Receiverships at Housing Authorities Have Resulted from Severe, Long-standing Problems

The problems that compel HUD and the courts to place public housing  authorities in receivership are serious physical, financial, and managerial  deficiencies that violate agreements between HUD and the authority and  that have persisted despite repeated interventions. Lawsuits over Poor Living Conditions Prompted Judicial Receiverships

To date, all judicial receiverships at PHAs have resulted from lawsuits filed  by residents and have involved the very poor physical condition of public  housing units. Administrative and Judicial Receiverships Have Operated Similarly, but Specific Remedies Have Varied

Administrative and judicial receiverships have operated similarly in that  they usually both involve the complete takeover of a PHA’s management  and operations or of an entire program within a PHA. Both types of  receivers have the same authority to implement any necessary changes to  improve the PHA’s performance. Both Administrative and Judicial Receiverships Have Shown Improvement

According to HUD’s assessed performance scores and/or other evidence,  nearly all of the 15 authorities showed improvement during their years of  receivership whether under administrative or judicial receivers. Performance scores under judicial receiverships have  generally remained high. For example, the Camden Housing Authority, the District of Columbia  Housing Authority, the Wellston Housing Authority, and the Housing  Authority of Kansas City all had problems with the physical condition of  their units prior to being placed in receivership. While HUD’s  performance scores do not have a component that captures the progress  made in desegregating developments, they do indicate that, in recent years,  these housing authorities generally made progress in improving the  management of the agency and the physical condition of the housing stock. Improvements Have Been Consistent at Authorities under Judicial Receiverships

All of the four housing authorities that have been or are currently under  judicial receivership (Boston, District of Columbia, Kansas City, and  Chester) have generally shown consistent improvements. In contrast, while housing authorities under administrative receiverships  have also made improvements, some are still experiencing problems. In some cases, the improvements have  not been sustained. Criteria for Ending Receiverships Vary

No set guidelines exist for ending either administrative or judicial  receiverships because both are handled on a case-by-case basis. The  criteria HUD uses to make this decision vary depending on the problems  that led to receivership and the severity of those problems. Administrative Receiverships

	Beaumont Housing Authority (TX)

The Department of Housing and Urban Development (HUD) took over the  public housing authority (PHA) in 2000 because of racial segregation in the  public housing developments. When the Beaumont  Housing Authority failed to take the necessary steps to desegregate its  public housing, HUD assumed control of the PHA’s management and  operations. The  housing authority now has an executive director in charge, but a HUD  official continues to oversee management and operations. HUD also hired a contractor to act as the board.
Why GAO Did This Study

About 3,000 public housing authorities--state, county, and municipal agencies--develop and manage low-income housing in cooperation with the Department of Housing and Urban Development (HUD). Since 1979, 15 housing authorities have been placed in the hands of receivers' outside parties designated to manage the authorities during a specific period of time, usually several years. GAO was asked to identify the circumstances that led to receiverships, any differences in the way they operate and in their results, and the factors that have influenced the termination of receiverships.

What GAO Found

Receiverships at housing authorities have generally resulted from long-standing, severe, and persistent management problems that led to deterioration of the housing stock. Under an administrative receivership, HUD appoints either a contractor or a HUD employee to take over the housing authority's management. Because receiverships generally involve the complete takeover of a housing authority's management and operations, HUD views receiverships as a last resort when other interventions such as technical assistance or sanctions have failed. HUD has made these decisions on a case-by-case basis. In four cases, decisions to appoint receivers were made by courts. These judicial receiverships stemmed from lawsuits filed against housing authorities because of poor living conditions in public housing. Administrative and judicial receiverships have operated similarly, and all of the receivers have had the same authority to make necessary changes. The specific corrective actions receivers have taken depended on the problems at the individual housing authority. Most receivers have found it necessary to oversee the complete reorganization of the housing authority's management and operations, develop and enforce policies and procedures, and improve physical conditions. In some cases, receivers have had to desegregate public housing to address fair housing violations. Whether under administrative or judicial receivers, nearly all of the 15 authorities showed improvement during their years of receivership. The four housing authorities under judicial receiverships generally have continued to demonstrate strong performance; for example, performance scores have improved and have generally remained high. While housing authorities under administrative receiverships have also made improvements, some still demonstrated a significant problem with housing units in very poor physical condition. According to HUD officials, HUD ends administrative receiverships when it is clear not only that conditions at the housing authority have improved but also that the authority's management can sustain the improvements. The decisions to end judicial receiverships are made by judges. To date, four administrative and two judicial receiverships have been terminated.