Scandal-Plagued DC Housing Agency Faces Reform Demands

By Valentina Pasquali | December 7, 2022, 8:13 PM EST ·

The independent government agency that manages thousands of affordable public housing units and the housing voucher program in the nation's capital faces a growing chorus of demands for reform amid accusations of far-reaching mismanagement and corruption and deeply rooted funding problems.

The District of Columbia Housing Authority is facing demands for reform amid accusations of corruption and funding problems. Above, affordable housing buildings in Washington, D.C., are shown mid-construction in 2013. (Photo by Linda Davidson/The Washington Post via Getty Images)

While the District of Columbia Housing Authority, or DCHA, has had a troubled history, it seems to be living through an especially turbulent fall following the Sept. 30 publication of a searing report by the U.S. Department of Housing and Urban Development. In the 72-page document, HUD accused the local agency of more than 80 failures in areas ranging from governance to record-keeping to management to procurement to basic upkeep.

The report followed a June lawsuit by outgoing D.C. Attorney General Karl Racine accusing the DCHA of failing to accommodate residents with disabilities, and it dovetailed with findings from an internal audit and a D.C. watchdog inquiry. It also coincided with the sudden resignation of the agency's number-two official, who had already left a trail of controversy after he was dismissed from the New York City Housing Authority in 2015.

Now, D.C. officials, including Mayor Muriel Bowser, have pitched various strategies to reform the struggling agency, while the unspoken threat of a HUD takeover looms along with the possibility that the department's report might buttress litigation against the agency.

"I do think that in D.C. there is an obligation on landlords to maintain housing up to the housing code and in safe conditions, so to the extent that the DCHA isn't doing that — and they're not doing that — of course they're open to liability, and frankly, they owe the tenants who have been living with these terrible conditions," said Amanda Korber, a supervising attorney in the housing law unit of the Legal Aid Society of the District of Columbia. "There's no question of that in my mind."

Inadequate Maintenance, Management and Oversight

The DCHA owns and manages nearly 8,100 affordable residential units in 60 sites across the District of Columbia, and, in the federal government's 2022 fiscal year, received some $76.5 million from HUD to maintain and operate them, the department said in its report.

The Sept. 30 report summarized findings from a weeklong on-site assessment that HUD staff conducted in March to gauge the local agency's compliance over the past three years with federal rules for the public housing and Housing Choice Voucher programs it administers. The D.C. agency manages some 16,400 of the voucher units, according to the HUD website.

Nearly 1,630 of DCHA's fully owned public housing units were vacant as of June, HUD found, resulting in an occupancy rate of 76.44%. That's down from 92.5% occupancy in April 2018 and is the lowest of any large public housing authority nationwide, according to the department. It is also a far cry from the 95% figure that the DCHA still states on its website.

Multiple housing professionals and experts contacted by Law360 identified such a dismal occupancy rate as one of the report's most damning findings.

"Anybody that pays attention to what's going on with housing here knows that we have a housing crisis, and the more affordable your housing needs to be, the more dire that crisis is," said Brook Hill, counsel for housing discrimination at the Washington Lawyers' Committee for Civil Rights and Urban Affairs. "We should have 100% occupancy because that housing is so desperately needed. I mean, if you just drive around the city, you see tents and people sleeping on the street and under bridges."

The report also accused the DCHA of failing to maintain its properties in "decent, safe and sanitary condition," citing leaky and rusty boiler rooms, a backlog of unaddressed maintenance requests, and at least several units across various developments with extensive mold damage.

"The fact that this is housing that's owned and operated by the government and that these folks there are living in such unsafe, unhealthy, horrendous conditions, it's embarrassing," Korber of Legal Aid D.C. said. "It's shameful, and it's something that has been happening in plain sight for a very long time, and so to me that stands out as a central failure."

HUD additionally found that the agency failed to manage its public housing waitlist, that its senior management team — led since summer 2021 by Executive Director Brenda Donald — and 13-member oversight board both lacked adequate expertise and training in their property management functions and that "systemic" problems plagued procurement.

"DCHA staff reported at times they felt constrained to take actions as directed by executive leadership and the board, instead of in conformance with the regulations, policies and procedures that should have governed their actions," the HUD report said.

According to local news reports, the DCHA internal auditor subsequently flagged improper bidding and payment practices surrounding several contracts with vendors in an early November review prompted by HUD's allegations.

