HUD report finds 87 percent of state's Section 8 housing deficient/cites MaineHousing as lacking oversight

Photo: A.M. Sheehan

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WASHINGTON, DC — Maine State Housing Authority (MSHA) "did not have adequate oversight ... and had an ineffective quality control system ... as a result, some tenants lived in units that did not meet HUD's standards for decent, safe, and sanitary housing."

So reads the Housing and Urban Development (HUD) Office of the Inspector General's (OIG) report after a year-long investigation into MSHA's management of the Section 8 Housing Choice Voucher (HCV) Program in Maine.

HUD's OIG launched its audit on the request of Senator Susan Collins in December of last year. Prior to that, MSHA had launched its own internal investigation in the wake of the lengthy exposé in this newspaper titled "Slumlords, shoddy oversight, taxpayer dollars ... living on Section 8."

The audit inspected 61 units in Maine and found 53 of them "did not meet HUD's housing quality standards."

“Unfortunately, this final report is only further proof that, under its previous leadership, Maine State Housing Authority failed to live up to its own mission –  to help Maine people obtain and maintain decent, safe, and affordable housing," said Senator Susan Collins in a statement released Tuesday.

"No one should ever be living in federally subsidized housing that fails to meet basic safety and health standards, and certainly taxpayers should not be footing the bill. I am hopeful that the unacceptable conditions revealed by this investigation are being corrected by its new management. Going forward, it is absolutely essential that Maine State Housing not only be steadfastly committed to ensuring safe and healthy housing for qualified residents, but that it also uses taxpayer dollars prudently.”

Within weeks of the story's publication, the town of Norway's Code Enforcement Officer Joelle Corey-Whitman formed an ad hoc committee to rewrite the town's ineffective rental ordinance. The new ordinance is focused on health and safety and has enforcement "teeth."

Norway Town Manager David Holt noted, "the Town of Norway supports our code enforcement officer in her continuing efforts to see that housing units of all types in Norway are lawful and safe. Thanks to the efforts of the Advertiser Democrat and the good work of several landlords and public agencies, the conditions today are better now than they were a year ago. The challenge for all of us is to make sure that the conditions are better in each successive year."

"I am happy to read what appears to be a thorough investigative report from the OIG," said Corey-Whitman. "My hope is with revised inspection protocols from MaineHousing and the revised Rental Occupancy Ordinance of Norway, we can have safer and healthier rental stock for tenants to choose from in our town."

Timeline

Dale McCormick resigned in March as director of MSHA and on Monday, John Gallagher took the reins as its new director. Gallagher was nominated by Governor Paul LePage in August and received legislative confirmation on September 6.

The OIG report recommends that the director of HUD's Boston office require MSHA to repay the Housing Voucher Program $194, 956 from a non-federal fund source and to conduct an independent cost analysis for the $111,742 charged to the Homeless Management Information Systems program to determine if those costs were "eligible, reasonable and supported."

MSHA paid at least $194,956 in housing assistance for units that did not meet housing quality standards, according to the OIG report.

MSHA administers approximately 3,200 HCV units for HUD. Prior to January 2012, MSHA administered some counties directly and used four program agents to cover the other counties in the state. In Oxford County, its agent was Avesta Housing Corporation which administered 1,252 units – the highest number for any of the contracted agents.

MSHA's immediate re-inspection of 125 units in Oxford County administered by Avesta in November 2011 found the majority of them did not meet HUD standards. As a result MSHA decided to phase out the use of agents by September, 2012.

MSHA's internal audit, issued in January 2012, found “systemic deficiencies in the administration and delivery” of the Section 8 housing program.

According to a September 21 letter from Peter Merrill, acting director of MSHA, in response to the OIG's report, MSHA contracted for an independent inspection of 500 units statewide, which was concluded in March 2012.

In May, Maine’s Office of Program Evaluation and Government Accountability reviewed MSHA's operations and found no indication of wrongdoing.

In June 2012, according to Merrill's letter, HUD decided to inspect all of the HCV housing.

However, Merrill argues the amount MSHA needs to repay stating the repayment of Housing Assistance Payments should be based only on those units with material deficiencies. Merrill states the amount he feels MSHA owes is $109,601.30.

On the whole, though, Merrill does not dispute the OIG's findings that MSHA did not ensure that HCV units meet HUD's Housing Quality Standards. In fact, he states MSHA "substantially agrees" with its findings.

Merrill concludes his letter with an apology to tenants, HUD, elected leaders and the citizens of Maine "for what happened in Norway."

Photo: A.M. Sheehan

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