U.S. Will Target Landlords Who Misuse Federal Programs

WASHINGTON —  The nation’s top law enforcement and housing officials announced a joint crackdown Monday against private landlords who enrich themselves on federal subsidies while allowing the apartments they manage to crumble and decay.

Atty. Gen. Janet Reno and Housing and Urban Development Secretary Andrew Cuomo targeted the 50 big cities from New York to Los Angeles in which most of the nation’s federally assisted low-income rental housing is located.

They announced a $50-million “Get Tough” campaign in which the government will send investigators into the field, identify violators, take enforcement actions and, when warranted, file civil or criminal cases against violators.

They also proposed legislation to prevent landlords from using the bankruptcy laws to stall foreclosure on mortgages and to make people convicted of illegally pocketing federal housing subsidies liable for all losses suffered by the government.

“The message is simple,” Cuomo said. “If you misuse federal resources, we will find out, we will track you down, we will make you pay.”

Cuomo said the Department of Housing and Urban Development will examine about 446,000 HUD-assisted housing units occupied by about 1 million low- and moderate-income people in the 50 cities.

Overall, HUD pays $9 billion each year to subsidize rents for the 4.3 million people who live in about 2.5 million privately owned apartment units.

“HUD is not in the business of subsidizing rich landlords so they can live in luxury while they let their tenants live in slums,” Cuomo said. “Landlords who get assistance from HUD have a legal obligation to provide safe, decent and affordable housing to some of the poorest and most vulnerable Americans.”

Cuomo outlined a process of “equity skimming” by which, he said, certain landlords simply keep for themselves federal money that should be used to meet their mortgage payments or to maintain their property.

If such a landlord defaults on his mortgage, HUD gets stuck with the bill because the mortgages are federally insured, Cuomo said. And he said that if no enforcement action is taken, “the bad landlord can walk away with big profits, abandoning responsibility for the project.”