Denver housing officials are not holding the Denver Housing Authority accountable when it comes to producing and preserving agreed-upon numbers of affordable units, according to a recent report issued by Denver Auditor Tim O’Brien.
The audit, released last week, identified 203 units in housing authority projects backed by taxpayer dollars that were renting at market rates. Of those, the rents for 89 units were at prices considered unaffordable to people making 80% of the city’s area median income — currently $69,520 for an individual or $89,360 for a family of three — which is a violation of the city’s agreement with the authority.
The rest were at risk of rising above that maximum level in the future, the audit says.
Auditors also found the authority was 32 units short of its commitment to develop housing for people with very low incomes and 301 units short of the number agreed upon for people with moderate incomes.
“The city needs stronger oversight to confirm the affordable housing results (that) it promises,” O’Brien said in a news release. “It’s clear the city is too trusting in third-party partners and as a result, the people who need the most help could be left out.”
The audit says the Denver Department of Housing Stability’s building inspection protocols — including providing notices at least 14 days before a visit — may allow managers of affordability-restricted properties to cover up critical health and safety issues.
City officials resisted auditors’ recommendations to change the department’s approach to inspections, partly out of respect for residents’ privacy, according to their response.
O’Brien’s office published its findings Nov. 16 in a 78-page report dissecting the Department of Housing Stability’s oversight of affordable housing in the city. Its findings resulted in 19 recommendations to the department, which is commonly referred to as HOST.
Suggestions included ensuring the department is getting regular reports from the Denver Housing Authority on development progress and making sure that construction contractors on affordable housing projects comply with prevailing wage laws.
“If affordable housing is a priority in the city, leaders need to show a matching responsibility to (ensure) effective use of resources, accountability to housing goals and commitment to helping those in Denver who need it most,” O’Brien said in the release.
The audit zeroed in on agreements between the city and the DHA. The quasi-governmental housing corporation controls more than 13,000 units of affordable housing and housing choice vouchers in the city.
The report notes that Denver has committed tens of millions of dollars out of the city’s voter-approved affordable housing fund to DHA since 2019, with the money going to build and maintain affordable projects.
Troubled by discoveries on site visits
O’Brien said he was troubled by what auditor’s office staff members found when they made surprise site visits to 21 affordable housing properties funded by the city. They did not enter private apartments. But in common areas and outside those buildings, they documented problems that included broken windows and doors, exposed wires, water damage, broken elevators and evidence of pest infestation.
City records had identified no such issues at 14 of those properties in recent inspections, auditors found.
One of the properties in that assessment was Fusion Studios, a supportive housing project in the Central Park neighborhood. Jesse Parris, a homeless advocate and former write-in candidate for mayor, lives there and frequently has referred to it as “roach-, lice- and bed bug-infested” during public comments at City Council meetings.
The housing department disagreed with two of O’Brien’s recommendations.
It rejected a recommendation to assess how often affordable housing properties should be inspected and how much warning property managers should be given ahead of time. In a response letter to O’Brien dated Nov. 1, Renee Gallegos, a deputy director of HOST, also rejected a recommendation to revise the frequency and notification protocols around inspections.
The department’s notification practices are driven by federal standards, Gallegos wrote. Affordable housing projects already receive inspections more frequently than their market-rate counterparts, she said, and the housing department is not responsible for enforcing municipal codes overseen by other city agencies, such as the health department.
“Residents in these buildings are already subject to up to four other inspections annually, and their privacy should be a priority,” Gallegos’ letter reads. “Limiting notice negatively impinges on their privacy.”
City housing officials found that a majority of the maintenance and safety issues that the audit report highlighted were already subject to work orders for repairs when the auditors made their visits, HOST spokesman Derek Woodbury said in an email after this story was first published. Woodbury emphasized that HOST’s inspection schedule that calls for site visits every year is actually more stringent than the requirements set out by the U.S. Department of Housing and Urban Development which only mandates inspections once every three years.
In the cover letter accompanying his report, O’Brien said he was disappointed in HOST officials’ decision to disagree with recommendations. He said those recommendations would better ensure the city’s affordable housing projects are “maintained, safe, and sanitary for the residents they benefit.”
The auditor’s office stated that it planned to follow up on HOST’s progress on 17 recommendations the department agreed with.
O’Brien’s audit plan for 2024 includes an intention to examine the city’s homeless shelters overseen by HOST.
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