Washington Post investigation: Millions misspent in HUD housing projects

The federal government’s largest housing construction program for the poor has wasted hundreds of millions of dollars on delayed or discarded projects and consistently failed to crack down on delinquent developers or the local housing agencies that funded them, according to a yearlong Washington Post investigation.

May 16, 2011
HUD, government spending, housing

The federal government’s largest housing construction program for the poor has wasted hundreds of millions of dollars on delayed or discarded projects and consistently failed to crack down on delinquent developers or the local housing agencies that funded them, according to the Washington Post.

Across the nation, nearly 700 projects that were awarded $400 million have been idling for years, the Post investigation found. Some have stagnated for a decade or longer, although record-high foreclosures and a striking loss of affordable housing have bogged down the country’s real estate market for years.

The yearlong Post investigation uncovered a broken down system that hands out billions of dollars to local housing agencies without enforcing rules, maintaining safeguards, or even upholding a dependable system to track projects. This has led to extensive misspending and delays in a twenty-year program intended to provide decent housing to the working poor.

The Post found flaws at every level:

■ Local housing agencies have awarded millions to troubled developers, including inexperienced builders, fledgling nonprofits, and groups accused of fraud or substandard work.

■ Checks were cut even when projects were still on the drawing boards, lacking land, financing, or permits to move forward. In at least 55 cases, developers collected HUD money but left behind only empty lots.

■ Overall, nearly one in seven projects shows signs of major delay. Housing agencies continually failed to cancel bad deals or alert HUD when projects flagged.

For more information: http://www.washingtonpost.com/investigations/a-pattern-of-hud-projects-s...

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