oversight

Housing Authority of Baltimore City (HABC) Thompson Court Decree

Published by the Department of Housing and Urban Development, Office of Inspector General on 2001-01-24.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                                                         U.S. Department of Housing and Urban Development
                                                                            Wanamaker Building, Suite 1005
                                                                                      100 Penn Square East
                                                                               Philadelphia, PA 19107-3380

                                                                           District Inspector General for Audit




January 24, 2001
                                                                                      Audit Memorandum
                                                                                      No. 2001-PH-1801


MEMORANDUM FOR:                    William Tamburrino, Director, Public Housing Program, HUB



FROM:                              Daniel G. Temme, District Inspector General for Audit, Mid-
                                   Atlantic, 3AGA

SUBJECT:                           Housing Authority of Baltimore City (HABC)
                                   Thompson Court Decree

Pursuant to our current audit of the Housing Authority of Baltimore City’s (HABC’s) Section 8
Program, our office completed an assessment of HABC’s progress in implementing the Section 8
component of the Thompson Partial Consent Decree (Decree). Specifically, we reviewed the
HABC’s progress in creating and implementing a Mobility Counseling Program designed to
assist residents, through the use of Special Section 8 Vouchers awarded under the Decree, to
move from areas of minority concentration to non-impacted areas in Baltimore City and
surrounding counties according to the terms and conditions of the Decree.

We found the HABC has made little progress in implementing the terms and conditions of the
Section 8 component of the Decree in providing desegregated housing opportunities to public
housing families now living in Baltimore City. Details of our review can be found under the
“Results of Review” section of this memorandum.

                                              BACKGROUND

The Thompson Court Decree was the result of a lawsuit brought by Carmen Thompson and five
other public housing families, represented by the American Civil Liberties Union (ACLU),
alleging that the HABC and HUD engaged in racial and economic segregation through site
selection and development of public housing in Baltimore City since 1937.

On June 25, 1996, the parties entered into a Partial Consent Decree, approved by a United States
District Court Judge of Maryland. The Partial Consent Decree called for:

   •     complete demolition and replacement within 5 years of all of Baltimore City’s family
         high-rise public housing projects and Fairfield Homes, a vacant low-rise project; and


       Visit the Office of Inspector General’s World Wide Web site at http://www.hud.gov/oig/oigindex.html
   •   replacement of the approximately 3,000 demolished units with:

   o 1,200 new or rehabilitated public housing units in Baltimore City;
   o 800 new or rehabilitated units for project based rental and home ownership; and
   o issuance of 1,342 new tenant-based Section 8 Special Vouchers.

Special Voucher Program

Pursuant to the settlement, HUD provided the HABC funding for 1,342 Special Section 8
Vouchers primarily to help relocate families living in areas of minority concentration in the City
of Baltimore to non-impacted areas in the City of Baltimore and surrounding counties as follows:

                      Area                             Number of Vouchers
       Baltimore City                                         200
       Baltimore County                                       360
       Surrounding     Counties    (Anne                      782
       Arundel, Carroll, Harford, Howard
       and Queen Anne)
                                                               1,342

The Decree targeted families that would be displaced from the four high-rises (Lafayette Courts,
Lexington Terrace, Flag House and Murphy Homes) slated for HOPE VI redevelopment, and to
assist other families living in public housing, public housing applicants and Section 8 families on
the waiting list. In order to ensure the goals established under the Decree were accomplished, the
HABC was required to hire a mobility counselor that offered relocation and advisory services to
qualified families.

