In the News

HUD secretary promises solutions addressing Little Rock housing authority problems

by Alex Thomas
Arkansas Democrat-Gazette
January 11, 2024

WASHINGTON -- U.S. Rep. French Hill, R-Ark., received a commitment from the head of the federal Department of Housing and Urban Development to resolve issues within the Little Rock housing authority amid ongoing concerns surrounding the body's finances and management.

Secretary Marcia Fudge fielded questions from Hill regarding the housing agency during a House of Representatives Financial Services Committee hearing Thursday. The hearing occurred as FBI agents entered the Little Rock office of the Central Arkansas Housing Corporation, a not-for-profit body affiliated with the Little Rock housing authority.

The Little Rock housing authority, which conducts business as the Metropolitan Housing Alliance, is the largest housing agency in Arkansas and provides housing services to approximately 8,000 residents.

"May I ask you for your personal commitment that HUD will take responsibility for this catastrophic situation and commit to resolving these long-standing issues at the Little Rock public housing authority?" Hill asked Fudge.

"Without question," she answered.

HUD issued a review of the local housing agency in August, giving it a "troubled" performance rating. Officials cited issues in meeting requirements related to submitting financial information.

In a September report, HUD's Quality Assurance Division within its Office of Housing Voucher Programs detailed nearly $30 million in questionable and potentially disallowed costs, including around $20.5 million in housing assistance payments marked due to late reexaminations and housing inspections. The report additionally notes hundreds of households that had not received a reexamination or inspection based on data dating to 2017.

Federal officials stated the Little Rock housing authority had failed to submit audited financial statements since 2019.

Hill sent Fudge a letter in September following HUD's designation and review of the Little Rock housing authority. The congressman from Little Rock pressed Fudge about possible federal actions to correct issues within the local agency and steps to review local inspections and financial records.

In an interview with the Arkansas Democrat-Gazette before Thursday's hearing, Hill confirmed HUD responded to his Sept. 7 letter, in which officials noted the federal agency can refer compliance matters to enforcement agencies. They added HUD will work to provide housing resources to residents if the Little Rock housing authority somehow enters financial insolvency.

"I consider it an interim response," Hill said. "I'm anxious to engage with Secretary Fudge today and then send a follow-up letter asking more specific questions about, since September, what is going to be the next step."

One option, according to Hill, could involve HUD taking the Little Rock housing authority into receivership.

"I think it's clear from looking at HUD's oversight of public housing agencies that they struggle with this around the country. This is not an isolated case," the congressman said. "Naturally, they want to see the remediation and proper compliance by housing authorities and not have to take them into receivership."

The Little Rock housing authority has been a subject of HUD scrutiny in recent years. Federal officials issued a financial management review in December 2015 calling for corrective actions, in which Little Rock housing authority complied in submitting financial documents and making adjustments to show accurate balances.

The Quality Assurance Division closed its review in October 2018 with a promise to follow up with a further review, but the coronavirus pandemic delayed such an evaluation.

"HUD never sent anyone to check on whether these changes were actually implemented for three years," Hill told Fudge. "Now, we're back to square one and worse off than before."

"No one's blaming the Department of Housing and Urban Development for the pandemic, and nobody's blaming HUD per se for the Little Rock public housing authority's gross financial mismanagement," the congressman continued. "HUD does bear responsibility, Madame Secretary, for failing to perform your compliance obligations and compelling the housing authority to take meaningful, corrective action."

Fudge agreed with Hill on the importance of inspections. Fudge noted inspections had been on hold when she became secretary in March 2021.

"I was the one who mandated, directed that they go and start to do inspections because I knew that there would be problems that we did not know about," she said. "I support it 100%."

The Little Rock housing authority's board has undergone significant changes in light of HUD's report. The Little Rock Board of Directors removed H. Lee Lindsey and Leta Anthony from the body, opting to keep Kerry Wright. Commissioners Branddii Peterson and Louis Jackson resigned as their terms ended in September.

Wright, whom the city board confirmed last March, commended Hill for his attention to this issue. He additionally noted "a great deal" of the financial questions involve the Central Arkansas Housing Corporation.

"What really was the major issue was we had some bad actors on the board," he told the Democrat-Gazette. "That seems to have been taken care of, and things seem to be moving along nicely."

The city board confirmed Bruce James and Karen Buchanan to the housing authority board in October. Linsey and Anthony's seats have remained vacant amid litigation over their removal, but Pulaski County Circuit Judge Cara Connors last week lifted a temporary restraining order that barred the city from filling these vacancies.