Gov’t-assisted apartments need tighter rein

It is about time that state and federal officials began taking concrete steps to deal with owners who are using public assistance to operate rundown apartment complexes that are supposed to be providing decent housing for poor and low-income families.

The latest move in that direction involves the Tennessee Housing Development Agency prohibiting the Health, Educational and Housing Facilities Board of Memphis from issuing additional bonds for lowincome housing pending a resolution of its mounting problems, according to a letter from the Nashvillebased agency.

The housing facilities board issues tax-exempt bond financing to developers for multifamily housing for low-income residents in Memphis. The board also approves PILOTs, or payment-in-lieu-of-tax programs, for multifamily housing, allowing a developer to invest money to repair properties.

The problem is that in too many cases these apartment developments have a host of maintenance and crime issues that defy the rationale for government assistance to the owners.

Theshamefullivingconditionsdocumentedlastyear by The Commercial Appeal at three rent-subsidized apartment complexes owned by Global Ministries Foundation is emblematic of the situation. In February, GMF lost funding from the U.S. Department of Housing and Urban Development after the nonprofit failed to provide good living conditions to its tenants.

The Health, Educational and Housing Facilities Board also is dealing with the after effects of a bond issued to Global Ministries Foundation to buy the decrepit Warren and Tulane apartments. As a result, bond holders received a default letter and the value of the $11.8 million bond decreased dramatically.

The quasi-government facilities board, in fact, has issued $49.9 million in bonds to GMF to buy seven properties.

Much of the attention about the deplorable living conditions at the these kinds of apartment complexes has focused on Global Ministries, but there are dozens in similar or worse condition across the city, whose owners literally receive federal, state and local assistance to operate apartments that barely meet standards for human habitation.

HUD has finally realized that. Still, it needs to do more to make sure that the owners of rent-subsidized apartment complexes maintain them. And, while we realize that city code enforcement officers are stretched thin, we hope they can find a way to keep a sharper eye on negligent owners.

As for the facilities board, THDA Executive Director Ralph Perrey said the facilities board should temporarily stop issuing bonds so it can deal with the problem bond for Warren and Tulane, and while it looks to fill its executive director vacancy. “It concerned us that the agency is in transition,” Perrey said on Monday. “They are working through a number of issues that attracted local and national media. We wanted them to deal with those issues without adding to their workload.”

Daniel Reid, the housing facilities board chairman, disagreed with the THDA’s decision, but the state agency made the right call.

This is a good time for the housing facilities board and HUD to really take a hard look at the nonprofit and private entities receiving government help in the name of helping poor and low-income residents.

Are they really helping, or are they making the lives of these families worse?