Meyer, Newark’s new housing chief, said that HUD officials knew in April that the project was in trouble and that local officials were going to try to “recover as much funds from the developer as possible.”
“They know absolutely what was up with this project and our travails with the developer,” he said.
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Meyer said communication probably broke down during HUD’s scramble to verify the status of projects. “The message didn’t get delivered correctly,” he said. “They were just telling people: ‘Tell us when they were completed.’ ”
HUD said it was “permissible under HOME program rules” to count the Newark project as complete because HUD officials had determined that no HOME money was used on incomplete units. But the agency said “neither the City nor HUD is satisfied with the level of subsidy used for this project.”
The agency added: “This situation is an unfortunate example of the huge effect that housing and credit market downturns had on residential real estate development. While it is unfortunate that this project could not be completed as originally envisioned, there is nothing inappropriate about the completion of this project for the lesser number of units.”
In St. Louis County, Mo., HUD reported a project complete with three units built and the developer drawing $690,000 out of the $1.1 million allocated. But the developer was supposed to build seven units. Some of the money was used on pre-development costs for homes that were not built, local officials said.
“We had kept hoping that we would do something else with the money,” said Darlene Rich, housing programs manager for the county. “Finally, we said, ‘We were done.’ ”
Rich said the remaining money was moved to another project, which was eventually completed. HUD said it will probably seek repayment from St. Louis County.
HUD declined to provide any documentation to verify the status of the hundreds of projects it has reported as complete, such as grant agreements and certificates of occupancy.
Staff members with the Financial Services Committee said they have also struggled to verify HUD’s data on completed projects. They recently visited construction sites for a series of older projects listed on a report that HUD provided to Congress in July. In some cases, they couldn’t find any houses or found fewer units than expected.
At the House hearing last week, members criticized HUD for not reporting for its projects how many units were proposed and how many were eventually delivered. They also cited HUD for providing inaccurate addresses for reportedly completed projects.
Rep. Bill Huizenga (R-Mich.) found an empty lot in Grand Haven, Mich. When his staff called the local housing agency, he said they learned the project was in another location.
The address HUD gave, Huizenga said, was “in the wrong city.”
HUD declined to respond to questions from The Post about the properties identified by members of Congress, saying the agency is researching the cases and will first report back to Congress. Local housing officials said addresses for projects often change as lots are developed. The local officials said HUD has not made a point of requesting updated addresses.
“We’re not required to do it,” said Bay, the official in California. “There’s no resistance to it. Obviously, I would prefer that our records are accurate in that regard.”
Following the money
HUD has also repeatedly told Congress that local housing agencies repay HOME money when construction deals go awry, guarding the federal government from losses.
HUD produced a chart for Congress earlier this year that showed more than $250 million repaid or forfeited by local housing agencies. But the chart provides only an overall amount of repayments for each local jurisdiction. It did not show why or when money was returned — or for which projects.
Officials at several local housing agencies with defunct projects said in recent weeks that they had no idea if money had ever been repaid to HUD. Even when money was returned, it often took years.
In Camden, N.J., a developer was paid $200,000 in the mid-1990s to build 15 houses but produced only a few, said Cyrus Saxon, bureau head with the city’s grants management department. He said HUD’s money was repaid in early 2011 — 14 years later.
Staff researcher Jennifer Jenkins contributed to this report.
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