units in
the face of continued funding cuts?
Mr. Banna. Thank you, Representative Horsford. Excellent
question. I think housing authorities, these are a key partner
in many housing developments to again, tackle that lack of
housing supply that we have now. We need all hands on deck,
more partners, more cooperation. Also, by housing authorities
being part of that partnership and local communities, private
industry, additional resources do come to the table through
those partnerships and then working with the public side of the
partnership as well. There are other advantages at the local
level as well.
Mr. Horsford. Thank you.
Mr. Banna. This is a time for all to be at the table so
that we can tackle the lack of housing supply----
Mr. Horsford. Thank you very much. It is great to know that
our public housing authorities are able to do what is necessary
to carry out their vital mission. However, public-private
partnerships do come with their own challenges, namely an
inherent lack of transparency and accessibility surrounding
data collection. Tenants searching for affordability periods of
specific buildings within the Low-Income Housing Tax Credit
Program have nowhere to look as no centralized public database
exists presently. This means that tenants could be unaware of
impending rent increases until they are notified by their
management. That is why today, I am introducing along with the
ranking member, Mr. Cleaver, the Housing Market Transparency
Act to allow the collection and consolidation of critical data,
such as habitability standards, recent inspection information,
ownership status, development costs, and more.
We all know we have an affordability housing crisis in this
country, but the only way to understand the magnitude of the
crisis is to get a holistic view of our current affordable
housing stock. By centralizing this information at HUD,
researchers, regulators, advocates, and administrators will be
able to make affordable housing development programs more
efficient and keep tenants well-informed. That should be at the
center of our housing policy. I yield back.
Chairman Davidson. I thank the gentlemen. The gentleman
from New York, Mr. Garbarino, is now recognized for 5 minutes.
Mr. Garbarino. Thank you, Chairman, thanks to the ranking
member for having this hearing, and thank you to all the
witnesses for being here. I will say, housing authorities, some
of them are very, very well run. We have a couple on Long
Island where I am from, a couple in my district that have done
a great job, but we also have some that have issues.
Specifically, I want to talk about the latest scandal that
hit New York City's Housing Authority, NYCHA, which led to 70
current and former NYCHA superintendents and staff being
arrested for allegedly pocketing bribes in exchange for
granting no-bid or micro-contract repair work. This 10-year, $2
million classic pay-for-play corruption scheme was the largest
number of Federal bribery arrests brought in a single day in
DOJ history and included public housing employees at
developments in every borough. Unfortunately, we have seen
consistent examples of waste, fraud, and abuse at many other
housing authorities across the country, ranging from multiple
NYCHA examples to the FBI's years-long investigation of missing
and unallocated funds of the Little Rock Public Housing
Authority.
Mr. Doherty, to speak more generally, why do these types of
problems appear to be so widespread and persistent for so long?
Mr. Doherty. Thank you for the question. I could tell you
that well-run housing authorities far outnumber poorly run
housing authorities, but housing authorities should be well
run. It is serving the most vulnerable population in this
country, and it is such a basic need to have decent, clean,
healthy housing. What I am really here to highlight is the
Atlantic City Housing Authority. Next door to us is the
Pleasantville Housing Authority. It runs great. There is no
reason why a housing authority should not run well, no matter
what the scale, whether it is the smallest one or the largest
one. They all should be running well, and if they are not, that
is when HUD should either exercise its ability to take it over
while law enforcement is researching and prosecuting corrupt
practices, but the focus really needs to stay on the residents
that are supposed to be served by the housing authorities.
Again, I would just reiterate, housing authorities should
be running well. Most of them are. The real focus needs to be
on the ones that are not because it is residents that are
suffering because of it.
Mr. Garbarino. Yes, and I agree with you. A lot of them do
run well. In my previous life as an attorney, my firm
represented a housing authority, and the smaller ones seem to
run great, but we have had the New York City Housing Authority
with thousands and thousands and thousands of people.
Unfortunately, it is usually the residents that are being hurt
by all the corruption that happens there.
Following the NYCHA incident, Department investigations
released more than a dozen recommendations for the Housing
Authority to implement. Of those recommendations, three were
repeat recommendations from a 2021 incident, in which 9
contractors were charged with bribery, following another scheme
that took advantage of the micro-contract process. The
recommendations include shifting responsibility for approving
micro-contracts to NYCHA centralized staff instead of building
superintendents, as well as identifying cost estimates for
common, repeat no-bid repair jobs, making it easier to spot
pricing anomalies. However, NYCHA ultimately rejected these
recommendations and appeared to continue with its ways.
