The Accountability Crisis in New York’s Project Based Rental Assistance Program

Tenants living in federally subsidized housing projects in New York City are given the runaround when they complain about their rent and repairs. Contractors, state, and federal agencies pass the buck on who is responsible for enforcing the rules.

This is part three of an investigative series on the Project-Based Rental Assistance Program in New York City. To read part one: “Compliance,” click here. To read part two: “Repairs,” click here. This series was supported by the Fund for Investigative Journalism.

After Vivian Colado spent several months in the hospital recovering from a stroke, she returned to a rent bill of over $20,000. “That day when I received the letter, my blood pressure went so high I had to go to the emergency room,” Colado told City Limits in Spanish.

Her Washington Heights apartment was federally subsidized—she was only supposed to pay 30 percent of her income in rent. Colado, 65, was living on social security payments of just $794 a month at the time. So how did her back rent, in under a year, skyrocket?

When her property manager did not hear from her to do her required annual income recertification because she was in the hospital, they terminated her federal housing subsidy and started charging her market rent—nearly $2,000 a month for her one bedroom. 

Unlike other federally subsidized tenants who work with government agencies like NYCHA to renew their vouchers, Colado’s subsidy is managed by a private state contractor, a firm called CGI, which in turn oversees property managers at hundreds of privately-run buildings like hers. 

When she returned from the hospital, it took weeks to get the right income paperwork from the Social Security Administration, putting her further behind. When she tried to get the issue cleared up, her management company, Hamilton Heights Association, said it was too late; the subsidy had already been terminated.

She got an eviction notice in 2023 for $23,147 in unpaid rent.

Colado fought her eviction case in court for two years, a process that caused her stress and worsened her already-poor health. “This could have been avoided. The failures in this case were their fault,” she told City Limits in Spanish.

A broken accountability system, advocates say, leaves tenants in the Project-Based Rental Assistance (PBRA) program—which some 100,000 low-income New Yorkers rely on to pay their rent—with nowhere to turn when something goes wrong with their housing.

In stories published earlier this week, City Limits documented how many property managers in the program fail to properly screen tenants for assistance, and how subsidized renters are often struggle to get repairs done on their homes.

One of the program’s issues, advocates say, is that tenant complaints never reach the right authorities, and supervisory agencies aren’t paying close attention. Property managers, contract administrators, and the U.S. Department of Housing and Urban Development (HUD) are slow to respond, and pass the buck on responsibility for making sure private managers follow the rules.

“Tenants are on this merry-go-round that goes to nowhere,” said Ashley Viruet, supervising attorney at Legal Services of New York City.

Little recourse

It took a personal message from one of Colado’s lawyers to a high-ranking New York HUD official to finally get her case addressed.

Under HUD regulations, property management is required to inquire about extenuating circumstances like a hospital stay that may delay recertification. When Colado returned from the hospital, she did file the missing recertification paperwork for 2021 with her management company. But Hamilton Heights Association said they didn’t get it, and tried to evict her anyway.

Lawyers for Colado at Legal Services NYC tried working with CGI and property management on the issue before escalating it to HUD. And it was only because one of the lawyers had the email for a high-ranking HUD official that the case got attention from the regional office.

“Once the regional reviewed the file, [the property manager] did find the misfiled requested certification. I advised management to recertify Ms. Colado for the 2021 period,” wrote Jonelle Stewart, branch chief for account executives in HUD’s New York regional office last July, in an email shared with City Limits.

Colado’s property manager is overseen by CGI, a private contractor called a Project-Based Contract Administrator (PBCA), that runs New York State’s Project-Based Rental Assistance program. CGI reports to the Housing Trust Fund Corporation, an arm of the State Department of Homes and Community Renewal (HCR), which ultimately reports to HUD.

None of those layers of oversight were able to get Colado’s case resolved. An investigation by City Limits showed that mistakes in the recertification process, like those that resulted in Colado’s lost paperwork, are widespread in the 65,000 units of PBRA housing across New York City.

PBRA tenants must re-certify their income each year, and errors can result in their paying miscalculated rent or even facing eviction. “The screening and enforcement structure is not functioning,” said Molly Rockett, staff attorney at Legal Services NYC.

