“Lost Money”


Houston Chronicle  
May 14, 2017

Each year, nearly two dozen tax increment reinvestment zones collect tens of millions of dollars for the redevelopment of blighted and stalled neighborhoods across Houston. By state law and city approval, some of those zones also produce millions of dollars annually that the city of Houston is supposed to use for affordable housing in a city where more than 43,000 families are on a waiting list for subsidized housing.

Reporters Rebecca Elliott and Mike Morris decided to focus on the affordable housing funds after a routine public information request for a decade’s worth of spending information produced a spreadsheet of figures even city officials could not explain. The city also was unable to tie expenditures to specific projects or even say how many families it had helped under its affordable housing initiatives.

Elliott and Morris spent 10 months reviewing thousands of pages of city council minutes, ordinances and contracts to create their own 13-year database of projects that the city intended to finance with its local housing fund. They then went back to the city with questions about the number of homes built or repair under each initiative, where those units were located and whether there were affordability requirements associated with each, among other details.

City officials were able to provide limited spending information for 10 of those 13 years. For example, the housing staff was able to say how much money was spent, but not who was paid. In some cases, city officials were unable to say how many homes had been built or repaired with the public dollars. Nor were they able to provide any records for the years prior to 2007, when a new accounting software was introduced.

It became increasingly clear that city officials were unsure how much they had spent from the housing fund each year or even how much money that had to spend. Repeated requests for explanation and information led city officials to realize they had lost track of tens of millions of dollars over the years and misspent millions more.

Among the Houston Chronicle’s findings:

  • Almost half of the $96 million spent since fiscal 2007 went to administrative costs, federal fines or to keep projects moving after the city lost state and federal grants.

  • Money that was supposed to go toward affordable housing projects was used to pay the city housing department’s rent for several years.

  • The Chronicle’s repeated questions about discrepancies led the city to discover it had $46 million available for new projects, tens of millions more than officials thought.

  • The city used the housing money to fund the construction, rental or purchase of, at most, 2008 homes over the previous decade. Fewer than 500 of those homes, however, still are categorized as affordable housing.

  • The city did not even have a definition for “affordable” when it came to housing projects.

In response to the “Lost Money” story, Mayor Sylvester Turner responded by proposing a series of reforms, including increased financial transparency and tighter affordability restrictions on homes the city subsidizes.

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Submitted by Matthew Schwartz and Mizanur Rahman.

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