Mr. Slover and Doherty, in your opinion, what can be done,
and you touched a little bit, Mr. Doherty, in your last
comments, what can be done to hold public housing authorities,
especially repeat offenders, more accountable for failures to
make meaningful reforms? I know, Mr. Doherty, you just said HUD
could take over for a little bit, but what other ideas are
there?
Mr. Doherty. I just think it is a repeat theme, which is
there has to be some sort of expectation and accountability to
the money from the beginning. In other words, HUD should not be
coming in and going, oh my god, something happened here. They
should know on a day-to-day basis what their money is being
used for and whether that is being successful so you can course
correct midstream versus 2 or 3 years after the fact. If HUD is
still making recommendations to NYCHA, after all we have read
about NYCHA for the last 3 years, do you not think that is a
little bit odd? They should not be making recommendations
anymore because, clearly, they are not listening and, so----
Mr. Garbarino. Here is the question. I mean, the governance
structure, how do we change it? How do you change the
governance structure?
Mr. Doherty. You change the governance structure by saying
you do not report to the mayor, to the Council, to whomever. It
is not their money. It is HUD's money. HUD is doing zero to 30
percent of area mean income. Local jurisdictions typically do
not do that work. That zero to 30 percent is what the Federal
dollars are for, so they should be focusing 100 percent of
their attention on that, and so, again, it needs to be an
operating business that reports to HUD, not to a local board.
Mr. Garbarino. I yield back. Thank you.
Chairman Davidson. I thank the gentlemen. The gentlewoman
from Massachusetts, Ms. Pressley, is now recognized for 5
minutes.
Ms. Pressley. Thank you to our witnesses for joining us
today. I want the record to reflect that under this Republican
majority in the 118th Congress, colleagues across the aisle
have been trying to defund climate investments, diversity,
equity, and inclusion initiatives, the Consumer Financial
Protection Bureau, and now public housing. I am not sure what
they actually want to fund.
Public housing is a lifeline for millions of families,
especially our elders, people with living with disabilities,
working families with children, and in many communities, there
is no other source of housing more affordable or readily
available to low-income households than public housing, and
that is important to recognize. Being low income, being poor is
certainly not a character flaw. Being poor is the hardest job
you will ever have. It has nothing to do with work ethic or
character. It is usually because of broken systems and
shortsighted or failed policies. Everyone is deserving of more
than just shelter or housing. They are deserving of a home, a
place where when you open the door, you feel a sense of
belonging and refuge and safety away from the pressures of the
world.
The chronic underfunding of public housing is a disgrace to
our values, and it has real consequences. I have constituents
in my district, the Massachusetts 7th, living in households
with backed-up raw sewage, rat infestations, dark hallways with
broken lights. A father recently explained to me how black mold
in his apartment endangered and actually resulted in his child
having severe asthma, so much so that they would rather sleep
in their car instead of in their apartment. This is shameful,
and it is preventable. This committee can and should and must
take decisive action on improving the quantity and quality of
public housing.
Mr. Banna, from your perspective, why have we not seen the
investments that we need to address the housing crisis?
Mr. Banna. Investment is needed. It is critical for both
the preservation and for the development of new units. I think
a choice has been made and decisions made to, again, with
limited resources fund where those funds will go. I think the
housing crisis that we have, the lack of affordable units that
are currently in the system, there is a need to focus on
affordable housing and reinvest into affordable housing; so
again, that all Americans may have that home that you
mentioned.
I think it is critical that we focus and, one, to preserve
the hard units, the locally owned units----
Ms. Pressley. Thank you.
Mr. Banna [continuing]. and to develop new units.
Ms. Pressley. Thank you. Massachusetts, the third most
expensive State to live in across the United States, we have
over 180,000 people on a wait list for subsidized apartments,
and yet thousands of units remain empty. The primary reason for
this is chronic underfunding, which has delayed repair,
renovation, and the hiring of necessary staff. Mr. Banna, given
the many problems with public housing and the thousands-long
wait list, can you outline how families are impacted when both
HUD and public housing authorities are chronically underfunded?
Mr. Banna. An example in the Housing Choice Voucher
Program, approximately only 1 in 4 eligible families receive a
housing voucher to be used in the private market. The limited
resources lead to longer waiting lists both in the public
housing and the Housing Choice Voucher Program, and, again,
without the resources to provide and develop new units, the
waiting lists only grow longer that directly affects our
residents and families.
