Santa Maria Sun / News

HUD finds problems with the county's department of housing and development

BY AMY ASMAN

Santa Barbara County officials recently released the findings of a monitoring visit from the U.S. Department of Housing and Urban Development (HUD) conducted in early May. HUD representatives reviewed the county’s Home Investment Partnership Act (HOME) program and its low-income housing projects that received funding from the federal government.

In a letter to County Executive Officer Chandra Wallar, HUD reported 17 findings from the visit, including deficiencies in department recordkeeping; a lack of documentation establishing the funding eligibility of local community housing development organizations; and a failure to include in its records files related to environmental reviews, financial reporting, and invoices.

HUD also found that two of the county’s major HOME funding recipients—Surf Development Company and Good Samaritan Shelter—don’t actually meet the department’s qualification requirements.

Based on information in county files, the letter said, Surf Development Company doesn’t qualify as an independently functioning community housing development organization because there “is no discernable difference between Surf and the Housing Authority of the County of Santa Barbara.” Surf Development Company doesn’t have any of its own employees or “any indication of intention to acquire its own employees.”

Good Sam, the letter continues, doesn’t include providing affordable housing to low- and moderate-income people as an organizational purpose in its bylaws, articles of incorporation, or tax filings. Also, the letter said there are no low-income clients on Good Sam’s board of directors, nor does the board stipulate how such individuals can offer input on the organization’s project planning or management.

The letter also specified compliance issues with several county housing projects, including the Rancho Hermosa, Braddock House, and Casa de Familia projects.

In an interview with the Sun, CEO Wallar said the county has had several HUD audits in the past, “but this is the most extensive one that we’ve seen.”

She said she’s already brought in employees from other departments to help the housing and development staff address HUD’s concerns.

Many of the county’s recordkeeping problems stem from the fact that the files are in partially electronic and partially hard copy forms. Staffers are working to scan hard copies into the electronic form so all of the files can be kept in one location.

“We take this very seriously. We want to be in complete compliance,” Wallar said.

One of the county’s HOME funding recipients—the now bankrupt Lompoc Housing and Community Development Corporation—was noticeably absent from HUD’s assessment.

“The choice of agencies to be reviewed was based on active status, current and prior performance, and total funding allocations made by the County to each agency,” HUD regional public affairs officer Gene Gibson said in an e-mail to the Sun. “At this time, while there are known compliance issues related to the LHCDC project portfolio, there is a plan in place for the continued provision of affordable housing in Federally developed housing units, low-income households continue to reside in Federally developed housing units, and Federal investments are not at imminent risk of loss.”

Gibson said the county will provide HUD with a summary of county decisions concerning the LHCDC properties once the management of assets with federal obligations is resolved.

John Polanskey, director of housing development for the Housing Authority of the County of Santa Barbara, said the finding regarding Surf Development Company isn’t consistent with existing HUD regulations for community housing development organizations (CHDO).

“Attached to this letter, and apparently the basis for this assertion, are proposed changes to the HOME program relating to CHDO qualification that were sent out for comment last December,” Polanskey told the Sun in an e-mail. “The HUD regulations correctly used to qualify Surf as a CHDO at the time, and that still existed at the time of this review, allow for ‘staff sharing’ for a CHDO to obtain affordable housing development expertise as long as a formal contract for these services exists between the CHDO and the organization providing these services, in this case the Housing Authority.”

Good Sam representatives were not reachable as of press time.

To read a full copy of HUD’s letter, visit santamariasun.com.