HUD’s press office did not respond to direct questions from City Limits about noncompliance by PBRA property managers in recertification procedures. Nor did they respond to questions about how they field direct tenant complaints, or review issues elevated to them by their managing agents in each state, like CGI.

New York’s HCR told City Limits that its primary function is to ensure CGI meets HUD’s contract requirements. HCR emphasized that it is not a party to any of the housing payment contracts and does not supervise the program—they only help elevate issues with HUD.

Sources with knowledge of the inner workings of the program told City Limits that most tenant complaints should be worked out with a building’s management company directly.

But as City Limits documented, property managers in the PBRA program often oversee thousands of units at once. Tenants reported having a hard time reaching them, and even CGI, the company contracted locally to manage the program, reported difficulty reaching some PBRA owners and property managers.

When there remained disagreement, the source said, tenants should contact CGI with their issues, which can mediate with the tenants and their building management.

Most of the tenants City Limits spoke to for this story did not know about CGI’s call center—even though HCR made an effort to post information in all PBRA buildings in 2022. Tenants and advocates who have used it said it rarely helped them get resolution.

A recertification specialist at a PBRA building, who spoke with City Limits on the condition of anonymity because they were not authorized to speak to the press, said even they have trouble contacting CGI. “I never contact [CGI]. Not after they never answered me,” they said.

If a problem persists, CGI could escalate the issue with HUD through monthly reports or meetings with HUD liaisons.

A spokesperson for HCR said that they escalate any noncompliance or nonresponse issues they hear from CGI to HUD. In the last several years, HCR said it worked closely with local advocates regarding owner and tenant disputes and thoroughly reviewed tenant issues brought to them.

But they emphasized that all authority for enforcement of program rules lies with HUD.

When tenants reach out to HUD directly, sources with knowledge of the program said, they are often sent back to the property manager or CGI.

“There’s this unspoken standard about how much time someone needs to stay in the broken bureaucracy before they move to the next level of enforcement,” said Bridgett Simmons, a staff attorney with the National Housing Law Project.

‘No clear pathway’

Agencies can’t seem to agree on who is actually responsible for enforcing the rights PBRA tenants are entitled to in the HUD handbook. HUD says that the PBCA—in this case, New York’s Housing Trust Fund Corporation and its subcontractor CGI—act as its agent in PBRA and must follow program procedures.

But “[CGI and the HTFC] don’t see themselves as enforcers or policers. They see themselves as functionally witnesses who notice and report problems to HUD,” said Rockett.

Little oversight over administration is par for the course in PBRA developments across the country, according to Simmons. “[Tenants] need someone to intervene, and that’s not what the PBCA is doing right now, unless something makes them,” she said. 

Sometimes that’s an upswell of tenants complaining in one building, or a demand letter from a legal assistance group, but “most often, it’s like HUD regional office having to tell the PBCA to handle something in a particular manner,” said Simmons.

Unlike PBRA, tenants who have federal housing subsidies through their local housing authority, like NYCHA, have other recourse. That includes a formal grievance process where they can dispute rent increases, argue about adding household members, or get special deductions processed.

“You can hold government agencies accountable in a way that you cannot hold a private company accountable,” said Viruet. But in PBRA, “There’s no clear pathway to hold your landlord accountable if they are not processing your recertification. If your rent is wrong, you can call CGI,” she said.

CGI, which operates the help line, is the same entity responsible for conducting annual management reviews in all of the properties that collect PBRA subsidies, reviews which happen every one to three years, depending on the results of previous audits.

City Limits examined management reviews of PBRA projects in New York City and found that paperwork issues—like miscalculated rent or administrative errors with annual tenant recertifications—were common. Over 90 percent of properties failed the portion of the review where CGI audits tenant files.

When a property manager fails a category in its review, like the tenant file audit, they are given a deadline for corrective action, usually sometime before the next audit. 

But 395 of 418 properties failed their tenant file review multiple years in a row in the period City Limits examined, blowing past deadlines to fix problems. Another 20 properties failed the tenant screening portion of the audit once, and just one passed every year.

CGI did not respond to questions from City Limits about how management companies could continuously fail tenant screening audits but still pass on their overall management review score.

HUD has the authority to terminate housing payment contracts with noncompliant property managers, but it’s rare. HUD did not respond to questions about how many managers in the PBRA program, if any, have been replaced in recent years.

