HUD Has Not Referred Troubled Public Housing Agencies as the Law and Regulations Require

The Office of Public and Indian Housing (PIH) has not referred troubled public housing agencies (PHAs) to the Assistant Secretary for Public and Indian Housing to take them over as the law and regulations require. Without this referral mechanism, a PHA could remain troubled for an indefinite period while conditions stagnate or deteriorate. We identified 18 PHAs that remained troubled for more than 2 years without being referred. PIH is creating a process for referring troubled PHAs, but two problems exist with its approach. First, the draft process that we reviewed in this evaluation would provide more options to the Assistant Secretary than the law and regulations allow. Second, PIH cannot meet the statutory deadlines for referral of a troubled PHA without substantial changes to the assessment process or changes to the law and regulations, which PIH is not making as part of its new process. The new process would allow some troubled PHAs more time to recover than the law and regulations allow. PIH’s training that existed at the time of our fieldwork on the authority and process for declaring a PHA in substantial default and for taking PHAs into possession suggests remedies that do not fully comply with the law and regulations. Finally, PIH has not submitted an annual troubled PHAs report to Congress for at least 11 years as the law requires, thereby missing another opportunity to strengthen the accountability and transparency of its recovery process. We recommended that PIH (1) refer troubled PHAs Directly to the Assistant Secretary for PIH when they have not met the 1- or 2-year recovery requirements, (2) ensure that referrals to the Assistant Secretary for PIH recommend only recovery options allowed by the law and regulations, (3) update training to include the actions that PIH must take when a troubled PHA does not meet the 1- or 2-year recovery requirements, (4) provide training on remedies for long-term troubled PHAs to all PIH staff members who routinely interact with troubled PHAs, and (5) submit an annual troubled PHAs report to Congress in accordance with the statute.