BATON ROUGE, La. (AP) — The Louisiana Housing Finance Agency has lost a federally funded housing contract worth $1 million per year to a Texas-based company, and a state senator said that lawmakers' decision to eliminate the agency could be partly to blame.
Sen. Lydia Jackson, D-Shreveport, said she worried an effort to dissolve the finance arm and consolidate several housing agencies risk such contracts. Gov. Bobby Jindal's administration disagrees, saying the finance agency didn't manage the contract well and the consolidation will help improve such problems.
The new law dissolves the finance agency's Board of Commissioners on Dec. 31, when it will become a subsidiary of the new state housing corporation. The LHFA will be eliminated on June 30, 2012.
Jackson said she is concerned the law puts the state at risk of losing contracts, just like the Project-Based Section 8 Housing program that the LHFA managed for nine years.
"That's a contract with a particular entity that, just because the Louisiana legislature says 'Transfer it to this new entity,' that doesn't mean that the other party to that contract is going to agree," said Jackson.
But the U.S. Department of Housing and Urban Development says the loss of the contract had nothing to do with local politics.
"It was based solely on the application and their bidding fee," said spokeswoman Donna White.
The governor's commissioner of administration, Paul Rainwater, said LHFA lost the contract because of poor performance.
"What we've said all along is that this agency could be run much better, and that's one of the reasons that we put this legislation together," said Rainwater. He said the LHFA has been "red flagged" by HUD for its failure to disperse federal funds.
The LHFA has administered Louisiana's project-based Section 8 housing program in Louisiana since 2003, bringing in $1 million each year. But a year and a half ago, HUD put all such contracts across the country up for rebidding.
Last week, Louisiana's contract went to the Southwest Housing Compliance Corporation, which already administers the program in Texas and Arkansas. The LHFA is appealing.
The LHFA has not yet met with HUD to hear why it failed to win the work, and federal officials were not immediately available Tuesday for comment. The Section 8 award process is based on several criteria, including an entity's technical approach to managing the program and its proposed fee.
The decision is not final, said Allison Jones, who chairs the LHFA's Board of Commissioners.
Daniel Strange, the executive secretary of the Louisiana Housing Council, said it's difficult for anyone to know why the state lost the contract, but it will result in the loss of 10-12 jobs in Louisiana.
"Certainly there was some concern about the uncertainty of the agency," said Strange.
Richard Murray, the executive director of the East Baton Rouge Parish Housing Authority, said he doesn't believe the loss will cause any immediate problems for local multi-family affordable housing units.
"I would certainly have hoped they would have kept it in state, but they decided not to I guess," said Murray.
HUD said housing services in Louisiana will not be interrupted.
"We expect that an out-of-state agency or entity will implement the program in the way it was supposed to be," said White.
On Thursday, a transition committee will start work on the plan for consolidating the LHFA and other state housing programs into the Louisiana Housing Corporation. Jones, Jackson, and Rainwater are all serving on the transition committee.
The new agency will also absorb several hurricane recovery programs in the state's Office of Community Development, such as Gustav and Ike Affordable Housing and the Plaquemines Parish Rehabilitation program. It also will absorb a first time homebuyers' program.
There are no comments yet