Office of Multifamily Housing Fails to Ensure Timely Resolution of Health & Safety Complaints

In July 2019, an explosion occurred at the Calloway Cove Apartments, a Section 8-assisted site in Jacksonville, Fla. The explosion resulted in a fire that injured several people. HUD’s Real Estate Assessment Center had identified life-threatening health and safety deficiencies at the property for several years, and there had been separate concerns related to health and safety issues at this site, which appear to have gone unaddressed and may have led to the fire.

Audit Findings

HUD’s Office of the Inspector General (OIG) found that the Office of Multifamily Housing Programs’ complaint process didn’t ensure timely resolution of health and safety complaints. HUD Multifamily oversees contracts with private owners of HUD-assisted properties such as the Section 8 Project-Based Rental Assistance program. The OIG found that performance-based contract administrators (PBCAs) responded to complaints quickly but didn’t resolve them in a timely manner.

Time Frames

On average, it took 2.5 days to resolve the life-threatening health and safety issues reviewed, including three days to resolve a gas leak issue. It took an average of 17 days to resolve the nonlife-threatening health and safety issues, including 175 days to resolve an infestation problem. For the purpose of the audit, the OIG determined reasonable benchmark resolution times to be 24 hours for resolving life-threatening health and safety issues and 72 hours for non-life-threatening health and safety issues.

The OIG stated that this condition occurred because HUD didn’t have a standardized, effective process for monitoring, tracking, and resolving complaints in a timely manner. As a result, Multifamily Housing tenants were, in some instances, faced with unhealthy and dangerous living environments for extended periods.

Complaint Process

PBCAs are state public housing agencies or agency affiliates, or are state housing finance agencies. PBCAs administer 92 percent of all Multifamily annual contribution contracts with the owners of private multifamily housing with Section 8 Project-Based Rental Assistance (PBRA). HUD Field Office staff administer the remaining 8 percent.

PBCAs send complaint logs to Multifamily regional offices at the end of each month. PBCAs work directly with property owners on complaint intake and resolution and perform core tasks for Section 8 PBRA contracts, ensure tenant safety, address tenant concerns and complaints, conduct onsite visits, perform management reviews, and ensure that contracts are administered according to Multifamily requirements.

By contract, PBCAs are required to respond immediately to life-threatening issues and within two business days for nonlife-threatening health and safety issues. Examples of life-threatening health and safety conditions include detection of gas, exposed wires, security bars preventing egress, missing breaker fuses, and smoke detectors that are missing or inoperable. Examples of non-life-threatening health and safety conditions include leaking faucets and pipes, sewer odors, cracked or missing windows, missing doors, mold and mildew, rats or mice infestation, and an inoperable water supply.

The Office of Multifamily Housing also receives complaints via a complaint line managed by the Multifamily Housing Clearinghouse at HUD headquarters. Complaints about a property’s management concerning poor maintenance, dangers to health and safety, mismanagement, and fraud are generally sent to the appropriate Multifamily regional office, which directs it to the appropriate PBCA, property management company, or property owner.

System Weaknesses

The OIG noted that although the Office of Multifamily has timeliness requirements for responding to health and safety issues, it has no timeline requirements for resolving those issues. The OIG found the following system “weaknesses” that caused HUD to be ineffective for resolving health and safety complaints in a timely manner:

• HUD’s Multifamily Housing Clearinghouse featured a housing complaint line that forwarded all complaints to the Multifamily field offices, which forwarded 97 percent of the complaints to a PBCA to resolve without routine follow-up or tracking. HUD personnel fielded the other 3 percent;
• HUD didn’t have agencywide guidance specifically stating how its staff must receive, monitor, and track complaints. Each field office had its own processes for staff to monitor complaint resolution;
• HUD staff generally tracked property complaints individually via email correspondence with the complainant, PBCA, management agent, or owner. This method made it impossible for management to fully monitor and track health and safety issues;
• HUD didn’t have an automated system to reliably track complaint intake and resolution. HUD has a system, the Integrated Real Estate Management System, which could be used for entering and tracking health and safety issues, but HUD didn’t require staff to use it for that purpose;
• HUD didn’t require reporting from the PBCAs on complaint intake and resolution in a manner to ensure resolution was completed in a timely manner. Although the annual contributions contract stated the PBCA would provide timely reports, the OIG found that monthly, quarterly, and annually wasn’t quick enough for HUD to properly ascertain the extent of life- and non-life threatening issues. This reporting included life-threatening complaints, which should be resolved within 24 hours. As a result, HUD wouldn’t know the full extent of complaints received or their resolution status for nearly 30 days in some cases;
• HUD’s contract with the PBCAs stated that HUD wouldn’t become intricately involved in the resolution of routine complaints;
• HUD hadn’t established specific time frames for resolving life-threatening or non-life threatening health and safety issues in Multifamily housing, as it had for other program areas such as Housing Choice Vouchers and public housing programs;
• HUD didn’t have a requirement that the projects’ property management immediately contact PBCA staff if a property had a life-threatening or non-life-threatening health and safety issue and to report when the issue had been resolved.

Recommendations

The OIG recommends that the Multifamily deputy assistant secretary:

• Develop a comprehensive process to ensure that complaints received by the Multifamily Housing Clearinghouse are resolved in a timely manner;
• Develop agencywide policies and procedures for the intake, monitoring, and tracking of health and safety complaints;
• Develop an automated real-time system for receiving, tracking, and resolving health and safety issues; and
• Revise the Multifamily annual contributions contract to define more clearly contractor and property management responsibilities and deadlines for resolving health and safety issues.

• HUD Audit 2021-KC-0004