As apartment owners and managers, from time to time, we get investigated by the U.S. Department of Housing and Urban Development (HUD).  Which is fine.  Every once in a while, however, HUD gets investigated as well.  Just recently, HUD’s Inspector General (its internal watchdog) released a report which severely criticized HUD’s current policy which permits individuals who are designated as “over income” to remain in public housing.

Following a torrent of criticism, HUD has now reversed course and is providing new guidance, urging Housing Authorities to evict residents who no longer qualify for subsidized housing. The report found that more than 25,000 residents make more than the maximum income allowed to qualify for public housing.  Now, while many of the “over income” residents exceeded the limit by a small amount, the audit revealed that nearly half were over the threshold by $10,000 to $70,000.  And what really drove the findings were that a few residents were glaringly over the limits:  such as a family of four in New York City with an income of just under $500,000 who is paying under $1,600 for a three-bedroom subsidized unit.

When the report was first made public, HUD harshly objected to the findings and asserted that “income diversity” in public housing was a good thing and that people should strive to earn more money, but not lose their eligibility for affordable housing.  HUD also stated that the number of over income families was less than three percent of those in public housing.  After hearing from many other voices (to put it mildly) following its initial comments (particularly when the most egregious examples were publicized and are so much harder to defend), HUD is changing its policy to now support removing over income individuals, particularly when affordable housing waiting lists continue to grow, from affordable housing.

I don’t suspect HUD (through various Housing Authorities and private landlords) will actively start evicting very many residents, but it was interesting to watch this debate continue to play out.  Indeed, nobody enjoys the investigative process.  Not even HUD.

Just A Thought.