HUD AND JUSTICE DEPARTMENT LAUNCH
"GET TOUGH" PARTNERSHIP
AGAINST BAD LANDLORDS WHO ABUSE
FEDERAL HOUSING ASSISTANCE IN 50 CITIES

Cuomo and Reno said the Department of Housing and Urban Development and the Department of Justice will focus their joint efforts to file civil and criminal charges where warranted against bad landlords in the 50 communities with the largest concentrations of HUD-assisted housing.

"HUD is not in the businesses 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. If they refuse, we will take severe action against them."

Reno said that U.S. Attorneys across the country are ready to pursue cases against bad landlords that HUD refers for possible prosecution.

"Landlords who receive federal funds must realize that if they don't play by the rules they will lose out in the end," Reno said. "We have successfully pursued unscrupulous landlords in the past and will work closely with HUD to continue our pursuit."

Reno said the "Get Tough" initiative will allow HUD and the Department of Justice to build on the success they have achieved by working together to settle 58 cases resulting in more than $33.5 million in settlements against bad landlords since 1994.

The HUD-Justice Department crackdown on bad landlords was endorsed today by the National Alliance of HUD Tenants and the National Affordable Housing Management Association.

"We support the efforts of the Clinton Administration to have stricter enforcement," said John Bohm, Executive Director of the National Affordable Housing Management Association. "We have been in the forefront calling for tough enforcement policies."

About 1 million low- and moderate-income people -- many of them elderly and disabled -- live in about 446,000 HUD-assisted apartment units owned by private landlords in the 50 targeted cities. Nationwide, about 3.2 million people live in about 1.4 million privately owned HUD-assisted apartment units.

"We know that most landlords of HUD-assisted housing are responsible and provide affordable housing as required under law," Cuomo said. "Our job is to identify and stop the minority who are abusing the program."

Cuomo highlighted enforcement actions against abusive landlords in: Kansas City, MO (Valley View, Hillcrest Manor and Good Shepherd Manor apartments); Chicago (Ellis Lakeview and Stone Terrace apartments); the New Orleans area (Hillcrest Homes in LaFource Parish); Dallas (Crest A, Coston Arms and Prince Hall apartments); New York City (Mott Haven VI apartments in the Bronx) and Indianapolis (Blacherne, Savoy and Hoosier apartments).

Bad landlords often pocket money that should be used for their mortgage payments and to keep their apartments properly maintained. This practice -- called equity skimming -- causes properties to deteriorate, and vacancies and crime to increase. It often leads landlords to default on their mortgages.

Since the mortgages of the HUD-assisted housing are insured by HUD, the Department gets stuck with the bill for the unpaid mortgages and for building repairs when the landlord defaults. If no enforcement action is taken, the bad landlord can walk away with big profits, abandoning responsibility for the project.

Enforcement actions that HUD and the Department of Justice will pursue against bad landlords include: prison sentences, civil fraud judgments, mortgage foreclosures, bans on doing business with the federal government, return of misused housing assistance funds to HUD, substantial fines, and appointment of new apartment managers.

Cuomo also announced that HUD will propose legislation to strengthen the Department's enforcement authority against bad landlords.

The proposed legislation would: prevent landlords from using bankruptcy laws to delay or avoid foreclosure and other enforcement actions; make people convicted of equity skimming liable for all losses suffered by HUD as a result of the crime; make criminal equity skimming a money laundering offense; and impose criminal penalties on anyone who obstructs a Federal audit dealing with HUD funding.

The HUD-assisted units are subsidized as part of the project-based Section 8 program, which was created 23 years ago to increase the supply of safe and well-maintained apartments for people who can't afford to rent apartments at market rates.

HUD will inspect all project-based Section 8 developments over the next 12 months to determine whether enforcement action should be considered, focusing most heavily on the 50 cities, Cuomo said.

The 50 communities targeted for an intensified crackdown against bad landlords under the "Get Tough" campaign, in alphabetical order by state, are: AL - Birmingham, Mobile. AZ - Phoenix, Tucson. CA - Los Angeles, Sacramento, San Francisco, San Jose. FL - Jacksonville, Miami, Tampa. IL - Chicago. CO - Denver. DC - Washington. GA - Atlanta. IN - Indianapolis. KY - Lexington, Louisville. LA - New Orleans. MA - Boston. MD - Baltimore. MS - Jackson. MI - Detroit. MO - Kansas City, City of St. Louis, St. Louis County. NC - Charlotte. NE - Omaha. NJ - Newark. NV - Las Vegas. NY - New York City. OH - Cincinnati, Cleveland, Columbus, Dayton, Toledo. OR - Portland. PA - Philadelphia, Pittsburgh. PR - San Juan. RI - Providence. TN - Knoxville, Memphis, Nashville. TX - Dallas, Houston, San Antonio. WA - Seattle, Spokane. WI- Milwaukee.