HUD audit finds 97 percent of Louisville’s Section 8 housing units did not meet quality requirements

From the HUD audit, bars on a front bedroom window block a Section 8 tenant’s ability to exit in case of an emergency.

An audit of the Louisville Metro Housing Authority’s Section 8 Housing Choice Voucher programs by the U.S. Department of Housing and Urban Development found that 97 percent of inspected units did not meet federal and local quality requirements, with 42 percent found to be in material noncompliance with those requirements.

HUD’s Office of Inspector General (OIG) made two rounds of inspections in late 2016 and early this year of 106 units approved by the local housing authority for families using Section 8 vouchers. The audit report found that 103 units failed the quality requirements of HUD and LMHA, with 44 of those units in material noncompliance, based on the severity of the violations or the risk of danger of injury. Of the 44 units found to have materially failed the inspection, the audit report stated that 27 of those units had 41 “life-threatening items requiring correction within 24 hours, which existed at the time of the Authority’s latest inspection.”

The OIG stated that the conditions in these units occurred “because the Authority lacked written procedures for its staff to follow in performing their respective duties,” resulting in LMHA disbursing $65,5000 in vouchers and receiving $7,800 in administrative fees for tenants living in inadequately maintained units. The audit report recommended that LMHA ensure the violations cited at failed units are corrected and reimburse HUD with over $73,000 in non-federal funds due to these violations, warning that unless the authority improves its inspection program, it is estimated that HUD will pay over $20.5 million next year in Section 8 assistance for units in Louisville that are materially noncompliant.

Tim Barry, the executive director of the Louisville Metro Housing Authority, told IL that they had 10,000 people in their Section 8 program, and the city code enforcement department did roughly 19,000 inspections of the units they live in each year. Barry said that while the authority appreciates the comments and recommendations of the HUD inspector general, he said that most of the violations found in the audit inspections were “minor.” He said that most of the units failed “for things like loose refrigerator gaskets, loose toilet seats, tubs that need caulking,” while the units cited for the more serious material noncompliance included violations like “missing or cracked receptacle covers, missing globe lights or porch lights and things like that.”

Barry said that the housing authority was “already in the process of taking those corrective measures that the OIG recommended.” Asked about the audit report figure of potentially $20.5 million being spent on failed units next year, he said, “there is no risk of that happening” due to LMHA making all of the corrective actions.

Barry said that while HUD is very precise in what they inspect and their recommendations: “we also have a responsibility to — as best we can — keep people in Section 8 housing. Because if for whatever reason the unit isn’t in compliance and we have to ask a Section 8 tenant to leave because the unit did not get into compliance, then, of course, that imposition in on the tenant, and they don’t have a lot of resources to begin with. So then they have to move and pay a deposit and moving expenses.”

He also said that the city’s building code — which LMHA has chosen to follow — is for the most part stricter than HUD’s housing quality standards, and their units with Section 8 tenants perform well in city inspections by code enforcement.

“The city is very stringent, and we have a fair amount of landlords that stay very unhappy with us because we’re too strict,” said Barry. “We do our best to get the units to pass, and most of the time — if not nearly all the time — the violations that will fail a unit are minor, very minor. But we have to be diligent about what we’re doing and some landlords have dropped from the programs because they just think we’re too strict.”

From the HUD audit, a fuse panel is shown without an internal cover, and the external cover is easily removed, exposing electrical contacts.

In its formal response to the HUD audit, LMHA stated that it “has already taken corrective action to ensure that units found by the Audit to be in material noncompliance were addressed immediately by the private market owners of these properties,” and is also “well underway in requiring owner compliance for the non-material inspection issues raised by the Audit.” In its evaluation of this comment by LMHA, the OIG commended the authority’s efforts, but added that “no support was provided to show that the deficiencies were corrected,” and LMHA “should work with HUD to ensure all violations were corrected and properly certified.”

A spokesperson for Mayor Greg Fischer deferred questions about the audit to Barry at the housing authority.

Cathy Hinko, the executive director of the Metropolitan Housing Coalition, which advocates for fair and affordable housing, told IL that the findings of the HUD audit were “appalling,” showing that city inspectors are clearly not doing a proper job and are not being properly trained. She also noted that the $73,000 in non-federal funds that must be repaid to HUD is a big deal — let alone the estimated $20.5 million figure if corrective actions aren’t taken — hoping that the city will cover the costs, as she believes this is due to the incompetence of the city’s inspectors.

Hinko said that the city promises Section 8 participants that while their housing units may not be gorgeous, at least they are safe — but this audit report appears to put that promise in question.

“The rate of violation is really appalling,” said Hinko. “Right now in the non-subsidized housing market people are renting terrible places because the vacancy rate is so low, and people accept slum conditions. If we cannot even get our subsidized housing to a safe point, what hope is there?”