Public Housing

In response to a congressional request, GAO reviewed the Chicago Housing Authority's (CHA) operations to assess: (1) the extent and nature of identified problems; (2) Department of Housing and Urban Development's (HUD) oversight of CHA management; (3) the status of a 1987 agreement between HUD and CHA that averted a threatened HUD takeover; and (4) CHA progress in resolving its widespread problems.

GAO found that: (1) most CHA projects had deteriorating buildings, damaged heating and water systems, broken elevators, and roach and rodent infestation, resulting from poor maintenance, age, and abusive tenants; (2) CHA estimated that it would need about $1 billion over a 5-year period to upgrade its projects to an acceptable level; (3) in 1987, over 16,000 criminal incidents occurred on CHA properties, a total increase of 11.5 percent over 1986, while homicides, aggravated assaults, and rapes increased 63 percent; (4) a recent HUD review of CHA cited 76 deficiencies in critical management areas and confirmed that CHA had made little progress toward correcting the problems; (5) lack of internal controls, inadequate financial management, and frequent turnover of top management since 1981 have contributed to continuous CHA problems; (6) HUD did not effectively monitor CHA prior to establishing a seven-member monitoring group in 1987; (7) prior to a HUD takeover in 1987, HUD and CHA signed an agreement that called for CHA to appoint a management team to manage its operations, an on-site HUD liaison to monitor management actions, establishment of an arbitration panel to settle disputes, and a needs assessment to analyze the entire CHA operation; (8) in 1988 CHA appointed a managing director who implemented a crisis management team to review CHA operations, implement corrective actions, and report progress in critical areas; (9) the team initiated changes to procurement procedures, tightened security, developed plans to improve project maintenance, and began meetings with tenants; and (10) although the crisis management approach shows promise, HUD and CHA must continue to cooperate to prevent CHA from returning to past practices.