Naked City

For nearly three years, the Texas Dept. of Housing and Community Affairs has hardly appeared in print unaccompanied by eyebrow-raising terms such as favoritism, suspicion, and lack of accountability, not to mention indictment and conviction. So is it time to bury the beleaguered agency and find another way to manage low-income housing programs?

Probably not, say members of the state Sunset Advisory Commission, who are scheduled on Tuesday, Jan. 9, to send recommendations to the full Legislature, which will determine the agency's future. But then again, some serious housecleaning appears to be in order at the TDHCA. Some commission members are less than impressed with the agency's behavior since it was severely rapped on the knuckles by a Sunset staff report eight months ago.

"I imagine that there will be some pretty stringent requirements at the agency if it is continued," says Michael Grimes, aide to Sunset Commission vice-chair Chris Harris, R-Arlington, one of the agency's most vocal critics. "Their history shows that if the Legislature doesn't follow up, they don't feel compelled to implement changes."

No one's saying it publicly, but insiders suggest that legislators may send the TDHCA board an ultimatum demanding that it find new executive leadership for the agency. Many top-level TDHCA staffers were with the agency when TDHCA board member Florita Bell Griffin, convicted in November for voting to approve an affordable housing project she profited from, exerted a great deal of influence over housing fund allocations.

Last spring's Sunset Commission staff report suggested placing TDHCA on a two-year probation period, and said the agency needs to do considerably better at targeting its housing funds to Texans in the greatest need. It also said that the agency fails to distribute subsidies to developers fairly and equitably, that its oversight of those developers is too lax, and that TDHCA board members are too closely tied to the housing industry to avoid conflicts of interest.

But the panel of legislators who head the Sunset Commission has repeatedly put off making a decision on whether to implement the reforms spelled out in the report. Ostensibly, it was waiting for the state auditor's office to complete its study of TDHCA, though speculation abounded that the legislators wanted to avoid casting a spotlight on the agency while then-Gov. George W. Bush was campaigning for president. Whatever the case, the auditor's report that came out in December basically concurred with the Sunset staff that TDHCA's administration of housing funds is porous, unfocused, and tends to prioritize the needs of developers over those of low-income households.

In the meantime, Sunset Commission members have been getting an earful from affordable housing advocates, developers, and past and current TDHCA employees about suspicious activity at TDHCA. "I get information literally weekly about stuff going on in that agency," says Grimes, echoing comments from other legislative offices.

But Michael Lyttle, who holds the unenviable position of heading up government relations for TDHCA, says he hopes the commission remains mindful that the agency is staffed with committed people trying to stand up for the needs of the poor with a budget that is far too small. Apartment builders need big incentives to produce units for families with very low incomes, says Lyttle, but Texas contributes less money to housing than much smaller states such as New Hampshire and Maine.

"You could say you don't want us to be developer-driven ... but you've got to work with those people," says Lyttle. He adds that most TDHCA staff agree that agency programs need improvement, and wish high-level politics didn't interfere with TDHCA's mission. "The best thing would be for this agency, developers, and advocates to have a similar vision," he says. "Unfortunately, I don't think we're at that point."

Sunset members indicate, however, that they plan to define very clearly what's expected of the agency during its probationary period, and also put in place formal procedures for removing TDHCA board members. Griffin, for example, continued to defy legislative pressure to step down from the board even after she was indicted on criminal charges in 1998. Laredo Democratic Sen. Judith Zaffirini's office says that the commission is likely to place the board off-limits to real estate agents and others with financial stakes in the housing industry.

Lyttle says that if the Legislature does put his agency on probation, TDHCA would likely benefit from the extra attention from lawmakers, who might get a better feel for the complications inherent in meeting the state's housing needs. But Lyttle doubts that an agency in charge of dispensing millions in subsidies through programs few people understand will ever look squeaky clean to its critics. "I suspect that this agency will always be a lightning rod," he says, "just given the nature of the business."