US housing program squanders millions

Washington Post / May 16, 2011

WASHINGTON — The federal government’s largest housing construction program for the poor has squandered hundreds of millions of dollars on stalled or abandoned projects and routinely failed to crack down on delinquent developers or the local housing agencies that funded them.


Nationwide, nearly 700 projects that were awarded $400 million have been idling for years, a Washington Post investigation found. Some have languished for a decade or longer, even as much of the country struggles with record-high foreclosures and a dramatic loss of affordable housing.


The Department of Housing and Urban Development, which oversees the nation’s housing fund, does not track the pace of construction and often fails to spot defunct deals, instead trusting local agencies to police projects.


The result is a trail of failed developments. Fields where apartment complexes were promised are empty and neglected. Houses that were supposed to be renovated are boarded up and crumbling.


A yearlong Post investigation uncovered a dysfunctional system that delivers billions of dollars to local housing agencies with few rules, safeguards, or even a reliable way to track projects. The lapses have led to widespread misspending and delays in a two-decade-old program meant to deliver decent housing to the working poor.


The Post found breakdowns at every level:


■ Local housing agencies have awarded millions to troubled developers, including novice builders, fledgling nonprofits, and groups accused of fraud or shoddy work.


■ Checks were cut even when projects were still on the drawing boards, without land, financing, or permits to move forward. In at least 55 cases, developers drew HUD money but left behind only barren lots.


■ Over all, nearly one in seven projects shows signs of significant delay. Time and again, housing agencies failed to cancel bad deals or alert HUD when projects foundered.


Source: http://www.boston.com/news/nation/washington/articles/2011/05/16/us_housing_program_squanders_millions/
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