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HUD fails to inspect apartment communities, but sends millions to the owners anyway

HUD has missed inspections at 11 Jacksonville properties

JACKSONVILLE, FLa. – The dollar figure is staggering. The I-TEAM has discovered the federal Department of Housing and Urban Development has paid the owners of 11 local HUD-approved apartment communities more than $20 million despite HUD failing to inspect the properties to confirm that the owners are keeping up with their agreement to provide safe and healthy living conditions for the tenants who live there.

How it works

To understand the significance of these missed inspections, you need to understand how HUD contracts work. Apartment owners agree to provide affordable housing to low-income earning families. In exchange for that housing, the federal government pays the owners of those properties the money they would normally earn if they rented the apartments at market value.

The owners also keep the money that tenants are able to afford to pay toward the rent. Tenants in these HUD communities typically pay the landlord 30% of their income.

Now that you understand the numbers, here’s how HUD is breaking its own rules in its agreement with these landlords.

Required inspections

To make certain that landlords receiving federal dollars are providing safe and healthy living conditions at their properties, HUD must be able to inspect them. The frequency of the inspection is based on the property’s score from the previous inspection. For example, if a property scores less than 80, HUD rules dictate that property must be inspected every year. Scores of 80-89 warrant an inspection every two years and properties with scores of 90 or above should be inspected every three years. The score is referred to by HUD as a REAC score.

The I-TEAM has discovered that these 11 HUD apartment communities in Duval County have not been inspected by HUD’s own deadline.

Nine of the 11 apartment communities were supposed to be inspected by December 31, 2019 -- a year and a half ago. The other two, Oakwood Villa and Mount Carmel Gardens, have not been inspected since 2015 -- roughly 5½ years. Yet, HUD still paid the owners of these 11 properties more than $28 million since those missed inspection dates.

A 12th property, Hilltop Village Apartments on West 45th Street in Northwest Jacksonville, was on the same missed inspection list until our report last month exposed a mice infestation in all 14 of the apartment buildings. After our first I-TEAM report last month showed video of mice scurrying around in a bathtub, a garbage can, a ceiling light, living room floors and a dresser, HUD ordered a re-inspection of the property.

In 2015, Hilltop Village received a REAC score of 85, meaning it should have been inspected again in 2017, but was not. Since then, the landlord, SP Hilltop Village LP, has been paid $7,747,206 by the federal government.

HUD now tells the I-TEAM that the 2017 inspection was canceled after Hurricane Irma damaged 10 units, but has not provided an explanation as to why it was not rescheduled for 2018 and 2019.

Oakwood Villa Apartments, which is currently managed by the same property management company as Hilltop Village, was last inspected in 2015. Its REAC score was much lower than Hilltop Village’s previous inspection score, meaning it should have been inspected by HUD in 2016, but it still has not been inspected.

We discovered that since 2016, tenants have called the city’s code enforcement division more than 101 times complaining about living conditions at Oakwood Villa. Code enforcement inspectors noted 91 violations during those calls. Yet HUD has not been on the property to inspect since 2015. The owners of the property were paid $6,608,740 by the federal government since then.

We have reached out to HUD for an explanation as to why there has been such a long gap in inspections of Oakwood Villa Apartments, as well as why the other 10 properties have still not been inspected.

We contacted Sen. Marco Rubio asking about these missed inspections. He sent a letter earlier this month to HUD Secretary Marcia Fudge demanding a new inspection at Hilltop Village. Since then, his team has also discovered 29 HUD-approved properties around the state with failing REAC scores that have not been inspected by HUD in several years. He said the owners of these properties have received more than $60.6 million from the federal government through their HUD contracts during the last two years.

Rubio insisted HUD should be held accountable for these missed inspections.

“Who was fired, who was reprimanded as a result of this? Because if there isn’t accountability, if there isn’t consequence for it, then these inspections become recommendations, they are not meaningful,” Rubio said.

Rubio said he is now considering legislation that would hold HUD accountable.

“I think one of the lessons that we are going to begin to explore is about passing a law that creates penalties for HUD if they don’t carry out these inspections.”

Rubio has given Fudge until June 1 to explain why the delay has occurred at the 29 properties and when they will be inspected.

Campus Towers, a senior citizens community on Kings Road in Jacksonville, is among the 29. It received a 54 REAC score when it was inspected in 2018 and should have been re-inspected the following year, but was not. The I-TEAM has found HUD has paid the landlord $1,003,373 since then.

If you live at any of the 11 Duval county properties we listed above and do not think that the living conditions are safe and healthy, please contact me at jwaugh@wjxt.com.


About the Author
Jennifer Waugh headshot

Jennifer, who anchors The Morning Shows and is part of the I-TEAM, loves working in her hometown of Jacksonville.

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