                       OBJECTIVE, SCOPE AND METHODOLOGY

The primary objective of our review was to determine if the HABC is successfully implementing
the Special Section 8 Voucher component of the Decree set forth by the United States District
Court for the District of Maryland. To accomplish our objectives we:

   •   interviewed HABC officials responsible for implementing the Decree;

   •   obtained a list of displacees affected by the demolition of Murphy Homes, Lexington
       Terraces, Flag House, and Lafayette Courts;

   •   visited the Relocation Coordinator to determine the status of the displacees, specifically
       whether they relocated to non-impacted areas;
   •   randomly selected a sample of displacees and reviewed their relocation files to determine
       if they were provided with information on all the housing options available, and whether
       they were encouraged to move to non-impacted areas;



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   •   visited HABC officials responsible for providing counseling services to families
       displaced from the four high-rises; and

   •   visited the mobility service contractor, Baltimore Neighborhoods, Inc., (BNI) to
       determine whether they complied with the terms and conditions set forth in the Court
       Decree and performed the following tests:

           o obtained a list of all families who were housed with Special Section 8 Vouchers
             and reviewed their files;
           o reviewed a sample of files for families who were interviewed, but not yet housed;
             and
           o obtained and reviewed documents identifying the counseling services provided by
             BNI.

We also visited the American Civil Liberties Union, and the HABC’s outside legal counsel to
obtain their perspectives on the implementation of the Thompson Court Decree.

                                          CRITERIA

The Thompson Court Decree

The Decree which was approved on June 25, 1996 requires the HABC, with the assistance of a
mobility service contractor, to provide relocation assistance and advisory services to families
displaced from the four public housing high-rises, (Flag House, Lafayette Courts, Lexington
Terrace and Murphy Homes), other families living in public housing including scattered sites,
public housing applicants and Section 8 families on the waiting list as of June 25, 1996. The
Mobility Services Program is designed to offer housing opportunities to those families, assisting
them to relocate to decent, safe, and sanitary dwellings not located in areas of minority
concentration, designated by the Decree as non-impacted areas. To accomplish these goals HUD
provided funding for the HABC to issue 1,342 Special Section 8 Vouchers.

Professional Services Contract between HABC and BNI

The contract, that was signed on September 16, 1998, requires the BNI to provide Section 8
Vouchers and advisory services to qualified families who desire to move to non-impacted areas.
These requirements are detailed in Section VIII, Mobility Counseling Services, and Appendix C,
Duties of the mobility services contractor (Attached),
                                           Attached of the Decree.

Consolidated Annual Contributions Contract (ACC)

Section 10 (A), Civil Rights Requirements, states the Housing Authority shall comply with all
statutory, regulatory, and executive order requirements pertaining to civil rights, equal
opportunity, and nondiscrimination, as those requirements now exist, or as they may be enacted,
promulgated, or amended from time to time.



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                                RESULTS OF OUR REVIEW

We found the HABC has made little progress in implementing the terms and conditions of the
Section 8 component of the Decree to provide desegregated housing opportunities to families
residing in Baltimore City public housing, public housing applicants and Section 8 families on
the waiting list. Specifically, the HABC had planned to lease the entire 1,342 Special Section 8
Vouchers over a six-year period, or approximately 225 vouchers per year since the Decree was
executed in 1996. However, based on records provided by the HABC and its mobility counselor,
we found the HABC had assisted no more than 51 families in moving from impacted to non-
impacted areas. Further, we found the HABC misreported the actual number of families assisted
in its Fiscal Year 2000 PHA Plan submitted to HUD, stating they had served 285 families.

The HABC’s inability to meet Decree requirements occurred because they did not:

   •   procure the Mobility Services Contractor concurrent with the relocation of the displaced
       residents from the four high-rises;
   •   monitor the performance of the mobility counselor;
   •   maintain accurate records on the number of families assisted; and
   •   provide any centralized point of contact with overall responsibility to oversee and
       coordinate the implementation of the Decree.

As a result of not complying with the terms and conditions of the Thompson Court Decree,
public housing families continue to be racially and economically segregated within defined areas
of the City of Baltimore.

