Building a Solid Foundation: Restoring Trust and Transparency in Public Housing Agencies

**Summary**

On February 10, 2026, the House Financial Services Subcommittee on Oversight and Investigations held a hearing titled "Building a Solid Foundation: Restoring Trust and Transparency in Public Housing Agencies." The hearing examined the systemic operational failures, financial mismanagement, and corruption within the nation’s more than 3,300 Public Housing Agencies (PHAs). Chairman Daniel Meuser (R-PA-9) convened the session to address the estimated 10% to 30% of the $40 billion in annual federal funding that is allegedly lost to fraud, improper payments, or misappropriation. The subcommittee sought to evaluate how the Department of Housing and Urban Development (HUD) and local PHAs can improve oversight to protect the nine million Americans relying on these programs.

The hearing featured testimony from experts in investigations, state-level enforcement, and housing policy. Mr. Bart Schwartz, Co-founder and Chairman of Guidepost Solutions and former federal monitor of the New York City Housing Authority (NYCHA), detailed the 2025 conviction of 70 NYCHA employees and contractors for bribery and no-bid contract schemes. He emphasized that NYCHA lacked a basic code of conduct or integrity program, leading to a culture of "defeatism." Mr. Chase Haller, Deputy Attorney General for the Indiana Attorney General’s Office, provided a case study of the Indianapolis Housing Agency (IHA). He described "disheartening" conditions at Lugar Tower, where residents faced security lapses, vermin infestations, and a lack of hot water. Mr. Haller noted that the Rental Assistance Demonstration (RAD) conversion at the site failed to generate sufficient cash flow for maintenance, leaving the property in a state of "disorder."

From a policy perspective, the witnesses and members debated the efficacy of current HUD oversight tools. Mr. Milan Ozdinec, President of Vargas Premier Corporation Consultants and a former HUD executive, highlighted the $70 billion capital backlog facing the public housing portfolio. He argued that while programs like Hope VI and RAD were designed to modernize housing through private investment, the "Brooke Amendment"—which limits tenant rent to 30% of income—has never been fully funded by the federal government, creating a permanent structural deficit. Conversely, Mr. Eric Oberdorfer, Director of Policy and Legislative Affairs for the National Association of Housing and Redevelopment Officials (NAHRO), defended PHAs, asserting that most are high performers. He argued that reported "improper payments" are often technical errors related to SAM.gov registrations rather than systemic fraud.

The hearing revealed a sharp partisan divide regarding the root causes of PHA failures. Republican members, including Chairman Meuser and Rep. J. Hill (R-AR-2), focused on the need for "integrity compliance" and aggressive fraud detection. They praised HUD Secretary Scott Turner’s deployment of AI-enabled tracking systems and a 25% increase in physical inspections. Rep. Hill highlighted a specific case in Little Rock where $30 million went missing, citing a total lack of local and federal accountability. Rep. Mike Flood (R-NE-1) expressed concern that PHA boards are often filled with "political patronage" appointees who lack real estate or property management expertise.

In contrast, Democratic members, led by Ranking Member Al Green (D-TX-9) and Rep. Maxine Waters (D-CA-43), argued that the Trump administration is "dismantling" HUD. Rep. Green cited the termination of 780 employees from the Office of Fair Housing and Equal Opportunity and a 43% reduction in field office staff, arguing that HUD cannot provide oversight if it is being "shuttered." Rep. Waters emphasized that the "lead and mold issues" could be eradicated with proper investment and urged PHAs to utilize "Section 3" requirements to hire and train the residents living within the developments. Rep. Rashida Tlaib (D-MI-12) criticized a proposed HUD rule to impose work requirements and time limits on voucher holders, calling the policy "shockingly cruel" and administratively burdensome for PHAs.

Several notable exchanges occurred regarding the New York City Housing Authority. Rep. Ritchie Torres (D-NY-15) challenged Mr. Schwartz on the impact of federal funding cuts, noting that NYCHA’s portfolio includes 755 boilers and over 3,000 elevators, many of which are nearly a century old. Rep. Torres argued that private landlords would find it "destabilizing" to receive only 82% of their expected revenue, which has been the reality for NYCHA due to congressional proration. Mr. Schwartz conceded that NYCHA faces a "funding crisis" but maintained that private-sector maintenance contracts and better data analytics could improve conditions even within current budget constraints.

The impact of this hearing extends to the broader affordable housing sector, including private developers involved in RAD conversions, municipal governments that oversee PHA boards, and the millions of low-income tenants served by these agencies. The discussion suggested that future legislative efforts may focus on "performance-based funding metrics" and stricter auditing requirements for "troubled" agencies.

