Housing Authority is HUD money pit

Insight on the News, July 29, 1996 by Susan Crabtree

Public housing in New Orleans remains mired in bureaucratic bungling despite two decades of attempts to bolster living conditions there, a recent General Accounting Office, or GAO, report has found.

The Housing Authority of New Orleans, or HANO, is one of the nation's largest and most problematic public-housing authorities, operating more than 13,000 housing units with 24,000 residents, according to the GAO.

The report says that HANO has failed to carry out routine maintenance such as repairs to plumbing, heating and electrical systems and modernization work such as replacing roofs and razing unsafe buildings. More than 25 percent of the apartments are vacant because of years of neglect and deterioration, according to the report.

Despite the dilapidated conditions, the housing authority has nearly $200 million in unspent modernization grants and other federal funding -- which represents 82 percent of the total funding to the housing authority during the last decade.

The GAO attributes HANO's decline to several problems, including the housing authority's board of commissioners' persistent interference in the authority's daily operations, which the GAO says has resulted in canceled modernization contracts and delays in HUD-mandated improvements.

HUD has made several attempts to remedy the situation in the last 20 years. It has withheld funding, twice required the authority to be managed by a commercial property-management firm, sanctioned the board of commissioners and negotiated directly with the mayor of New Orleans in 1994 to establish a partnership between HUD and the city.

But these corrective measures have changed little, GAO says, prompting Secretary Henry Cisneros to declare the housing authority in breach of contract and to enter into another cooperative agreement with the mayor of New Orleans.

Louisiana Republican Rep. Richard Baker, who requested the report, is discouraged by HUD's willingness to work with the city of New Orleans rather than placing HANO under complete HUD control. "What is so unbelievable is that HANO is, by far, the worst public-housing authority in the country and they are receiving special treatment," Paul Sawyer, Baker's staff director, says firmly. "To describe HANO as having Third World conditions, in most instances, would be complimentary."

HUD officials deny giving any special treatment to HANO and say that most large housing authorities resemble HANO's profile. Involving city officials, they maintain, is less costly and more efficient than unilaterally taking over a city's housing authority. "If you work with the city you have the involvement of the local leaders and give them a stake in making improvements," contends HUD spokesman Michael Zerega.

Baker scheduled a hearing in New Orleans for mid-July to discuss the status of HANO.