At what point does HUD’s Office of the Inspector General (OIG) start investigating negligent landlords for allowing subsidized apartment complexes to rack up housing code violations that threaten the health and safety of renters and become magnets for shootings and other dangerous activity?
Atlanta Civic Circle asked this question about the Forest Cove Apartments—owned by Ohio-based mega-landlord Millennia Housing Management and condemned in 2021 after accumulating 231 housing code violations—to the U.S. Department of Housing and Urban Development’s (HUD) inspector general, Rae Oliver Davis, at a May 3 press conference.
Oliver Davis said health and safety issues at government-subsidized apartments “should be dealt with within 24 hours.”
“It shouldn’t escalate to the point where people have to be relocated, or we have deaths,” she said during a virtual press conference on Wednesday.
But Oliver Davis would not say whether her office is formally investigating Millennia—which housing advocates have demanded for more than two years. OIG spokesperson Dwrena Allen said in an email that, “as a matter of practice, we do not confirm or deny the existence of an investigation.”
The National Low Income Housing Coalition, the National Housing Law Project, and Atlanta’s Housing Justice League are among the chorus of over 20 groups calling on HUD and its inspector general’s office to hold Millennia accountable for unsafe, uninhabitable conditions at its Section 8 properties nationally.
But Foluke Nunn, a community organizer with the American Friends Service Committee, another member of the so-called Millennia Resistance Campaign, told Atlanta Civic Circle that the OIG has not responded to the coalition’s cry for help.
A Millennia spokesperson, Valerie Jerome, told Atlanta Civic Circle on Friday that the company “is not aware of a formal investigation” by the HUD inspector general’s office.
Oliver Davis said, “We’re certainly paying attention to what’s in the news, and we’re aware of the complaints [about living conditions], whether it’s Millennia or other [landlords].”
An Atlanta judge condemned Forest Cove, located on Atlanta’s southside, and ordered it demolished in December 2021, citing the 231 housing code violations for disrepair, sewage leaks, mold, pests, and garbage piling up that rendered the complex uninhabitable, along with “around 650-700 calls for service for various issues that include domestic threats, thefts, burglaries, robberies, aggravated assault, and homicides on the property between January 2020 and November 2021.”
HUD last inspected Forest Cove in 2018, failing the complex with a Real Estate Assessment Center score of 32 out of 100, spokesperson Shannon Watkins said in an email, noting the agency did not conduct inspections during the pandemic.
Still, HUD continued paying millions of dollars a year to Millennia to house people at Forest Cove, until the city of Atlanta intervened in 2022 and relocated the nearly 200 remaining families still living at the distressed property.
Millennia owns at least 30 Section 8 apartment complexes nationally, and Forest Cove is not the only property the company owns that’s attracted scrutiny. Deaths and injuries have also been reported at Millennia-owned complexes in at least Arkansas, Florida, Mississippi, and Missouri in the last five years.
Oliver Davis said her office can investigate only a fraction of the “thousands” of complaints it receives annually from Section 8 tenants and community advocates about dangerous properties and negligent landlords, because it has limited resources. “If something is systemic, then absolutely we can get involved,” she said.
The inspector general’s office receives about $150 million annually and employs more than 500 full-time staffers. HUD spends upwards of $30 billion a year on rent vouchers, subsidizing some 2.4 million households across the U.S.
Municipal intervention—like what’s happened in Atlanta with Forest Cove—can prompt an OIG investigation, Oliver Davis said. “I wouldn’t say [a city stepping in] is a tipping point, but I do think it’s a theme,” Oliver Davis said.
How much enforcement power does the inspector general have?
The HUD inspector general can pursue both criminal and civil investigations, Oliver Davis said. The inspector general has subpoena power—“so we can issue subpoenas even to external entities, like larger corporate landlords”—as well as its own law enforcement agents, which she said have the same authority as the Federal Bureau of Investigation.
“Sometimes, it might be difficult to build an actual criminal investigation,” Oliver Davis said, so the office will pursue a civil investigation. That’s where the agency’s audit division gets involved, to investigate the spending of landlords providing substandard housing.
In some cases, the inspector general’s office will audit a property to determine if the owner is taking HUD money, only to allow conditions that create “safety and health issues,” Oliver Davis said.
Other times, the investigation is more specific, such as a probe of property owners receiving HUD money for lead remediation who either don’t make the fixes or don’t supply proper disclosures to HUD. “We see a lot of that,” she said.
Investigations can yield criminal charges, civil lawsuits, and administrative sanctions. Criminal charges, Oliver Davis said, are “a way to address the most egregious behavior.” Civil penalties can include hefty fines.
In February, a HUD administrative law judge ordered the landlord, Apex Waukegan, and its property manager, Integra Affordable Management, to pay over $1.26 million for “knowingly failing to maintain housing units in a decent, safe, sanitary manner” at a 150-unit Section 8 property, Lakeside Tower Apartments, in Waukegan, Illinois, an agency press release said.
Apex started contracting with HUD in 2019. HUD initiated administrative action against Apex and Integra after an onsite review in September, 2021 that “discovered deplorable conditions at Lakeside,” the agency said. The judge cited Apex and Integra (controlled by the same entity) for 34 violations of their Housing Assistance Payment (HAP) contract, based on the HUD inspection and multiple inspections by the city of Waukegan.
Like the Forest Cove tenants, Lakeside Tower residents complained about “water damage, mold, cracked paint, and other issues,” and reported the landlord didn’t make repairs. For instance, mold, stains, and cracks would get painted over, only to reappear because the maintenance personnel didn’t remediate underlying leaks, the agency said.
In severe, systemic cases, HUD might deem a property owner unfit to contract with the agency as a low-income housing provider, and revoke its federal funding and bar it from future subsidy deals. “That’s a big one in some people’s minds,” Oliver Davis said, “because it literally means you can’t do business with the government anymore.”
The inspector general added that, when weighing potential enforcement actions against a landlord, her office must consider how penalties could impact tenants.
“There is a question of, when we take a program participant out, where will people go?” Oliver Davis said. “There are real challenges there, and I can’t ignore those.”
HUD created a Cooperative Housing program for low income people to have home ownership on a collective level bringing stationary living and eliminating the constant transitory movement due to annual rent increases. An excellent concept on paper. I reside on such a property in SW Atlanta and the members have never been trained as to what they were buying into and their responsibilities to live. This is a pattern for HUD, they have no follow up. This property was paid in full in July 2011, there was a mortgage burning ceremony and no one understood what was happening so they enjoyed the party. Is this not the behavior of the average low income people. HUD sets us up to be preyed upon. And this community like Forest Cove has major issues with our failing utility grids because since new build? There have never been any updates. We’ve had fires and floods with sewer backups! Have contacted political representatives and was recently told by our Council Member Boone that they were told that they can’t get involved 🤔 We have Section 8 members here, but HUD says that we are not on their Cooperative Federal Database. That we need to hire Attorneys. We can’t get the members to comprehend that we own the property, that standing together is our power. They love the one who has disrespected us for decades and apparently has plans to frustrate us out and sell because we are in a gentrification area and the property has deterioted severely. Please won’t someone help us save our homes from the predators? We can’t blame those who don’t understand. I have emails to prove that our Mayor was listening and promising to help us and dropped us prior to announcing his intent to run for Mayor. Now, his office has been ignoring our plea. We are tax payers, voters and we are owners of a property that generates nearly $2 million dollars a year! Why won’t someone stand with us? A large group of Forest Cove residents are homeless, but no one is addressing them. Why do we have to become homeless to get help 😞
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