HUD Commends Changes at L.A. Housing Agency

Los Angeles’ low-income housing agency, the target of a federal audit after a $24-million operating loss last year, has made significant strides toward improvement, a federal official said.

“A year ago, things were in crisis here,” said Housing and Urban Development Assistant Secretary Michael Liu, who delivered the progress report during the dedication of a public housing community center in Boyle Heights on Thursday. “HUD is very happy with what you have [done] here with the Housing Authority.”

Liu cautioned that the Los Angeles Housing Authority has not left all of its troubles behind. But he said HUD’s confidence in the agency’s direction has risen markedly in the year since HUD threatened to put the Housing Authority into receivership.

The agency manages more than 45,000 housing units and housing vouchers for low-income residents.

It now has a balanced budget of $875 million, said Elenore A. Williams, chairwoman of the commission that oversees it.

“It’s a new day for the Housing Authority,” Williams said. The October hiring of Rudolf Montiel as executive director was a major step toward putting the agency on surer financial footing, she said.

The agency also has addressed serious flaws in its low-income subsidy program. In February 2004, it had to suspend vouchers for 1,500 participants. The agency had issued the vouchers without the funding to back them.

With new policies in place, “no family will be dropped from the program in 2005,” Williams said.

Liu said federal authorities are continuing to monitor the Housing Authority’s progress. The agency still needs to hire a chief financial officer and a director to oversee Section 8 federal housing subsidies, he said. “There are still some key things that have to be done.”

The 1,500-voucher shortfall sparked a HUD inquiry into the use of Housing Authority reserves to cover vouchers.

A HUD audit released in January criticized the Housing Authority for, among other things, awarding $4.6 million in contracts to tenant management corporations for moving and extermination services, even though they “did not have the capability to carry out the services required.”

When HUD began investigating, it clamped a lid on the Housing Authority’s ability to award contracts of more than $50,000 without federal approval.

That ceiling has been raised to $250,000 because “we trust you,” Liu said at the dedication of the Aliso Village Community Service Center.