The Office of the Inspector General of the Department of Housing & Urban Development estimates that there are more than 25,0000 households taking up public housing units that exceed HUD’s 2014 eligibility income ceilings, according to an audit completed earlier this summer.
Furthermore the OIG estimated that HUD will pay more than $104 million in the coming year for public housing units occupied by families that exceed income ceilings. The OIG launched an audit of the program last August.
Among the biggest offenders among those over the income limit was one household in New York City, which was making an annual income of $497,911 and living in taxpayer-funded public housing paying $1,574 in rent for a three-bedroom apartment.
The threshold varies depending on location, from an income limit in New York of $67,100, to just $14,500 in Mississippi.
The audit reveals that nearly half of those households over the income limits were over the threshold by $10,000 to $70,000.
In another case involving the Housing Authority of the City of Los Angeles, HUD found a family that had been over-income since at least May 2011. As of June 2014, the five-person household’s annual income was $204,784, while the low-income threshold was $70,450. Five members of the household earned income. The member with the highest income earned $132,224. As of June 2014, the family paid a flat rent of $1,091 monthly for its public housing unit.
According to the L.A. housing authority, it did not evict this family from its 4-bedroom unit because its policy does not require it to evict over-income families because HUD regulations don’t require it.
In another case was found in Chicago where a luxury building used by voucher holders, 500 North Lake Shore Drive, qualified as the most expensive apartment building in downtown Chicago.
The New Bedford Housing Authority in Massachusetts admitted a family to the program in January 2003, and it had been over-income since at least August 2010.
As of November 2013, the three-person household’s annual income was $212,845, while the low-income threshold was $42,950. The member with the highest income earned $129,789.
As of July 2014, the family paid a flat rent of $525 monthly for its public housing unit. According to the New Bedford housing authority, it did not evict this family from its 2- bedroom unit because its policy does not require it to evict families solely because they are over-income.
“We recommend that HUD direct housing authorities to establish policies to reduce the number of overincome families in public housing, thereby putting as much as an estimated $104.4 million to better use by providing those funds to eligible low-income families in need of housing assistance,” the audit concludes.
HUD initially made no efforts to correct this. The Washington Post initially reported that when HUD was first presented with the conclusions of the draft audit by the OIG’s office, the agency strongly objected to all of them.
HUD regulations required families to be income eligible only at admission to the program, not after.
“…there are positive social benefits from having families with varying income levels residing in the same property,” Milan Ozdinec, HUD’s deputy assistant secretary for public housing and voucher programs, wrote in response to the OIG. He further warned that “amending policies to force over-income families to leave could negatively affect their interest and full participation in achieving self-sufficiency.”
Ozdinec also accused the inspector general of “over-emphasizing” a problem when higher-earning tenants represent just 2.6% of the 1.1 million families in public housing, the Post reported.
But following a series of high-profile criticisms on Capitol Hill, the agency now says it is urging housing authorities nationwide to evict tenants who earn too much to qualify for government subsidies.
The full audit can be read here.