Relocation of Families From the Demolished High-Rises

Under the terms and conditions of the Decree, the HABC could not release vouchers for use as
Special Vouchers until a Mobility Counseling Program administered by a non-governmental
entity was available to the families. Because the HABC did not timely design and issue a RFP,
the contract of services with BNI was not executed until September 1998, over two years after
the execution of the Thompson Court Decree. Since HOPE VI redevelopment activity had
already begun at two of the four high-rises (Lafayette Courts and Lexington Terrace), the 885
families relocated from these projects were not provided mobility counseling services according
to Decree requirements. Consequently, the HABC was not in a position to offer any of these
families Special Section 8 Vouchers when they were required to relocate. However, 21 of these
families subsequently expressed an interest to participate in the Special Section 8 Program and 4
of these families were eventually issued a voucher, but as of October 2000 no one has yet
successfully leased a unit.

HABC provided relocation counseling to all 592 displaced families from the other two high-rises
(Flag House and Murphy Homes). The HABC also provided optional mobility counseling to 105
of these families who expressed an interest in participating in the Special Section 8 Voucher
Program. Based on an analysis of records provided by BNI, only 44 of 592 displaced families



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were eventually referred from these two high-rises, which resulted in only 6 vouchers being
issued and one family leasing a unit pursuant to the Special Voucher Program.

Status of Displaced Tenants

Despite the fact that only one family displaced from the four high-rises relocated to a non-
impacted area with a Special Section 8 Voucher, we asked the HABC to provide us with a status
of all of the displaced families so we could determine whether families moved to non-impacted
areas and/or rehabilitated HOPE VI units independent of the counseling program. The HABC
could only provide listings of where a family moved, but could not provide documents
identifying whether families relocated to non-impacted areas. The OIG obtained census tract
information and compared it to the HABC’s list of displaced families and determined the vast
majority of the families still reside in impacted areas as illustrated below:


                                                                                RELOCATED TO:

High-Rise           Total Number of         Non-Impacted Areas           Status Unknown         Impacted areas        Pleasant View
                        Families                                                                    (Public          Gardens/Terraces
                                                                                               Housing, Section 8,   Hope IV Projects
                                                                                                  and Private
                                                                                                   Housing)
Lafayette                  587                       8                        147                     278                  154
Courts
Lexington                  298                       4                         83                     170                   41
Terrace
Flag House                 179                       4                         16                     132                   27
Murphy                     413                       1                         86                     296                   30
Homes
Total                   1,477                       17 a/                     332                     876                  252

a/ Only one family (located in Flag House) leased a unit pursuant to the Special Voucher Program




Mobility Counselor Performance

Through outreach meetings conducted by BNI in May and June of 1998 and its own mobility
counseling discussed above, the HABC compiled a list of 1,322 families that were referred to
BNI. These families were living in impacted areas and voluntarily agreed to participate in the
Mobility Counseling Program. These referrals included the 65 families from the displaced high-
rises. We reviewed BNI’s database and determined that the vast majority of families had not yet
completed mobility counseling. As illustrated below, 1,061 of the 1,322 families (80 percent)
referred to BNI, had not yet completed mobility counseling and, therefore, were not eligible to
receive a voucher; 205 families received a voucher; and 56 are pending issuance. Only 32 of the
205 families that received a voucher have successfully leased a unit in a non-impacted area.




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                                         BNI'S PERFORMANCE
        1400       1322

        1200
                                  1061
        1000


         800


         600


         400

                                                    205
         200
                                                                  56             32
           0


                FAMILIES    COUNSELING NOT    VOUCHERS        VOUCHERS      UNITS UNDER
                REFERRED      COMPLETED        ISSUED          PENDING         LEASE
                                                              ISSUANCE



BNI did not update its database timely, and therefore, could not provide us with pertinent
information for over 800 of the 1,061 families (75 percent) who initially expressed some interest
in participating in the program, but had not yet completed the mobility counseling process. The
families either did not show up for their initial interview, attend required counseling workshops,
or provide BNI with additional information that was requested. BNI’s Executive Director could
not provide us with an explanation as to why the database was not being updated.

