Kemp Cites Abuses, Halts Elderly Housing Program

HUD Secretary Jack Kemp today suspended a housing program for the elderly that has cost the government more than $119 million in losses, as he struggled to clean up mismanagement and abuse within the agency dating from the Ronald Reagan Administration.

Kemp announced he was halting new and pending applications for the Retirement Service Center program, saying that in addition to costing the government millions it has failed to serve the low-income elderly for whom it was designed.

It was the third troubled program Kemp has placed on hold since taking over the reins of the Department of Housing and Urban Development earlier this year.

In announcing the latest suspension, Kemp said that in addition to direct losses, the program has incurred loan defaults in excess of $250 million.

“This is a program that should serve low-income people but instead is serving upper- and middle-income persons--and doing it very poorly at that,” he said. “I plan a complete redesign of the Retirement Service Center program and will require that it be targeted to low- and moderate-income elderly.”

About 30% of the projects that received HUD funding since the program was launched in 1983 are in default, the department said. Many were built in areas where there was not a sufficient shortage in housing for the elderly to support the projects, officials added.