Audit reveals problems in Section 8 housing in Louisville

LOUISVILLE, KY (WAVE) - Nearly 10,000 struggling families living in Louisville depend on the city’s Section 8 voucher program to afford a safe home.

Yet in a handful of cases those homes were anything but safe, according to the most recent audit conducted by the Office of the Inspector General (OIG) for the United States Department of Housing and Urban Development (HUD).

The audit included pictures of exposed electrical wiring, holes in floors or rusted out vents, and bars on windows that could trap someone inside during an emergency.

Those were just some of the violations federal inspectors found.

A whopping 97% of the 106 homes they checked had violations - 898 of them to be exact. These were homes that had already been given a passing grade by the city’s own inspectors.

WAVE 3 News Investigative Reporter Natalia Martinez took those findings to the new director for the Louisville Metro Housing Authority, Lisa Osanka.

“As you can imagine the moment our inspector leaves after a passed unit something can happen,” Osanka said. “A light bulb can go out, a leak can form under a sink, so it’s a hard inspection to pass several months after the last passed date.”

But the report found that the majority of violations -- 684 of them -- existed before the authority’s latest inspection.

The audit said some of the problems found were “life-threatening” or put families at risk of danger or injury.

The top violations by category were for windows, followed by electrical issues and flooring.

"We want to have safe and affordable housing,” Osanka said. “And if there are life-threatening situations, we don't give them 30 days to make those corrections. Those corrections have to happen within 24 hours."

That is what happened with the properties found to have life-threatening violations in the audit. But that’s not what seemed to happen to Shameka Shaw, who rented a Section 8 home on Virginia Avenue.

"It's disgusting,” Shaw said. “This house failed four inspections."

The home’s inspection history is filled with one violation after the other. Inspection records list an electrical problem, “live bare wires,” in the crawl space as being identified in November 2015. The same problem showed up again in an inspection in April 2016, then again in July. The description of the violation seems to have been copied and pasted.

It wasn't checked off until September.

Shaw took us inside of the home where the kitchen caught fire.

“You could smell fried wiring as soon as you hit the yard,” she said.

The official cause of the fire was "undetermined" according to Louisville Fire records.

Shaw blames the wiring.

The homeowner said his electrician later determined the cause of the fire was a stove left on.

He also said the electrical problem described in the inspection records was fixed in 2015, otherwise the tenant wouldn’t have been allowed to move in.

The property owner further said that if there’s a problem identified with any of the Section 8 homes he rents, he fixes the problem as soon as possible. He said he believes the Section 8 program is great, and has participated in it for 10 years.

It was only after the blaze that the city cut ties with the property owner for non-compliance, according to a termination letter.

Osanka explained the program allows homeowners who they have cut ties with on a certain property because of non-compliance, to continue renting out other units through the program.

Osanka said if an owner is not in compliance after a violation is identified, they stop making payments to that property owner through an abatement program. They only start repaying that property owner once they’ve fixed the problem.

Meanwhile, the audit warned that more than $20 million would go to landlords not following the rules if things weren’t fixed.

Osanka said they’ve been hard at work making sure that doesn’t happen.

"We would welcome the HUD OIG auditor if they would like to," she said.

Osanka started leading the authority after the long-time director, Tim Barry, retired a few months after the audit was released.

The audit also found the Metro Housing Authority did not have proper written procedures for staff to follow.

“As a result, some tenants lived in inadequately maintained units,” the report states.

It further explains that they dispersed $65,500 in payments and received more than $7,800 in fees for the units that were found to be out of compliance. The audit recommended the authority to reimburse those $73,000 dollars for the inspected units that failed to meet HUD’s standards.

The audit also found deficiencies when it came to the authority abating, or stopping subsidies to the property owners, especially when it came to retroactively abating those payments.

Osanka explained that was an easy fix after they realized they were stopping the payments to owners not in compliance a month too late.

According to inspectors, the authority was also not checking to see if property owners were on a list of federally disbarred or suspended from the program. From the sample of 10 owners, none were found to have been on the federal list.

The authority confirmed the violations found in the sample of inspections conducted by the OIG were promptly fixed.

HUD confirmed to WAVE 3 News the authority has already made the $73,000 reimbursement.

As a result of the audit, technical assistance was provided to the authority to develop policies and procedures that would help ensure the compliance with HUD’s and the authority’s rules. They also hired a compliance manager and an ombudsman to conduct inspections.

“They have documented their corrective actions, provided them to us and we continue to work with them," HUD said.

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