BNI’s Executive Director said they were not able to achieve greater success in implementing the
program because: HABC’s referral listing was outdated by the time they were able to initiate
contact with the family; residents were apprehensive in relocating due to the limited availability
of transportation resources and their unfamiliarity with the non-impacted areas; and the difficulty
in recruiting landlords. We acknowledge the obstacles put forth by the Executive Director,
however, as noted in Appendix C of the Decree, the duties of the mobility counselor are to
provide counseling services to assist families in overcoming the aforementioned obstacles.
Further, BNI’s slowness in putting together a workable plan, and its failure to follow up with
families interested in participating in the program contributed to the unsuccessful implementation
of the program.

Contractor Performance

As of August 1, 2000, HABC had approved and paid BNI over $540,000. However, HABC did
not monitor the contractor’s performance until May 2000 or 20 months into the contract. The
HABC determined that BNI’s performance was well below expectations, and recently, BNI
notified the HABC that they will not be able to fulfill the terms of the contract and would
withdraw as of December 31, 2000. However, according to BNI’s Executive Director, the
HABC’s Acting Deputy Director terminated the contract on November 20, 2000.


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HABC Record Keeping

The HABC did not adequately track and maintain records on implementing the Decree, and
therefore, could not provide an accurate account of the actual number of families assisted.
Specifically, Special Voucher Program status reports provided by the HABC were not automated,
and generally only indicated whether a voucher was issued, but did not always track whether the
family leased a unit or if the voucher expired. We found this basic information was only
maintained and updated by BNI, further evidencing HABC’s failure to effectively administer the
Special Section 8 Voucher Program. For example, as of November 2000, HABC officials
indicated 218 vouchers had been issued and 51 units were under lease, while BNI’s database
identified 205 vouchers issued and 32 units under lease. Further, HABC reports did not identify
that 41 of the 218 vouchers issued had expired, and the HABC significantly overstated its
accomplishments in its Fiscal Year 2000 PHA Plan submitted to HUD, which incorrectly
reported that 285 families had been assisted.

An HABC Section 8 official claimed that when a family leased outside the City of Baltimore, the
HABC would not necessarily receive any information on their status. The OIG disagrees with
that statement since the Special Section 8 Voucher Program is designed to house families outside
the City of Baltimore. Additionally, the Decree clearly states that a Special Section 8 Voucher
utilized outside the City of Baltimore does not remove it from the Special Section 8 Voucher
Program. Therefore, the status of each voucher must be maintained.

Overall Decree Responsibility

No responsible official(s) within the HABC assumed full responsibility for ensuring the Decree
was appropriately and timely implemented. Initially, the HABC’s Inspector General identified
the Associate Director for Planning and Program Development as the responsible official to
contact regarding the Decree. However, when we contacted this official we were told that
officials within Housing Operations were responsible for administering the Decree. Although
Housing Operations officials acknowledged they were responsible for administering the Decree,
they did not know the current status of the Decree’s implementation and could only provide
additional points of contact, indicating we would need to contact the Section 8 Director for more
specific information. Unfortunately, the Section 8 Director also could not provide an overall
status on the implementation of the Decree. It was not until our site visit to HABC’s Relocation
Coordinator, not among the points of contact provided by Housing Operations and BNI, that we
were able to obtain some information on the families who lived in the four aforementioned high-
rises and the number of Special Section 8 Vouchers issued and under lease.

Challenges to Decree Implementation

HABC officials pointed to the unique characteristics of the City of Baltimore’s neighborhoods as
an important reason for the slow progress in implementing the Decree. Apparently, residents of
Baltimore have very strong ties to their neighborhoods, regardless of their race, and do not wish
to move under any circumstances. Recently, as part of the Decree, the HABC planned to spend


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$4.1 million to purchase and renovate 40 homes in non-impacted areas in the City of Baltimore
to provide rental housing for public housing residents. However, this plan met with considerable
opposition from the local community. The opposition underscores the close ties residents have
to their neighborhoods and the apparent difficulty city officials have in implementing the Decree.

In early October 2000, as a result of the aforementioned opposition and continuing management
differences, the Mayor of Baltimore asked for and received the resignation of the HABC’s
Executive Director.

