A housing mess on O'Malley's steps; Computers failed, apartments were abandoned while city went after snazzy projects

THE BALTIMORE SUN

IN THE PAST six years, the Housing Authority of Baltimore City has spent $12 million of taxpayers' money on its computers. Much of that money went down the hole: The agency has been without an information management system since December, when its aging mainframe was shut down to avert a Y2K disaster.

Unbelievable. Equally unbelievable is that for five months now, an army of permanent and temporary clerks has done the paperwork by hand.

They authorize purchases and keep track of inventories without computers. They use typewriters to process federal rent subsidy vouchers for 11,000 tenants each month.

Not surprisingly, they're having trouble keeping up. The result: extreme delays in payments and billings. A landlord renting to a Section 8-subsidized tenant this month can expect to see the first payment in July.

Patricia J. Payne, who became Mayor Martin O'Malley's housing commissioner in February, says she has no idea when -- or whether -- the department will get an operating replacement system, or how much it will cost. She questions whether the consultants hired by the previous administration even knew what they were doing.

Just one example

The computer fiasco is the most egregious of several serious Housing Authority management problems uncovered since Mayor Kurt L. Schmoke's 12-year term ended in December. They suggest that despite nationwide acclaim for innovations, his housing commissioner, Daniel P. Henson III, failed in his mission to rectify longstanding management deficiencies.

The situation is alarming. Recently, the federal Department of Housing and Urban Development told Baltimore it was worried about the Housing Authority's overspending. Cuts were ordered. Even so, a $15 million budget deficit is expected.

Personnel changes are being made -- as they should be.

Eric Brown, the Housing Authority's day-to-day chief for the past seven years, has quit. Reginald Thomas, chairman of the agency's five-person board of directors, is also out.

When Dan Henson became the city's housing chief in 1993, he inherited a bureaucratic nightmare. Both the federally funded Housing Authority and the separate Department of Housing and Community Development were rudderless and in disarray.

In six years, Mr. Henson engineered a seemingly impressive turnaround. Crime-ridden and antiquated Lafayette Courts, Lexington Terrace and Murphy Homes high-rises were razed. Attractive mixed-income communities with names like Pleasant View Gardens, The Terraces and Heritage Crossing replaced them. HUD executives hailed them as among the best in the nation. (Flag House Courts, the last of the high-rise projects, is to be demolished later this year.)

Amid the ribbon-cutting hoopla and kudos, the rest of the story was easy to overlook: The energetic, action-oriented and self-confident Mr. Henson essentially ran a one-man show. He was never able to overcome the agency's historical management problems, develop a competent command staff or install a system of accountability.

In the end, he was more successful dealing with highly visible new construction than rescuing decaying neighborhoods.

The dismal state of scattered-site public housing underscores that point: Because of lousy supervision, more than one-third of 2,700 Housing Authority rowhouses around the city are vacant -- even though 20,000 families are on the waiting list.

Tearing away at problem

Under Mr. Henson, the Housing Authority's management response to this blight was telling. It asked HUD to authorize the demolition of 1,000 of the worst rowhouses, even though razing them would create gaps on residential blocks, increase neighborhood instability and drastically reduce the city's public housing inventory. HUD rejected the request, saying the city had no plan. (In the end, it approved the wrecking of 300 yet-to-be-identified rowhouses).

Making sure that Housing Authority -- and other city-owned problem properties -- will not continue to ruin neighbor- hoods is among Ms. Payne's toughest challenges.

Ms. Payne, a former state housing secretary, will also have to quickly find competent executive aides. In good economic times, the available talent pool is limited. But her decision to borrow Leonard Vaughan, Howard County's housing administrator, to temporarily fill Mr. Brown's job as the Housing Authority's top manager, was a refreshing example of new thinking.

As of now, though, Ms. Payne is hanging by the skin of her teeth.

Confronted with HUD-ordered belt-tightening and devoid of both competent aides and viable proposals, Commissioner Payne is thinking of not applying for more funding from the Clinton administration's Hope VI program, which has a May 18 deadline.

Skipping seed money?

This news has stunned local developers. Baltimore, after all, has been the Hope VI program's biggest single beneficiary. The $172 million the city has received from Washington under the program provided seed money to replace high-rises with suburban-style communities where public housing tenants live next door to homeowners.

This could be the last Hope VI funding opportunity. The Clinton brainchild is unlikely to survive the change of administrations, regardless of whether the next president is Democrat Al Gore or Republican George W. Bush. For that reason alone, Baltimore's ostensible willingness to forgo what has become an annual $20 million sure-thing is puzzling.

Plenty of aging public housing projects could put such an infusion of renovation money to good use. Just one example: Perkins Homes, a deteriorated World War II-era complex east of Little Italy, could be an important bridge to link city redevelopment areas. But without additional federal funding, it will likely remain an eyesore.

Baltimore's public housing and its administration are under a microscope. A Greater Baltimore Committee task force is expected to unveil a status report and recommendations within the next several weeks. Seven subcommittees are studying issues ranging from the feasibility of privatized management to streamlining inspection of Section 8 units.

Telling signs

Although Mayor O'Malley has not indicated which direction he may take, his appointment of developer Otis Warren to the Housing Authority board is a tip-off. Mr. Warren's firm has been quite successful in privately managing low-income units in difficult neighborhoods.

In the 1950s and 1960s, when Baltimore's public housing high-rises were built, many problems of poverty were concentrated in vertical structures that gradually became unmanageable. Since then, thinking among planners has changed. The preferred strategy now is to mix public housing tenants and working families, including homebuyers, in communities built by the Housing Authority.

Is this a more workable approach than economically and racially segregated high-rises? It can be.

But the city must assure that the newly built, innovative communities will retain their stability and attractiveness even after their newness wears off. It also has to make sure public housing rowhouses are run better. Those are management challenges that requires changing the administrative style and culture of the Housing Authority staff and tenants.

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