The Department of Housing and Urban Development (HUD), headed up by Secretary Ben Carson, is getting ready to toss one of President Obama’s most prized — and illegal — policies in the recycling bin.
Under Obama-era policies, the HUD doles out taxpayer dollars for Section 8 housing, going against administrators and the U.S. Supreme Court.
But not for long.
Under new leadership, the HUD is now going to return to a “competitive bidding process” to award Section 8 housing contracts — so taxpayer dollars aren’t used.
According to a top HUD official, the department is taking many of the steps necessary to change back to the competitive procurement method are being taken now, but didn’t want to comment on when the announcement from the department might happen for fear of tainting the bidding process.
Supporters of the competitive bidding procurement process say the net result will increase efficiency in the program and save taxpayer money. And Republican lawmakers that have been critical of HUD’s actions in the past are applauding the change in course as well.
“When dealing with performance-based Section 8 contract administrators, it’s clear that full and open competition is the way to get the best value for the taxpayer,” said Rep. Mario Diaz-Balart, R-Fla. “As Chairman of the Housing Appropriations Subcommittee, I have repeatedly insisted both publicly and privately that HUD follow Congressional intent, the GAO, and the Supreme Court.”
Diaz-Balart is one of a small handful of elected officials who put pressure on HUD and then-Secretary Julián Castro during the years in which HUD ignored findings that their grant process was illegal.
Section 8 housing is a federal program that pays rental assistance to landlords to help low-income people acquire affordable housing.
Because HUD had problems administering the program, in 1995 it started to contract out the management of Section 8 housing units through a competitive bidding process. However, in March of 2012, HUD suddenly shifted away from the competitive bidding process, and began using funding mechanisms which were more like grants.
Contractors who had previously gained HUD’s business under the bidding process appealed to the Government Accountability Office in 2012, just months after HUD changed course. And by August of that year, the GAO ruled that HUD’s actions were “unreasonable and in disregard of applicable statutory guidance.”
Undeterred, HUD pressed forward with their choice, which then made them the target of a lawsuit. From that point, HUD lost an embarrassing string of rulings which culminated in the U.S. Supreme Court denying to hear an appeal from the agency in April of 2015.
Despite all those rulings, HUD didn’t budge. But the Trump administration is now set to return to the previous methods.
Eric Strong is the CEO of Navigate Affordable Housing Partners, a company that has won HUD Section 8 contracts in the past under the competitive system. He’s also publicly lobbied HUD to change back to the performance based contracting method.
“All we’ve ever wanted was fair and open competition because we know it results in the best financial situation for the taxpayer and also will result in better housing for the residents who live in those [Section 8] units,” Strong told the Washington Examiner.
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