Senior Project Told to Suspend Results of Housing Lottery

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 earlier this month 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 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 requirements.

HUD’s position is disappointing to Lawndale officials who say the lottery was unfair to city residents, 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. “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.”