Head Strong: War stories of a HUD takeover

Posted: March 20, 2011

I wish Estelle Richman success with the U.S. Department of Housing and Urban Development's takeover of the Philadelphia Housing Authority. Given her position as HUD's chief operating officer and her extensive experience in city and state government, she certainly seems to have the necessary credentials. But unless things have changed in the last two decades, I fear the federal government is ill-equipped to run the nation's fourth-largest housing authority.

I know something about the subject, or at least I used to. Almost 19 years ago, as HUD's regional administrator, I initiated what was then the largest federal takeover of a public housing authority - Philadelphia's.

At age 29, I'd been appointed by George H.W. Bush's administration to oversee HUD activities in five states and the District of Columbia. The HUD secretary was the conservative stalwart and former pro football star Jack Kemp. Eight months into the job, I recall sitting in his office seeking approval for the Philadelphia takeover. We had recently taken similar steps in Chester, and the early results were encouraging.

The real problem in Chester and Philadelphia - though it could be blamed on Republicans in the former and Democrats in the latter - was the same: patronage.

The situation in Philadelphia was deplorable. Back in 1992, the authority's vacancy rate was 20 percent, even though more than 13,000 were on the waiting list for public housing. Why? The PHA was so incompetent that it was taking more than four years to get vacant units reoccupied.

The three towers at Southwark Plaza, in South Philadelphia, still stood, and they were a monument to waste, fraud, and abuse. Two of them were vacant, and although $6 million had been spent on a renovation project, architectural plans hadn't even been drawn up.

A HUD audit at the time inspected 87 city public-housing units and found that 86 failed safety and sanitation standards.

Meanwhile, many were feeding at the PHA trough. Its budget at the time was $200 million, and it has risen to about $350 million in the decades since.

On the merits, a federal takeover seemed like the right thing to do in 1992. And looking back, I can see the turnaround effort also suited my ambition at the time. But while I'd love to write that the takeover improved public-housing residents' quality of life, a fair reading of history suggests that's a stretch.

Because I was a presidential appointee, my days at HUD were numbered once Bill Clinton defeated Bush, and I left in February 1993. HUD relinquished control of the PHA the following spring.

By many measures, things had gotten worse under federal control. The vacancy rate had increased. So, too, had the repair backlog. And many top jobs remained unfilled.

Truth was, the undertaking was gargantuan, and the HUD bureaucracy was unsuited for it. The PHA was a complex political animal that could not be quickly tamed by federal oversight.

One hindrance was an unholy alliance between the tenant leaders who wielded power over their developments and the politicians who wielded power over the PHA. And race was a subplot in most of the drama. Most of the residents were African American, while much of the political establishment controlling the PHA was white, as were most of the often inept contractors.

I never won over the residents. They demanded change, but when I gave them change by firing the top 34 managers, they protested outside my office for two weeks. Like those who complain about Congress but reelect their representative, they wanted everyone fired except the person they relied on.

The climate was constantly contentious. I appointed Elton Jolly to run the authority, and I remember my friend Shanin Specter suggesting "special master," which I thought made sense. I never expected it to take on racial significance, especially given that Jolly was an African American who had worked for the civil rights leader Leon Sullivan. I was wrong.

And instead of being lauded for appointing the first PHA inspector general, I fended off accusations that I had hired him because he was white. That was a ludicrous charge, but I did make other damaging hiring mistakes.

Meanwhile, my decision to move into Southwark for a week with Jolly caused a public-relations fiasco. Then-Inquirer columnist Steve Lopez had great fun noting that I was living in public housing while wearing a Ralph Lauren oxford cloth shirt.

Bogged down in daily battles over personnel, we never got the chance to focus on the delivery of services and housing stock.

Later on, though, Carl Greene did, which is what makes the former PHA director's recent downfall so sad. He may have been a skirt-chaser - and I am not defending that - but by all accounts he was a public-housing professional who made great strides in improving the housing stock. That HUD now has to take over the agency is a testament to how integral he was to the overall health of the authority.

And now everything old is new again.

Apparently the patronage has gone white-collar, though. In August, The Inquirer reported that since 2007, PHA had paid more than $33 million in legal fees to politically connected firms, such as the one that employed former Mayor John Street's son. With prosecutors watching, HUD is undertaking a forensic audit of the authority.

A recent Inquirer op-ed by Marwan Kreidie, a former chairman of the State Civil Service Commission, noted that Philadelphia's is the only housing authority in the commonwealth without civil-service protections - which is no doubt one reason everything old is new again.


Michael Smerconish can be reached via www.smerconish.com.

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