|HUD No. 00-194|
|Further Information:||For Release|
|In the Washington, DC area: 202/708-0685||Monday|
|Or contact your local HUD office||July 31, 2000|
CUOMO SAYS NATIONWIDE INSPECTION RESULTS SHOW HUD HOUSING IS "GOOD INVESTMENT" FOR OWNERS, RESIDENTS & TAXPAYERS
WASHINGTON - Housing and Urban Development Secretary Andrew Cuomo today marked completion of HUD's first-ever, nationwide inspection of all 29,000 HUD-assisted multifamily housing complexes by honoring owners of properties that passed inspection with the highest scores.
The inspections of more than 29,000 privately-owned, HUD-assisted complexes were completed by HUD's Real Estate Assessment Center earlier this year. Some 87 percent of the properties were found to be in excellent or good condition. Only 1.6 percent of the properties - about 530 complexes - were in condition requiring that they be referred to HUD's new Enforcement Center for immediate remedial action.
"Today we are slaying a stereotype," said Cuomo. "Talk to our critics and they'll say HUD housing isn't fit for humans. But they're wrong. Take an objective, nationwide look as we have done and you'll see that 87 percent of our assisted complexes are in excellent or good condition, are a good investment for owners, taxpayers and the residents who call these complexes home.
"These are very positive results, and we want to make them even more positive. Because of the speed and thoroughness with which we handle properties that are not well-maintained, not being well-operated, I am confident that next year's numbers will be even better. HUD's taking this inspection process seriously. The vast majority of owners and operators are taking it seriously. And so too should that handful of owners who are not performing up to snuff. Because if they don't, they'll be out of business."
When Cuomo became HUD Secretary in 1997, the department did not have the capability to regularly and systematically inspect all of its 44,000 subsidized and public housing complexes, which house about 4.1 million low and moderate income families. Cuomo developed a 2020 Management Reform Plan, and soon established a Real Estate Assessment Center and an inspection system to provide an accurate gauge of whether HUD units are in decent, safe and habitable condition.
HUD's inspection criteria were established with the assistance of Parsons/Brinkerhoff, an internationally-recognized engineering firm, and the inspection instrument was refined in collaboration with industry leaders. Actual inspections began in late 1999. Each inspection assesses 69 items. Inspectors, usually employed by private contractors, use hand-held computers to assess and electronically report the conditions at each housing complex, including building exteriors, common areas, building systems and a randomly-selected sample of the apartment units in each complex. Inspectors also examine and verify certificates for boilers, elevators, fire alarms, lead-based paint and sprinkler systems.
Under the system, the top 20 percent will not face another inspection for three years, the next 30 percent will be inspected biennially and the remaining 50 percent will be inspected annually.
"Inspections are an incentive for good landlords," said Cuomo. "Under our system, landlords objectively determined to be providing good housing to families in need should and will be given some real flexibility to run their developments. If they're performing well, it's a waste of time and taxpayer dollars for us be on their backs every year." Cuomo said.
The most frequent problems found in inspections were in individual apartments and included holes in the wall, chipping or peeling paint, damaged stoves, inoperable or missing smoke detectors, leaky faucets or pipes and damaged cabinets and counter-tops. Where exigent health and safety violations such as gas leaks, exposed wires, or water leaks near electrical outlets are discovered, owners are notified immediately and are given just three days to take corrective action.
Apartment complexes that scored below 60 -- some 11 percent -- will be required to develop an improvement plan that will be submitted to and monitored by one of HUD's 18 Multifamily Housing Hubs. Those scoring below 30 -- the remaining 1.6 percent or about 530 complexes -- have been assigned to HUD's Enforcement Center. The Center may take civil or recommend criminal action against operators who fail to move immediately to resolve the deficiencies identified by the HUD inspection. As proposed under Cuomo's 2020 Plan, the Enforcement Center is headed by an FBI agent.
HUD's Enforcement Center takes a variety of approaches to resolving the difficulties identified by the process:x
- In June 2000, for example, the Center took control of a 268-unit high-rise complex in Newark, New Jersey after the owner failed to correct conditions identified in an inspection. Working with the U.S. Attorney and HUD's Inspector General, the owner and the corporation were debarred, found guilty of criminal violations and forced to pay $1 million to HUD.
- When a not-for-profit failed to make repairs on a multi-family complex in Waterloo, Iowa, the Center became a mortgagee-in-possession and made the repairs. The complex now is scheduled to be sold to another owner.
- After scoring poorly on a REAC inspection, a complex in Detroit was referred to the Center which also identified issues of financial mismanagement, including excessive fees and unauthorized payments on mortgages and liens. The Section 8 agreement was modified and tenants were relocated with a recommendation made for foreclosure of the property. Recently, a HUD team returned to the complex and was greeted by applause from its residents.
The 1,000 highest scoring properties: