The Clinton administration has chosen New York as headquarters for a new FBI-led enforcement center that will pursue an intensified nationwide crackdown on fraud and mismanagement by owners of federally subsidized low-income housing, City Limits has learned.
Agency sources say the enforcement center, created in alliance with the Justice Department, is the latest sign of HUD Secretary Andrew Cuomo's desire to boost his law-and-order credibility at a time when his department faces deep staffing and program cuts. His choice to base the national office in New York fits with his recent moves to begin foreclosure proceedings against a handful of owners of dilapidated federally subsidized projects in Brooklyn and the Bronx.
“We plan to consolidate all enforcement activities in New York,” confirmed a HUD spokesman, explaining that HUD currently has enforcement staff spread throughout each program and division of the agency.
The enforcement center's chief is Edward J. Kraus, a 20-year FBI agent and a top deputy to FBI Director Louis Freeh. The center will take over responsibility for a regulatory oversight system long considered ineffectual by tenant leaders and other critics. As City Limits has documented over many years, dozens of privately-owned projects in New York City–housing thousands of tenants–are in declining condition despite millions of dollars in annual rent supports from HUD. Yet only now is the agency beginning to penalize owners for failing to maintain safe and decent housing.
Cuomo ratcheted up enforcement and oversight of the Section 8 program earlier this year and has slowly begun shifting HUD into a more collaborative role with legal services lawyers and tenant groups trying to remove bad landlords from some city housing projects.
Next month, HUD is slated to file foreclosure papers on a 114-unit Section 8 rent subsidized project on 139th Street in the Bronx. HUD has also placed two large Section 8 developments in Bedford Stuyvesant, including the 315-unit Medger Evers Houses on Gates Avenue, in the foreclosure pipeline.
“Cuomo may want an enormous amount of reform in the New York area,” explained Richard Wagner of Brooklyn Legal Services, who is working with tenants in the Bedford Stuyvesant projects. “Relocating enforcement to New York may be a way to get it away from the inside-the-Beltway influence peddlers,” he added.