Ms. Pressley. I want to just also say since housing is not
only about health outcomes and economic and social mobility,
but it is also about dignity. When you walk into a space that
is eroding in real time around you, it takes a toll on your
psychological well-being. You feel invisible and that your
government does not think you are worth investing in, so this
is also about dignity. Many public housing authorities have
turned to the Rental Assistance Demonstration Program in the
face of congressional inaction. This program converts public
housing units into privately managed Section 8 housing. Roughly
10 percent of our public housing stock nationwide has been
converted through Rental Assistance Demonstration (RAD), often
taking place with little government oversight. Instead of
compromise programs like RAD, we have to ensure that HUD and
public housing authorities have the funding and the staffing
they need to repair and renovate public housing while ensuring
the health and safety of public housing residents. Thank you,
and I yield.
Chairman Davidson. I thank the gentlewoman. The gentleman
from Nebraska, Mr. Flood, is now recognized for 5 minutes.
Mr. Flood. Thank you, Mr. Chairman. I would like to start
by thanking our witnesses for your testimony today. The cases
of the D.C. and the Atlantic City Housing Authorities are
deeply disturbing, and I have a number of questions on how
Congress can best prevent cases like this from happening again.
Mr. Slover and Mr. Doherty, please help me clarify what
authority does HUD has to intervene and address malpractice and
fraud at public housing authorities, and, specifically, what
tools do they have at their disposal to make changes at
individual PHAs?
Mr. Doherty. HUD does have the ability to take over a
housing authority. It did it recently in Irvington, New Jersey
where they disbanded the Board, took over complete management,
terminated the executive director, and put it into receivership
to turn that Housing Authority around; so, it does have the
ability to do it. It just seems as though the process to get
there seems longer than it should be, and until they get to
that point of taking over and putting in receivership, the
residents continue to suffer on a regular basis. There is a
mechanism there. It is, as Bill mentioned before, pulling the
trigger sooner to take over the housing authority.
Mr. Flood. Mr. Slover?
Mr. Slover. Yes, I would agree with that. The D.C. Housing
Authority was taken into receivership about 20, 25 years ago
through D.C. Superior Court. It came out of receivership and
was basically put back on the same trajectory. It began because
the Board that is now running the agency is majority controlled
by the mayor. Again, I keep elevating it back to the same
place, which is that without lines of accountability, without
an understanding that PHAs are a subsidiary of HUD, not an
adjunct development company for a city. In other words, the
cities who take advantage of it use it for their disposal
versus what HUD's mandate is. They are getting away from the
zero to 30 percent of area mean income.
HUD needs to run PHAs as if they are the owner and operator
of those businesses. That is not what they do today, and the
results are what you get. That is why I am talking about,
funding, we do not know if funding is the problem because just
at the D.C. Housing Authority, I watched millions and millions
and millions of dollars wasted on contracts, consulting fees,
this, that, and the other thing. We have no idea what it costs
to run that business.
Mr. Flood. If you could go back and waive a wand at the
D.C. Housing Authority, what should have HUD done, when and how
and how fast and how extreme?
Mr. Slover. There are basic metrics, basic metrics of
occupancy and rent collection. Those are the two easiest things
to monitor. As soon as they went below 90 percent, they should
have come in. We went down to 70 percent, and they still have
not come in.
Mr. Flood. Come in and do what?
Mr. Slover. They got to come in and say why is the
occupancy low. Why are you doing this? Why are you doing this?
Put them on a PIP, a performance improvement plan.
Mr. Flood. Do those work?
Mr. Slover. In the private sector, they do. The private
sector comes in, and they do not tolerate mismanagement because
the money walks. The problem with this business is it is the
biggest subscription business in the world. The money just
keeps coming in, and the results do not happen and the money
keeps coming and so, what is the compelling reason to improve?
Mr. Flood. Can HUD come in and fire people and assume
control?
Mr. Slover. That is the thing. HUD owns this business,
again, getting back to my testimony, which is to say it needs a
complete reorganization. Right now, it is a local jurisdiction
issue: the local board this, the independent that. It is not
working. On enough places, it is impacting.
Mr. Flood. I appreciate that. There is one more question I
want both of you to answer, and that is, you were both fired
from your positions after reporting examples of mismanagement,
fraud, and corruption. Are there any relevant whistleblower
protections for people working in PHAs? Is that something
Congress should consider, Mr. Doherty?
Mr. Doherty. There are no protections that I know of, but I
would imagine, yes, that is something that Congress certainly
should consider.
Mr. Flood. Mr. Slover?
Mr. Slover. Absolutely. The mayor, through emergency
legislation, reconstituted the Board and removed my independent
seat. This is an independent agency that she is not supposed to
have control of, and yet they were able, within 2 weeks, to
remove my seat, so that is not an independent board.
Mr. Flood. Thank you both for your testimony, and I yield
back.
Chairman Davidson. I thank the gentleman. The gentlewoman
from Michigan, Ms. Tlaib, is now recognized for 5 minutes.
Ms. Tlaib. Thank you all three of you for being here, and
thank you, Chair, for this important hearing. I want to start
off, and I know some maybe have brought this up, but the PHAs,
it is understatement, are facing decades of underinvestment. Do
you have any idea how much underinvestment we are talking
about, Mr. Banna?
Mr. Banna. Thank you for the question. NAHRO does estimate
that the current capital fund backlog is over $90 billion.
Ms. Tlaib. Yes, $60 to 90 billion. Those are the amounts.
Did you know that Mr. Doherty?
Mr. Doherty. Yes. I would imagine that it is severely
underfunded, which was also what made it more frustrating for
me----
Ms. Tlaib. Yes.
Mr. Doherty [continuing]. because we had limited resources.
Ms. Tlaib. Sure.
Mr. Doherty. To see those resources not going to benefit
the residents made it even that more challenging.
Ms. Tlaib. In terms of oversight and accountability, while
our witness' testimony discuss an important role of HUD, HUD's
OIG, PHA board's role in oversight, there is one group that has
not received as much attention, and those are the PHA residents
and voucher holders themselves. Today the Public Housing
Assessment Scoring System is based on four categories: physical
conditions, financial conditions, management operations, and
capital fund usage. Until 2011, the Public Housing Assessment
System also included an additional category, which was the
resident assessment subsystem, or what they call, I think, RAS?
Is that correct? All three of you, are you familiar? Just nod.
That is fine.
[Witnesses respond by nodding.]
Ms. Tlaib. Okay. You are not familiar with it, Mr. Doherty?
Mr. Doherty. No.
Ms. Tlaib. Okay. This category assessed residents, whether
or not they were satisfied in a number of areas, including
maintenance and repairs, communication, safety, services, and
housing property appearance. Should HUD bring back a resident
assessment category, and, if so, are there any changes--and,
Mr. Banna, we will start with you--would make it or it is
weighting overall PHA scores?
Mr. Banna. There currently is a resident component to,
generally, board membership. There is usually a resident
commissioner at the agency as well.
Ms. Tlaib. So, they have no input, the residents.
Mr. Banna. On the Public Housing Assessment System (PHAS)
system, the RAS, the resident subsystem, currently is not part
of that. The management and through occupancy is one way that
the residents can speak. Again, if the units are not occupied
is one way of having the resident input but housing authorities
regularly hold their public meetings a lot of times----
Ms. Tlaib. Yes. No, no, but do they get any input in
scoring? Do they----
Mr. Banna. Not at this time
Ms. Tlaib. No.
Mr. Banna. Not directly.
Ms. Tlaib. Last year, HUD updated its physical inspection
process with the New National Standards for Physical Inspection
of Real Estate System as part of the so-called, what is it,
NSPIRE--there are many acronyms--process.
Residents can add up to five units to the inspection list.
The process also includes a very brief survey, right? However,
the resident-selected units are not necessarily included in the
inspection score, and the resident survey is not factored into
the score at all. I think this is a really big, missed
opportunity here. To all the witnesses, should the current
NSPIRE process factor resident assessments into the physical
inspection score? Bill?
Mr. Slover. I agree a hundred percent that tenant feedback,
client feedback is one of the most critical elements. I mean, I
was the advocate----
Ms. Tlaib. That is who we are serving, right?
Mr. Slover. I was the advocate representative on the Board
for 7 years. I represented the tenants. That was my job.
Ms. Tlaib. It is helpful. How about you, Matt?
Mr. Doherty. You are a hundred percent right, and I would
tell you; I think the residents in Atlantic City Housing
Authority would tell you that they do not voice their opinion
anymore because no one cares.
Mr. Banna. Yes, that is right.
Ms. Tlaib. Yes. How about you, because this quasi-
governmental authority thing, we do it with water now. We do it
with housing. We have been doing it for the housing, and I am
being honest. It is like a step removed from the actual
residents being able to have any real say about their quality
of life and their housing.
Mr. Banna. The resident units are in addition to the NSPIRE
system. They were not in the former system, so that is an
improvement to have additional input from the residents so the
residents can actually be part of the inspection process that
they were not necessarily part of previously.
Ms. Tlaib. Yes. Just to all my colleagues--not many of us
here--I really think this is a very important factor because
there is a saying we say in Detroit, mayors come and go, but
neighborhoods and community do not go anywhere. We are still
there, and it is like we have no real say or input or any kind
of a sense of real self-determination of what we consider
quality. That was the whole point of creating housing
commissions, but now, again, there does not seem to be a direct
accountability for our residents on those PHAs. Thank you so
much. I yield.
