Press Releases

Today, the Subcommittee on Oversight and Investigations examined how to improve management from Public Housing Agencies (PHAs) to improve living conditions for residents.

On Fraud and Mismanagement of PHAs:

Chairman French Hill (AR-02) said, “In 2023, in a detailed audit by Department of Housing and Urban Development (HUD) Housing Authority in Little Rock, otherwise known as Metropolitan Housing Alliance, was put in the troubled PHA category. And among an extensive list of deficiencies, were the lack of internal controls since 2016, financial reporting, [and] record keeping. None of those impacted or met HUD standards. And $30 million is missing and nobody can find where it went. And then, after 11 years of complaining to the City of Little Rock Housing Authority, the HUD local office, the HUD regional office in Dallas, finally our Attorney General … prosecuted criminally a landlord in the section eight program…. And was the first validation of tenant complaints in a decade.”

Subcommittee on Capital Markets Chairman Ann Wagner (MO-02) said, “For decades mismanagement, waste, fraud, and abuse at Public Housing Agencies (PHAs) have deprived residents of access to safe, stable housing while also, frankly, squandering enormous sums of taxpayer dollars. For example, near my district, mismanagement at the East Saint Louis housing authority was so severe it resulted in the HUD taking control of the agency for over 30 years. At its core, the problem at the East Saint Louis housing authority were a product of mismanagement and, most importantly, fraud.”

On Policies that Influence PHAs:

Subcommittee on Oversight and Investigations Chairman Dan Meuser (PA-09) questioned the witnesses on policies that would hold PHAs accountable, to which Mr. Haller answered, "So right now, we actually have a second settlement agreement we’ve signed with the … owner of the property which has more public transparency to it. So, they have to report to us certain security incidents within 48 hours. They have to give us a monthly written report, which we can file publicly. We can do 12 unannounced inspections, as well as regular inspections."

Rep. Barry Loudermilk (GA-11) questioned the witnesses on the impact regulations have on PHAs, saying “we see that in across the financial services sector, even in small banks, where you have to move personnel away from doing a productive job to do compliance. And I'm sure that we see the same thing in public housing, especially to the extent that there's a long list of regulations and reporting requirements that PHAs must follow.” To which Mr. Ozdinec answered: “In my view, significant impact. They spend significant time complying with the regulations.”

Witnesses Echoed the Work of the Committee:

Mr. Bart M. Schwartz, Co-founder & Chairman, Guidepost Solutions, said, “NYCHA had severe problems with governance and administration, and no focus on values-based integrity and ethics. It did not have a proper code of conduct. We saw poor management, shoddy work by field employees and contractors, deficient employee oversight and lack of discipline, and standard operating procedures that were obsolete. There was a lack of pride in the workforce. Use of technology and data to enable efficient operational and capital performance and planning – as well as oversight and compliance assessments – was deficient. There was a lack of accountability, transparency, and cooperation. Functions operated in silos.”

Mr. Chase M. Haller, Deputy Attorney General and Section Chief, Homeowners Protection Unit, Office of the Indianna Attorney General, said, “My home state of Indiana has approximately 6.5 million residents. As of 2023, about 146,000 of those residents lived in federally subsidized housing, representing about 2.1% of the state’s population. Residents in subsidized housing are some of our state’s most vulnerable. As a state government agency tasked with protecting consumers, the Indiana Attorney General has taken action repeatedly against the Indianapolis Housing Agency and other subsidized housing providers who have neglected their tenants. My Section includes a dedicated staff of five in an agency that employs 400 public servants. Under the leadership of Attorney General Rokita and over the last five years, our Section has been aggressively enforcing our state’s housing laws, including within government subsidized housing. Our investigations and enforcement actions have uncovered systemic problems ranging from sham nonprofit owners, owners abandoning failing housing projects, and issues unique to public housing programs such as HUD inspection standards and deferred maintenance involving public housing agencies.”

Mr. Milan M. Ozdinec, President Vargas Premier Corporation Consultants, said, “The public housing program, including the existing capital fund program, are ill equipped to allow PHAs to manage the existing inventory of units owned by them nationwide. The Brooke Amendment, setting tenant rents at no more than 30% of income with the Federal Government making up the difference, has not lived up to expectations mostly because the program has not ever been adequately funded by the Federal Government. In addition, proper asset management, which includes the ability to establish and fund reserves for operations and replacement, is not possible under existing HUD statute and regulations.”

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