More than a decade after chronic mismanagement led to a federal takeover, the Housing Authority of New Orleans will officially return to local control on July 1, federal and city officials announced Wednesday.
U.S. Department of Housing and Urban Development Secretary Shaun Donovan and Mayor Mitch Landrieu signed a transition agreement authorizing the formal handoff during a news conference at City Hall. Donovan was in town for a conference on homelessness.
The transfer has been months in the making. David Gilmore, one in a line of federally appointed administrative receivers who led the agency since the federal takeover, left the job in April. Two HUD staffers are now temporarily running HANO.
On a visit to New Orleans last month, Sandra Henriquez, the HUD assistant secretary for public and Indian housing, said HANO would be released from federal control this summer because it is “wholly better” now than it was when it was seized in 2002.
Donovan echoed that sentiment Wednesday, saying both the financial and operational management of the organization has improved to a point that he feels comfortable returning it to local control.
“I think by any measure, if you look at the way the Housing Authority is performing, there are just many, many indicators that the authority is in better shape,” Donovan said.
Specifically, he said, HANO is serving 4,500 more people than it did when it was taken over. At the same time, its voucher program is more efficient and its financial condition is “as strong as it’s ever been,” despite cutbacks in federal funding for public housing, Donovan said.
“HANO has been able to recover financially at the same time that there have been resource challenges,” he said. “So that, to me, gives me a real sense that the management there is strong.”
Before the transfer is complete, a board of seven commissioners, at least two of whom must be housing authority tenants nominated by the Residents Council, needs to be seated.
Four appointees — Dwayne Bernal, Toni Hackett Antrum, Vonda Rice and Alice Reiner — have been announced. The other three members are expected to be named before July 1, Landrieu said. They do not need to be confirmed by the City Council, a spokesman for the mayor said.
Once in place, the board will sign off on a new leader for the agency. Landrieu said the search for an executive director is underway and he hopes someone will be named before July 1.
The federal government took control of HANO in February 2002 after finding it in default on its contract with HUD.
Public housing authorities typically are governed by a locally appointed or elected board of commissioners. They are required to comply with federal housing regulations and are bound by an annual contract with HUD that provides for their funding.
HUD can declare a housing authority to be in default of that contract if the local agency is mismanaged financially or if it operates in an unethical manner. Housing authorities also can volunteer to be put under federal control or can be pushed into judicial receivership by federal courts.
In the case of HANO, HUD found the agency to be in “substantial default” of its annual contract in 2002. At the time, the agency had struggled to commit millions of dollars in federal grants, failed to revitalize its crumbling developments and operated in other ways HUD found deficient.
For example, before HANO was taken over, it took 200 days to “turn over” a public housing apartment, meaning a family had to wait more than six months to move into a unit after another family had moved out. The standard turnover time is about 50 days, Donovan said. New Orleans now has reduced its time to 31 days.
“I think it’s fair to say that when HANO was taken into receivership, it was as troubled, particularly for a large housing authority, as any housing authority in the country,” Donovan said.
The decision to take over HANO came after federal and local authorities failed repeatedly to improve operations without such extreme federal intervention.
Nationally, HUD still has seven housing authorities in administrative receivership, meaning HUD has assumed the role of the board of directors. One public housing authority is under a judicial receivership, where the court selects a receiver.
Since 1979, the average administrative receivership nationwide has lasted three years and seven months, according to HUD. The New Orleans takeover has lasted nearly three and a half times that long. In its more than 12 years under federal control, HANO has had six different administrative receivers.
When it reverts to local control in July, HANO “for the most part” will be run by its board, much like the New Orleans Aviation Board or the Regional Transit Authority, Landrieu said.
It was apparent Wednesday that HUD wants Landrieu to have a guiding hand in the authority’s operation. Donovan said Landrieu is key to his comfort with turning the agency over to local control.
“I wouldn’t be nearly as comfortable as I am saying this is the right step without Mitch’s leadership,” Donovan said. “If you have a housing authority that doesn’t have strong leadership from the mayor, real engagement from the city, that’s where we often see problems. From my perspective, the fact that you have a mayor who is completely engaged in this is one of the most important indicators that we can have success.”
HANO operates nine housing developments containing more than 3,500 units. About half of the units, 1,812, are public housing. The rest are either affordable or market-rate apartments. Those figures do not include public housing complexes currently under construction, such as the Iberville housing development.
The authority also provides rental vouchers to about 17,700 families through its Section 8 rental-assistance program. The agency employs 263 people.