HUD Archives: News Releases

HUD No. 00-307
Further Information: For Release
In the Washington, DC area: 202/708-0685 Wednesday
Or contact your local HUD office October 25, 2000

New Standards for a New Century, Executive Summary
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New Standards for a New Century, Full Report
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Listing of highly rated properties
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WASHINGTON - More than 260 landlords were praised today by U.S. Housing and Urban Development Secretary Andrew Cuomo for scoring high marks in HUD’s first nationwide inspection of its assisted multifamily housing complexes. The results of the inspection -- and an analysis of the inspection process -- are detailed in a new HUD report, "New Standards for a New Century: The Transformation of HUD’s Systems for Monitoring and Enforcing the Quality of HUD-Assisted Housing," which was released by Cuomo today.

Nearly 87 percent of the 29,000 properties inspected earlier this year by HUD’s Real Estate Assessment Center -- REAC, for short -- were found to be in either excellent or good condition. Only 1.6 percent of the properties -- about 530 complexes -- were in such bad condition that they were referred to HUD’s new Enforcement Center for immediate remedial action.

Prior to 1997, HUD did not have in place a system for inspecting its 44,000 subsidized and public housing complexes, which house about 4.1 million low- and moderate-income families. When Cuomo was named housing secretary he developed his 2020 Management Reform Plan, which among other things, established REAC and the inspection system.

The inspection system addresses long-standing concerns with HUD’s ability to provide decent, safe, and sanitary housing in good repair. Underpinning the development of the system were two key objectives: empower people and communities, and restore the public’s trust in public housing.

"For too long, subsidized housing has been thought to be just another bad program," Cuomo said. "We now have in place a system that gives us the real picture. We now can get an accurate assessment of our properties, enforce our standards, and help remedy problems as they occur. Nearly 90 percent of our assisted properties are in excellent or good condition, and are a good investment for owners, taxpayers and the residents who call them home."

Under the inspection system, the top 20 percent of properties 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 good incentives for good landlords," Cuomo said. "Under our system, landlords that provide safe and decent housing will be given flexibility to run their developments. If a landlord is doing a good job, it’s a waste of taxpayer dollars for us to inspect every year."

The inspection criteria were established with help from Parsons/Brinkerhoff, an international engineering firm, and the inspection instrument was refined after collaborating with industry leaders.

The inspections began in late 1999. Inspectors, usually employed by private contractors, use hand-held computers to assess and record 69 conditions at each property, including building exteriors, common areas, and various building systems. Inspectors also examine and verify certificates for boilers, elevators, fire alarms, lead-based paint and sprinkler systems.

Inspection scores can range from 0 - 100. A score of 90 and above is excellent; 60-89, standard; 30-59, substandard, upper range; and 0-29, substandard, lower range.

The most frequent problems found were in individual apartments and included holes in walls, chipping or peeling paint, damaged stoves, inoperable or missing smoke detectors, leaky faucets or pipes and damaged cabinets and counter-tops. If pressing health and safety violations such as gas leaks, exposed wires, or water leaks near electrical outlets were discovered, owners were notified immediately and given three days to fix them.

Apartment complexes that scored below 60 -- some 11 percent -- are 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 action or recommend criminal action against operators who fail to move immediately to resolve the deficiencies identified in the inspection.

The Enforcement Center, which is headed by a former FBI agent, takes a variety of approaches to resolving the difficulties identified by the process:

  • In June 2000, for example, the Center took control of a 268-unit high-rise complex in Newark, NJ, 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, IA, 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.

According to today’s report, "Implementing HUD’s new system of assessment, monitoring, and compliance was an ambitious task, both in terms of its scope and the level of technical expertise required. In three years, however, HUD has proceeded from a plan to a modernized, operational system." The report concludes that the new inspection system has resulted in:

  • Greater knowledge to government officials, advocacy groups, housing practitioners, and the general public through a reliable flow of information concerning the performance of public and multifamily assisted housing.

  • Improved procedures for fixing problems through the establishment of dedicated operational centers.

  • Greater voluntary compliance because of regular and clear directions to housing agencies and multifamily owners concerning their responsibilities for maintaining quality housing.

    A copy of the "New Standards for a New Century" and a listing of highly rated properties are posted on the HUD website.



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