• HUD has known about the problems for years but still imposes few requirements on local housing agencies and relies on a data system that makes it difficult to determine which developments are stalled.
• Even when HUD learns of a botched deal, federal law does not give the agency the authority to demand repayment. HUD can ask local authorities to voluntarily repay, but the agency was unable to say how much money has been returned.
360-degree Google Street View images of selected stalled or abandoned affordable-housing projects nationwide.
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The D.C. region has a particularly troubled track record. In Prince George’s County, the nonprofit Kairos Development Corp., received $750,000 in 2005 to build dozens of homes. Six years later, Kairos has not built a single house.
“When Kairos came along, I thought this would be something that would help the community,” said Clinton Adams, a local landowner who discussed selling property to Kairos. “What did they do with the money?”
Dozens of housing agencies nationwide acknowledge botched deals and often blame the economy for leaving developers without financing to finish the work.
But hundreds of stalled projects predate the troubled financial markets, with developers tapping HUD’s program for easy money and then escaping even rudimentary oversight from local and federal authorities. The agency’s inspector general for years has chronicled scores of delayed projects and millions in waste.
“We need to reduce the risk for HUD funding in development deals,” said Annemarie Maiorano, who manages HUD money for Wake County, N.C. “There needs to be basic standards.”
HUD officials said they have recently tried to determine why developments are delayed and have begun to cancel projects. In response to inquiries from The Post, the agency last month launched investigations into a series of defunct deals, finding questionable payments and excessive delays, and in recent weeks has sought the return of more than $4 million from housing agencies in the District and Prince George’s County.
“We can do better and we will,” said Mercedes Marquez, HUD’s assistant secretary for community planning and development, who was nominated by President Obama in 2009. “HUD, the Congress and every taxpayer I know expects these funds to be put to work. . . . I won’t hesitate to do what’s necessary.”
A program that began with great promise for the poor
Past HUD scandals have involved misused vouchers for rental properties, unsafe conditions in public housing and corruption in grant-making programs. The Post’s investigation is the first systemic look at the progress of construction in HUD’s affordable-housing fund, known as the HOME Investment Partnerships Program.
The program launched with great promise two decades ago, when Congress vowed to fund the construction or renovation of thousands of apartments and houses for working-poor families.
Since 1992, HUD’s vast main office on 7th Street in Southwest Washington and its 43 field offices have overseen $32 billion in funding, which is distributed in block grants to 642 cities, counties and states. They, in turn, partner with developers, giving out grants or loans with generous terms such as delayed repayment, low interest rates and outright forgiveness of debt.
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