News Channel 11 investigation: Critical review not happening in - CBS46 News

News Channel 11 investigation: Critical review not happening in some Section 8 housing

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At William and Jessica's apartment, they'll serve you a cool drink, but they'll warn you.

"You can't put a drink down for five minutes without one crawling in it," William said. "We have a serious problem with roaches here."

The young father said the roach issue has grown steadily worse since he moved into Tyler Apartments in Johnson City in 2008. That's despite regular pest control spraying by property management and non-stop work by William and Jessica including what they describe as hundreds of dollars in insecticide products.

"You win the battle sometimes, but you're never going to win the war," William said.

Insect infestations aren't permitted in public housing units where, according to HUD's own website, are supposed to be "decent, safe, sanitary, and in good repair."

To ensure that, HUD, or the U.S. Department of Housing and Urban Development, has instituted mandatory inspections by its own staff, and in the case of Section 8 housing like Tyler Apartments - a third party contractor. The required inspections not only involve an inspection of the physical properties where Section 8 tenants live. It also includes a regular overview of the paperwork.

But a 7-month investigation by News Channel 11 revealed a key review of certain Section 8 public housing units has not been happening according to long-standing federal requirements because of an on-going legal dispute involving the U. S. Department of Housing and Urban Development.

It's called the Management Occupancy Review, or MOR.

According to the Tennessee Housing Development Agency's executive director Ralph Perrey, his agency had a contract with the HUD to conduct the MOR's annually at HUD's PBCA - or Performance Based Contract Administrator - housing units across Tennessee from 2000 until 2011.

The purpose of the MOR was to make sure all aspects of the contract between HUD, the tenant, and the property owner - including physical inspections - were in compliance with federal housing standards.

"It's safe, decent, affordable housing," Perrey said. "That's the easiest summary I can give you."

In 2011, HUD announced it would open its PBCA contracts to a bidding process in an effort to save money.

THDA learned it lost the contract, but almost immediately other companies sued HUD for the way it handled the bidding process.

HUD tried to fix the problems by bidding out the contracts a second time.

"That time, we won the contract in Tennessee," Perrey said. "Other people won it in other places, and another lawsuit was filed about the way that was done. And it's been in court ever since."

During the legal proceedings, THDA has worked through a series of contracts with HUD for the management of its PBCA properties. But one part of the contract was not continued.

"What HUD has said is, 'you have the contract but we don't want you to inspect any of the properties,'" Perry said. "We have not had the ability to actually go out and eyeball those properties."

In fact, Perrey says he believes no one has been conducting the full MOR inspections of PBCA properties in Tennessee since 2011, not even HUD. "I don't believe they have the capacity to do it. They're not staffed up to do it."

News Channel 11 asked a HUD spokesperson who was conducting MOR inspections of PBCA housing.

A spokesman in Nashville answered through email that the inspections were being conducted by HUD TN staff.

But through a public records request, News Channel 11 found no record of an MOR at Tyler Apartments was available since 2011 when THDA was still allowed by HUD to do the full MOR. That MOR of Tyler Apartments found the property to be in "above average" condition according to records obtained by News Channel 11.

We found record of a REAC, or physical inspection, by HUD of Tyler Apartments in 2012. In the report, we found multiple units had roaches. That would have been followed up on in the MOR inspection, but those haven't happened because of the legal fight. M and M Properties says it addressed all problems and is in compliance.

"We try to be very aggressive about monitoring them properly and making sure we are in compliance with HUD regulations," said M and M Properties owner Harry Gibson who said the lack of continuity in the MOR process hasn't impacted his company's operations. "We're continuing to do business and will to the best of our ability to maintain safe, decent, sanitary, and affordable housing."

We asked Gibson about claims of a roach infestation at Tyler Apartments.

"Well, it depends on what you describe as a bug infestation," Gibson said. "A lot of people look at one bug and say you have an infestation."

Again, we asked, "Do you have any properties where roaches are a big problem?"

"We think so, but I'd not care to divulge that," Gibson said.

The legal battle between HUD and its challengers in the PBCA conflict has no end in sight.   On June 23rd, the U.S. Department of Justice filed a motion asking the U.S. Court of Appeals for the Federal Circuit to conduct a rehearing, also known as a rehearing "en banc", of the PBCA lawsuit.

"We expect this will delay a decision for many months," said Patricia Smith, THDA Director of Public Affairs.

As the legal proceedings continue, residents in Section 8 housing have options for reporting problems. They can file complaints with the property manager, and they can call the THDA hotline: 1-800-314-9320.

William said he's hopeful something will lead to a resolution - the elimination of the roaches.

"It's just a terrible situation that shouldn't be," he said.

  • Note: News Channel 11 has spent the past seven months investigation this story. We still have a lot of questions and will continue pursing answers, but HUD has not responded to our most recent questions submitted on June 20th.

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