Government Lending

Hurricane Laura the latest blow to residents of one HUD-subsidized community in Galveston

Residents sued HUD in June over conditions

As fires and a hurricane threaten communities across the U.S. this week, residents of low-income housing are at an especially high risk of financial and other loss resulting from the natural disasters, the Urban Institute has shown.

For one community in Galveston, Texas, Hurricane Laura — expected to make landfall in Texas and Louisiana as a Category 4 hurricane — is just the latest in a long series of disasters that they say have been made worse by the way the Department of Housing and Urban Development has managed the situation.

Built in 1971 with 192 units, Sandpiper Cove is a privately owned apartment complex under HUD contract that allows tenants to pay 30% of their income after deductions, or a minimum of $25 per month, with HUD paying the difference. The property also sits directly in a high-risk flood area, according to FEMA’s flood maps.

John Henneberger, co-director of Texas Housers, a Texas low-income housing information service, said their organization has been following Sandpiper Cove for nearly a decade. Because of its location relative to the seawall and lack of any sort of elevation, Henneberger said the 200-family complex floods in every hurricane.

“When they flood, the tenants who suffer water damage lose their personal possessions, their furniture and their household belongings among other things. They’re all low-income so most of them don’t have renter’s insurance,” Henneberger said. “Then HUD comes in, gets the owner to basically patch up the apartment, which then leaves the tenants suffering a recouped financial loss that they can’t bear.”

When Galveston residents were issued a mandatory evacuation order on Monday ahead of Hurricane Laura’s approach, Sand Piper Cove tenants were given a location for a bus that would evacuate them to Austin, but were not told where they would be going upon arrival. The uncertainty of where they are going is matched by what they will find when they return.

Because of repeated water damage, Sandpiper Cove has experienced a myriad of other problems including mold, sewage back-ups, broken air conditioners, buckling ceilings, rats and cockroaches, residents told the Houston Chronicle.

At the end of June, the non-profit law firm Lone Star Legal Aid’s Fair Housing team and housing civil right lawyers filed a lawsuit for Sandpiper Cove against HUD for “intentional discrimination and its failure to relocate tenants after the property failed inspections and received a Notice of Default.”

In a release, LSLA cited Rule-24 CFR 886.323 of the Code of Federal Regulations, which states that when a property participates in the project-based rental assistance program and it receives a Notice of Default, HUD shall provide a remedy for those tenants.

“In the case of Sandpiper Cove residents, HUD won’t let them move without a tenant choice voucher, despite the fact that these vouchers help families rent houses and apartments throughout Galveston. HUD’s failure to provide assistance to these tenants violates its habitability regulations and its obligation to affirmatively further fair housing under the Fair Housing Act,” the release said.

In Houston, LSLA filed claims against HUD and two other Section 8 project-based apartment complexes — Coppertree and Arbor Court — for similar complaints of inadequate living conditions in 2018, according to the National Housing Law Project.

Henneberger said Texas Housers has been working with residents of Sandpiper Cove to seek a meeting with HUD officials in Houston, as tenants pursue a more permanent and systemic solution to the problem. Currently, residents are seeking the option to receive Housing Choice Vouchers so they can leave their existing units for alternative housing.

“Bottom line, the tenants are basically locked into these developments, by virtue of the fact that this is a project-based development and the tenant has no choice. If they want the rent subsidy, they have to live at Sandpiper Cove – they can’t take a voucher and go find a place that doesn’t flood or a place that doesn’t have mold or sewage problems or electrical problems,” Henneberger said.

On Aug. 10, HUD announced it plans to allocate $472 million of CARES Act funding for low-income households. According to HUD secretary Ben Carson, Public Housing Authorities will use the money to make sure people have “a decent, safe, and affordable place to call home.”

For now, Henneberger, along with Texas Housers community outreach coordinator Ericka Bowman, are attempting to stay in contact with the residents of Sandpiper Cove as they make their way to Austin.

According to a report from CoreLogic, 431,810 single-family and multifamily homes along the Texas and Louisiana coast are at risk of storm surge damage from projected Category 4 Hurricane Laura, representing approximately $88.3 billion at potential risk for reconstruction cost value.

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