In a separate report in early October, the D.C. Office of the Inspector General identified similar issues with the agency's management of the funds it received from the local government in fiscal year 2020.

"DCHA did not use district housing subsidy resources efficiently and effectively," the OIG said in the 42-page document. "Specifically, DCHA failed to use $60.89 million in available funding resources to (1) provide rental assistance for the district's low-income households during FY 2020 … and (2) to ensure the district of Columbia's public housing conditions are rehabilitated and maintained adequately and timely."

The agency's approach to redeveloping its properties, with six such locally funded projects currently underway, also drew criticism from HUD.

The feds reported complaints over disruptions to tenants' lives, such as forcing them to relocate to entirely different neighborhoods during construction or to units of inadequate size, and dinged the agency for failing to guarantee a similar number of public housing units in the redeveloped buildings, favoring instead subsidized units dispersed amid market-rate homes.

"Some board members highlight the DCHA's poor job of communicating to the residents about redevelopment plans, the constant changes to these plans, and a lack of focus on resident services as root causes of the problems," HUD found in its report. "Some members support redevelopment, others do not."

The agency also appears to have at times stopped regular upkeep on properties scheduled to be redeveloped "in retaliation" for complaints, according to the report.

Tenants and advocates increasingly fear that the DCHA's inability or unwillingness to properly maintain buildings and fill vacant units is becoming more and more entangled with its plans for redevelopment in a "self-fulfilling prophecy," Hill of the Washington Lawyers' Committee for Civil Rights and Urban Affairs said.

"A lot of times when public housing residents put in a ticket for maintenance, the public housing authority gives them what's called a mandatory transfer, which means that, instead of fixing their unit, they get moved to another unit," Hill said. "So units that have big maintenance issues become vacant and … a property that has a lot of units that are vacant because they're uninhabitable … it becomes a lot easier to redevelop that. It's hard to redevelop a property that's full of people living there."

Years of Mismanagement and Neglect

Amid the whirlwind of revelations, DCHA Deputy Executive Director Victor Martinez abruptly resigned on Oct. 7 after less than a year in the post, to move on "to new endeavors in the next chapter of his career," according to an agency spokesperson.

His hiring in December 2021 had raised eyebrows in D.C. because of his termination six years earlier from the public housing agency in New York City in what DCHA leadership later described as just part of the mayoral transition in the Big Apple. But at the time, the dismissal had been linked to his role in the alleged mismanagement of agency inventory.

According to Korber of Legal Aid, the HUD report has contributed to bringing attention to the severity of the DCHA crisis, although tenants and advocates have had front-row seats for a while.

"We've seen a constant turnover of high-level staff … and a real decline in the agency's ability to serve residents with dignity and to ensure the tenants are living in safe, healthy conditions," she said. "It's only been getting worse."

In its Nov. 29 response to the HUD report, the DCHA's current leadership leaned on the agency's long-running troubles to defend itself. The 60-page document called the department's work "thorough" and "unsurprising," and far from a "wake-up call" for management and the board.

"The report details the cumulative effect of problems from years of management neglect across many departments within the agency," the DCHA noted. "The numerous problems didn't materialize and cannot be fixed overnight."

The agency said in its response that it has cleared more than 10,000 pending work orders this year to date, initiated a broader overhaul of its maintenance processes and started to clean up its outdated waiting list for public housing, among other initiatives.

In an email to Law360, a DCHA spokesperson listed several other plans to improve the quality of services the agency provides to low-income residents, such as holding quarterly "mass eligibility events" for 3,500 to 5,000 wait-listed people at once, beginning in the second quarter of next year.

Leadership is "urgently" addressing the results of "years of neglect," and is "confident" that it can "transform" and "rebuild" the agency, the spokesperson wrote.

This is not the first time the DCHA has fallen on hard times. From 1995 to 2000, the public housing authority was forced into receivership by the D.C. Superior Court as part of the resolution of a 1992 lawsuit, Pearson v. Pratt Kelly, that alleged similar issues of inexplicably vacant units at the same time as never-ending waitlists.

"When does it stop being a crisis and become a steady state of affairs?" said Susan Bennett, professor of law emerita at American University's Washington College of Law and founder and once-director of the school's Community Economic and Equity Development Clinic. "This is just honestly a head-scratcher, and for those of us who've been around for a long time, it is like, 'We have seen this movie before.'"

