FOX 8 Investigates: Unfair Housing

NEW ORLEANS, LA (WVUE) - You work hard to pay your mortgage or rent each month, but what if we told you your tax dollars are paying the rent for some public housing tenants who are making six figures? That's exactly what we found happening across Louisiana in our FOX 8 investigation, Unfair Housing.

Nearly $144,000, over $115,000, how about almost $129,000? You'd probably like to make money like that, but you might be surprised to learn these are some of the annual incomes of public housing tenants in Louisiana.

"It's a clear abuse of taxpayer funds." That was the reaction from State Rep. Cameron Henry, R-Metarie, when we showed him the findings of our investigation. We obtained public records from a federal audit into the U.S. Department of Housing and Urban Development's public housing program. It ranked Louisiana seventh in the country for allowing people to live in public housing who earned more than HUD's 2014 eligibility income limits.

We found that taxpayers are helping pay rent for hundreds of those tenants, from New Orleans to the west bank to down the bayou. Take a look at the incomes of some the highest-earning tenants: More than $143,000 in St. Charles Parish. Nearly $116,000 in Berwick. Close to $100,000 in Lafourche. And tenants in New Orleans made anywhere from $77,000 to over $86,000 a year.

"What we seem to have now is a group of individuals who have found a way to abuse the system and are preventing others who truly need it from being able to have a decent house," Henry said.

We reached out to every housing authority in our viewing area who made the list. The director of the Jefferson Parish Housing authority, Juan Patterson, agreed to talk to us on camera. The federal audit found a dozen over-income tenants were living in public housing there, some making as much as $59,000 and $64,000 a year.

"I think it's not so much the issue of it being a waste of taxpayer's money, I think it's more of an issue of fairness to the people who are on the waiting list who want to get an apartment," Patterson said.

And thousands of low-income families are on waiting lists across the state in need of affordable housing. After the federal audit was released in July, HUD sent a letter to housing authorities across the country. It said: "The audit identified several cases where families had incomes that were 'excessively' above the income threshold." And of the housing authorities sampled, none were using their discretion to evict the over-income families. The letter goes on to encourage housing authorities to adopt local policies to remove excessively over-income tenants to ensure public housing is available for the nation's most vulnerable families.

"We haven't made any policy decisions with respect to that, so far, what we have done is simply what I talked about - letting them know what the opportunities are for home ownership, the assistance that is available for them to get into home ownership," Patterson said.

Patterson also said that of the dozen over-income tenants we found living in the Jefferson Parish public housing system, six have since moved out. As for why the others are still there, he said that can be complicated. Some may have bad credit and can't get a loan to buy a house; others may like the safety net that public housing provides, meaning if they lose their job, their rent will be adjusted downward. And still others may not be able to afford housing in the private market on their own because they rely on income from family members, like working adult children, who live with them.

Reporter: "What would you say to those who say these tenants are cheating the system?"

Patterson: "They're actually not. They are abiding by all the rules that the system established for them, so no, they're not cheating the system."

Our investigation uncovered that the system continues to allow over-income tenants to live in government housing. We asked all the housing authorities in our viewing area for a current income list from their tenants. The Housing Authority of New Orleans denied our request saying it "is so burdensome as to interfere with the operation of HANO's constitutional and legal duties."

Others complied, and we found some tenants who are making big money are still cashing in on your tax dollars for their rent. In Berwick, there's a family of three living in a two-bedroom unit. Their annual income right now? Nearly $151,000. Last year, they were pulling in nearly $129,000. In Jefferson Parish, of those six over-income families still living in public housing, one is making nearly $66,000 a year; another more than $72,000.

Reporter: "A lot of viewers who see this will say that's more than they may make, and so they maybe asking, with someone with that kind of income, shouldn't they be renting or buying in the private market?"

Patterson: "Well, I think with that kind of income, especially if it's earned income, they should be renting in the private market or actually purchasing a home in the private market."

And after seeing the findings of our investigation, Rep. Henry said the system needs to change.

"You feel bad for the families on that list who are making the bare minimum doing exactly what they are supposed to do to try to get into one of these housings, and we know they are not going to stay there forever, yet we let a few - unfortunately it is more than a few, several hundred - abuse that, and the authorities that are supposed to be monitoring this seem to be willing to overlook it for whatever reason," Henry said.

When that federal audit was released in July, it estimated more than $104 million in taxpayer money would be used over the next year to pay government housing rent for over-income families that otherwise would have been used to house low-income families.

After seeing what we uncovered in our investigation, Rep. Henry said he plans to look into what can be done at the state level to keep those over-income tenants from living in public housing.

On Monday, HANO issued the following statement: "HUD has issued updated guidance, which will be vetted through our next agency planning process." 
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