Millions Wasted as Homes for Poor Sit Unfinished

'Washington Post' investigates massive issues with the HUD fund
By Kate Seamons,  Newser Staff
Posted May 15, 2011 11:11 AM CDT

(Newser) – Brace yourself: This is yet another depressing housing story. A yearlong Washington Post investigation reveals that the country's largest federal housing construction program for the poor has wasted hundreds of millions of dollars on "stalled or abandoned" projects and failed to hold "derelict developers" accountable. The Post counts some 700 projects that have been infused with $400 million and sat idle for, in some cases, more than a decade. The fund, which is supposed to help finance the construction or renovation of homes for working-poor families, is managed by the US Department of Housing and Urban Development—and HUD has largely ignored these woes: It doesn't track construction timelines, and entrusts local agencies with staying up on defunct deals.

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No corner of the country is untouched, writes the Post, which points to projects in California, New Jersey, and Texas that sit boarded up—or haven't even begun. In DC, one development group was given $750,000 to build dozens of homes; six years later, not a single one has been constructed. Some housing agencies fault the economy for drying up the financing developers need to finish the projects, as HUD's money generally doesn't cover the entire cost. But the Post notes that hundreds of delayed jobs predate the current economic woes, instances where developers—many of whom didn't have land or permits—accessed HUD's "easy money" and benefited from the utter lack of oversight. And even if HUD does learn of a bungled deal, it can't demand its money back: Federal law only allows them to ask local agencies to voluntarily pay the money back—into the agencies' own federal accounts. (Read more Department of Housing and Urban Development stories.)

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