CGI was recently fired from running a Section 8 program in Columbus, Ohio after tenants complained of civil rights violations, lost paperwork, endless correspondence, and inaccurate payments.

A former CGI housing specialist, granted anonymity to protect their job security, told City Limits that CGI’s department that works on contracts like PBRA does not have enough capacity to manage housing programs. “I don’t personally have faith that a company like that should be anywhere near housing,” said the specialist.

HUD, meanwhile, has been hit with massive layoffs that cut its staff 40 percent, losses that affected the departments responsible for overseeing New York’s PBRA program, sources say. 

In March, the Daily News reported there was just one management employee remaining in HUD’s New York office. HUD’s account executives in the Multifamily Division have seen the portfolio of properties they oversee grow in number, sources said.

Meanwhile, more and more homes could be entering the PBRA program across the country. Through the federal Rental Assistance Demonstration (RAD) initiative, local housing authorities can choose to convert public housing to private management and PBRA as a means to unlock extra funding.

In New York City, however, developments converted under RAD (locally called PACT) become Project Based Section 8 projects overseen by NYCHA, not PBRA projects.

Nationwide, 43 percent of the nearly 200,000 converted public housing units became PBRA as of 2020, according to data from HUD’s RAD Resource Desk.

And HUD’s Inspector General’s Office, in a December 2024 report, found serious physical conditions deficiencies in PBRA properties converted under RAD. City Limits documented similar issues in New York’s existing PBRA housing earlier this week.

Towards reform

CGI has administered the PBRA program in New York since 2005, winning a contract renewal each time it came up.

Now, HUD is considering more wholesale changes to how it selects PBCAs to administer the PBRA program, reigniting debate about whether private actors can effectively run publicly-subsidized housing.

HUD wants to expand the pool of contractors that can become PBCAs, arguing that federal procurement rules force it to simply renew existing contracts, rather than update contracts and seek new vendors. In its proposed rule changes, the agency argued the current regime allows “no collaborative relationship between contractor and HUD.”

HUD also wrote that the changes would benefit tenants, as the updated contracts could include new tasks and rules to protect resident safety, as well as allow HUD to standardize how it tracks tenant complaints and follows up on physical safety inspections.

Advocates have been calling attention to the “declining oversight quality” provided by PBCAs like CGI, writing to HUD during an open comment period last year.

“Properties are owned and operated entirely by private actors with strong profit incentives to cut corners, under-staff management, and provide oversight as cheaply as possible,” wrote a group of national housing advocacy organizations, tenant groups, and legal aid organizations in a letter during that time. “Accordingly, tenants often face chronic management misconduct by a revolving door of minimally-trained property managers.” 

They went on to describe a “loop” where HUD regional offices send tenants back to PBCAs without resolving their issues. PBCAs, they argued, need to be empowered to take enforcement action, instead of shifting the responsibility to HUD.

HUD’s internal Inspector General had concerns about the model too, writing in 2009 that HUD was unable to control costs in PBCA contracts, including paying out almost half of the contract administration services budget on fees to PBCAs.

Because of the lack of enforcement, “the American people are not getting the full benefit of the contract,” said Simmons.

But some advocates have warned that reforming rules governing the PBCA won’t solve what they see as the main problem: outsourcing the PBRA program to private entities. “More privatization with less tenant protections will mean that there will be less hooks to compel someone to do their job,” said Simmons.

The Trump administration, which has proposed significant cuts to public benefits like housing assistance, has also expressed openness towards increased privatization. The administration also recently issued new rules mandating English-only HUD materials, a barrier to tenants like Colado.

“[The Trump administration] places additional unnecessary burden on these programs to see that they fail,” said Simmons.

With little accountability, advocates say management companies can take advantage of the federal turmoil to keep margins high, while shirking their program responsibilities. Changing the program has stalled out for decades, and may prove challenging in the current environment.

PBCAs are also a political constituency, and may be content to keep the status quo, which results in cyclical contract renewals.

“Why would I do my job if you’re still going to pay me if I don’t do my job?” asked Simmons.

Additional reporting by Daniel Parra Mejia. To reach the reporter behind this story, contact [email protected]. To reach the editor, contact [email protected].

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