As for next steps, Chairman Meuser announced that the committee has sent oversight letters to 32 PHAs currently designated as "troubled" by HUD, requesting detailed records on procurement, financial management, and property conditions. The witnesses were asked to provide additional "best practices" for PHA management in writing. The subcommittee set a deadline of March 17, 2026, for witnesses to respond to follow-up questions for the record.

field name: value Summary: On February 10, 2026, the House Financial Services Subcommittee on Oversight and Investigations held a hearing titled "Building a Solid Foundation: Restoring Trust and Transparency in Public Housing Agencies." The hearing examined the systemic operational failures, financial mismanagement, and corruption within the nation’s more than 3,300 Public Housing Agencies (PHAs). Chairman Daniel Meuser (R-PA-9) convened the session to address the estimated 10% to 30% of the $40 billion in annual federal funding that is allegedly lost to fraud, improper payments, or misappropriation. The subcommittee sought to evaluate how the Department of Housing and Urban Development (HUD) and local PHAs can improve oversight to protect the nine million Americans relying on these programs.

The hearing featured testimony from experts in investigations, state-level enforcement, and housing policy. Mr. Bart Schwartz, Co-founder and Chairman of Guidepost Solutions and former federal monitor of the New York City Housing Authority (NYCHA), detailed the 2025 conviction of 70 NYCHA employees and contractors for bribery and no-bid contract schemes. He emphasized that NYCHA lacked a basic code of conduct or integrity program, leading to a culture of "defeatism." Mr. Chase Haller, Deputy Attorney General for the Indiana Attorney General’s Office, provided a case study of the Indianapolis Housing Agency (IHA). He described "disheartening" conditions at Lugar Tower, where residents faced security lapses, vermin infestations, and a lack of hot water. Mr. Haller noted that the Rental Assistance Demonstration (RAD) conversion at the site failed to generate sufficient cash flow for maintenance, leaving the property in a state of "disorder."

From a policy perspective, the witnesses and members debated the efficacy of current HUD oversight tools. Mr. Milan Ozdinec, President of Vargas Premier Corporation Consultants and a former HUD executive, highlighted the $70 billion capital backlog facing the public housing portfolio. He argued that while programs like Hope VI and RAD were designed to modernize housing through private investment, the "Brooke Amendment"—which limits tenant rent to 30% of income—has never been fully funded by the federal government, creating a permanent structural deficit. Conversely, Mr. Eric Oberdorfer, Director of Policy and Legislative Affairs for the National Association of Housing and Redevelopment Officials (NAHRO), defended PHAs, asserting that most are high performers. He argued that reported "improper payments" are often technical errors related to SAM.gov registrations rather than systemic fraud.

The hearing revealed a sharp partisan divide regarding the root causes of PHA failures. Republican members, including Chairman Meuser and Rep. J. Hill (R-AR-2), focused on the need for "integrity compliance" and aggressive fraud detection. They praised HUD Secretary Scott Turner’s deployment of AI-enabled tracking systems and a 25% increase in physical inspections. Rep. Hill highlighted a specific case in Little Rock where $30 million went missing, citing a total lack of local and federal accountability. Rep. Mike Flood (R-NE-1) expressed concern that PHA boards are often filled with "political patronage" appointees who lack real estate or property management expertise.

In contrast, Democratic members, led by Ranking Member Al Green (D-TX-9) and Rep. Maxine Waters (D-CA-43), argued that the Trump administration is "dismantling" HUD. Rep. Green cited the termination of 780 employees from the Office of Fair Housing and Equal Opportunity and a 43% reduction in field office staff, arguing that HUD cannot provide oversight if it is being "shuttered." Rep. Waters emphasized that the "lead and mold issues" could be eradicated with proper investment and urged PHAs to utilize "Section 3" requirements to hire and train the residents living within the developments. Rep. Rashida Tlaib (D-MI-12) criticized a proposed HUD rule to impose work requirements and time limits on voucher holders, calling the policy "shockingly cruel" and administratively burdensome for PHAs.

Several notable exchanges occurred regarding the New York City Housing Authority. Rep. Ritchie Torres (D-NY-15) challenged Mr. Schwartz on the impact of federal funding cuts, noting that NYCHA’s portfolio includes 755 boilers and over 3,000 elevators, many of which are nearly a century old. Rep. Torres argued that private landlords would find it "destabilizing" to receive only 82% of their expected revenue, which has been the reality for NYCHA due to congressional proration. Mr. Schwartz conceded that NYCHA faces a "funding crisis" but maintained that private-sector maintenance contracts and better data analytics could improve conditions even within current budget constraints.

The impact of this hearing extends to the broader affordable housing sector, including private developers involved in RAD conversions, municipal governments that oversee PHA boards, and the millions of low-income tenants served by these agencies. The discussion suggested that future legislative efforts may focus on "performance-based funding metrics" and stricter auditing requirements for "troubled" agencies.

As for next steps, Chairman Meuser announced that the committee has sent oversight letters to 32 PHAs currently designated as "troubled" by HUD, requesting detailed records on procurement, financial management, and property conditions. The witnesses were asked to provide additional "best practices" for PHA management in writing. The subcommittee set a deadline of March 17, 2026, for witnesses to respond to follow-up questions for the record.