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Tuesday, May 17, 2011 - 12:02pm

WashPo: $4M Ga. HUD Dollars Squandered

Updated: 3 years ago.
Sustainable Fellwood is Savannah's first environmentally-friendly public housing development. It was briefly delayed for financing reasons early on, but is on track to open on time. Residents already live in Phase I. (photo by permission Sustainable Fellwood)

A Washington Post investigation found hundreds of millions of dollars from the federal government's largest housing construction program are being squandered on delayed projects.

The projects include several in Georgia.

The Post spent a year tracking government money from the US Department of Housing and Urban Development's HOME Program.

That program helps to fund housing projects for the poor.

Nationwide, the newspaper found 700 projects, awarded $400 million, that have been idling for years.

The investigation also found that HUD officials failed to crack down on derelict developers and the local housing authorities that fund them.

The director of the Savannah Public Housing Authority, Erlene Davis, says that she can understand why there have been delays.

"When we had the recession, the financing that had been in place for some projects was no longer available," Davis says. "And so new funding sources had to be found."

Davis says, one public housing project in Savannah was briefly stalled because of difficult financing in its early stages.

But now the project, called Sustainable Fellwood, is on time and has residents ready to move in.

"It delayed the start of phases two and three," Davis says. "But we're on target to finish on time."

In Atlanta, HUD records show that several projects that are six years old are still not finished.

One project, which was awarded $3 million in 2005, is a 120-unit multi-family residence acquisition and rehabilitation that has drawn down "practically all" of its HUD money, according to an agency official.

Another unfinished project, which was award $250,000 in 2005, is a new home construction and has spent about 65% of its HUD funding, according to an agency official.

A spokesman for Atlanta's Bureau of Public Housing was not immediately available for comment.

In the state's more rural areas, the agency responsible for projects under HUD's HOME program is the Georgia Department of Community Affairs.

The DCA official in charge of multi-family projects, Laurel Hart, defended the program.

"It's such an important part of housing Georgians during these difficult times that it's a shame [the Washignton Post] concentrated on the small number of projects which were difficult to close in some very challenging economic times," Hart says. "Seniors couldn't even afford to pay the utility bills in the mobile homes before our projects were built."

Hart says that her office awarded five projects HUD funds in 2008 and that all of them are "100%" finished.

These projects are in LaGrange, Moultrie, Douglas, Breman and Donaldsonville.

And she says that her office awarded five projects HUD funds in 2009 and that only one of them, in Henry County, is significantly delayed.

The project, in Locust Grove, has spent only 25% of its HUD money, but is on track to finish this year, according to Hart.

A spokesman for HUD directed questions about specific projects to local agencies.

"How the local or state government produces affordable housing is really up to the local community," says Brian Sullivan. "That is the very nature of a block grant program."

Sullivan says, while stalled projects represent a tiny portion of the HOME program's budget, HUD does pay close attention to and recovers money from local agencies that don't meet their legal requirements to build housing.

"It's not a matter of trust that [local agencies] produce affordable housing. It's a legal agreement that HUD has with these state and local housing agencies that they will produce affordable housing," Sullivan says. "The suggestion in the Washington Post that we are looking the other way and that we do not recover wasted money is an absolute fallicy."

The Post article can be viewed here.

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