HUD to Review Draw for Senior Apartments

The U.S. Department of Housing and Urban Development has ordered the developer of a senior housing project in Lawndale to temporarily suspend the results of the lottery it used to select tenants while the agency reviews the way the lottery was conducted.

Cooperative Services Inc., the Detroit-based developer that is building Lawndale’s only apartment complex for low-income seniors, violated HUD’s policies by failing to seek the agency’s approval before holding the lottery, HUD officials said in a letter sent Wednesday to the developer.

The developer also may have violated federal guidelines in not holding a separate drawing for handicapped tenants, the letter said.

But because Cooperative Services did follow federal guidelines to advertise vacancies and seek applications, HUD officials said in the letter that they are likely to allow the March 13 lottery results to stand, as long as they determine that the drawing was carried out in accordance with their requirements.

HUD’s position is disappointing to Lawndale city officials who say the lottery was unfair to Lawndale residents and elderly Latinos in particular. They asked the agency, which provided grant money to build the project, to order a new drawing.

“What we wanted them to say is, ‘You will redo the lottery,’ ” Lawndale City Atty. David Aleshire said. “What they’re saying is that even though they find problems with the way the lottery was conducted, they’re not necessarily going to make them do it over again.”

Mel Atkinson, Cooperative Services’ operations manager, did not dispute HUD’s contention that the company failed to seek the agency’s approval for the lottery procedures but said HUD has approved Cooperative’s lottery procedures in the past. He said that a copy of the procedures has been sent to HUD and that he expects the agency to approve them.

Cooperative Services contracted with the city to build the 56-unit project in 1989. The three-story building on 153rd Place is expected to be finished in mid-July.

City officials brought their complaints to HUD in mid-April after the lottery results showed that most of the apartment’s tenants will probably come from outside the city.

“We spent over five years trying to get this development under way,” Aleshire said Thursday. “Yet the end result is that only a small number of Lawndale residents end up getting a benefit. . . . There’s a real error in the HUD program that there isn’t something in this for local communities. It’s no wonder that people end up fighting HUD and that the national housing policy and office is in such a disaster.”

In ordering Cooperative Services to temporarily suspend the results of the lottery, HUD required only that final tenancy selections be put off until the review is completed. HUD did not order the developer to cease processing applications.

Three weeks ago, Cooperative Services accused city officials of wrongly advising elderly applicants that the lottery will be rescheduled and that they need not comply with requests for information to qualify them for an apartment.

Although city officials adamantly denied the allegations, Joyce Ellenbecker of Cooperative Services said she heard about them “from several prospective residents.” The city is “doing a disservice to their own residents,” she said, because applicants who fail to provide financial information jeopardize their chances of getting a subsidized apartment.

Because housing built with HUD grants may not give preference to local residents, Lawndale officials originally wanted to sell the site to a private developer to ensure that the city’s senior population would get first crack at the subsidized apartments.

But after negotiations with two private developers fell through, the city reluctantly sold the site for $436,000 in 1989 to Cooperative Services, a nonprofit corporation that has built subsidized housing projects nationwide since 1945.

Company officials assured the city at the time that local advertising about the lottery usually guarantees that more than half the tenants would be from the city sponsoring the development, Aleshire said.

Nevertheless, city officials planned to send flyers to Lawndale seniors notifying them about the lottery. However, one week before the lottery was to take place, officials realized that they needed more time to get the flyers out.

Councilwoman Carol Norman asked Cooperative Services to postpone the drawing one week, but the developer refused, saying it was against company policy and would be too difficult.

When the lottery results came in, 52 of the 306 people who applied were Lawndale residents; of the first 100 names chosen, 17 were from the city. In addition, a disproportionate number of applicants who received priority are Asian, rather than Latino, city officials said.

After the drawing, city officials renewed their request that Cooperative Services reschedule the lottery. But the developer refused, saying it would be unfair to those who were selected.

In a letter dated April 16 to the developer, city officials alleged that the lottery was not fairly conducted and that the “priority tenant list does not reflect the ethnic composition of the city and the region.”

Although Latinos are 28.4% of the area’s population, they make up only 15% of the tenant applications, the letter stated. Asians make up only 6.7% of the population, but 36% of the applicants are Asian.

“The (Latino) community, which by far constitutes the largest ethnic minority population in the city and the region, seems particularly under-represented,” it said.

City officials also objected to the formation of a three-member committee that interviews prospective tenants. The committee members were chosen from among the housing applicants, a system which “presents the opportunity for discrimination,” Aleshire said.

But Cooperative Services General Manager Fred Wood said volunteer selection committees have been successful in other developments and that committee members are instructed about the “nondiscriminating nature of the interview.” The committee gathers non-financial information on applicants.

To ensure that a wide range of ethnic groups would be aware of the drawing, he said, Cooperative Services ran advertisements about the lottery in five different newspapers and sent letters to 10 organizations, including the National Assn. for Hispanic Elderly and the Plaza de la Raza.

“We feel we have reached all ethnic groups that wanted to apply,” Ellenbecker said. “We tried to reach all the communities. I don’t have any idea” why some ethnic groups chose to apply more than others.