While agreeing that executive director Donald inherited a "disaster" of an agency when she took over a year and a half ago, Legal Aid's Korber argued that the DCHA response "glossed over" the fact that the problems have continued under her tenure, and that the HUD report pointed to a lack of experience with affordable housing by current managers and board members.

As of early December, the occupancy rate for D.C. public housing units had dropped further to just over 73%, with more than 2,000 units sitting empty, according to the latest data displayed on HUD's website.

A HUD spokesperson told Law360 in an email that the department is reviewing DCHA's response to its report and "will continue to work directly with the Public Housing Authority to resolve any items needing to be addressed."

A Fight for Survival, Independence and Money

In its response to the HUD report, the DCHA separately highlighted "plans for massive redevelopment across the portfolio," noting groundbreakings on a pair of long-delayed projects, the launch of several more and the renovation of nearly 400 vacant units, with 800 more slated for overhauls next year.

Derek Hyra, a professor at American University's School of Public Affairs whose work focuses on how housing, urban and race politics affect neighborhood change, said the agency's and local government's incapacity to think more creatively about redevelopment is one of the bigger failures on display, and that any serious reform of the public housing framework in D.C. needs to start there.

"What I'm seeing is the assets of the public housing authority are really just seen by the DCHA or the City Council or the mayor as something where maybe we could get some development done … to get mixed-income housing that raises economic revenue for the city tax-base as opposed to thinking about how to use redevelopment to actually maintain the existing public housing stock," according to Hyra, who has served as board chair for the Redevelopment and Housing Authority in nearby Alexandria, Virginia.

"Land in D.C. is gold because it is worth so much," he added. "There could be some innovative financing opportunities because the public housing that may or may not be in disrepair sits on land that is highly valuable and that developers are salivating to get."

That shift, however, requires the involvement of stakeholders who have foremost in mind the needs and interests of public housing residents, not the tens of millions of dollars that are up for grabs in the redevelopment of DCHA properties into mixed-income, market-rate units with "a sprinkle" of public housing, according to Hyra.

"We need a board that is going to seriously think about how to do creative financing, not to generate greater revenue for a company, but for the housing authority, so it has sufficient funds to maintain quality public housing," he said, adding that perhaps a HUD takeover of the agency would not be such bad news after all if it guaranteed the DCHA's full independence from local political and economic interests.

Emergency legislation that D.C. Mayor Muriel Bowser, who directs the appointment of a majority of the board, proposed at the start of December with D.C. Council Chair Phil Mendelson to overhaul the DCHA governance structure would definitely not do the trick, according to Hyra and other observers.

Instead, it would further consolidate Bowser's control of the oversight body by removing all 13 current commissioners and empowering her to appoint a smaller nine-member "stabilization and reform board" on her own, with approval by City Council.

"This streamlined reform board will ensure that we are not only addressing the issues raised by HUD, but that the agency is living up to our belief that a safe and stable life begins with safe and stable housing," Bowser said in a statement when she introduced the legislation.

Her office did not respond to requests for comment.

"The mayor and her appointees have had a controlling vote on the board for all these years, and it's gotten us where we are now," Korber said. "Now she wants to remove the voices from the board that are the ones who asked the hard questions of the executive and her team. To do that at a time like this, and through emergency legislation, it's completely inappropriate."

A planned vote on the bill on Tuesday was postponed at the last minute, well into the late hours of a marathon D.C. Council session, amid uncertainty over its outlook. The Council will next get a chance to decide on it on Dec. 20.

According to Hyra of American University, in addition to the uniquely severe managerial and oversight challenges that the DCHA faces at this point, the agency joins its counterparts across the country in suffering from intractable budget shortfalls, both due to decades of underfunding by the federal government and a lack of real appetite by D.C. officials to make up for the gap out of local coffers, especially in a place like the district whose economy has been steadily booming over the past 20 years.

Hill of the Washington Lawyers' Committee agreed that public housing in the U.S. is essentially "set up to fail," with federal incentives heavily skewed toward privatized Housing Choice Voucher, or Section 8, schemes rather than publicly owned affordable housing stock. But while the DCHA might not be able to do a "full 180" without such root causes being addressed, it has room to make "incremental progress," he said.

--Editing by Jill Coffey.

Hello! I'm Law360's automated support bot.

How can I help you today?

For example, you can type:
  • I forgot my password
  • I took a free trial but didn't get a verification email
  • How do I sign up for a newsletter?
Ask a question!