We acknowledge the HABC has a daunting task in relocating and placing families in non-
impacted census tracts. However, it does not appear the HABC has placed any urgency or
dedicated appropriate management resources to accomplish this task. The HABC’s outside legal
counsel cited BNI, the mobility counselor, as the primary reason for the lack of progress in
implementing the Thompson Consent Decree. However, as stated above, the mobility counselor
was not hired timely, and it was clear the Section 8 vouchers were not being issued and leased
according to established benchmarks. Despite apparent implementation problems, the HABC
had not conducted timely monitoring of its mobility counselor to measure its performance. The
ACLU blamed the lack of progress in implementing the Decree on the time the Justice
Department took to make changes to the RFP for the mobility counselor, HABC reluctance, and
the time spent negotiating a contract with BNI.

                                        * * * * * *
In summary, the HABC has not adequately administered or provided sufficient oversight to
ensure the Special Section 8 Voucher component of the Thompson Court Decree is successfully
implemented. Consequently, public housing residents continue to be racially and economically
segregated within defined areas of the City of Baltimore.

Recommendations:

We recommend you ensure:

1A.    The HABC develops appropriate policies and procedures to successfully implement the
       relocation, mobility services, and the Special Section 8 Vouchers component of the
       Thompson Court Decree. These policies and procedures should provide for the review
       and evaluation of the mobility counselor’s compliance with Appendix C of the Decree.

1B.    The HABC designates management personnel who will have overall responsibility for
       implementing the Decree and provide sufficient staff resources to accurately account for
       the Special Section 8 Vouchers leased and issued; and monitor the performance of its
       mobility counselor.

1C.    The HABC expediently recruits a new mobility counselor that can adequately implement
       Appendix C of the Decree.




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The results of our review were discussed with HABC officials during the review and at an exit
conference on January 5, 2001. HABC officials stated they agreed with the review and have
initiated actions to implement the recommendations made in this report. We have included the
HABC’s response in its entirety as Appendix
                                   Appendix A.A

If you have any questions, please contact Allen Leftwich, Assistant District Inspector General for
Audit at (215) 656-3401.




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                        Appendix A
Auditee Comments




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                                                                                  Appendix B

Distribution

Director, Public Housing Program, HUB
Director, Community Planning and Development, 3ED
Secretary’s Representative, Mid-Atlantic, 3AS
Special Agent in Charge, 3AGI
Audit Liaison Officer, 3AFI
Director, Office of Public Housing, Baltimore Area Office, 3EPH
Baltimore Area Coordinator, 3ES
Principal Staff
Departmental Audit Liaison Officer, FM (Room 2206)
Deputy Chief Financial Officer for Finance, FF (Room 2202)
Audit Liaison Officer, Office of Public and Indian Housing, PF (Room 5156)
Director, Office of Budget, FO (Room 3270)
Acquisitions Librarian Library, AS (Room 8141)
The Honorable Fred Thompson, Chairman, Committee on Governmental Affairs, 340 Dirksen
       Senate Office Building, US Senate, Washington, DC 20510
The Honorable Joseph Lieberman, Ranking Member, Committee on Governmental Affairs, 706
       Hart Senate Office Building, US Senate, Washington, DC 20515
The Honorable Dan Burton, Chairman, Committee on Government Reform, 2185 Rayburn
       Building, House of Representatives, Washington, DC 20515
The Honorable Henry Waxman, Ranking Member, Committee on Government Reform, 2204
       Rayburn Building, House of Representatives, Washington, DC 20515
Ms Cindy Fogleman, Subcommittee on Oversight and Investigations, Room 212, O’Neil House
       Office Building, Washington, DC 20515
Director, Housing and Community Development Issue Area, US GAO, 441 G Street, N.W.,
       Room 2474, Washington, DC 20548, Attn: Stanley Czerwinski
Mr. Steve Redburn, Chief, Housing Branch, Office of Management & Budget, 725 17th Street,
       N.W., Room 9226, New Executive Office Building, Washington, DC 20503
Executive Director, Housing Authority of Baltimore City, 417 E. Fayette Street, PO Box 1917,
       Baltimore, MD 21202-3134




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