Chairman Davidson. I thank the gentlewoman. The gentlewoman
from Texas. Ms. De La Cruz is now recognized for 5 minutes.
Ms. De La Cruz. Thank you, Mr. Chairman, for holding this
hearing today, and thank you to the witnesses for appearing
before us.
Today's hearing is simple. Our Nation's public housing
agencies serve a critical function. We have talked about that.
I have heard that from the reps over and over but ensuring
access to housing for those that qualify for it starts first
with proper oversight and transparency at HUD. It also is a
critical step to ensure that we are being good stewards of our
tax dollars. That is why I introduced H.R. 7280, the HUD
Transparency Act, which was reported favorably out of this
committee with a bipartisan 50 to zero vote. This is not a
partisan issue, and transparency at HUD hand-in-hand with HUD's
ability to achieve its stated goals, which, for the public
housing program, is to provide a decent and safe rental housing
for eligible low-income families, elderly, and persons with
disabilities.
That being said, for today's witnesses, just how critical
proper oversight and accountability is at HUD and at local
PHAs, and, unfortunately, how there seems to be a vacuum of
that leadership. Mr. Slover, you said something that stuck with
me in response to the internal backlash you received at the
D.C. Housing Authority. This backlash was for simply requesting
an audit, I might add. You stated, and I quote in part, That is
my job. I have a fiduciary responsibility to oversight. If I
see something wrong, I have to say something. In addition to a
fiduciary responsibility, did you feel that requesting an audit
was also in the best interest of the residents, many of whom
are elderly that DCHA serves?
Mr. Slover. One hundred percent. I think the purpose of the
audit was to sort of ferret out the mismanagement and say,
well, the mismanagement is really what results in poor
conditions. As soon as somebody sees something in poor
condition, they say we need more money. Maybe somebody should
step back and say, ``Well, how did it get to these poor
conditions?'' Well, it was so poorly managed that we need to
manage it; so, management is critical, that was the purpose of
the audit to come in from a top-to-bottom analysis.
Ms. De La Cruz. Now, did that same audit that you request
find that there were more than 80 deficiencies at DCHA?
Mr. Slover. There were 80, but I would offer to you that it
was a scratch of the surface. I was more surprised at what was
not in the report than what was.
Ms. De La Cruz. Very interesting. Why do you think, I
should ask, why do you think there was so much internal
opposition to this audit?
Mr. Slover. You have to understand, if you take a look at
the construct of just the D.C. Housing Authority Board, you
have people on that Board who are basically making money off of
the enterprise in one way or another. They are a mayoral
appointees. They are there to push favors. I do not want to say
nobody, but it did not seem that anybody was there who
understood that their job was to work for the Authority, not
for somebody who put them on that Board, and that is the
problem with these boards is people are there for the wrong
reason. They do not understand who their boss is. The boss is
the Agency. Their client is the resident. That is it at the end
of the day. All your decisions need to be made on how to
improve the enterprise, not what you can get out of it.
Ms. De La Cruz. It almost seems like it is a culture within
the Agency. Would you agree with that?
Mr. Slover. Absolutely, if you look at the money and where
it goes. We had a scandal with the chairman of the Board who
drove a $4.5 million contract to his girlfriend. Everybody knew
it, and so it just goes on and on and on. DC's a unicameral
form of government. There is only one party, and we are in a
government that has very few checks and balances, and so the
result is we are all part of the same fraternity. Everybody,
let us do our thing.
Ms. De La Cruz. Leadership always starts at the top, and
you see the results of leadership all the way down, and that is
what you are clearly stating here. I only have a couple more
seconds to go. Thank you, gentlemen, for your time. I yield
back.
Chairman Davidson. I would like to thank our witnesses for
their testimony today, and as we talk so much about D.C. Public
Housing Authority, the ranking member and I were pointing out
that the current Acting Secretary at HUD is a former director
of D.C. Public Housing Authority. I think your testimony is
incredibly important. I hope it rallies our committee to
address these problems
Without objection, I ask that all members have 5
legislative days who wish to submit additional written
questions for the witnesses to the chairman, which will be
forwarded to witnesses for their response. If forwarded, I ask
our witnesses to please respond promptly as you are able.
[The information referred to can be found in the appendix.]
Chairman Davidson. This hearing is now adjourned.
[Whereupon, at 11:27 a.m., the subcommittee was adjourned.]
A P P E N D I X
May 22, 2024
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