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Federal Inspector General report shows 91% of units inspected by MaineHousing failed to meet quality standards

“Several different inspectors from both the Authority and Avesta” passed 30 units that failed to meet HUD quality standards

A federal report from the U.S. Department of Housing and Urban Development (HUD) Office of the Inspector General (OIG) shows that the MaineHousing Authority has regularly inspected, and passed, housing units that don’t meet HUD’s quality standards.

MaineHousing, despite blaming recent inspection failures on third-party providers, was found to have directly inspected, and passed, 10 out of 11 units that “did not comply with HUD’s housing quality standards,” according to the report.

A story about sub-standard units in Norway prompted the firing of a Section 8 administrator Avesta Housing “rogue inspector” and led to the sudden termination of Avesta’s contracts administering Section 8 housing.

MaineHousing and then director Dale McCormick placed the blame for inspection failures solely on Avesta and “rogue inspector” Kay Hawkins and crafted an internal audit to support those claims. McCormick then made the decision, without board input, to bring all Section 8 administration and inspection in-house.

The report, issued by OIG, was done at the request of Maine Senator Susan Collins, who became concerned about the condition of HUD funded housing units in Maine following reports of the sub-standard living units in Norway. The OIG review was initiated because there were, “concerns about the well-being and safety of tenants living in units that may not have complied with HUD’s housing quality standards,” according to the report.

The OIG report details the review the OIG’s office made of “units that passed the Authority’s and Avesta’s inspections after March 2011 to determine whether…units complied with HUD’s housing quality standards.”

The results weren’t good.

According to the report, 30 of 32 units inspected, “did not comply with HUD’s housing quality standards,” and 10 of those were inspected directly by MaineHousing.

Despite MaineHousing and McCormick’s longstanding position that this was the problem primarily of one “rogue inspector,” the report notes that the 30 units passed by Avesta and MaineHousing that failed HUD standards were inspected by, “several different inspectors, from both the Authority and Avesta.”

The report says that not only did 30 of 32 units fail to meet HUD standards, but several units also contained, “health and safety violations.” OIG also stated that some of the units shouldn’t have ever been approved for initial occupancy, finding “deficiencies that would have existed at the time.”

The report notes that MaineHousing and Avesta inspectors may have been, in effect, covering for each other. “In addition,” the report states, “the Authority and Avesta performed quality control inspections of each other’s units. These inspections did not indicate problems with the inspection process.”

Senator Collins, who requested the investigation by OIG, said the activity the review uncovered was “appalling.”

“The failed inspection rates uncovered by the Inspector General’s investigation are shocking,” Collins said. “They indicate systemic failures by both Maine State Housing Authority and Avesta, rather than problems caused by one “rogue inspector” as MSHA and Avesta previously had asserted.”

“The bottom line is people who live in federally subsidized housing should expect decent, safe, and sanitary conditions.  Unfortunately, this report shows that federal funds are instead going to property owners who fail to properly maintain their units.  This is absolutely unacceptable,” Collins added.

The report goes on to question the capacity of MaineHousing to move forward with their plan to pull all Section 8 inspections in-house, a plan put in place before McCormick’s sudden resignation in March.

In reaction to the Norway incidents, MaineHousing decided to phase out contract administrators by the end of year and “assume responsibility for all of its 3,200 units,” the report stated.

David Montoya, the Inspector General, doesn’t feel that MaineHousing is in a position to handle the inspection program, citing the 10 of 11 passed inspections that failed to meet HUD standards.

According to the Inspector General, “our initial assessment determined the likelihood that there were serious systemic deficiencies with the unit failures managed by both the Authority (MaineHousing) and Avesta and that it is questionable whether the Authority has the capacity to manage the entire program in house as planned,” Montoya said. “We are concerned that the Authority may not have the capacity and expertise to accomplish both a reorganization while effectively managing the inspection program.”

Senator Collins agreed with the sentiment that MaineHousing may not be fit to run the inspection program for Section 8.

“As part of a corrective action plan proposed by MSHA, the agency will no longer use outside inspectors and will instead assume responsibility for the safety of its units,” said Collins. “This report, however, reveals instances where MSHA-inspected units also failed to meet HUD’s housing quality standards, which raises troubling questions about the agency’s capacity to ensure safe and healthy housing for qualified residents.

MaineHousing board chair Peter Anastos expressed his disappointed in the findings of the report.

“This is the real, major problem at MaineHousing. They have taken their eye off the ball of the core mission of providing quality, affordable housing to chase ‘green’ initiatives and carbon trading schemes,” Anastos said.

“The former administration at MaineHousing might have been rock stars at carbon conferences around the world, but they didn’t take care of the Maine people that needed them most. That’s a shame and we are going to fix it.”